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II.

GENERAL PRINCIPLES (RULE 128)

A. DEFINITION

G.R. No. L-2068 October 20, 1948

DOMINADOR B. BUSTOS, petitioner,


vs.
ANTONIO G. LUCERO, Judge of First Instance of Pampanga, respondent.

E. M. Banzali for petitioner.


Acting Provincial Fiscal Albino L. Figueroa and Assistant Provincial Fiscal Marcelo L. Mallari for respondent.

TUASON, J.:

The petitioner herein, an accused in a criminal case, filed a motion with the Court of First Instance of Pampanga after he
had been bound over to that court for trial, praying that the record of the case be remanded to the justice of the peace
court of Masantol, the court of origin, in order that the petitioner might cross-examine the complainant and her
witnesses in connection with their testimony, on the strength of which warrant was issued for the arrest of the accused.
The motion was denied and that denial is the subject matter of this proceeding.

According to the memorandum submitted by the petitioner's attorney to the Court of First Instance in support of his
motion, the accused, assisted by counsel, appeared at the preliminary investigation. In that investigation, the justice of
the peace informed him of the charges and asked him if he pleaded guilty or not guilty, upon which he entered the plea
of not guilty. "Then his counsel moved that the complainant present her evidence so that she and her witnesses could be
examined and cross-examined in the manner and form provided by law." The fiscal and the private prosecutor objected,
invoking section 11 of rule 108, and the objection was sustained. "In view thereof, the accused's counsel announced his
intention to renounce his right to present evidence," and the justice of the peace forwarded the case to the court of first
instance.

Leaving aside the question whether the accused, after renouncing his right to present evidence, and by reason of that
waiver he was committed to the corresponding court for trial, is estopped, we are of the opinion that the respondent
judge did not act in excess of his jurisdiction or in abuse of discretion in refusing to grant the accused's motion to return
the record for the purpose set out therein. In Dequito and Saling Buhay vs. Arellano, G.R. No. L-1336, recently
promulgated, in which case the respondent justice of the peace had allowed the accused, over the complaint's objection,
to recall the complainant and her witnesses at the preliminary investigation so that they might be cross -examined, we
sustained the justice of the peace's order. We said that section 11 of Rule 108 does not curtail the sound discretion of the
justice of the peace on the matter. We said that "while section 11 of Rule 108 defines the bounds of the defendant's right
in the preliminary investigation, there is nothing in it or any other law restricting the autho rity, inherent in a court of
justice, to pursue a course of action reasonably calculated to bring out the truth."
But we made it clear that the "defendant can not, as a matter of right, compel the complaint and his witnesses to repeat
in his presence what they had said at the preliminary examination before the issuance of the order of arrest." We called
attention to the fact that "the constitutional right of an accused to be confronted by the witnesses against him does not
apply to preliminary hearings' nor will the absence of a preliminary examination be an infringement of his right to
confront witnesses." As a matter of fact, preliminary investigation may be done away with entirely without infringing the
constitutional right of an accused under the due process clause to a fair trial.

The foregoing decision was rendered by a divided court. The minority went farther than the majority and denied even
any discretion on the part of the justice of the peace or judge holding the preliminary investigation to compel the
complainant and his witnesses to testify anew.

Upon the foregoing considerations, the present petition is dismissed with costs against the petitioner.

Moran, C.J., Paras, Pablo, Bengzon, and Briones, JJ., concur.

G.R. No. 190846, February 03, 2016

TOMAS P. TAN, JR., Petitioner, v. JOSE G. HOSANA, Respondent.

DECISION

BRION, J.:

Before us is a petition for review on certiorari1 challenging the August 28, 2009 decision 2 and November 17, 2009
resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 88645.chanRoblesvirtualLawlibrary

The Facts

The respondent Jose G. Hosana (Jose) married Milagros C. Hosana (Milagros) on January 14, 1979.4During their marriage,
Jose and Milagros bought a house and lot located at Tinago, Naga City, which lot was covered by Transfer Certificate of
Title (TCT) No. 21229.5chanroblesvirtuallawlibrary

On January 13, 1998, Milagros sold to the petitioner Tomas P. Tan, Jr. (Tomas) the subject property, as evidenced by a
deed of sale executed by Milagros herself and as attorney-in-fact of Jose, by virtue of a Special Power of Attorney (SPA)
executed by Jose in her favor. 6 The Deed of Sale stated that the purchase price for the lot was P200,000.00. 7 After the
sale, TCT No. 21229 was cancelled and TCT No. 32568 was issued in the name of Tomas.8chanroblesvirtuallawlibrary

On October 19, 2001, Jose filed a Complaint for Annulment of Sale/Cancellation of Title/Reconveyance and
Damages against Milagros, Tomas, and the Register of Deeds of Naga City. 9 The complaint was filed before the Regional
Trial Court (RTC), Branch 62, Naga City. In the complaint, Jose averred that while he was working in Japan, Milagros,
without his consent and knowledge, conspired with Tomas to execute the SPA by forging Jose's signature making it
appear that Jose had authorized Milagros to sell the subject property to Tomas. 10chanroblesvirtuallawlibrary

In his Answer, Tomas maintained that he was a buyer in good faith and for value. 11 Before he paid the full consideration
of the sale, Tomas claimed he sought advice from his lawyer-friend who told him that the title of the subject lot was
authentic and in order.12 Furthermore, he alleged that the SPA authorizing Milagros to sell the property was annotated at
the back of the title.13chanroblesvirtuallawlibrary

Tomas filed a cross-claim against Milagros and claimed compensatory and moral damages, attorney's fees, and
expenses, for litigation, in the event that judgment be rendered in favor of Jose. 14chanroblesvirtuallawlibrary

The RTC declared Milagros in default for her failure to file her answer to Jose's complaint and Tomas' cross-claim.15 On
the other hand, it dismissed Tomas' complaint against the Register of Deeds since it was only a nominal
party.16chanroblesvirtuallawlibrary

After the pre-trial conference, trial on the merits ensued. 17chanroblesvirtuallawlibrary

Jose presented his brother, Bonifacio Hosana (Bonifacio), as sole witness. Bonifacio testified that he learned of the sale of
the subject property from Milagros' son. 18 When Bonifacio confronted Milagros that Jose would get angry because of the
sale, Milagros retorted that she sold the property because she needed the money. Bonifacio immediately informed Jose,
who was then in Japan, of the sale. 19chanroblesvirtuallawlibrary

Jose was furious when he learned of the sale and went back to the Philippines. Jose and Bonifacio verified with the
Register of Deeds and discovered that the title covering the disputed property had been transferred to
Tomas.20chanroblesvirtuallawlibrary

Bonifacio further testified that Jose's signature in the SPA was forged. 21 Bonifacio presented documents containing the
signature of Jose for comparison: Philippine passport, complaint-affidavit, duplicate original of SPA dated 16 February
2002, notice of lis pendens, community tax certificate, voter's affidavit, specimen signatures, and a handwritten
letter.22chanroblesvirtuallawlibrary

On the other hand, Tomas submitted his own account of events as corroborated by Rosana Robles (Rosana), his
goddaughter. Sometime in December 1997, Tomas directed Rosana to go to the house of Milagros to confirm if Jose
knew about the sale transaction. Through a phone call by Milagros to Jose, Rosana was able to talk to Jose who
confirmed that he was aware of the sale and had given his wife authority to proceed with the sale. Rosana informed
Tomas of Jose's confirmation.23chanroblesvirtuallawlibrary

With the assurance that all the documents were in order, Tomas made a partial payment of P350,000.00 and another
P350,000.00 upon the execution of the Deed of Absolute Sale (Deed of Sale). Tomas noticed that the consideration
written by Milagros on the Deed of Sale was only P200,000.00; he inquired why the written consideration was lower than
the actual consideration paid. Milagros explained that it was done to save on taxes. Tomas also learned from Milagros
that she needed money badly and had to sell the house because Jose had stopped sending her
money.24chanRoblesvirtualLawlibrary

The RTC Ruling

In its decision dated December 27, 2006, 25 the RTC decided in favor of Jose and nullified the sale of the subject property
to Tomas. The RTC held that the SPA dated June 10, 1996, wherein Jose supposedly appointed Milagros as his
attorney-in-fact, was actually null and void.

Tomas and Milagros were ordered to jointly and severally indemnify Jose the amount of P20,000.00 as temperate
damages.26chanRoblesvirtualLawlibrary

The CA Ruling

Tomas appealed the RTC's ruling to the CA.

In a decision dated August 28, 2009, 27 the CA affirmed the RTC ruling that the deed of sale and the SPA were void.
However, the CA modified the judgment of the RTC: first, by deleting the award of temperate damages; and second, by
directing Jose and Milagros to reimburse Tomas the purchase price of P200,000.00, with interest, under the principle of
unjust enrichment. Despite Tomas' allegation that he paid P700,000.00 for the subject lot, the CA found that there was
no convincing evidence that established this claim. 28chanroblesvirtuallawlibrary

Tomas filed a motion for the reconsideration of the CA decision on the ground that the amount of P200,000.00 as
reimbursement for the purchase price of the house and lot was insufficient and not supported by the evidence formally
offered before and admitted by the RTC. Tomas contended that the actual amount he paid as consideration for the sale
was P700,000.00, as supported by his testimony before the RTC. 29chanroblesvirtuallawlibrary

The C A denied the motion for reconsideration for lack of merit" in a resolution dated November 17,
2009.30chanRoblesvirtualLawlibrary

The Petition

Tomas filed the present petition for review on certiorari to challenge the CA ruling which ordered the reimbursement of
P200,000.00 only, instead of the actual purchase price he paid in the amount of P700,000.00.31chanroblesvirtuallawlibrary

Tomas argues that, first, all matters contained in the deed of sale, including the consideration stated, cannot be used as
evidence since it was declared null and void; second, the deed of sale was not specifically offered to prove the actual
consideration of the sale;32third, his testimony establishing the actual purchase price of P700,000.00 paid was
uncontroverted;33 and, fourth, Jose must return the full amount actually paid under the principle of solutio
indebiti.34chanroblesvirtuallawlibrary

Jose, on the other hand, argues that first, Jose is estopped from questioning the purchase price indicated in the deed of
dale for failing to immediately raise this question; and second, the terms of an agreement reduced into writing are
deemed to include all the terms agreed upon and no other evidence can be admitted other than the terms of the
agreement itself.35chanRoblesvirtualLawlibrary

The Issues

The core issues are (1) whether the deed of sale can be used as the basis for the amount of consideration paid; and (2)
whether the testimony of Tomas is sufficient to establish the actual purchase price of the
sale.chanRoblesvirtualLawlibrary

OUR RULING

We affirm the CA ruling and deny the petition.

Whether Tomas paid the purchase price of P700,000.00 is a question of fact not proper in a petition for review
on certiorari. Appreciation of evidence and inquiry on the correctness of the appellate court's factual findings are not the
functions of this Court, as we are not a trier of facts.36chanroblesvirtuallawlibrary

This Court does not address questions of fact which require us to rule on "the truth or falsehood of alleged
facts,"37 except in the following cases:ChanRoblesVirtualawlibrary

(1) when the findings are grounded entirely on speculations, surmises, or conjectures; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of
discretion; (4) when the judgment is based on misappreciation of facts; (5) when the findings of fact are
conflicting; (6) when in making its findings, the same are contrary to the admissions of both appellant
and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in
the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; and
(10) when the findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record.38chanroblesvirtuallawlibrary

The present case does not fall under any of these exceptions.

Whether Tomas sufficiently proved that he paid P700,000.00 for the subject property is a factual question that the CA
had already resolved in the negative. 39 The CA found Tomas' claim of paying P700,000.00 for the subject property to be
unsubstantiated as he failed to tender any convincing evidence to establish his claim.

We uphold the CA's finding.


In civil cases, the basic rule is that the party making allegations has the burden of proving them by a preponderance of
evidence.40 Moreover, the parties must rely on the strength of their own evidence, not upon the weakness of the defense
offered by their opponent.41chanroblesvirtuallawlibrary

Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side and is usually
considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the credible
evidence."42 Preponderance of evidence is a phrase that, in the last analysis, means probability of the truth. It is evidence
that is more convincing to the court as it is worthier of belief than that which is offered in opposition
thereto.43chanroblesvirtuallawlibrary

We agree with the CA that Tomas' bare allegation that he paid Milagros the sum of P700,000.00 cannot be considered as
proof of payment, without any other convincing evidence to establish this claim. Tomas' bare allegation, while
uncontroverted, does not automatically entitle it to be given weight and credence.

It is settled in jurisprudence that one who pleads payment has the burden of proving it; 44 the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment.45 A mere allegation is not
evidence,46 and the person who alleges has the burden of proving his or her allegation with the requisite quantum of
evidence, which in civil cases is preponderance of evidence.

The force and effect of a void contract is distinguished from its admissibility as evidence.

The next question to be resolved is whether the CA correctly ordered the reimbursement of P200,000.00, which is the
consideration stated in the Deed of Sale, based on the principle of unjust enrichment.

The petitioner argues that the CA erred in relying on the consideration stated in the deed of sale as basis for the
reimbursable amount because a null and void document cannot be used as evidence.

We find no merit in the petitioner's argument.

A void or inexistent contract has no force and effect from the very beginning. 47 This rule applies to contracts that are
declared void by positive provision of law, as in the case of a sale of conjugal property without the other spouse's written
consent.48 A void contract is equivalent to nothing and is absolutely wanting in civil effects. 49 It cannot be validated either
by ratification or prescription. 50 When, however, any of the terms of a void contract have been performed, an action to
declare its inexistence is necessary to allow restitution of what has been given under it. 51chanroblesvirtuallawlibrary

It is basic that if a void contract has already "been performed, the restoration of what has been given is in order." 52 This
principle springs from Article 22 of the New Civil Code which states that "every person who through an act of
performance by another, or any other means, acquires or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same." Hence, the restitution of what each party has given is a
consequence of a void and inexistent contract.
While the terms and provisions of a void contract cannot be enforced since it is deemed inexistent, it does not preclude
the admissibility of the contract as evidence to prove matters that occurred in the course of executing the contract, i.e.,
what each party has given in the execution of the contract.

Evidence is the means of ascertaining in a judicial proceeding the truth respecting a matter of fact, sanctioned by the
Rules of Court.53 The purpose of introducing documentary evidence is to ascertain the truthfulness of a matter at issue,
which can be the entire content or a specific provision/term in the document.

The deed of sale as documentary evidence may be used as a means to ascertain the truthfulness of the consideration
stated and its actual payment. The purpose of introducing the deed of sale as evidence is not to enforce the terms
written in the contract, which is an obligatory force and effect of a valid contract. The deed of sale, rather, is used as a
means to determine matters that occurred in the execution of such contract, i.e., the determination of what each party
has given under the void contract to allow restitution and prevent unjust enrichment.

Evidence is admissible when it is relevant to the issue and is not excluded by the law of these rules.54There is no provision
in the Rules of Evidence which excludes the admissibility of a void document. The Rules only require that the evidence is
relevant and not excluded by the Rules for its admissibility. 55chanroblesvirtuallawlibrary

Hence, a void document is admissible as evidence because the purpose of introducing it as evidence is to ascertain the
truth respecting a matter of fact, not to enforce the terms of the document itself.

It is also settled in jurisprudence that with respect to evidence which appears to be of doubtful relevancy, incompetency,
or admissibility, the safer policy is to be liberal and not reject them on doubtful or technical grounds, bu t admit them
unless plainly irrelevant, immaterial, or incompetent; for the reason that their rejection places them beyond the
consideration of the court, if they are thereafter found relevant or competent. On the other hand, their admission, if they
turn out later to be irrelevant or incompetent, can easily be remedied by completely discarding them or ignoring
them.56chanroblesvirtuallawlibrary

In the present case, the deed of sale was declared null and void by positive provision of the law prohibiting th e sale of
conjugal property without the spouse's consent. It does not, however, preclude the possibility that Tomas paid the
consideration stated therein. The admission of the deed of sale as evidence is consistent with the liberal policy of the
court to admit the evidence: which appears to be relevant in resolving an issue before the courts.

An offer to prove the regular execution of the deed of sale is basis for the court to determine the presence of the
essential elements of the sale, including the consideration paid.

Tomas argues that the Deed of Sale was not specifically offered to prove the actual consideration of the sale and, hence,
cannot be considered by the court. Tomas is incorrect.

The deed of sale in the present case was formally offered by both parties as evidence.57 Tomas, in fact, formally offered it
for the purpose of proving its execution and the regularity of the sale. 58chanroblesvirtuallawlibrary
The offer of the deed of sale to prove its regularity necessarily allowed the; lower courts to consider the terms written
therein to determine whether all the essential elements 59 for a valid contract of sale are present, including the
consideration of the sale. The fact that the sale was declared null and void does not prevent the court from relying on
consideration stated in the deed of sale to determine the actual amount paid by the petitioner for the purpose of
preventing unjust enrichment.

Hence, the specific offer of the Deed of Sale to prove the actual consideration of the sale is not n ecessary since it is
necessarily included in determining the regular execution of the sale.

The consideration stated in the notarized Deed of Sale is prima facie evidence of the amount paid by the petitioner.

The notarized deed of sale is a public document and is prima facie evidence of the truth of the facts stated
therein.60chanroblesvirtuallawlibrary

Prima facie evidence is defined as evidence good and sufficient on its face. Such evidence as, in the judgment of the law,
is sufficient to establish a given fact, or the group or chain of facts constituting the party's claim or defense and which if
not rebutted or contradicted, will remain sufficient. 61chanroblesvirtuallawlibrary

In the present case, the consideration stated in the deed of sale constitutes prima facie evidence of the amount paid by
Tomas for the transfer of the property to his name. Tomas failed to adduce satisfactory evidence to rebut or contradict
the consideration stated as the actual consideration and amount paid to Milagros and Jose.

The deed of sale was declared null and void by a positive provision of law requiring the consent of both spouses for the
sale of conjugal property. There is, however, no question on the presence of the consideration of the sale, except with
respect to the actual amount paid. While the deed of sale has no force and effect as a contract, it remains prima
facie evidence of the actual consideration paid.

As earlier discussed, Tomas failed to substantiate his claim that he paid to Milagros the amount of P700, 000.00, instead
of the amount of P200,000.00 stated in the deed of sale. No documentary or testimonial evidence to prove payment of
the higher amount was presented, apart from Tomas' sole testimony. Tomas' sole testimony of payment is self-serving
and insufficient to unequivocally prove that Milagros received P700,000.00 for the subject property.

Hence, the consideration stated in the deed of sale remains sufficient evidence of the actual amount the petitioner paid
and the same amount which should be returned under the principle of unjust enrichment.

Unjust enrichment exists "when a person unjustly retains a benefit at the loss of another, or when a person retains money
or property of another against the fundamental principles of justice, equity, and good conscience."62 The prevention of
unjust enrichment is a recognized public policy of the State and is based on Article 22 of the Civil
Code.63chanroblesvirtuallawlibrary
The principle of unjust enrichment requires Jose to return what he or Milagros received under the void contract which
presumably benefitted their conjugal partnership.

Accordingly, the CA correctly ordered Jose to return the amount of P200,000.00 since this the consideration stated in the
Deed of Sale and given credence by the lower court. Indeed, even Jose expressly stated in his comment that Tomas is
entitled to recover the money paid by him in the amount of P200,000.00 as appearing in the contract.

WHEREFORE, we hereby DENY the petition for review on certiorari. The decision dated August 28, 2009 and the
resolution dated November 17, 2009, of the Court of Appeals in CA-G.R. CV No. 88645 is AFFIRMED. Costs against the
petitioner.

SO ORDERED.cralawlawlibrary

G.R. No. 185590, December 03, 2014

METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DEVELOPMENT
CORPORATION AND SPOUSES MANUEL LEY AND JANET LEY, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks the reversal of the Court of Appeals’
Decision1 dated September 4, 2008 in CA-G.R. CV No. 75590 dismissing the appeal of petitioner Metropolitan Bank and
Trust Company assailing the dismissal of its complaint by the Regional Trial Court (RTC) of Makati City, Branch 56, and
the Resolution2 dated December 5, 2008 denying the Bank’s motion for reconsideration.

The Court of Appeals adopted the following recital of facts in the Decision 3 dated July 3, 2001 of the RTC in Civil Case No.
91-1878:

This is an action for recovery of a sum of money and damages with a prayer for the issuance of writ of
preliminary attachment filed by the plaintiff Philippine Banking Corporation 4 against the defendants,
namely: Ley Construction and Development Corporation (hereafter “LCDC”) and Spouses Manuel and
Janet C. Ley (hereafter “[defendant]-spouses”).

The complaint alleges that: Defendant LCDC, a general contracting firm, through the oral
representations of defendant-spouses, applied with plaintiff, a commercial bank, for the opening of a
Letter of Credit. Plaintiff issued, on April 26, 1990, Letter of Credit DC 90[-]303-C in favor of the
supplier-beneficiary Global Enterprises Limited, in the amount of Eight Hundred Two Thousand Five
Hundred U.S. Dollars (USD 802,500.00). The letter of credit covered the importation by defendant LCDC
of Fifteen Thousand (15,000) metric tons of Iraqi cement from Iraq. Defendant applied for and filed with
plaintiff two (2) Applications for Amendment of Letter of Credit on May 3, 1990 and May 11, 1990,
respectively.

Thereafter, the supplier-beneficiary Global Enterprises, Inc. negotiated its Letter of Credit with the
negotiating bank Credit Suisse of Zurich, Switzerland. Credit Suisse then sent a reimbursement claim by
telex to American Express Bank Ltd., New York on July 25, 1990 for the amount of Seven Hundred
Sixty[-]Six Thousand Seven Hundred Eight U.S. Dollars (USD 766,708.00) with a certification that all terms
and conditions of the credit were complied with. Accordingly, on July 30, 1990, American Express Bank
debited plaintiff’s account Seven Hundred Seventy Thousand Six Hundred Ninety[-]One U.S. Dollars and
Thirty Cents (USD 770,691.30) and credited Credit Suisse Zurich Account with American Express Bank,
Ltd., New York for the negotiation of Letter of Credit. On August 6, 1990, plaintiff received from Credit
Suisse the necessary shipping documents pertaining to Letter of Credit DC 90-303-C that were in turn
delivered to the defendant. Upon receipt of the aforesaid documents, defendants executed a trust
receipt. However, the cement that was to be imported through the opening of the subject Letter of
Credit never arrived in the Philippines.

The prompt payment of the obligation of the defendant LCDC was guaranteed by [defendant]-spouses
under the Continuing Surety Agreement executed by the latter in favor of the defendant.

The obligation covered by the subject Letter of Credit in the amount of USD 802,500.00 has long been
overdue and unpaid, notwithstanding repeated demands for payment thereof. Plaintiff, therefore,
instituted the instant complaint for recovery of the following amounts: Twenty[-]Three [M]illion Two
Hundred [F]ifty[-]Nine Thousand One Hundred Twenty[-]Four Pesos and Fourteen Centavos
(PHP23,259,124.14) as of June 15, 1991, inclusive of interest and penalty, plus additional interest thereon
of Thirty percent (30%) per annum; attorney’s fees equivalent to Twenty[-]Five percent [25%] of the total
obligation; and costs of suit.

In support of its cause of action against defendant, plaintiff presented the testimony of Mr. Fenelito
Cabrera, Head of the Foreign Department of plaintiff’s Head Office. (T.S.N. dated June 16, 1995, p. 4)
There being no other witness to be presented by the plaintiff (Order dated June 27, 1997), the plaintiff
filed its formal offer of exhibits dated July 18, 1997 to which defendant filed its comments/objections to
formal offer of evidence dated February 23, 1998. In an order dated March 4, 1998, Exhibits “A” to “N”
to “N-4” including [their] sub-markings were admitted for the purposes they were respectively offered.
However, on defendants’ motion for reconsideration dated [March 30,] 1998 that was duly opposed by
the plaintiff in its opposition dated June 3, 1998, this Court partially granted defendants’ motion for
reconsideration. Consequently, Exhibits “ D ” , “ E ” , “ H ” , “ I ” , “ J ” , “ K ” , “ L ” , and “ M ” and their
sub-markings were not admitted for not being properly identified and authenticated by a competent
witness. Only Exhibits “A”, “B”, “C”, “C-1”, and “N”, “N-1” to “N-4” remain admitted in evidence.
(Order dated September 9, 1998)

Defendant filed a motion to dismiss by way of demurrer to evidence on the ground that plaintiff’s
witness Mr. Fenelito Cabrera was incompetent to testify with respect to the transaction between the
plaintiff and the defendant and that the plaintiff’s documentary exhibits were not properly identified and
authenticated.5

The trial court found that the Bank’s only witness, Fenelito Cabrera, was incompetent to testify on the documents
presented by the Bank during the trial. Cabrera was with the Bank’s Dasmariñas Branch and not with the Head Office
from March 1990 to June 1991, the period the transaction covered by the documents took place. Thus, he could not
have properly identified and authenticated the Bank’s documentary exhibits. His lack of competence was even admitted
by the Bank’s counsel who did not even ask Cabrera to identify the documents. As the documents were not identified
and duly authenticated, the Bank’s evidence was not preponderant enough to establish its right to recover from LCDC
and the spouses Ley.6

The trial court further ruled that only the following documents remained admitted in evidence:

Exhibit Document

“A” Continuing Surety Agreement dated July 25, 1989

“B” Application and Agreement for Commercial Letter of Credit

“C” and “C-1” Letter of Credit No. DC 90-303-C

“N” and “N-1” to “N-4” Statement of Outstanding Obligations

For the trial court, these were insufficient to show that LCDC and the spouses Ley were responsible for the improper
negotiation of the letter of credit. Thus, the trial court concluded in its Decision dated July 3, 2001 that the Bank failed to
establish its cause of action and to make a sufficient or preponderant case. 7 The dispositive portion of the decision
reads:

WHEREFORE, the demurrer to evidence is granted. The case is dismissed. 8

The Bank appealed to the Court of Appeals. It claimed that the trial court erred in granting the demurrer to evidence of
LCDC and the spouses Ley on the ground that the Bank failed to establish its cause of action. The Bank insisted that,
even without considering the exhibits excluded in evidence by the trial court, the Bank was able to prove by
preponderant evidence that it had a right and that right was violated by LCDC and the spouses Ley. It explained that the
trial court was wrong in considering only Exhibits “A,” “B,” “C,” “C-1,” “N” and “N-1” to “N-4” as the following
documents were also admitted in evidence and should have been considered in the resolution of the demurrer to
evidence.9

Exhibit Document

“F” Register Copy or Memorandum on the Letter of Credit

“G” Trust Receipt No. TRI432/90 dated August 16, 1990

“G-1” Bank Draft

“G-2” Bill of Exchange

The Bank asserted that the consideration of Exhibits “F,” “G” and “G-1” to “G-2” would have established the following:

(a) On August 16, 1990, LCDC and the spouses Ley received from the Bank the necessary shipping
documents relative to the Letter of Credit evidencing title to the goods subject matter of the
importation which the Bank had previously received from Credit Suisse;

(b) Upon receipt of the shipping documents, LCDC and the spouses Ley executed a trust receipt, Trust
Receipt No. TRI432/90, in favor of the Bank covering the importation of cement under Letter of Credit
No. DC 90-303-C;

(c) The issuance of the trust receipt was an acknowledgement by LCDC and the spouses Ley of their
receipt of the shipping documents and of their liability to the Bank;

(d) By signing the trust receipt, constituted an admission by LCDC and the spouses Ley that the Letter of
Credit was in order, including the Bank’s payment of the amount of US$766,708.00 under the Letter of
Credit.10

Thus, even with only the testimony of Cabrera and Exhibits “A,” “B,” “C,” “C-1,” “N” and “N-1” to “N-4” and “F,” “G”
and “G-1” to “G-2,” the demurrer should have been denied and LCDC and the spouses Ley held liable to the Bank.

Moreover, the Bank contended that its Exhibits “D,” “E,” “H,” and “I” should have been also admitted in evidence
because LCDC and the spouses Ley effectively admitted the authenticity of the said documents when they stated in the
pre-trial brief which they submitted during the pre-trial of the case at the trial court:

III. DOCUMENTARY EXHIBITS

Defendants shall adopt the documents submitted by plaintiff and marked as Annexes
“A”, “B”, “C”, “D”, “E”, “E-1”, “F”, “G”, “G-1”, “H” and “H-1” in the plaintiff ’s
complaint.

Defendants reserve the right to mark or adopt such other documentary evidence as
may be discovered or warranted to support its claim in the course of the trial. x x x. 11

The Court of Appeals found no merit in the Bank’s appeal. It observed that Cabrera, the Bank’s only witness, prepared
and properly identified Exhibits “F,” “G,” “N” and “N-1” to “N-4” only. The Bank’s counsel even admitted in open
court during Cabrera’s direct examination that Cabrera was incompetent to testify on the rest of the Exhibits. The trial
court was therefore correct in not giving any evidentiary weight to those Exhibits not properly identified by Cabrera.12

For the Court of Appeals, the statement in the pre-trial brief that LCDC and the spouses Ley “shall adopt” Annexes “A,”
“B,” “C,” “D,” “E,” “E-1,” “F,” “G,” “G-1,” “H” and “H-1” of the Bank’s complaint did not constitute an admission of the
said documents by LCDC and the spouses Ley. However, the appellate court noted that LCDC and the spouses Ley
admitted the existence and authenticity of the Bank’s Exhibits “A,” “B,” “C,” “C-1,” and “G.”13

Nevertheless, the Court of Appeals ruled that the following Exhibits of the Bank were admitted in evidence:

Exhibit Document

“A” Continuing Surety Agreement dated July 25, 1989

“B” Application and Agreement for Commercial Letter of Credit

“C” and “C-1” Letter of Credit No. DC 90-303-C

“F” Register Copy or Memorandum on the Letter of Credit

“G” Trust Receipt No. TRI432/90 dated August 16, 1990

“N” and “N-1” to “N-4” Statement of Outstanding Obligations

Even upon inclusion and consideration of the above-mentioned exhibits, the Court of Appeals held that the Bank still
failed to show that LCDC and the spouses Ley were directly responsible for the improper negotiation of the letter of
credit. Thus, the Court of Appeals, in its Decision dated September 4, 2008, dismissed the appeal and affirmed the
decision of the trial court.14 The dispositive portion of the Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and the assailed decision of
the RTC, National Capital Judicial Region, Branch 56, Makati City in Civil Case No. 91-1878 is AFFIRMED.15

The Court of Appeals denied the Bank’s motion for reconsideration, prompting the Bank to file this petition.
The Bank insists that it has been able to establish its cause of action not only through preponderance of evidence but
even by the admissions of LCDC and the spouses Ley. It maintains that its cause of action is not predicated on the
improper negotiation of the letter of credit but on the breach of the terms and conditions of the trust receipt.16

The petition fails.

First, the Bank’s petition suffers from a fatal infirmity. In particular, it contravenes the elementary rule of appellate
procedure that an appeal to this Court by petition for review on certiorari under Rule 45 of the Rules of Court “shall raise
only questions of law.”17 The rule is based on the nature of this Court’s appellate function – this Court is not a trier of
facts18 – and on the evidentiary weight given to the findings of fact of the trial court which have been affirmed on appeal
by the Court of Appeals – they are conclusive on this Court.19 While there are recognized exceptions to the rule, 20 this
Court sees no reason to apply the exception and not the rule in this case.

The conceptual distinction between a question of law and a question of fact is well-settled in case law:

There is a “question of law” when the doubt or difference arises as to what the law is on a certain state
of facts, and which does not call for an examination of the probative value of the evidence presented by
the parties-litigants. On the other hand, there is a “question of fact” when the doubt or controversy
arises as to the truth or falsity of the alleged facts. x x x. 21

The issue of whether or not the Bank was able to establish its cause of action by preponderant evidence is essentially a
question of fact. Stated in another way, the issue which the Bank raises in this petition is whether the evidence it
presented during the trial was preponderant enough to hold LCDC and the spouses Ley liable.

The required burden of proof, or that amount of evidence necessary and sufficient to establish one’s claim or defense, in
civil cases is preponderance of evidence. 22 Preponderance of evidence is defined as follows:

Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side and
is usually considered to be synonymous with the term “greater weight of evidence” or “greater weight
of the credible evidence.” Preponderance of evidence is a phrase which, in the last analysis, means
probability to truth. It is evidence which is more convincing to the court as worthier of belief than that
which is offered in opposition thereto. 23 (Emphasis supplied, citation omitted.)

As preponderance of evidence refers to the probability to truth of the matters intended to be proven as facts, it concerns
a determination of the truth or falsity of the alleged facts based on the evidence presented. Thus, a review of the
respective findings of the trial and the appellate courts as to the preponderance of a party’s evidence requires that the
reviewing court address a question of fact.

Moreover, a demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence. Evidence is the
means, sanctioned by the Rules of Court, of ascertaining in a judicial proceeding the truth respecting a matter of
fact.24 As such, the question of sufficiency or insufficiency of evidence, the basic issue presented by the Bank, pertains to
the question of whether the factual matters alleged by the Bank are true. Plainly, it is a question of fact and, as such, not
proper subject of a petition for review on certiorari under Rule 45 of the Rules of Court. It was incumbent upon the Bank
to demonstrate that this case fell under any of the exceptions to this rule but it failed to do so.

Second, the Bank attempts to avoid the “only questions of law” rule for appeals filed under Rule 45 by invoking the
misapprehension of facts exception. 25 According to the Bank, the trial and the appellate courts misapprehended the
facts with respect to the determination of the basis of the Bank’s cause of action.26 In particular, the Bank contends that
both the trial and the appellate courts erred in the consideration of the proper actionable document upon which the
Bank based its cause of action. The Bank asserts that its cause of action is not grounded on the Letter of Credit but on
the Trust Receipt.

The Bank’s reference to the Trust Receipt as its “primary actionable document”27 is mistaken and misleading.

The nature of the cause of action is determined by the facts alleged in the complaint. 28 A party’s cause of action is not
what the party says it is, nor is it what the designation of the complaint states, but what the allegations in the body defin e
and describe.29

In this case, the Bank’s allegations as to the basis of its cause of action against LCDC and the spouses Ley, however, belie
the Bank’s claim. In particular, the relevant portion of the Bank’s Complaint30 reads:

1.2 The defendants:chanroblesvirtuallawlibrary

a. Ley Construction and Development Corporation (LCDC) is a general contracting firm


engaged in the construction of buildings, infrastructures, and other civil works with
principal office at Mapulang Lupa St., Malinta, Valenzuela, Metro Manila where it [may
be] served with summons and other processes of this Court.

b. Sps. Manuel and Janet C. Ley, the major stockholders of defendant (LCDC) with
business address at 23rd Floor Pacific Star Bldg., Makati Avenue, Makati, Metro Manila
where the processes of this Honorable Court [may be] served upon them are
impleaded herein in their capacity as Surety for the obligation incurred by defendant
LCDC with the herein plaintiff by virtue of a Continuing Surety Agreement they
executed in favor of the plaintiff, a copy of which is hereto attached as Annex “A”;

2. STATEMENT OF CAUSE OF ACTION AGAINST DEFENDANT LCDC AND SPOUSES MANUEL AND
JANET LEY

2.1 In conjunction with its business, defendant LCDC sought to import “Iraqi Cement” from Iraq thru its
supplier “Global Enterprises, Limited” with address at 15 A. Tuckeys Lane, Gibraltar.

2.2 To finance this importation, defendant LCDC applied with the plaintiff for the opening of Letter of
Credit as evidenced by the Application and Agreement for Commercial Letter of Credit, copy of which is
marked as Annex “B” and made integral part hereof.

2.3 Acting on defendant[’]s oral representation and those stated in its application (Annex “B”), plaintiff
issued on April 26, 1990 its Letter of Credit No. DC 90[-]303-C in favor of the supplier Global Enterprises
Limited, as beneficiary in the amount of U.S. Dollars: EIGHT HUNDRED TWO THOUSAND FIVE
HUNDRED (US $802,500) for the account of defendant, covering the importation of 15,000 metric tons
of Iraqi Cement from Iraq, copy of the Letter of Credit is marked as Annex “C” and made integral part
hereof;

2.4 On May 3, 1990, defendant applied for and filed with plaintiff an Application for Amendment of
Letter of Credit, copy of which is attached as Annex “ D ” hereof, and another application for
amendment was filed on May 11, 1990 copy of which is marked as Annexes “E” and “E-1” hereof;

2.5 After these amendments were communicated to the negotiating bank, Credit Suisse of Zurich,
Switzerland, the beneficiary negotiated its Letter of Credit therewith. Thereafter, Credit Suisse sent a
reimbursement claim by telex to American Express Bank Ltd., New York on July 25, 1990 for the amount
of US$766,708.00 with a Certification that all terms and conditions of the credit were complied with;

2.6 Accordingly, on July 30, 1990, American Express Bank debited plaintiff’s account US$770,691.30 and
credited Credit Suisse Zurich Account with American Express Bank Ltd., New York for the negotiation of
Letter of Credit;

2.7 On August 6, 1990, plaintiff received from Credit Suisse the necessary shipping documents
pertaining to Letter of Credit DC 90-303-C all of which were in turn delivered and received by the
defendant on August 16, 1990 as evidenced by their acknowledgment appearing on the plaintiff’s
register copy, a copy of which is hereto attached as Annex “F”;

2.8 Upon defendant’s receipt of the shipping documents and other documents of title to the imported
goods, defendant signed a trust receipt manifesting its acceptance/conformity that the negotiation of
the LC is in order. A copy of the TR and the draft issued by the defendant as a means of paying its LC
obligation to the plaintiff are hereto attached and marked as Annexes “G” and “G-1” hereof;

2.9 Sometime during the 3rd week of August, defendant LCDC informed the plaintiff that the expected
shipment of cement subject matter of the LC was allegedly held up in Iraq purportedly on account of the
trade embargo imposed against it by the United Nation[s] and sought assistance from the plaintiff to
secure no-dollar import permit from the Central Bank as defendant was negotiating with its supplier
Global Enterprises Limited, Inc. for an alternate shipment of Syrian Cement.

2.10 Plaintiff acceded to the request of the defendant and conformably secured the requested approval
from Central Bank to allow the defendant to import cement on a no-dollar basis, a copy of the
defendant’s request as well as the Central Bank approval are hereto attached as Annexes “H” and “H-1”.
2.11 About two months after the plaintiff has obtained the requested Central Bank approval (Annex
“H-1”)[,] plaintiff was again advised by the defendant that the alternate shipment of Syrian Cement is no
longer forthcoming and that defendant LCDC after a series of negotiation with its supplier has agreed
with the latter for a reimbursement of the value of the negotiated Letter of Credit.

2.12 While defendant was negotiating with its supplier for that replacement of Syrian cement, defendant
advised plaintiff not to initiate any move as it might jeopardize defendant’s negotiation with its supplier.

2.13 In December 1990, four (4) months from defendant’s receipt of the shipping and export documents
from plaintiff, as it became perceptible that defendant’s negotiation with its supplier for reimbursement
or replacement would fail[,] defendant for the first time asked for copies of the beneficiary ’s draft, the
Charter Party Agreement even as it contested the validity of defendant’s obligation to plaintiff.

2.14 For the first time, defendant also began to assail the validity of the payment made by the plaintiff to
the supplier (Global Enterprises Ltd.) through Credit Suisse, with the intention of avoiding the payment
of its lawful obligation to reimburse the plaintiff the amount of US $802,500 which obligation is now
long overdue and unpaid notwithstanding repeated demands.

2.15 The obligation covered by the aforesaid Letter of Credit bears interest and charges at the rate of
30% per annum which rate [may be] increased or decreased within the limits allowed by the law.

2.16 The prompt payment of the obligations contracted by defendant LCDC from the plaintiff inclusive
of the subject Letter of Credit is guaranteed by defendant Sps. Manuel and Janet Ley by making
themselves jointly and severally liable with the defendant LCDC in accordance with the terms of a
Continuing Surety Agreement which they executed in favor of the plaintiff (Annex “A”).31 (Emphases
supplied.)

That the Bank’s cause of action was hinged on the Letter of Credit is unmistakable. Taken as a whole, the Bank’s
allegations make a cause of action based on the Letter of Credit. The Trust Receipt was mentioned incidentally and
appears only in paragraph 2.8 of the Complaint. 32 In stark contrast, the Letter of Credit figures prominently in the
Complaint as it is mentioned in almost all of the paragraphs of Part 2 (Statement of Cause of Action Against Defendant
LCDC and Spouses Manuel and Janet Ley). More tellingly, in paragraph 2.15, the Bank speaks of “the obligation
covered by the aforesaid Letter of Credit.” 33

Moreover, under paragraphs 1.2(b) and 2.16 of the Complaint, the spouses Ley have been impleaded as co -defendants
of LCDC on account of their execution of a Continuing Surety Agreement in the Bank’s favor to guarantee the “prompt
payment of the obligations contracted by defendant LCDC from the plaintiff inclusive of the subject Letter of Credit. ”
34
In short, the Bank seeks to hold liable (1) LCDC for its obligations under the Letter of Credit, and (2) the spo uses Ley
for their obligations under the Continuing Surety Agreement which stands as security for the Letter of Credit and not for
the Trust Receipt.

Another significant factor that contradicts the Bank’s assertion that its “primary actionable document” is the Trust
Receipt is the manner it pleaded the Letter of Credit and the Trust Receipt, respectively.

The relevant rule on actionable documents is Section 7, Rule 8 of the Rules of Court which provides:

Section 7. Action or defense based on document. – Whenever an action or defense is based upon a
written instrument or document, the substance of such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall
be deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.

An “actionable document” is a written instrument or document on which an action or defense is founded. It may be
pleaded in either of two ways:

(1) by setting forth the substance of such document in the pleading and attaching the document thereto
as an annex, or

(2) by setting forth said document verbatim in the pleading. 35

A look at the allegations in the Complaint quoted above will show that the Bank did not set forth the contents of the
Trust Receipt verbatim in the pleading. The Bank did not also set forth the substance of the Trust Receipt in the
Complaint but simply attached a copy thereof as an annex. Rather than setting forth the substance of the Trust Receipt,
paragraph 2.8 of the Complaint shows that the Bank simply described the Trust Receipt as LCDC’s manifestation of “its
acceptance/conformity that the negotiation of the [Letter of Credit] is in order.”36

In contrast, while the Bank did not set forth the contents of the Letter of Credit verbatim in the Complaint, the Bank set
forth the substance of the Letter of Credit in paragraph 2.3 of the Complaint and attached a copy thereof as Annex “C”
of the Complaint. The Bank stated that it “issued on April 26, 1990 its Letter of Credit No. DC 90[-]303-C in favor of the
supplier Global Enterprises Limited, as beneficiary[,] in the amount of U.S. Dollars: EIGHT HUNDRED TWO THOUSAND
FIVE HUNDRED (US$802,500.00) for the account of defendant [LCDC], covering the importation of 15,000 metric tons of
Iraqi Cement from Iraq.”37

Thus, the Bank’s attempt to cling to the Trust Receipt as its so-called “primary actionable document” is negated by the
manner of its allegations in the Complaint. Thus, too, the trial and the appellate courts did not misapprehend the facts
when they considered the Letter of Credit as the basis of the Bank’s cause of action.

Third, a look at the Letter of Credit, the actionable document on which the Bank relied in its case again st LCDC and the
spouses Ley, confirms the identical findings of the Regional Trial Court and the Court of Appeals.

In Keng Hua Paper Products Co., Inc. v. Court of Appeals, we held38:


In a letter of credit, there are three distinct and independent contracts: (1) the contract of sale between
the buyer and the seller, (2) the contract of the buyer with the issuing bank, and (3) the letter of credit
proper in which the bank promises to pay the seller pursuant to the terms and conditions stated therein.
x x x.

Here, what is involved is the second contract – the contract of LCDC, as the buyer of Iraqi cement, with the Bank, as the
issuer of the Letter of Credit. The Bank refers to that contract in the Petition for Review on Certiorari and the
Memorandum filed by the Bank in this case when the Bank argues that, as LCDC and the spouses Ley have admitted the
issuance of the Letter of Credit in their favor, they are “deemed to have likewise admitted the terms and conditions
thereof, as evidenced by the stipulation therein appearing above the signature of respondent Janet Ley,”39 viz:

“In consideration of your arranging, at my/o[u]r request[,] for the establishment of this commercial letter
of credit (thereinafter referred to as the [“]Credit[”]) substantially in accordance with the foregoing, I/we
hereby covenant and agree to each and all of [the] provisions and conditions stipulated on the reverse
side hereof.”40

The above stipulation actually appears on the Application and Agreement for Commercial Letter of Credit, the Bank’s
Exhibit “B.” It is the contract which contains the provisions and conditions governing the legal relationship of the Bank
and LCDC, particularly their respective rights and obligations, in connection with the Bank’s issuance of Letter of Credit
No. DC 90-303-C. The importance of the provisions and conditions supposed to be stipulated on the reverse side of the
Application and Agreement for Commercial Letter of Credit is underscored by the following note appearing below the
space for the signature of Janet Ley:

IMPORTANT: PLEASE READ PROVISIONS AND CONDITIONS ON REVERSE SIDE HEREOF BEFORE
SIGNING ABOVE.41

However, the Bank’s Exhibit “B” has nothing on its reverse side. In other words, the reverse side of the Application and
Agreement for Commercial Letter of Credit is a blank page. 42 Even the copy of the Application and Agreement for
Commercial Letter of Credit attached to the Bank’s Complaint also has nothing on its back page. 43

A cause of action – the act or omission by which a party violates the right of another44 – has three essential elements:

(1) the existence of a legal right in favor of the plaintiff;

(2) a correlative legal duty of the defendant to respect such right; and

an act or omission by such defendant in violation of the right of the plaintiff with a resulting injury or damage to
(3)
the plaintiff for which the latter may maintain an action for the recovery of relief from the defendant. 45

Although the first two elements may exist, a cause of action arises only upon the occurrence of the last element, giving
the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. 46 In this case,
however, even the legal rights of the Bank and the correlative legal duty of LCDC have not been sufficiently established
by the Bank in view of the failure of the Bank’s evidence to show the provisions and conditions that govern its legal
relationship with LCDC, particularly the absence of the provisions and conditions supposedly printed at the back of the
Application and Agreement for Commercial Letter of Credit. Even assuming arguendo that there was no impropriety in
the negotiation of the Letter of Credit and the Bank’s cause of action was simply for the collection of what it paid under
said Letter of Credit, the Bank did not discharge its burden to prove every element of its cause of action against LCDC.

This failure of the Bank to present preponderant evidence that will establish the liability of LCDC under the Letter of
Credit necessarily benefits the spouses Ley whose liability is supposed to be based on a Continuing Surety Agreement
guaranteeing the liability of LCDC under the Letter of Credit.

The Court therefore finds no reason to disturb the rulings of the courts a quo as the petition put forward insufficient
basis to warrant their reversal.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.

G.R. No. 156284 February 6, 2007

AUGUSTO GOMEZ, as Special Administrator of the Intestate Estate of Consuelo Gomez, Petitioner,
vs.
MARIA RITA GOMEZ-SAMSON, MARCIAL SAMSON, JESUS B. GOMEZ, and the REGISTER OF DEEDS OF PASIG and
MARIKINA, RIZAL, Respondents.

x----------------------x

AUGUSTO GOMEZ, as Special Administrator of the Intestate Estate of Consuelo Gomez, Petitioner,
vs.
ARISTON A. GOMEZ, SR. (who died during the pendency of the cases below and substituted by his surviving wife, LUZ
BAYSON GOMEZ, and children namely: ARISTON B. GOMEZ, JR., MA. RITA GOMEZ-SAMSON, JESUS B. GOMEZ, MA.
TERESA G. BLOOM, MARIANO B. GOMEZ, and CARLOS B. GOMEZ) and ARISTON B. GOMEZ, JR., Respondents.

DECISION

CHICO-NAZARIO, J.:

Which came first, the chicken or the egg?


This age-old question has spurned millions of debates in scientific and religious circles, and has stimulated the
imagination of generations of children and adults. Many profess that they are certain of the answer, and yet their
answers are divergent.

The case at bar involves a similarly baffling question, but in significantly lesser proportions of philosophical mystery.
Petitioner claims that, in the two Deeds of Donation he is impugning, the signatures of the donee were jotted down
before the bodies of the Deeds were typewritten. Respondents maintain that the bodies of the Deeds were encoded first,
and then, a clashing presentation of expert witnesses and circumstantial evidence ensued. Petitioner’s expert claims she
is certain of the answer: the signature came first. Respondents’ expert, on the other hand, says that it is impossible to
determine which came first accurately. As both the trial court and the Court of Appeals ruled in favor of respondents,
petitioner is furious how these courts could adopt an opinion that was "neither here nor there."

However, as it is with the chicken and egg riddle, is the person certain of which came first necessarily the one who is
more credible?

This is a Petition for Review on Certiorari of the Decision 1 and Resolution2 dated 4 September 2002 and 27 November
2002, respectively, of the Court of Appeals in CA-G.R. CV No. 40391 affirming the Joint Decision of the Regional Trial
Court (RTC) of Pasig City dated 8 April 1992 in Civil Cases No. 36089 and No. 36090.

The facts of the case, as summarized by the Court of Appeals, are as follows:

On February 15, 1980, [petitioner] instituted these cases, to wit: (1) Civil Case No. 36089, entitled: "Augusto Gomez, as
Special Administrator of the Intestate Estate of Consuelo Gomez, Plaintiff, versus Maria Rita Gomez-Samson, Marcial
Samson, Jesus B. Gomez, and the Registers of Deeds of Pasig and Marikina, Rizal, Defendants"; and (2) Civil Case No .
36090, entitled: "Augusto Gomez, as Special Administrator of the Intestate Estate of Consuelo Gomez, Plaintiff, versus
Ariston Gomez, Sr., and Ariston B. Gomez, Jr., Defendants", both in the Regional Trial Court, Pasig City.

CONSUELO, ARISTON, SR. and Angel, all surnamed Gomez, were sister and brothers, respectively. MARIA-RITA
Gomez-Samson, JESUS Gomez and ARISTON Gomez, JR. are the children of ARISTON, SR. while AUGUSTO Gomez is the
child of Angel.

In Civil Case No. 36089, plaintiff AUGUSTO alleged in his complaint that CONSUELO, who died on November 6, 1979,
was the owner of the following real properties:

"(a) A parcel of land, with all the improvements thereon, situated in Marikina, Metro Manila, covered by Transfer
Certificate of Title No. 340233 in her name, x x x;

"(b) A parcel of land, with all the improvements thereon, situated in Marikina, Metro Manila, covered by Transfer
Certificate of Title No. 353818 in her name, x x x,"

"(c) A parcel of land, with all the improvements thereon, situated in Pasig, Metro Manila, covered by Transfer Certificate
of Title No. 268396 in her name, x x x;"
that after the death of Consuelo, defendants Rita and Jesus fraudulently prepared and/or caused to be prepared a Deed
of Donation Intervivos; that in the said document, Consuelo donated the above described properties to defendants Rita
and Jesus; that the said defendants forged or caused to be forged the signature of the donor, Consuelo; that the notarial
acknowledgement on the said document was antedated to April 21, 1979; that on the basis of the said document
defendants sought the cancellation of the certificates of title in the name of Consuelo and the issuance of new ones in
the names of defendants Rita and Jesus.

On the basis of the foregoing, plaintiff prayed that the Deed of Donation Intervivos be declared false, null and void ab
initio, and/or be nullified; that TCT Nos. 340233, 353818, and 268396 be reinstated or be replaced by titles in the name of
the Intestate Estate of Consuelo Gomez; and, that defendants be ordered to pay damages, by way of attorney’s fees and
expenses of litigation plus costs.

On April 24, 1980, private defendants, and nominal defendants Registers of Deeds of Pasig and Marikina, Rizal, filed their
common answer, denying the material allegations in the complaint and asserting that a copy of the deed of donation
was submitted to the Notarial Section of the CFI of Quezon City as early as July 2, 1979; that the said document is valid
and not a forgery or otherwise subject to similar infirmity; that the said document being valid, the properties covered
therein passed in ownership to private defendants, as early as April 20, 1979; that defendants have the perfect and
absolute right to cause the cancellation of TCT Nos. 340233, 353818, and 26839 and request for the issuance of new
certificates of titles in their respective names; that they have the right to use, enjoy, possess, dispose and own these
properties; that no law was violated by the nominal defendants when the old certificates of title were cancelled and new
certificates were issued in the name of the private defendants, hence, plaintiff has no cause of action against the nominal
defendants neither has the court jurisdiction over the foregoing issue.

Defendants thereafter prayed for moral damages of ₱ 2,000,000.00; compensatory damages of ₱ 1,000,000.00;
exemplary damages of ₱500,000.00; attorney’s fees of ₱200,000.00; and that individual plaintiff be made jointly and
severally liable with the estate of Consuelo Gomez.

In Civil Case No. 36090, the same plaintiff alleged in his complaint that Consuelo was also the sole and absolute owner of
the following personal properties:

(a) Seventy-five (75) common shares of stock of V-Tri Realty, Inc. with a total par value of ₱75,000.00 and covered by
Stock Certificate No. 003;

(b) Eleven thousand eight hundred fifty three (11,853) common shares of stock of First Philippine Holdings Corporation
with a total par value of ₱118,530.00 covered by Stock Certificates Nos. A-02614 (7,443 shares) and A-02613 (2,040
shares) and A-09018 (2,370 shares);

(c) Jewelries and collector’s items, contained in Consuelo Gomez’s Safe Deposit Box No. 44 at the PCI Bank, Marikina
Branch, which were inventoried on January 9, 1980 per Order of the Court in Special Proceedings No. 9164;

(d) A four-door sedan 1978 Mercedes Benz 200 with Motor No. 11593810-050706, Serial/Chassis No. 12302050-069893,
Plate No. A6-252 and LTC Registration Certificate No. 0140373 valued at ₱200,000.00, more or less at the time Consuelo
Gomez died;
(e) A four-door sedan 1979 Toyota Corona with Motor No. 12RM-031643, Serial/Chassis No. RT-130-901150, Plate No.
B-09-373 and LTC Registration Certificate No. 0358757, valued at ₱50,000.00, more or less at the time Consuelo Gomez
died;

(f) Two hundred thousand pesos (₱200,000.00) including accrued interests on money market placement with the BA
Finance Corporation per its promissory note No. BAT-0116 dated March 9, 1978.

that after the death of Consuelo, defendants fraudulently prepared and/or caused to be prepared a Deed of
Donation Intervivos; that in the said document Consuelo donated the above described properties to defendants Ariston,
Sr. and Ariston, Jr.; that the said defendants forged or caused to be forged the signature of the donor, Consuelo; that the
notarial acknowledgment on the said document was antedated to April 21, 1979; that on the basis of the said document
defendant Ariston, Sr., [in] December 1978, effected or tried to effect a change of the LTC registration of the two (2)
vehicles; that defendant Ariston, Jr., for his part, pre-terminated the money market placements with BA Finance and
received checks in the sums of ₱187,027.74 and ₱4,405.56; that with the exception of the jewelries, which are with the
bank, defendant Ariston, Sr., has benefited and will continue to benefit from the use of the two (2) vehicles and from the
dividends earned by the shares of stocks.

On the basis of the foregoing, the plaintiff prayed that the Deed of Donation Intervivos be declared false, null and
void ab initio, and/or be nullified; that defendant Ariston, Sr., be ordered to deliver the stock certificates, jewelries,
collector’s items, and vehicles in his possession plus all the cash dividends earned by the shares of stock and reasonable
compensation for the use of the two (2) motor vehicles; that defendant Ariston, Jr. be ordered to pay the amount of ₱
191,533.00 received by him from BA Finance, with interest from the time he received the amount until he fully pays the
plaintiff; and, damages, by way of attorney’s fees and expenses of litigation, plus costs.

On March 19, 1980, defendants Ariston, Sr. and Ariston Jr., filed their answer, denying the material allegations in the
complaint and asserting that a copy of the Deed of Donation was submitted to the Notarial Section of the CFI of Quezon
City as early as July 2, 1979; that the said document is valid and not a forgery or otherwise subject to similar infirmity; t hat
the said document being valid, the properties covered therein passed in ownership to defenda nts, as early as April 20,
1979; and that defendants have the perfect and absolute right to use, enjoy, possess and own these properties.

Defendants thereafter prayed for moral damages of ₱ 2,000,000.00; compensatory damages of ₱ 1,000,000.00;
exemplary damages of ₱500,000.00; attorney’s fees of ₱200,000.00; and that individual plaintiff be made jointly and
severally liable with the estate of Consuelo Gomez.

On May 27, 1980, the plaintiff filed a Motion to Consolidate, in both cases, which the trial court in Civil Case No. 36090
granted in its Order dated June 6, 1980. Whereupon, the records of Civil Case No. 36090 were transmitted to the RTC,
Branch 23.

After appropriate proceedings, the trial court directed the parties to submit their respective memoranda th irty (30) days
from their receipt of the transcript of stenographic notes.

In its joint decision dated April 8, 1992, the trial court dismissed the complaints. 3
The dispositive portion of the RTC Joint Decision reads:

WHEREFORE, it is Ordered:

1. That the instant complaints be dismissed;

2. That the replevin bonds nos. 2223, 2224, 2225, and 2226 of the Stronghold Insurance Company, Incorporated be
cancelled;

3. That Augusto Gomez and the estate of the late Consuelo Gomez, jointly and solidarily, should pay to Ariston Gomez,
Jr. the following amounts:

Moral damages of ₱1,000,000.00;

Exemplary damages of ₱250,000.00

Attorney’s fees of ₱200,000.00

And costs of suit; with legal interest on all the amounts, except on costs and attorney’s fees, commencing from February
15, 1980, until fully paid.4

Petitioner filed a Petition for Review with the Court of Appeals. The latter affirmed the RTC’s Joint Decision in the 4
September 2002 assailed Decision, the dispositive portion of which reads:

WHEREFORE, the appealed decision is AFFIRMED in toto. 5

Petitioner filed a Motion for Reconsideration, but the same was denied by the Court of Appeals in the assailed Resolution
dated 27 November 2002.

Petitioner filed the present Petition for Review on Certiorari, bringing forth before us the following issues for our
consideration:

1) Whether or not the instant petition presents several exceptions to the general rule that an appeal by certiorari under
Rule 45 may only raise questions of law and that factual findings of the Court of Appeals are binding on this Honorable
Court;

2) Whether or not the Court of Appeals’ Decision is based on a misapprehension of facts and on inferences that are
manifestly mistaken, absurd or impossible;

3) Whether or not the Court of Appeals seriously erred in its finding of fact that Consuelo Gomez herself paid the donor’
s tax of the properties subject of the donation on 09 October 1979 when the evidence on record point to the contrary;

4) Whether or not the Court of Appeals seriously erred in giving credence to the testimony of former judge Jose
Sebastian, the Notary Public who notarized the assailed Deeds of Donation;
5) Whether or not the Court of Appeals seriously erred in dismissing the irregularities apparent on the fac e of the
assailed Deeds of Donation as mere lapses of a non-lawyer who prepared them;

6) Whether or not the Court of Appeals seriously erred in totally disregarding the very unusual circumstances relative to
the alleged totally execution and notarization of the assailed Deeds of Donation;

7) Whether or not the Court of Appeals seriously erred and is manifestly mistaken in inferring that respondents were able
to sufficiently and substantially explain the reason for the belated transfer of the pertinent prope rties covered by the
assailed Deeds of Donation;

8) Whether or not the Court of Appeals seriously erred and is manifestly mistaken in not giving due weight to the expert
opinion of the NBI representative, which the lower court itself sought; and

9) Whether or not the Court of Appeals seriously erred in not finding that the totality of circumstantial evidence
presented by petitioner produced a single network of circumstances establishing the simulation and falsification of the
assailed Deeds of Donation.6

As acknowledged by petitioner, findings of fact of the trial court, especially when upheld by the Court of Appeals, are
binding on the Supreme Court.7 Petitioner, however, seeks refuge in the following established exceptions 8 to this rule:

1) When the inference made is manifestly mistaken, absurd or impossible. 9

2) When there is grave abuse of discretion in the appreciation of facts.10

3) When the judgment is based on a misapprehension of facts. 11

4) Where the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; 12 and

5) Where the facts set forth by the petitioner are not disputed by the respondent, or where the findings of fact of the
Court of Appeals are premised on absence of evidence but are contradicted by the evidence of record. 13

Weight and Credibility of the Expert Witnesses

The core issue in this Petition, as in that in the lower courts, is whether petitioner was able to prove that the Deeds of
Donation were merely intercalated into two sheets of paper signed by Consuelo Gomez (Consuelo).

The only direct evidence presented by petitioner on this matter is the testimony of Zenaida Torres, Document
Examiner14 of the National Bureau of Investigation (NBI). Respondents, on the other hand, presented their own expert
witness, Francisco Cruz, Chief of Document Examination 15 of the PC-INP Crime Laboratory. Other direct evidence
presented by respondents includes testimonies positively stating that the Deeds of Donation were signed by Consuelo in
their completed form in the presence of Notary Public Jose Sebastian. These testimonies are that of Jose Sebastian
himself, and that of several of the respondents including Ariston Gomez, Jr. (Ariston, Jr.), who allegedly drafted said
Deeds of Donation.
As the testimony of Zenaida Torres is the single most important evidence of petitioner, it is imperative to examine the
lengthy discussion of the trial court analyzing her testimony, and the contradictory findings of Francisco Cruz.

Zenaida Torres’s testimony, as noted by the trial court, was that she had examined the two Deeds of Donation,
denominated as Documents No. 401 and No. 402, and her findings were that the signatures therein were indeed those of
Consuelo. However, she opined that Documents No. 401 and No. 402 were not typed or prepared in one continuous
sitting because the horizontal lines had some variances horizontally. Nevertheless, she admitted that the vertical lines did
not show any variance.

Zenaida Torres also testified that with respect to Document No. 401, the typewritten words "Consuelo C. Gomez" were
typed after the handwritten signature "Consuelo C. Gomez." This is based on her analysis of the letter "o" in the
handwritten signature, which touches the letter "n" in the typewritten name "Consuelo C. Gomez." She could not,
however, make any similar findings with respect to Document No. 402, because the typewritten words "Consuelo C.
Gomez" and the handwritten signature "Consuelo C. Gomez" "do not even touch" in the latter document.

Zenaida Torres failed to convince the trial court that the Deeds of Donation were not prepared in one sitting:

To start with, it is very significant that Torres herself admits that the signatures of Consuelo in the Donations 401 and 402
are genuine.

(This is contrary to the allegations of Augusto in his complaint; wherein he alleged that the signatures of Consuelo were
forged. In fact, as per the allegations, in Augusto’s complaint, the signatures were forged, after the death of Consuelo).

(In effect, Augusto is now trying to shift the thrust of his attack, to a scenario wherein Consuelo allegedly signed two
papers in blank, and thereafter, said Donations 401 and 402 were typed on top.)

Furthermore, Torres fell apart during, cross-examination. Torres admitted that she had not taken any specialized studies
on the matter of "Questioned Documents," except on one or two seminars on "Questioned Documents." She admitted
that she had not passed the Board Exams, as a Chemist; she further admitted that she has not written any thesis or similar
work on the subject matter at issue.

Regarding non-typing in one continuous sitting, she admitted that she had never seen the typewriter used to type the
Donations 401 and 402, nor even tried to get hold of it, before she made the report; that there were no variances insofar
as the vertical alignments of the typewritten documents were concerned; that there were only variances insofar as the
horizontal alignments are concerned; she admitted that if anybody had wanted to incorporate a document into a blank
sheet of paper, on top of a signature, the normal step to be taken would be to be careful on horizontal alignment, which
can be seen via the naked eye; and not the vertical alignment. Yet, the vertical alignment, as admitted by her, was
perfect.

In fact, she had to admit that it is possible that if the paper roller is loose, the horizontal alignment will have a varianc e;
whereas, the vertical alignment would have no variance, and there would be nothing sinister about this. She had to admit
this, because she was confronted with an authority on the matter, more particularly the book of Wilson Harrison (vide
Exhibit "17"). She admitted that she had not used bromide when she took the photographs of the two (2) Donations 401
and 402, which photographs she later on enlarged. She admitted that when she had taken the photographs of the two (2)
Donations, she had not put the typewritten pitch measure on top. She admitted that when the photographs were
enlarged, the alignment of the typewritten words became distorted; more so when a typewriter pitch measure is not
used, when photographing the documents.

In effect, insofar as the issue of typewriting in one sitting or not, is concerned, the testimony of Torres was completely
discredited (Vide TSN of May 19, 1986).16

On the other hand, the trial court gave weight to the testimony of Francisco Cruz:

Cruz testified on this point that the Donations 401 and 402 were both typed in one continuous sitting. He elucidated
clearly on how he arrived at this conclusion.

To start with, he was able to determine that the typewriter used was the elite typewriter, because as per Cruz, when his
typewriting measuring the instruments were placed over the documents, there were twelve (12) letters that went inside
one inch, which is a characteristic of an elite typewriter.

Secondly, he noticed that the color tone of the typewriter ink is the same, thru the entire documents.

As per Cruz, this is another indication that the Donations 401 and 402 were prepared in one continuous sitting, because,
as per Cruz, if the typewriter is used one time and sometime after that, the typewriter is used again, the color tone will
most probably be different.

He further concluded that both the horizontal and vertical alignments are in agreement. He explained how he arrived at
this conclusion.

As per Cruz, by using an instrument which is a typewriting measuring instrument produced by the Criminal Research Co.,
Inc. in the USA and placing said instrument to test the vertical alignment from the top down to the bottom, there is a
perfect vertical alignment.

In fact, as per Cruz, when he took photographs of the documents, he had already placed the typewriting measuring
instrument over the document and he showed to the court the enlarged photographs, indicating clearly that all the
vertical alignments are all in order.

He also found out that the horizontal and vertical alignments are in agreement.

He explained that the slight variances as to the spacing of the words "Know All Men By These Presents" and the words
"That I Consuelo C. Gomez, single, of legal age, Filipino, and a resident of 24 Pine Street, New Marikina Subdivision,
Marikina", there is a slight disagreement in the spacing, but not in the alignment.

He explained that the normal reason for such discrepancy in the spacing is because the typist sometimes tries to push
the variable spacer; the [button] on the left side of the roller, and if you press that round [button], there will be a variance
spacing namely one space, two spaces, and three spaces; and these are not attached so there is a variable in the spacing.
In short, this was due to the pushing of the variable paper by the typist.

Furthermore, he emphasized that the left margins are aligned and this signifies that there was typing in one continuous
sitting, because if you type on a paper and re-insert it again, there are differences in the left hand margin. All of his
findings appear in the blow up photographs which were marked as Exhibits "31" to "34".

He even pointed out the differences in the Jurat wherein admittedly, Judge Sebastian inserted the date "21ST" and "1"
(page number), "401" (document number), "I" (book number), and "82" (series); and also his signature "Jose R. Sebastian"
and his "PTR Number" (vide pages 12 to 19, TSN of April 25, 1982).

All attempts by opposite counsel to discredit the testimony of Cruz on this issue, proved futile. 17

As stated above, petitioner also alleges that the signature "Consuelo C. Gomez" was written before the typewritten name
"Consuelo C. Gomez." In this second round of analysis of the respective testimonies of Zenaida Tor res and Francisco
Cruz, the trial court arrived at the same conclusion:

[ZENAIDA TORRES’S] FINDINGS ARE BASED SOLELY ON A SINGLE HANDWRITTEN LETTER "O", WHICH TOUCHES
(DOES NOT EVEN INTERSECT) THE TYPEWRITTEN LETTER "N". BASED ON THIS, WITHOUT MORE, TORRES CONCLUDED
THAT THE TYPEWRITTEN NAME "CONSUELO C. GOMEZ" CAME AFTER THE HANDWRITTEN SIGNATURE "CONSUELO C.
GOMEZ".

We need but cite authorities on the matter (with which Authorities Torres was confronted and which authorities she had
to admit), which read as follows:

The Intersection of Ink Lines with Typescript. It is often stated that is possible to determine whether an ink line which
intersects typescript was written before or after the typing. The theory is simple; most typewriter inks are greasy and an
ink line tends to shrink in width as it passes over a greasy place on the paper. If, indeed, an ink line is observed to suffer a
distinct reduction in width every time it intersects the typescript it may safely be concluded that the ink line was written
after the typescript.

In practice, however, ink lines written across typescript are rarely seen to suffer any appreciable shrinkage in width, since
the amount of oily medium transferred from the ribbon to the paper is rarely sufficient to have any effect. Indeed, if the
ink happens to be alkaline, surplus ink, instead of shrinking, may spread out into the typescript to increase the width of
the inkline at the intersection. In the case the proof that the ink followed the typescript would be the presence of a
swelling rather than a shrinkage.

Experience has shown that it is rarely possible for any definite opinion as to the order of appearance on the paper for
intersecting ink lines and typescript to be justified on the [meager] amount of evidence which generally available.

A similar state of affairs will be found to hold for carbon paper and waxer; which have much in common with typewriter
ribbons in the way the mark they make on paper react with intersecting ink lines". (Wilson, Suspect Documents; Exhibits
"19"; "19-A"; "37"; "37-D"; underscoring ours).

In fact, the very authority of Torres on the matter, states as follows:


"Sequence of Writing

Intersecting writing strokes may have distinctive patterns, depending upon the order of writing the lapse of time
between the two writings, the density of the two strokes and the kind of inks, writing instruments, and paper used. With a
binocular microscope or a hand-magnifier aided by skillfully controlled light and photography, the true order of
preparation may be revealed and demonstrated to a lay observer.

What appears to be the obvious solution may not always be the correct answer. For example, the line of deepest color
usually appears on top even if it was written first. Careful study and testing is necessary before reaching a conclusion.
Some of the more common criteria for determining sequence are considered in the following paragraphs.

If we considered the intersection of two writing strokes or the intersection of writing and typewriting the majority of
problems are covered. Substantial, repeated intersections of two writings offer a higher probability of success than a
single indifferent intersection, such as a weak stroke crossing another which only very infrequently can produce a clear
indication of the order of writing". (Exhibits "V" and "V-1" (underscoring ours).18

The trial court again sided with Francisco Cruz who testified, citing authorities, 19 that it is impossible to determine
accurately which came first, because there were no intersections at all. 20 The trial court added: "[i]n fact, common sense,
without more, dictates that if there are no intersections (between the typewritten and the handwritten words), it would
be extremely difficult, if not impossible, to determine which came first."21 The Court of Appeals found nothing erroneous
in these findings of the trial court. 22

Petitioner claims that the testimony of Zenaida Torres, having positively maintained that the handwritten signatures
"Consuelo C. Gomez" in both Deeds of Donation were affixed before the typewritten name of Consuelo C. Gomez,
cannot possibly be overcome by the opinion of Francisco Cruz that was "neither here not there." 23

Petitioner also puts in issue the fact that Zenaida Torres was a court-appointed expert, as opposed to Francisco Cruz
who was merely designated by respondents. Petitioner also assails the credibility of Francisco Cruz on the ground that he
had once testified in favor of respondent Ariston, Jr. 24

Finally, petitioner stresses that Zenaida Torres conducted her tests on the carbon originals of both Deeds of Donation
that were then in the possession of the Notarial Register of Quezon City. On the other hand, Francisco Cruz conducted
his tests, with respect to Document No. 401, on the original in the possession of Ariston, Jr.

On the first point, we agree with petitioner that positive evidence 25 is, as a general rule, more credible than negative
evidence.26 However, the reason for this rule is that the witness who testifies to a negative may have forgotten what
actually occurred, while it is impossible to remember what never existed. 27

Expert witnesses, though, examine documentary and object evidence precisely to testify on their findings in court. It is,
thus, highly improbable for an expert witness to forget his examination of said evidence. Consequently, whereas faulty
memory may be the reason for the negative testimonies delivered by ordinary witnesses, this is unlikely to be so with
respect to expert witnesses. While we, therefore, cannot say that positive evidence does not carry an inherent advantage
over negative evidence when it comes to expert witnesses, 28 the process by which the expert witnesses arrived at their
conclusions should be carefully examined and considered.

On this respect, Prof. Wigmore states that the ordinary expert witness, in perhaps the larger proportion of the topics
upon which he may be questioned, has not a knowledge derived from personal observation. He virtually reproduces,
literally or in substance, conclusions of others which he accepts on the authority of the eminent names responsible for
them.29 In the case at bar, the expert witnesses cited sources as bases of their observations. Francisco Cruz’s statement
that "no finding or conclusion could be arrived at," 30 has basis on the sources presented both by him and by Zenaida
Torres. Both sets of authorities speak of intersecting ink lines. However, the typewritten words "Consuelo C. Gomez"
barely touch and do not intersect the handwritten signature Consuelo C. Gomez in Document No. 401. In Document No.
402, said typewritten words and handwritten signature do not even touch.

In the case at bar, therefore, the expert testimony that "no finding or conclusion can be arrived at," was found to be more
credible than the expert testimony positively stating that the signatures were affixed before the typing of the Deeds of
Donation. The former expert testimony has proven to be more in consonance with the authorities cited by both experts.

As regards the assertion that Zenaida Torres conducted her tests on the carbon originals of both Deeds of Donation
found in the notarial registrar, whereas Francisco Cruz merely examined the original in the possession of Ariston, Jr. with
respect to Document No. 401, suffice it to say that this circumstance cannot be attributed to respondents. After the
examination of the documents by Zenaida Torres, fire razed the Quezon City Hall. The carbon originals of said Deeds
were among the documents burned in the fire. Petitioner never rebutted respondents’ manifestation concerning this
incident, nor accused respondents of burning the Quezon City Hall.

Other than the above allegations, petitioner’s attack on the entire testimony of Francisco Cruz (including the part
concerning whether the Deeds were typed in one continuous sitting) rests primarily in the contention that, while Zenaida
Torres was court-appointed, Francisco Cruz’s testimony was solicited by respondents, one of whom had previously
solicited such testimony for another case.

In United States v. Trono,31 we held:

Expert testimony no doubt constitutes evidence worthy of meriting consideration, although not exclusive on questions of
a professional character. The courts of justice, however, are not bound to submit their findings necessarily to such
testimony; they are free to weigh them, and they can give or refuse to give them any value as proof, or they can even
counterbalance such evidence with the other elements of conviction which may have been adduced during the
trial. (Emphasis supplied.)

Similarly, in Espiritu v. Court of Appeals32 and Salomon v. Intermediate Appellate Court, 33 this Court held:

Although courts are not ordinarily bound by expert testimonies, they may place whatever weight they choose upon such
testimonies in accordance with the facts of the case. The relative weight and sufficiency of expert testimony is peculiarly
within the province of the trial court to decide, considering the ability and character of the witness, his actions upon the
witness stand, the weight and process of the reasoning by which he has supported his opinion, his possible bias in favor
of the side for whom he testifies, the fact that he is a paid witness, the relative opportunities for study or observation of
the matters about which he testifies, and any other matters which serve to illuminate his statements. The opinion of the
expert may not be arbitrarily rejected; it is to be considered by the court in view of all the facts and circumstances in the
case and when common knowledge utterly fails, the expert opinion may be given controlling effect (20 Am. Jur.,
1056-1058). The problem of the credibility of the expert witness and the evaluation of his testimony is left to the
discretion of the trial court whose ruling thereupon is not reviewable in the absence of an abuse of that
discretion. (Underscoring supplied.)

Thus, while the expert witness’ possible bias in favor of the side for whom he or she testifies, and the fact that he or she
is a paid witness, may be considered by the trial court, the latter should weigh the same with all the other evidence
adduced during trial, as well as with the witness’ deportment, actions, ability, and character upon the witness stand. The
trial court is consequently given the discretion in weighing all these circumstances in its determination of the expert
witness’ credibility, as it is in a better position than the appellate courts to observe the demeanor of these witnesses. As
there is no evidence of abuse of discretion on the part of the trial court in such determination, the latter is not reviewable
by this Court.

Alleged patent irregularities on the face of the assailed Deeds of Donation

As previously mentioned, the testimony of Zenaida Torres constitutes the only direct evidence presented by petitioner to
prove that the Deeds of Donation were merely intercalated over the signature of Consuelo. Petitioner, however, also
presents the following circumstantial evidence and arguments to prove the same, claiming that there are patent
irregularities on the face of the assailed Deeds of Donation:

1) Both deeds are each one-page documents contained in a letter size (8" ½" x "11") paper, instead of the usual legal size
(8" ½" x "14") paper, and typed single spaced, with barely any margin on its four sides; 34

2) In Doc. 401, three parcels of land located in two different municipalities were purportedly donated to two donees in
the same document;35

3) In Doc. 402, shares of stock in two corporations, jewelries and collector’s items in a bank deposit box, two registered
cars, cash and money placement in another bank, and a bodega were donated to three donees in the same document; 36

4) The bodega mentioned in Doc. No. 402 was not owned by Consuelo. If the Deeds were executed by Consuelo, she
would surely have known this fact as she was the treasurer of V-TRI Realty Corporation;37

5) If Doc. 401 is superimposed on Doc. 402, the signature of Consuelo on both documents appear almost in the same
place;38

6) The whole of both Deeds of Donation, including the notarial acknowledgement portion and the TAN Num bers and
Residence Certificates of the signatories, were typed with only one typewriter. The only portions that seemed to have
been typed with a different machine are the date ("21 st") below the acknowledgement and the filled-in numbers of the
"Doc. No. ___; Book No. ___; Page No. ___’" portion, the name "Jose R. Sebastian" above the words NOTARY PUBLIC and
the PTR Number with date and place of issue; 39
7) The PTR Number and its date and place of issue appear in the right hand side of the name and signature of Jose
Sebastian, instead of below it;40

8) The inserted date (which was typed with the same machine used for typing the name of notary public Jose Sebastian)
is different from the date of the clause "In WITNESS WHEREOF, the parties hereunto set their hands in Quezon City, on
the 20th day of April/1979" (which was typed with another machine; the one used in typing the body of the deed and the
body of the acknowledgment);41

9) The TAN Numbers and the Residence Certificate Numbers of the purported donor and donees have already been
typed with the same machine that was used in typing the body of the deed and the body of the acknowledgement; 42

10) It is highly questionable that a supposedly well-educated person like Ariston Gomez, Jr. would not have thought of
preparing at least five copies of each document as there were four donees and one donor. 43

The Court of Appeals ruled:

As to the alleged intercalation of the text of the deeds of donation above the supposedly priorly affixed signature of
CONSUELO on a blank sheet of bond paper, as shown by the one-page document in a letter size paper, typed single
space with barely any room left on the top, bottom and left and right margins, as well as the lack of copies thereof, it has
been explained that the same was due to the fact that the said documents were prepared by defendant ARISTON, JR., a
non-lawyer inexperienced with the way such documents should be executed and in how many copies. x x x.

xxxx

Accordingly, it is not surprising that someone as unfamiliar and inexperienced in preparing a deed of donation, or any
deed of conveyance for that matter, as ARISTON, JR., prepared the documents that are the subject matter of the case at
bar in the manner that he did. 44

Petitioner counters that the alleged irregularities "do not relate to the proper construction or manner of writing the
documents as would necessitate the expertise of a lawyer. Rather, they relate to matters as basic as observing the proper
margins at the top, left, right and bottom portions of the document, using the appropriate paper size and number of
pages that are necessary and observing appropriate spacing and proper placement of the words in the document."

All these alleged irregularities are more apparent than real. None of these alleged irregularities affects the validity of the
subject Deeds of Donation, nor connotes fraud or foul play. It is true that the condition and physical appearance of a
questioned document constitute a valuable factor which, if correctly evaluated in light of surrounding circumstances,
may help in determining whether it is genuine or forged. 45 However, neither the expert witnesses, nor our personal
examination of the exhibits, had revealed such a questionable physical condition.

Legal documents contained in 8 ½ x 11 paper are neither unheard of, nor even uncommon. The same is true with
regard to single-spaced legal documents; in fact, petitioner’s Supplemental Memorandum was actually single-spaced.

That the subject Deeds of Donation appear to have conveyed numerous properties in two sheets of paper does not
militate against their authenticity. Not all people equate length with importance. The simplicity and practicality of
organizing the properties to be donated into real and personal properties, and using one-page documents to convey
each category, are clearly appealing to people who value brevity. The same appeal of conciseness had driven petitioner
to make a single-spaced Supplemental Memorandum whose only object was to summarize the arguments he has laid
down in the original twice-as-long Memorandum,46 an endeavor that we, in fact, appreciate.

The allegation concerning the use of one typewriter to encode both Deeds of Donation, including the notarial
acknowledgment portion, TAN, and residence certificates, is purely paranoia. Being in the legal profession for many years,
we are aware that it is common practice for the parties to a contract to type the whole document, so that all the notary
public has to do is to input his signature, seal, and the numbers pertaining to his notarial registry.

The use of single-paged documents also provides an explanation as to why the PTR number and the date and place of
issue are found in the right-hand side of the name and signature of Jose Sebastian, instead of below it. We agree with
respondents that it is irrational, impractical, and contrary to human experience to use another page just to insert those
minute but necessary details. Such use of single-paged documents, taken together with the fact that the Deeds of
Donation are of almost the same length, are also the reasons why it does not baffle us that the signatures of Consuelo
appear at around the same portions of these Deeds. Indeed, we would have been suspicious had these documents been
of varying lengths, but the signatures still appear on the same portions in both.

The only observations concerning the physical appearance of the subject Deeds of Donation that truly give us doubts as
to their authenticity are the relatively small margins on the sides of the same, the lack of copies thereof, and the alleged
inclusion in Document No. 402 of a bodega allegedly not owned by Consuelo. However, these doubts are not enough to
establish the commission of fraud by respondents and to overturn the presumption that persons are innocent of crime or
wrong.47 Good faith is always presumed. 48 It is the one who alleges bad faith who has the burden to prove the
same,49 who, in this case, is the petitioner.

The small margins in the said Deeds of Donation, while indicative of sloppiness, were not necessarily resorted to because
there was a need to intercalate a long document and, thus, prove petitioner’s theory that there were only two pieces of
paper signed by Consuelo. Respondents admit that the use of one sheet of paper for both Deeds of Donation was
intentional, for brevity’s sake. While the ensuing litigation could now have caused regrets on the part of Ariston, Jr. for his
decision to sacrifice the margins for brevity’s sake, there still appears no indication that he did so maliciously. Indeed, law
professors remind bar examinees every year to leave margins on their booklets. Despite the importance examinees put
into such examinations, however, examinees seem to constantly forget these reminders.

The testimonies of Ariston Gomez, Sr. (Ariston, Sr.), Ariston, Jr., Maria Rita Gomez-Samson (Maria Rita), and Notary Public
Jose Sebastian tend to show that there were one original and two copies each of Documents No. 401 and No. 402. Of
these documents, it was the original of Document No. 402 and a duplicate original of Document No. 401 which were
actually presented by petitioner himself before the trial court, through the representative of the notarial registrar of
Quezon City, who testified pursuant to a subpoena. The latter two documents were submitted to the NBI for examination
by petitioner and by the NBI Handwriting Expert, Zenaida Torres.
Petitioner testified that he could not find copies of the two Deeds of Donation with the Bureau of Records Management .
He, however, was able to find certified true copies of these documents with the Register of Deeds and the Land
Transportation Commission.50

According to the testimony of Ariston, Jr., the original of Document No. 401 was separated from the brown envelope,
containing the other copies of the Deeds of Donation, which Jose Sebastian left with respondents, as they were trying to
fit the same into a certain red album. On the other hand, Maria Rita testified that one copy each of the duplicate originals
of Documents No. 401 and No. 402 were lost. Maria Rita explained that when she was about to leave for Spain to visit her
sister in Palma de Mallorica, her father, Ariston, Sr., gave her the brown envelope, containing duplicate originals of the
Deeds of Donation in question, to show to her sister in Palma de Mallorica. 51Maria Rita explained in detail how her
handbag was stolen as she was praying in a chapel while waiting for the connecting flight from Madrid to Palma de
Mallorica. The handbag allegedly contained not only duplicate originals of the said Deeds of Donation, but a lso other
important documents and her valuables. Maria Rita presented the police report of the Spanish police authorities 52 and
her letter to the Valley National Bank of U.S.A.,53 regarding these losses.

Notary public Jose Sebastian retained two copies of the Deeds of Donation in his files. Jose Sebastian explained t hat he
did so because Consuelo wanted two copies of each document. Since Jose Sebastian had to transmit to the Notarial
Registrar duplicate originals of the document, he had to photocopy the same to keep as his own copies, and transmit to
the Notarial Registrar whatever duplicate original copies he had. Jose Sebastian did not notice that, instead of retaining a
duplicate original of Document No. 402, what was left with him was the original. 54

While it cannot be denied that the unfortunate incidents and accidents presented by respondents do arouse some
suspicions, the testimonies of Ariston, Jr., Maria Rita, and Jose Sebastian had been carefully examined by the tr ial court,
which found them to be credible. Time and again, this Court has ruled that the findings of the trial court respecting the
credibility of witnesses are accorded great weight and respect since it had the opportunity to observe the demeanor of
the witnesses as they testified before the court. Unless substantial facts and circumstances have been overlooked or
misunderstood by the latter which, if considered, would materially affect the result of the case, this Court will
undauntedly sustain the findings of the lower court.55

All petitioner has succeeded in doing, however, is to instill doubts in our minds. While such approach would succeed if
carried out by the accused in criminal cases, plaintiffs in civil cases need to do much more to overturn findings of fact and
credibility by the trial court, especially when the same had been affirmed by the Court of Appeals. It must be stressed
that although this Court may overturn a conviction of the lower court based on reasonable doubt, overturning
judgments in civil cases should be based on preponderance of evidence, and with the further qualification that, when the
scales shall stand upon an equipoise, the court should find for the defendant. 56

Respondents also point out that Ariston, Jr., the person they claim to have prepared said Deeds of Donation, was never
confronted during the trial with all these alleged irregularities on the face of the Deeds of Donation. As such, the trial
court was never given a chance to determine whether Ariston, Jr. would have given a rational, logical and acceptable
explanation for the same.
Respondents are correct. As the alleged irregularities do not, on their faces, indicate bad faith on the part of respondents,
it is necessary for petitioner to confront respondents with these observations. Respondents would not have thought that
the Deeds of Donation would be impugned on the mere basis that they were written on short bond paper, or that their
margins are small. Respondents were thus deprived of a chance to rebut these observations by testimonies and other
evidence, and were forced to explain the same in memoranda and briefs with the appellate courts, where these
observations started to crop up. It would have been different if the date of the documents had been after Consuelo ’s
death, or if there had been obvious alterations on the documents. In the latter cases, it would have been the
responsibility of respondents’ counsel to see to it that Ariston, Jr. explain such inconsistencies.

Payment of donor’s tax before the death of Consuelo

In ruling that there had been no antedating or falsification of the subject Deeds of Donation, the Court of Appeals was
also persuaded by the following evidence: (1) the finding that it was the deceased CONSUELO herself who paid the
donor’s tax of the properties subject of the donation, as evidenced by the Philippine Commercial and Industrial Bank
(PCIB) check she issued to the Commissioner of the Bureau of Internal Revenue (BIR) on 9 October 1979, in the amount
of ₱119,283.63, and (2) the testimony and certification dated 22 November 1979 of Jose Sebastian that the said
documents were acknowledged before him on 21 April 1979. 57 Respondents had presented evidence to the effect that
Consuelo made an initial payment of ₱119,283.63 for the Donor’s Tax on 9 October 1979, while respondent Ariston, Sr.,
supplied the deficiency of ₱2,125.82 on 4 December 1979.

Petitioner claims that the Court of Appeals seriously erred in its finding of fact that Consuelo herself paid the donor’s tax
of the properties subject of the donation on 9 October 1979, as the evidence allegedly shows that the Donor ’s Tax was
paid on 4 December 1979, or a month after Consuelo’s death.58 Petitioner thereby calls our attention to his Exhibit "O," a
certificate dated 4 December 1979 issued by Mr. Nestor M. Espenilla, Chief of the Transfer Taxes Division of the BIR,
confirming the payment of the donor’s tax. The certificate reads:

LUNGSOD NG QUEZON

December 4, 1979

TO WHOM IT MAY CONCERN:

This is to certify that MS. CONSUELO C. GOMEZ of 8059 Honradez St., Makati, Metro Manila, paid
donor’s tax on even date in the amount of ₱121,409.45 inclusive of surcharge, interest and compromise
penalties as follows:

RTR No. 2814499, PTC Conf. Receipt No. 2896956 – ₱119,283.63

RTR No. 2814500/PTC Conf. Receipt No. 2896957 – 2,125.82

---------------
Total
₱121,409.45
This certification is issued upon request of Mr. Ariston Gomez, Sr.

(SGD)NESTOR M. ESPENILLA
Chief, Financing, Real Estate and Transfer

Taxes Division
TAN E2153-B0723-A-759

Petitioner highlights the fact that the Revenue Tax Receipts (RTRs) and the Confirmation Receipts for the payments
supposedly made by Consuelo on 9 October 1979 and by respondent Ariston, Sr. on 4 December 1979 bore consecutive
numbers, despite being issued months apart. Petitioner also points to the fact that the tax was stated in the certification
to have been paid "on even date" -- meaning, on the date of the certification, 4 December 1979.

Petitioner presented further the check used to pay the Donor’s Tax, which, petitioner himself admits, was signed by
Consuelo.60 Petitioner draws our attention to the words "RECEIVED – BIR, P.T.C. CUBAO BR., NON-NEGOTIABLE, T-10
DEC. 4." Petitioner concludes that Philippine Trust Company Bank, Cubao Branch, received the check on 4 December
1979 as a collection agent of the BIR.

Respondents, on the other hand, presented the following documents to prove payment of the Donor ’s Tax before the
death of Consuelo on 6 November 1979:

1) The covering letter to the BIR Commissioner dated 24 September 1979 and prepared by Mariano A. Requija,
accountant of Consuelo and Ariston, Jr., which included the Donor’s Tax Return for the properties covered by the two
Deeds of Donation. The letter was stamped received by the BIR Commissioner on 8 October 1979; 61

2) Another letter dated 24 September 1979 executed by Mariano A. Requija containing the breakdown of the donations
received by the BIR on 8 October 1979; 62

3) A schedule of gifts which was also dated 24 September 1979 and which was also received by the BIR on 8 October
1979, enumerating all the donated properties included in the Deeds of Donation. 63

4) The Donor’s Tax Return covering the properties transferred in the two Deeds of Donation filed, received, and
receipted by the BIR Commissioner on 8 October 1979; 64

5) The 9 October 1979 PCIB Personal Check No. A144-73211 issued by Consuelo in favor of the BIR Commissioner in the
amount of ₱119,283.63.65

6) An "Authority to Issue Tax Receipt" issued by the BIR Commissioner on 21 October 1979 for a total amount of ₱
119,283.63.66

Before proceeding further, it is well to note that the factum probandum 67 petitioner is trying to establish here is still the
alleged intercalation of the Deeds of Donation on blank pieces of paper containing the signatures of Consuelo. The
factum probans68 this time around is the alleged payment of the Donor’s Tax after the death of Consuelo.
Firstly, it is apparent at once that there is a failure of the factum probans, even if successfully proven, to prove in turn the
factum probandum. As intimated by respondents, payment of the Donor’s Tax after the death of Consuelo does not
necessarily prove the alleged intercalation of the Deeds of Donation on blank pieces of paper containing the signatures
of Consuelo.

Secondly, petitioner failed to prove this factum probandum.

Ariston, Jr. never testified that Consuelo herself physically and personally delivered PCIB Check No. A144-73211 to the BIR.
He instead testified that the check was prepared and issued by Consuelo during her lifetime, but that he, Ariston, Jr.,
physically and personally delivered the same to the BIR. 69 On the query, however, as to whether it was delivered to the
BIR before or after the death of Consuelo, petitioner and respondents presented all the conflicting evidence we
enumerated above.

The party asserting a fact has the burden of proving it. Petitioner, however, merely formulated conjectures based on the
evidence he presented, and did not bother to present Nestor Espenilla to explain the consecutive numbers of the RTRs
or what he meant with the words "on even date" in his certification. Neither did petitioner present any evidence that the
records of the BIR Commissioner were falsified or antedated, thus, letting the presumption that a public official had
regularly performed his duties stand. This is in contrast to respondents’ direct evidence attesting to the payment of said
tax during the lifetime of Consuelo. With respect to respondents’ evidence, all that petitioner could offer in rebuttal is
another speculation totally unsupported by evidence: the alleged fabrication thereof.

Credibility of Jose Sebastian

Petitioner claims that no credence should have been given to the testimony of the notary public, Jose Sebastian, as said
Jose Sebastian is the same judge whom this Court had dismissed from the service in Garciano v. Sebastian. 70Petitioner
posits that the dismissal of Judge Jose Sebastian from the service casts a grave pall on his credibility as a witness,
especially given how, in the course of the administrative proceedings against him, he had lied to mislead the investigator,
as well as employed others to distort the truth.

Petitioner further claims that the reliance by the Court of Appeals on the 22 November 1979 Certification by J ose
Sebastian is misplaced, considering the questionable circumstances surrounding such certification. Said certification,
marked as petitioner’s Exhibit "P," reads:

November 22, 1979

HON. ERNANI CRUZ PAÑO


Executive Judge
CFI – Quezon City

Sir:

In connection with the discrepancies noted by the Acting Clerk of Court in my notarial report pertaining
to another document submitted to the Notarial Section last July 2, 1979 I have the honor to certify that
documents Nos. 401 and 402 referring to Donations Inter Vivos executed by Donor Consuelo C. Gomez
in favor of Donees Ma. Rita Gomez-Samson et. al. were signed in my presence by all the parties and
their instrumental witnesses on April 21, 1979 in my office. I hereby further certify that said two
documents among other documents were reported by me in accordance with law on July 2, 1979, for all
legal intents and purposes.

In view of the above, it is respectfully requested that the certified true copies of the said two documents
officially requested by one of the Donees be issued.

Very respectfully,

(Sgd.) JOSE R. SEBASTIAN

Notary Public71

Petitioner points out that the Certification was made after the death of Consuelo, and claims that the same appears to be
a scheme by Jose Sebastian to concoct an opportunity for him to make mention of the subject Deeds of Donation
intervivos, "despite the plain fact that the latter had utterly no relation to the matter referred to by J ose Sebastian in the
opening phrase of the letter."72

It is well to note that, as stated by the Court of Appeals, Jose Sebastian was originally a witness for petitioner Augusto. As
such, Rule 132, Section 12, of the Rules of Court prohibits petitioner from impeaching him:

SEC. 12. Party may not impeach his own witness. – Except with respect to witnesses referred to in paragraphs (d) and (e)
of section 10, the party producing a witness is not allowed to impeach his credibility.

A witness may be considered as unwilling or hostile only if so declared by the court upon adequate showing of his
adverse interest, unjustified reluctance to testify, or his having misled the party into calling him to the witness stand.

The unwilling or hostile witness so declared, or the witness who is an adverse party, may be impeached by the party
presenting him in all respects as if he had been called by the adverse party, except by evidence of his bad character. He
may also be impeached and cross-examined by the adverse party, but such cross-examination must only be on the
subject matter of his examination-in-chief.

This rule is based on the theory that a person who produces a witness vouches for him as being worthy of credit, and
that a direct attack upon the veracity of the witness "would enable the party to destroy the witness, if he spoke against
him, and to make him a good witness, if he spoke for him, with the means in his hands of destroying his credit, if he
spoke against him."73

Neither had there been declaration by the court that Jose Sebastian was an unwilling or hostile witness. Jose Sebastian is
also neither an adverse party, nor an officer, director nor a managing agent of a public or private corporation or of a
partnership or association which is an adverse party. 74
Be that as it may, even if Jose Sebastian had been declared by the court as an unwilling or hostile witness, the third
paragraph of Section 12 as quoted above, in relation to Section 11 75 of the same Rule, only allows the party calling the
witness to impeach such witness by contradictory evidence or by prior inconsistent statements, and never by evidence of
his bad character. Thus, Jose Sebastian’s subsequent dismissal as a judge would not suffice to discredit him as a witness
in this case.

We have also ruled in People v. Dominguez, 76 which, in turn cited Cordial v. People,77 that:

(E)ven convicted criminals are not excluded from testifying in court so long as, having organs of sense, they "can perceive
and perceiving can make known their perceptions to others."

The fact of prior criminal conviction alone does not suffice to discredit a witness; the testimony of such a witness must be
assayed and scrutinized in exactly the same way the testimony of other witnesses must be examined for its relevance and
credibility. x x x. (Emphasis supplied.)

The effect of this pronouncement is even more significant in this case, as Jose Sebastian has never been convictedof a
crime before his testimony, but was instead administratively sanctioned eleven years after such testimony. Scrutinizing
the testimony of Jose Sebastian, we find, as the trial court and the Court of Appeals did, no evidence of bias on the part
of Jose Sebastian. On top of this, Jose Sebastian’s testimony is supported by the records of the notarial registry, which
shows that the documents in question were received by the Notarial Registrar on 2 July 1979, which was four months
before the death of Consuelo on 6 November 1979.

Alleged unusual circumstances relative to the execution and notarization of the subject Deeds of Donation

The last set of circumstantial evidence presented by petitioner to prove the alleged intercalation of the subject Deeds of
Donation on two blank papers signed by Consuelo are the following allegedly unusual circumstances relative to the
execution and notarization of the said deeds. According to petitioner:

1. The signing and acknowledgement of the Deeds of Donation on 21 April 1979 is highly improbable and implausible,
considering the fact that Consuelo left the same day for the United States on a pleasure trip; 78

2. The flight time of Consuelo on 21 April 1979 was 11:00 a.m.. And even assuming that the flight time was 1:00 p.m., as
contended by respondents, the ordinary boarding procedures require Consuelo to be at the airport at least two hours
before flight time, or 11:00 a.m.. Petitioner points out that respondents’ alleged time frame (from 7:00 a.m. to 11:00 a.m.)
is not enough to accomplish the following acts: respondents and Consuelo leaving Marikina at 7:00 a.m. and arriving at
the notary public Jose Sebastian’s house at Pag-asa, Q.C. at about 8:00 a.m. to 8:30 a.m.; some "small talk with Jose
Sebastian; Jose Sebastian examining the documents; Jose Sebastian having a closed meeting with Consuelo to discuss
the documents; Jose Sebastian reading the documents to respondents line by line and asking the latter whether they
accepted the donation; Jose Sebastian typing the notarial entries; the parties signing the deeds; Jose Sebastian talking
privately with Consuelo, who paid the former in cash for his services; Ariston Gomez, Jr. driving Consuelo and other
respondents back to Marikina, and dropping the other respondents at their respective residences; picking up Consuelo’s
luggage; and Ariston Gomez, Jr. bringing Consuelo to the Manila International Airport;79
3. It is contrary to human experience for Consuelo and respondents not to make a prior arrangement with the notary
public Jose Sebastian and instead take a gamble on his being in his office; 80

4. It is illogical for Consuelo to rush the execution of the donations when she was in fact planning to come back from her
pleasure trip shortly, as she did;81 1awphi1.net

5. The choice of a notary public from Quezon City is highly suspect, when Consuelo and respondents reside in Marikina.
It is also illogical that Consuelo would have chosen a notary public whom she met only on the same day she executed
the Deeds, especially when Consuelo had a regular lawyer whose notarial services she availed of only two weeks before
her death;82

6. It is improbable that Consuelo paid Jose Sebastian in cash, for there is no reason for her to carry much cash in peso
when she was about to leave for the United States in that same morning; 83

7. Maria Rita’s residence certificate was obtained from Manila when she is a resident of Marikina. Also, Maria Rita
obtained said residence certificate on 20 April 1979, and yet Maria Rita testified that she was surprised to know of the
donation only on 21 April 1979. 84 Also suspicious are the circumstances wherein Ariston Gomez, Jr. obtained a residence
certificate on 17 April 1979, when he testified that he knew of the schedule for signing only on 20 April 1979, and
Consuelo had two residence certificates, as she used different ones in the Deeds of Donation and the document
notarized two weeks before her death; 85 1awphi1.net

8. If Consuelo was really frugal, she could have also made a will;86

9. All the instrumental witnesses of the Deeds of Donation are biased, being themselves either donees of the other Deed
of Donation, or a relative of a donee; 87 and

10. Respondents were not able to sufficiently and substantially explain the belated transfer of the properties cove red by
the assailed Deeds of Donation. Petitioner points to Maria Rita’s testimony that the real properties were transferred after
the death of Consuelo. While respondents assert that the personal properties were transferred to them prior to
Consuelo’s death, evidence shows otherwise.88

This Court does not find anything suspicious in a person wanting to transfer her properties by donation to her loved
ones before leaving for abroad via an airplane. While many believe these days that taking the plane is the "safest way to
travel," this has not always been the case. The fear that planes sometimes crash, now believed to be irrational, has always
been at the back of the minds of air travelers. Respondents maintain in their testimonies before the RTC that the Deeds
were completed to the satisfaction of Consuelo only on 20 April 1979. She allegedly wanted to have the documents
signed and notarized before she left for abroad.

The claim that the flight time of Consuelo was at 11:00 a.m. is hearsay thrice removed, and thus cannot be given any
weight. Petitioner claims that he was told by his twelve-year old son that Consuelo was leaving at 11:00 a.m. on 21 April
1979, such son having learned about this from the maid of Consuelo when the son called Consuelo’s house that
day.89 This is in contrast to Maria Rita’s positive testimony that the flight time was at 1:00 p.m. on the same day. 90 Maria
Rita joined Consuelo in this flight.
As regards petitioner’s claim that respondents’ alleged time frame in the morning of 21 April 1979 was insufficient, this
Court is not convinced. As held by the Court of Appeals, petitioner did not present any proof that it had been impossible
to perform those alleged acts within three hours. 91 As argued by respondents, the one-paged documents can be read
aloud without difficulty within five to ten minutes each. We can also take judicial notice of the fact that traff ic is usually
very minimal on Saturday mornings, and was much less of a problem in 1979.

Respondents and Consuelo’s decision not to make a prior arrangement with notary public Jose Sebastian does not
surprise us either. Respondents explain that, since the telephone lines of Marikina were inefficient in the year 1979, they
decided to take a calculated gamble. It is not at all unreasonable to expect that Jose Sebastian would be at his house on
a Saturday, at around 8:00 a.m.

With respect to the choice of a notary public from Quezon City, we find the explanation relative thereto satisfying. We
quote:

Moreover, ARISTON, JR. disclosed that they could not have gone to the notary public whom his aunt, CONSUELO, knew
because she did not want to go to said notary public since our cousins whom she didn’t like had access to him and she
wanted to keep the execution of the deeds confidential. Thus:

Q: And also you know for a fact that your auntie had a regular Notary Public for the preparation and notarization of legal
documents in the name of Atty. Angeles, now Congressman Angeles of Marikina, is that correct?

A: It depends on the frame of time. Yes and No. He was a regular Notary Public, but way before that date. But after that,
he fall out of graces of my auntie. He was not anymore that regular.

Q: How long before April 30 did he fall out of graces of your auntie, year before that?

A: I don’t specifically remember but what I do know is such confidential document like this, we would not really go to
Angeles.

Q: Even for notarization purposes?

xxxx

A: Even for notarization purposes, no sir. This confidential nature, no.

ATTY. FERRY:

Are you saying that your auntie trusted more Sebastian than Angeles?

A: No. He is trusting her own experience about Atty. Angeles.

Q: Are you saying that she had sad experience with Atty. Angeles in connection with the latter’s performance of his duty
as Notary Public, as a lawyer?

A: That is what she told me.


Q: When was that?

A: She will tell me that regularly.

xxxx

ATTY. FERRY:

Q: Mr. Gomez, you testified last April 6, 1989 that after the execution of the two documents in question dated April 20,
1979, Atty. Angeles fell out of the graces of your auntie and you added that as a consequence, your auntie did not avail
of the notarial services of Atty. Angeles when it comes to confidential matters, is that correct?

A: Yes. After that particular execution of the Deed of Donation Inter Vivos, Atty. Angeles especially if the documents are
confidential in nature.

Q: You used confidential matters, did your aunt spell out what these confidential matters are?

A: This particular document, Deed of Donation was under the category "confidential".

Q: But did you discuss this, the matter of notarizing this document by Atty. Angeles with your auntie such that she made
known to you this falls under confidential matters?

A: Yes we did.

Q: So in other words, you intimated to your auntie that Atty. Angeles would possibly notarized these documents?

A: No.

Q: How did it come about that your auntie gave that idea or information that these documents should be notarized by
other notary public other than Angeles, because it is confidential?

A: It came from her.

Q: Yes, did she tell you that?

ATTY. GUEVARRA:

That’s what he said. "It came from her".

ATTY. FERRY:

My question is, how did it come about your auntie told you that these two documents are of confidential matters?

A: Well, no problem. I said that it has to be notarized, she said more or less, "ayaw ko kay Atty. Angeles".

Q: She said that?


A: That’s correct.

Q: And you were curious to know why she told you that?

A: No. I knew why she told me that. She said that Atty. Angeles….well, my cousins whom she didn’t like have access to
Atty. Angeles.92

The Court of Appeals had fully explained that the belated transfer of the properties does not affect the validity or effects
of the donations at all, nor dent the credibility of respondents’ factual assertions:

Per our perusal of the records, we find that the defendants were able to sufficiently and substantially explain the reason
for the belated transfer of the pertinent properties, i.e., after the death of CONSUELO. Thus, the testimony of MA. RITA
revealed, insofar as the real properties are concerned, the following:

"Q: Since you were already aware as you claim that as early as when you went to the States in the company of your
auntie, Consuelo Gomez, these 2 parcels of land together with the improvements consisting of a house were transferred
to you, you did not exert efforts after your arrival from the States to effect the transfer of these properties?

"A: No, I did not.

"Q: Why?

"A: Well, for delicadeza. My auntie was still alive. I am not that aggressive. Tita Elo told me "akin na iyon" but I did not
transfer it in my name. "Siempre nakakahiya."

"Q: That was your reason for not effecting the transfer of the properties in your name?

"A: Yes, that was my reason.

"Q: Did you not know that the deed supposedly executed by Consuelo Gomez was a donation inter vivos, meaning, it
takes effect during her lifetime?

"A: I do not know the legal term donation inter vivos. I have also my sentiment. Tita Elo was very close to us but I did not
want to tell her: "Tita Elo, ibigay mo Na iyan SA akin. Itransfer mo na sa pangalan ko." It is not my character to be very
aggressive."

In addition, Article 712 of the Civil Code provides:

"ART. 712. Ownership is acquired by occupation and by intellectual creation.

"Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and
intestate succession, and in consequence of certain contracts, by tradition.

"They may also be acquired by means of prescription."


Clearly, the issuance of the titles in the names of the defendants is not the mode by which they acquired ownership of
the properties, but rather the fact that the same were donated to them. The circumstance that aforesaid properties were
actually transferred in the names of the donees only after the death of the donor, although the deeds of donation were
dated April 21, 1979, does not by itself indicate that the said documents were antedated. 93

Petitioner seems to unduly foreclose the possibility – one which experience tells us is not a rare occurrence at all – that
donations are often resorted to in place of testamentary dispositions, often for the purpose of tax avoidance. Such
properties usually remain in the donor’s possession during his or her lifetime, despite the fact that the donations have
already taken effect. Nevertheless, the purpose of utilizing donation as a mode to transfer property is not in issue here.

Finally, the allegations concerning the payment of Jose Sebastian in cash, the suggestion that Consuelo should have also
made a will, and the claim that all the instrumental witnesses of the will are biased, are purely speculative.

In sum, all these circumstantial evidence presented by petitioner had failed to comply with the strict requirements in
using circumstantial evidence, for which Section 4, Rule 133 of the Rules of Court provides:

SEC. 4. Circumstantial evidence, when sufficient. – Circumstantial evidence is sufficient for conviction if:

(a) There is more than one circumstance;

(b) The facts from which the inferences are derived are proven; and

(c) The combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.

While the above provision seems to refer only to criminal cases, it has been pointed out that in some jurisdictions, no
distinction is made between civil and criminal actions as to the quality of the burden of establishing a proposition by
circumstantial evidence. In such jurisdictions the rule is generally stated to be that the circumstances established must
not only be consistent with the proposition asserted but also inconsistent with any other rational theory. 94

In all, what petitioner has succeeded in doing is to raise doubts in our minds. Again, while such approach would succeed
if carried out by the accused in criminal cases, plaintiffs in civil cases need to do much more to overturn findings of fact
and credibility by the trial court, especially when the same had been affirmed by the Court of Appeals.

Leniency in the weighing of petitioner’s evidence could only produce a mere equipoise:

When the scales shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or
the other, the court will find for the defendant.

Under this principle, the plaintiff must rely on the strength of his evidence and not on the weaknesses of the defendant ’
s claim. Even if the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of
evidence on his side if such evidence is insufficient in itself to establish his cause of action."95 (Emphasis supplied.)

Petitioner’s liability for damages


The last part of the trial court’s decision, which was affirmed in toto by the Court of Appeals, involves the award of
damages in favor of Ariston, Jr. The trial court held Augusto Gomez and the estate of the late Consuelo "jointly and
solidarily liable" for moral and exemplary damages, and attorney’s fees.

The trial court held:

The records are clear, that plaintiff was so desperate for evidence to support his charges, that he repeatedly subpoenaed
the defendants themselves; at the risk of presenting evidence contradictory to his legal position and which actually
happened, when plaintiff subpoenaed Ariston Gomez Jr., Ariston Gomez Sr., and Maria Rita Gomez-Samson, as his
witnesses.

All told, the court finds plaintiff was motivated not by a sincere desire to insure the totality of the estate of Consuelo, b ut
rather by his desire to cause injury to defendants, and to appropriate for himself and the rest of the Gomez brothers and
nephews, other than the donees, properties which were clearly validly disposed of by Consuelo, via Donations Inter
Vivos.96

Our own examination of the records of the case, however, convinces us of the contrary. Respondents never assailed the
authenticity of petitioner’s evidence, and merely presented their own evidence to support their assertions. As previously
stated, petitioner’s evidence had successfully given us doubts as to the authenticity of the subject Deeds of Donation.
While such doubts are not enough to discharge petitioner’s burden of proof, they are enough to convince us that
petitioner’s institution of the present case was carried out with good faith. The subpoenas directed against respondents
merely demonstrate the zealous efforts of petitioner’s counsel to represent its client, which can neither be taken against
the counsel, nor against its clients.

While, as regards the alleged intercalation of the Deeds of Donation on two blank sheets of paper signed by Consuelo,
the burden of proof lies with petitioner, the opposite is true as regards the damages suffered by the respondents. Having
failed to discharge this burden to prove bad faith on the part of petitioner in instituting the case, petitioner cannot be
responsible therefor, and thus cannot be held liable for moral damages.

This Court has also held that, in the absence of moral, temperate, liquidated or compensatory damages, no exemplar y
damages can be granted, for exemplary damages are allowed only in addition to any of the four kinds of damages
mentioned.97

The attorney’s fees should also be deleted, as it was supposed to be the consequence of a clearly unfounded civil action
or proceeding by the plaintiff.

WHEREFORE, subject to the modification of the assailed Decision, the Petition is DENIED. The Joint Decision of the
Regional Trial Court of Pasig City in Civil Cases No. 36089 and No. 36090, which was affirmed in toto by the Court of
Appeals, is AFFIRMED with MODIFICATION that the following portion be DELETED:

3. That Augusto Gomez and the estate of the late Consuelo Gomez, jointly and solidarily should pay to Ariston Gomez, Jr.
the following amounts:
Moral damages of ₱1,000,000.00;

Exemplary damages of ₱250,000.00

Attorney’s fees of ₱200,000.00

And costs of suit; with legal interest on all the amounts, except on costs and attorney’s fees, commencing from February
15, 1980, until fully paid.

SO ORDERED.

B. PURPOSE

C. SCOPE

G.R. No. 177188 December 4, 2008

EL GRECO SHIP MANNING AND MANAGEMENT CORPORATION, petitioner,


vs.
COMMISSIONER OF CUSTOMS, respondent.
DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court , filed by petitioner El
Greco Ship Manning and Management Corporation (El Greco), seeking to reverse and set aside the Decision 1 of the
Court of Tax Appeals (CTA) En Banc dated 14 March 2007 in C.T.A. EB No. 162. In its assailed Decision, the CTA En
Banc affirmed the Decision2 dated 17 October 2005 of the CTA Second Division in CTA Case No. 6618, ordering the
forfeiture of the vessel M/V Criston, also known as M/V Neptune Breeze, for having been involved in the smuggling of
35,000 bags of imported rice.

The factual and procedural antecedents of this case are as follows:

On 23 September 2001, the vessel M/V Criston docked at the Port of Tabaco, Albay, carrying a shipment of 35,000 bags
of imported rice, consigned to Antonio Chua, Jr. (Chua) and Carlos Carillo (Carillo), payable upon its delivery to Albay.
Glucer Shipping Company, Inc. (Glucer Shipping) is the operator of M/V Criston. 3

Upon the directive of then Commissioner Titus Villanueva of the Bureau of Customs (BOC), a Warrant of Seizure and
Detention, Seizure Identification No. 06-2001, was issued by the Legaspi District Collector, on 23 September 2001 for the
35,000 bags of imported rice shipped by M/V Criston, on the ground that it left the Port of Manila without the necessary
clearance from the Philippine Coast Guard. Since the earlier Warrant covered only the cargo, but not M/V Criston which
transported it, a subsequent Warrant of Seizure and Detention, Seizure Identification No. 06-2001-A, was issued on 18
October 2001 particularly for the said vessel. The BOC District Collector of the Port of Legaspi thereafter commenced
proceedings for the forfeiture of M/V Criston and its cargo under Seizure Identification No. 06-2001-A and Seizure
Identification No. 06-2001, respectively.4

To protect their property rights over the cargo, consignees Chua and Carillo filed before the Regional Trial Court (RTC) of
Tabaco, Albay, a Petition for Prohibition with Prayer for the Issuance of Preliminary Injunction and Temporary Restraining
Order (TRO) assailing the authority of the Legaspi District Collectors to issue the Warrants of Seizure and Detention and
praying for a permanent injunction against the implementation of the said Warrants. Their Petition was docketed as Civil
Case No. T-2170.5

After finding the Petition sufficient in form and substance and considering the extreme urgency of the matter involved,
the RTC issued a 72-hour TRO conditioned upon the filing by Chua and Carillo of a bond in the amount
of P31,450,000.00, representing the value of the goods. After Chua and Carillo posted the required bond, the 35,000
bags of rice were released to them. 6

The Legaspi District Collector held in abeyance the proceedings for the forfeiture of M/V Criston and its cargo under
Seizure Identification No. 06-2001 and Seizure Identification No. 06-2001-A pending the resolution by the RTC of Civil
Case No. T-2170. When the RTC granted the Motion to Dismiss Civil Case No. T-2170 filed by the BOC, the Legaspi
District Collector set the hearing of Seizure Identification No. 06-2001 and Seizure Identification No. 06-2001-A. A notice
of the scheduled hearing of the aforementioned seizure cases was sent to Glucer Shipping but it failed to appear at the
hearing so set. After a second notice of hearing was ignored by Glucer Shipping, the prosecutor was allowed to present
his witnesses.7

In the meantime, while M/V Criston was berthing at the Port of Tabaco under the custody of the BOC, the Province of
Albay was hit by typhoon "Manang." In order to avert any damage which could be caused by the typhoon, the vessel was
allowed to proceed to another anchorage area to temporarily seek shelter. After typhoon "Manang" had passed through
Albay province, M/V Criston, however, failed to return to the Port of Tabaco and was nowhere to be found.8

Alarmed, the BOC and the Philippine Coast Guard coordinated with the Philippine Air Force to find the missing vessel.
On 8 November 2001, the BOC received information that M/V Criston was found in the waters of Bataan sporting the
name of M/V Neptune Breeze.9

Based on the above information and for failure of M/V Neptune Breeze to present a clearance from its last port of call, a
Warrant of Seizure and Detention under Seizure Identification No. 2001-208 was issued against the vessel by the BOC
District Collector of the Port of Manila. 10

For the same reasons, the Legaspi District Collector rendered a Decision on 27 June 2002 in Seizure Identification No.
06-2001 and Seizure Identification No. 06-2001-A ordering the forfeiture of the M/V Criston, also known as M/V Neptune
Breeze, and its cargo, for violating Section 2530 (a), (f) and (k) of the Tariff and Customs Code. 11

In the meantime, El Greco, the duly authorized local agent of the registered owner of M/V Neptune Breeze, Atlantic
Pacific Corporation, Inc. (Atlantic Pacific), filed with the Manila District Collector, in Seizure Identification No. 2001 -208, a
Motion for Intervention and Motion to Quash Warrant of Seizure Detention with Urgent Prayer for the Immediate
Release of M/V Neptune Breeze. El Greco claimed that M/V Neptune Breeze was a foreign registered vessel owned by
Atlantic Pacific, and different from M/V Criston which had been involved in smuggling activities in Legaspi, Albay. 12

Acting favorably on the motion of El Greco, the Manila District Collector issued an Order13 dated 11 March 2002 quashing
the Warrant of Seizure and Detention it issued against M/V Neptune Breeze in Seizure Identification No . 2001-208 for
lack of probable cause that the said vessel was the same one known as M/V Criston which fled from the jurisdiction of
the BOC Legaspi District after being seized and detained therein for allegedly engaging in smuggling activities.
According to the decretal part of the Manila District Collector’s Order:

WHEREFORE, pursuant to the authority vested in me by law, it is hereby ordered and decreed that the Warrant of Seizure
and Detention issued thereof be Quashed for want of factual or legal basis, and that the vessel "M/V Neptune Brreze" be
released to [El Greco] after clearance with the Commissioner of Customs, proper identification and compliance with
existing rules and regulations pertinent in the premises.

On automatic review by BOC Commissioner Antonio Bernardo, the Order dated 11 March 2002 of the District Collector of
the Port of Manila was reversed after finding that M/V Neptune Breeze and M/V Criston were one and the same and that
the Legaspi District Collector had already acquired prior jurisdiction over the vessel. The Decision dated 15 January 2003
of the BOC Commissioner, contained in his 2 nd Indorsement14 to the Manila District Collector, decreed:
Respectfully returned to the District Collector, POM, the within case folders in POM S. I. No. 2001 -208, EL GRECO SHIP
MANNING AND MANAGEMENT CORPORATION, Claimant/Intervenor, with the information that the Decision of that
Port in the aforesaid case is hereby REVERSED in view of the following reasons:

1. Subject vessel MV "NEPTUNE BREEZE" and MV "CRISTON" are one and the same as shown by the vessels documents
retrieved by the elements of the Philippine Coast Guard from MV "CRISTON" during the search conducted on board
thereof when the same was apprehended in Tabaco, Albay, indicating therein the name of the vessel MV "NEPTUNE
BREEZE," the name of the master of the vessel a certain YUSHAWU AWUDU, etc. These facts were corroborated by the
footage of ABS-CBN taken on board the vessel when the same was subjected to search.

2. Hence, prior jurisdiction over the said vessel was already acquired by the Port of Legaspi when the said Port issued
WSD S.I. No. 06-2001-A and therefore, the Decision of the latter Port forfeiting the subject vessel supercedes the
Decision of that Port ordering its release.

Seeking the reversal of the Decision dated 15 January 2003 of the BOC Commissioner, El Greco filed a Petition for Review
with the CTA which was lodged before its Second Division as CTA Case No. 6618. El Greco averred that the BOC
Commissioner committed grave abuse of discretion in ordering the forfeiture of the M/V Neptune Breeze in the absence
of proof that M/V Neptune Breeze and M/V Criston were one and the same vessel.15 According to El Greco, it was highly
improbable that M/V Criston was merely assuming the identity of M/V Neptune Breeze in order to evade liabil ity since
these were distinct and separate vessels as evidenced by their Certificates of Registry. While M/V Neptune Breeze was
registered in St. Vincent and the Grenadines 16 as shown in its Certificate of Registry No. 7298/N, M/V Criston was
registered in the Philippines. Additionally, El Greco argued that the Order dated 11 March 2002 of the Manila District
Collector already became final and executory for failure of the BOC Commissioner to act thereon within a period of 30
days in accordance with Section 2313 of the Tariff and Customs Code.

On 17 October 2005, the CTA Second Division rendered a Decision 17 in CTA Case No. 6618 sustaining the 15 January 2003
Decision of the BOC Commissioner ordering the forfeiture of M/V Neptune Breeze. Referring to the crime laboratory
report submitted by the Philippine National Police (PNP) stating that the serial numbers of the engines and the
generators of both M/V Criston and M/V Neptune Breeze were identical, the CTA Second Division concluded that both
vessels were indeed one and the same vessel. The CTA Second Division further ruled that nothing in the provisions of
Section 2313 of the Tariff and Customs Code could buttress El Greco’s contention that the Order dated 11 March 2002 of
the Manila District Collector already became final and executory. The dispositive portion of the Decision of the CTA
Second Division reads:

WHEREFORE, premises considered, the present Petition for Review is hereby DISMISSED. The Decision in the
2nd Indorsement dated January 15, 2003 of then Commissioner Bernardo is hereby AFFIRMED.18

In a Resolution19 dated 7 February 2006, the CTA Second Division denied the Motion for Reconsideration of El Greco for
failure to present issues that had not been previously threshed out in its earlier Decision.

Undaunted, El Greco elevated its case to the CTA En Banc through a Petition for Review, docketed as C.T.A. EB No. 162,
this time lamenting that it was being deprived of its property without due process of law. El Greco asserted that the CTA
Second Division violated its constitutional right to due process when it upheld the forfeiture of M/V Neptune Breeze o n
the basis of the evidence presented before the Legaspi District Collector in Seizure Identification No. 06-2001 and Seizure
Identification No. 06-2001-A, of which El Greco was not notified and in which it was not able to participate. 20

In its Decision21 promulgated on 14 March 2007, the CTA En Banc declared that the CTA Second Division did not commit
any error in its disquisition, and dismissed the Petition of El Greco in C.T.A. EB No. 162 for lack of merit. According to th e
CTA En Banc, the appreciation and calibration of evidence on appeal (from the ruling of the BOC) lies within the sound
discretion of its Division, and the latter’s findings and conclusions cannot be set aside unless it has been sufficiently
shown that they are not supported by evidence on record. The CTA En Banc thus disposed:

WHEREFORE, the instant petition is hereby DISMISSED. Accordingly, the assailed Decision promulgated on October 17,
2005 and Resolution dated February 7, 2006 of the Second Division of this Court, are hereby AFFIRMED. 22

Without filing a Motion for Reconsideration with the CTA, El Greco already sought recourse before this Court via this
Petition for Review on Certiorari, raising the following issues:

I.

WHETHER OR NOT EL GRECO WAS DENIED OF ITS RIGHT TO DUE PROCESS.

II.

WHETHER OR NOT M/V NEPTUNE BREEZE AND M/V CRISTON ARE ONE AND THE SAME VESSEL.

III.

WHETHER OR NOT M/V NEPTUNE BREEZE IS QUALIFIED TO BE THE SUBJECT OF FORFEITURE UNDER SECTION 2531 OF
THE TARIFF AND CUSTOMS CODE.

The primordial issue to be determined by this Court is whether M/V Neptune Breeze is one and the same as M/V Criston
which had been detained at the Port of Tabaco, Albay, for carrying smuggled imported rice and had fled the custody of
the customs authorities to evade its liabilities.

El Greco insists that M/V Neptune Breeze and M/V Criston are not the same vessel. In support of its position, El Greco
again presents the foreign registration of its vessel as opposed to the local registration of M/V Criston.

The CTA En Banc, however, affirming the findings of the CTA Second Division, as well as the Legaspi District Collector,
concluded otherwise.

We sustain the determination of the CTA En Banc on this matter.

Well-entrenched is the rule that findings of facts of the CTA are binding on this Court and can only be disturbed on
appeal if not supported by substantial evidence. 23 Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. 24
A review of the records of the present case unveils the overwhelming and utterly significant pieces of evidence that more
than meets the quantum of evidence necessary to establish that M/V Neptune Breeze is the very same vessel as M/V
Criston, which left the anchorage area at Legaspi, Albay, without the consent of the customs authorities therein while
under detention for smuggling 35,000 bags of imported rice.

The crime laboratory report of the PNP shows that the serial numbers of the engines and generators of the two vessels
are identical. El Greco failed to rebut this piece of evidence that decisively identified M/V Neptune Breeze as the same as
M/V Criston. We take judicial notice that along with gross tonnage, net tonnage, length and breadth of the vessel, the
serial numbers of its engine and generator are the necessary information identifying a vessel. In much the same way, the
identity of a land motor vehicle is established by its unique motor and chassis numbers. It is, thus, highly improbable that
two totally different vessels would have engines and generators bearing the very same serial numbers; and the only
logical conclusion is that they must be one and the same vessel.

Equally significant is the finding of the Legaspi District Collector that all the documents submitted by M/V Criston were
spurious, including its supposed registration in the Philippines. In a letter dated 14 March 2002, Marina Administrator
Oscar M. Sevilla attested that M/V Criston was not registered with the Marina.

Finally, Customs Guard Adolfo Capistrano testified that the features of M/V Criston and M/V Neptune Breeze were
similar; while Coast Guard Commander Cirilo Ortiz narrated that he found documents inside M/V Criston bearing the
name M/V Neptune Breeze. These testimonies further fortified the conclusion reached by the Legaspi District Collec tor
that M/V Criston and M/V Neptune Breeze were one and the same.

We also take note that the purported operator of M/V Criston, Glucer Shipping, was a total no-show at the hearings held
in Seizure Identification No. 06-2001 and Seizure Identification No. 06-2001-A before the Legaspi District Collector.
Despite being sent several notices of hearing to its supposed address, Glucer Shipping still failed to appear in the said
proceedings. It becomes highly unfathomable for an owner to ignore proceedings for the seizure of its vessel, risking the
loss of a property of enormous value.

From the foregoing, we can only deduce that there is actually no Glucer Shipping and no M/V Criston. M/V Criston
appears to be a mere fictional identity assumed by M/V Neptune Breeze so it may conduct its smuggling activities with
little risk of being identified and held liable therefor.

We cannot give much credence to the self-serving denial by El Greco that M/V Neptune Breeze is not the same as M/V
Criston in light of the substantial evidence on record to the contrary. The foreign registration of M/V Neptune Breeze
proves only that it was registered in a foreign country; but it does not render impossible the conclusions consistently
reached by the Legaspi District Collector, the CTA Second Division and the CTA en banc, and presently by this Court, that
M/V Neptune Breeze was the very same vessel used in the conduct of smuggling activities in the name M/V Criston.

Neither can we permit El Greco to evade the forfeiture of its vessel, as a consequence of its being used in smuggling
activities, by decrying denial of due process.

In administrative proceedings, such as those before the BOC, technical rules of procedure and evidence are not strictly
applied and administrative due process cannot be fully equated with due process in its strict judicial sense. 25The essence
of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to
explain one's side or an opportunity to seek reconsideration of the action or ruling complained of. 26

Although it was not able to participate in the proceedings in Seizure Identification No. 06-2001 and Seizure Identification
No. 06-2001-A before the Legaspi District Collector, it had ample opportunity to present its side of the controversy in
Seizure Identification No. 2001-208 before the Manila District Collector. To recall, full proceedings were held before the
Manila District Collector in Seizure Identification No. 2001-208. Even the evidence presented by El Greco in the latter
proceedings fails to persuade. The only vital evidence it presented before the Manila District Collector in Seizure
Identification No. 2001-208 was the foreign registration of M/V Neptune Breeze. It was still the same piece of evidence
which El Greco submitted to this Court. Even when taken into consideration and weighed against each other, the
considerably sparse evidence of El Greco in Seizure Identification No. 2001-208 could not successfully refute the
substantial evidence in Seizure Identification No. 06-2001 and Seizure Identification No. 06-2001-A that M/V Neptune
Breeze is the same as M/V Criston.

Moreover, the claim of El Greco that it was denied due process flounders in light of its ample opportunity to rebut the
findings of the Legaspi District Collector in Seizure Identification No. 06-2001 and No. 06-2001-A before the CTA Second
Division in CTA Case No. 6618 and the CTA En Banc in C.T.A. EB No. 162, and now before this Court in the Petition at bar.
Unfortunately, El Greco was unable to make full use to its advantage of these repeated opportunities by offering all
possible evidence in support of its case. For example, evidence that could establish that M/V Neptune Breeze was
somewhere else at the time when M/V Criston was being held by customs authority at the Port of Legaspi, Albay, would
have been helpful to El Greco’s cause and very easy to secure, but is glaringly absent herein.

After having established that M/V Neptune Breeze is one and the same as M/V Criston, we come to another crucial issue
in the case at bar, that is, whether the order of forfeiture of the M/V Neptune Breeze is valid.

The pertinent provisions of the Tariff and Customs Code read:

SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law . – Any vehicle, vessel or aircraft, cargo, articles
and other objects shall, under the following conditions, be subject to forfeiture:

a. Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully in the importation or exportation of
articles or in conveying and/or transporting contraband or smuggled articles in commercial quantities into or from any
Philippine port or place. The mere carrying or holding on board of contraband or smuggled articles in commercial
quantities shall subject such vessel, vehicle, aircraft or any other craft to forfeiture; Provided, That the vessel, or aircraft or
any other craft is not used as duly authorized common carrier and as such a carrier it is not chartered or leased;

xxxx

f. Any article, the importation or exportation of which is effected or attempted contrary to law, or any article of prohibited
importation or exportation, and all other articles which, in the opinion of the Collector, have been used, are or were
intended to be used as instruments in the importation or exportation of the former;

xxxx
k. Any conveyance actually being used for the transport of articles subject to forfeiture under the tariff and customs laws,
with its equipage or trappings, and any vehicle similarly used, together with its equipage and appurtenances including
the beast, steam or other motive power drawing or propelling the same. The mere conveyance of contraband or
smuggled articles by such beast or vehicle shall be sufficient cause for the outright seizure and confiscation of such beast
or vehicle, but the forfeiture shall not be effected if it is established that the owner of the means of conveyance used as
aforesaid, is engaged as common carrier and not chartered or leased, or his agent in charge thereof at the time has no
knowledge of the unlawful act.

The penalty of forfeiture is imposed on any vessel engaged in smuggling, provided that the following conditions are
present:

(1) The vessel is "used unlawfully in the importation or exportation of articles into or from" the Philippines;

(2) The articles are imported to or exported from "any Philippine port or place, except a port of entry"; or

(3) If the vessel has a capacity of less than 30 tons and is "used in the importation of articles into any Philippine port or
place other than a port of the Sulu Sea, where importation in such vessel may be authorized by the Commissioner, with
the approval of the department head." 27

There is no question that M/V Neptune Breeze, then known as M/V Criston, was carrying 35,000 bags of imported rice
without the necessary papers showing that they were entered lawfully through a Philippine port after the payment of
appropriate taxes and duties thereon. This gives rise to the presumption that such importation was illegal. Consequently,
the rice subject of the importation, as well as the vessel M/V Neptune Breeze used in importation are subject to forfeiture.
The burden is on El Greco, as the owner of M/V Neptune Breeze, to show that its conveyance of the rice was actually
legal. Unfortunately, its claim that the cargo was not of foreign origin but was merely loaded at North Harbor, Manila,
was belied by the following evidence - the Incoming Journal of the Philippine Coast Guard, Certification issued by the
Department of Transportation and Communications (DOTC) Port State Control Center of Manila, and the letter dated 4
October 2001 issued by the Sub-Port of North Harbor Collector Edward de la Cuesta, confirming that there was no such
loading of rice or calling of vessel occurring at North Harbor, Manila. It is, therefore, uncontroverted that the 35,000 bags
of imported rice were smuggled into the Philippines using M/V Neptune Breeze.

We cannot give credence to the argument of El Greco that the Order dated 11 March 2002 of the Manila District
Collector, finding no probable cause that M/V Neptune Breeze is the same as M/V Criston, has already become final and
executory, thus, irreversible, pursuant to Section 2313 of the Tariff and Customs Code. According to said provision:

SEC. 2313. Review of Commissioner. – The person aggrieved by the decision or action of the Collector in any matter
presented upon protest or by his action in any case of seizure may, within fifteen (15) days after notification in writing by
the Collector of his action or decision, file a written notice to the Collector with a copy furnished to the Commissioner of
his intention to appeal the action or decision of the Collector to the Commissioner. Thereupon the Collector shall
forthwith transmit all the records of the proceedings to the Commissioner, who shall approve, modify or reverse the
action or decision of the Collector and take such steps and make such orders as may be necessary to give effect to his
decision: Provided, That when an appeal is filed beyond the period herein prescribed, the same shall be deemed
dismissed.
If in any seizure proceedings, the Collector renders a decision adverse to the Government, such decision shall be
automatically reviewed by the Commissioner and the records of the case elevated within five (5) days from the
promulgation of the decision of the Collector. The Commissioner shall render a decision on the automatic appeal within
thirty (30) days from receipts of the records of the case. If the Collector’s decision is reversed by the Commissioner, the
decision of the Commissioner shall be final and executory. However, if the Collector’s decision is affirmed, or if within
thirty (30) days from receipt of the record of the case by the Commissioner no decision is rendered or the decision
involves imported articles whose published value is five million pesos (P5,000,000.00) or more, such decision shall be
deemed automatically appealed to the Secretary of Finance and the records of the proceedings shall be elevated within
five (5) days from the promulgation of the decision of the Commissioner or of the Collector under appeal, as the case
may be: Provided, further, That if the decision of the Commissioner or of the Collector under appeal as the case may be,
is affirmed by the Secretary of Finance or if within thirty (30) days from receipt of the records of the proceedings by the
Secretary of Finance, no decision is rendered, the decision of the Secretary of Finance, or of the Commissioner, or of the
Collector under appeal, as the case may be, shall become final and executory.

In any seizure proceeding, the release of imported articles shall not be allowed unless and until a decision of the
Collector has been confirmed in writing by the Commissioner of Customs. (Emphasis ours.)

There is nothing in Section 2313 of the Tariff and Customs Code to support the position of El Greco. As the CTA en
banc explained, in case the BOC Commissioner fails to decide on the automatic appeal of the Collector’s Decision within
30 days from receipt of the records thereof, the case shall again be deemed automatically appealed to the Secretary of
Finance. Also working against El Greco is the fact that jurisdiction over M/V Neptune Breeze, otherwise known as M/V
Criston, was first acquired by the Legaspi District Collector; thus, the Manila District Collector cannot validly acquire
jurisdiction over the same vessel. Judgment rendered without jurisdiction is null and void, and void judgment cannot be
the source of any right whatsoever. 28

Finally, we strongly condemn the ploy used by M/V Neptune Breeze, assuming a different identity to smuggle goods into
the country in a brazen attempt to defraud the government and the Filipino public and deprive them of much needed
monetary resources. We further laud the efforts of the Commissioner of the Customs Bureau and the other executive
officials in his department to curb the proliferation of smuggling syndicates in the country which deserves no less than
our full support.

WHEREFORE, in view of the foregoing, the instant Petition is DENIED. The Decision dated 17 October 2005 and
Resolution dated 7 February 2006 of the Court of Tax Appeals En Banc in CTA EB No. 172 are AFFIRMED. Costs against
the petitioner.

SO ORDERED.
G.R. No. 201796 January 15, 2013

GOVERNOR SADIKUL A. SAHALI and VICE-GOVERNOR RUBY M. SAHALl, Petitioners,


vs.
COMMISSION ON ELECTIONS (FIRST DIVISION), RASHIDIN H. MA TBA and JILKASI J. USMAN,Respondents.

RESOLUTION

REYES, J.:

This is a Petition for Certiorari under Rule 65 in relation to Rule 64 of the Rules of Court filed by Sadikul A. Sahali (Sadi kul)
and Ruby M. Sahali (Ruby), assailing the Order 1 dated May 3, 2012 issued by the First Division of the Commission on
Elections (COMELEC) in EPC Nos. 2010-76 and 2010-77.

During the May 10, 2010 elections, Sadikul and private respondent Rashidin H. Matba (Matba) were two of the four
candidates who ran for the position of governor in the Province of Tawi-Tawi while Ruby and private respondent Jilkasi J.
Usman (Usman) ran for the position of Vice-Governor.2

On May 14, 2010, the Provincial Board of Canvassers (PBOC) proclaimed petitioners Sadikul and Ruby as the duly elected
governor and vice-governor, respectively, of the province of Tawi-Tawi. In the statement of votes issued by the PBOC,
petitioner Sadikul garnered a total of 59,417 as against private respondent Matba’s 56,013,3 while petitioner Ruby
prevailed over private respondent Usman, with votes of 61,005 and 45,127, respectively. 4

Alleging that the said elections in the Province of Tawi-Tawi were attended by massive and wide-scale irregularities,
Matba filed an Election Protest Ad Cautelam 5 with the COMELEC. Matba contested the results in 39 out of 282 clustered
precincts that functioned in the province of Tawi-Tawi. The said election protest filed by Matba was raffled to the First
Division of the COMELEC and was docketed as EPC No. 2010-76.

Usman also filed an Election Protest Ad Cautelam 6 with the COMELEC, contesting the results in 39 out of the 282
clustered precincts in the Province of Tawi-Tawi. Usman’s election protest was likewise raffled to the First Division of the
COMELEC and was docketed as EPC No. 2010-77. The respective election protests filed by private respondents Matba
and Usman prayed, inter alia, for the technical examination of the ballots, Election Day Computerized Voters List (EDCVL),
the Voters Registration Record (VRR), and the Book of Voters in all the protested precincts of the province of Tawi-Tawi.7

After Sadikul filed his Answer8 with counter-protest, a preliminary conference was conducted by the COMELEC in EPC No.
2010-76. On November 24, 2011, the COMELEC issued a Preliminary Conference Order 9 in EPC No. 2010-76. Thereafter,
the COMELEC issued an Order10 dated November 23, 2011 which directed the retrieval and delivery of the 39 ballot boxes
containing the ballots in the 39 protested clustered precincts as well as the election paraphernalia therein.
Meanwhile, in EPC No. 2010-77, the COMELEC, after Ruby’s filing of her Answer11 with counter-protest, conducted a
preliminary conference on January 4, 2012. On January 20, 2012, the COMELEC issued its Preliminary Conference
Order12 in the said case.

On January 17, 2012, the COMELEC resolved to consolidate EPC No. 2010-76 and EPC No. 2010-77.

On February 9, 2012, the retrieval and delivery of the ballot boxes and other election documents from the 39 protested
precincts were completed. On February 20, 2012, the COMELEC First Division ordered the recount of the contested
ballots, directing the creation of five recount committees for the said purpose. 13

On February 24, 2012, Matba and Usman filed a Manifestation and Ex-Parte Motion (Re: Order Dated 20 February 2012),
requesting that they be allowed to secure photocopies of the contested ballots. Further, they moved for a technical
examination of the EDCVL, the VRR and the Book of Voters for the contested precincts in the province of Tawi -Tawi by
comparing the signature and the thumbmarks appearing on the EDCVL as against those appearing on the VRRs and the
Book of Voters.14

Private respondents Matba and Usman averred that, instead of recounting the ballots in the pilot pr ecincts constituting
20% of the protested precincts, the COMELEC First Division should order the technical examination of the said election
paraphernalia from the 38 clustered precincts that are the subject of both election protests filed by them.

On March 5, 2012, the COMELEC First Division issued an Order 15 which granted the said ex-parte motion filed by Matba
and Usman. Thus, the COMELEC First Division directed its Election Records and Statistics Department (ERSD) to conduct
a technical examination of the said election paraphernalia by comparing the signature and thumbmarks appearing on
the EDCVL as against those appearing on the VRRs and the Book of Voters.

On March 9, 2012, Sadikul and Ruby jointly filed with the COMELEC First Division a Strong Manifestation of Grave
Concern and Motion for Reconsideration (Of the Order Dated March 5, 2012) 16. They asserted that the March 5, 2012
Order issued by the COMELEC First Division, insofar as it directed the technical examination of the EDCVL, the VRR and
the Book of Voters, should be reversed on account of the following: first, the said Order was issued without due process
since the COMELEC First Division did not allow them to oppose the said ex-parte motion; second, the COMELEC First
Division cannot just order a technical examination in the absence of published rules on the matter; and third, the
COMELEC First Division could not just examine the said election paraphernalia without violating the Precautionary
Protection Order issued by the Presidential Electoral Tribunal in the protest case between Manuel Roxas and Jejomar
Binay.

On March 15, 2012, Matba and Usman filed with the COMELEC First Division their counter-manifestation17 to the said
manifestation and motion for reconsideration filed by Sadikul and Ruby. They asserted therein that Sadikul and Ruby
were not deprived of due process when the COMELEC First Division issued its March 15, 2012 Order. They averred that
their respective election protests and the Preliminary Conference Orders issued by the COMELEC First Division all
indicated that they would move for the technical examination of the said election paraphernalia. Nonetheless, they
pointed out that Sadikul and Ruby failed to express any objection to their intended motion for technic al examination of
the said election paraphernalia.
Further, Matba and Usman claimed that said motion for technical examination is not a contentious motion since the
intended technical examination would not prejudice the rights of Sadikul and Ruby considering that the same only
included the EDCVL, the VRR and the Book of Voters, and not the ballots.

On March 23, 2012, Sadikul and Ruby then filed with the COMELEC First Division their Reply 18 to the
counter-manifestation filed by Matba and Usman. In turn, Matba and Usman filed with the COMELEC First Division their
Rejoinder19 on March 30, 2012. On May 3, 2012, the COMELEC First Division issued the herein assailed Order 20which
denied the said motion for reconsideration of the March 5, 2012 Order filed by Sadikul and Ruby. The COMELEC First
Division maintained that Sadikul and Ruby were not deprived of due process. It pointed out that the intention of Matba
and Usman to ask for the technical examination of the said election documents had always been apparent from the filing
of their separate election protests, preliminary conference briefs and their intention to offer as evidence all election
documents and paraphernalia such as the EDCVL, VRRs and Book of Voters on the protested precincts.

Further, the COMELEC First Division opined that the insinuation asserted by Sadikul and Ruby that there are no published
rules governing the technical examination of election paraphernalia is untenable. It pointed out that the technical
examination of election paraphernalia is governed by Section 1, Rule 18 of COMELEC Resolution No. 8804. As to the
Precautionary Protection Order issued in the protest case between Manuel Roxas and Jejomar Binay, the COMELEC First
Division averred that it would request a clearance from the Presidential Electoral Tribunal for the conduct of said
technical examination.

Hence, petitioners Sadikul and Ruby filed the instant petition with this Court essentially asserting that the COMELEC First
Division committed grave abuse of discretion amounting to lack or excess of jurisdiction when: first, it did not give them
the opportunity to oppose the motion for technical examination filed by Matba and Usman; and second, it ordered the
technical examination of the said election paraphernalia despite the lack of sanction and published rules governing such
examination.

The petition is denied.

The petitioners’ resort to the extraordinary remedy of certiorari to assail an interlocutory order issued by the COMELEC
First Division is amiss. "A party aggrieved by an interlocutory order issued by a Division of the COMELEC in an election
protest may not directly assail the order in this Court through a special civil action for certiorari. The remedy is to seek the
review of the interlocutory order during the appeal of the decision of the Division in due course." 21

Under the Constitution, the power of this Court to review election cases falling within the original exclusive jurisdiction of
the COMELEC only extends to final decisions or resolutions of the COMELEC en banc, not to interlocutory orders issued
by a Division thereof. Section 7, Article IX of the Constitution mandates:

Sec. 7. Each Commission shall decide by a majority vote of all its Members any case or matter brought before it within
sixty days from the date of its submission for decision or resolution. A case or matter is deemed submitted for decision or
resolution upon the filing of the last pleading, brief, or memorandum required by the rules of the Commission or by the
Commission itself. Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each
Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of
a copy thereof. (Emphasis ours)
In Ambil, Jr. v. COMELEC,22 this Court elucidated on the import of the said provision in this wise:

We have interpreted this provision to mean final orders, rulings and decisions of the COMELEC rendered in the exercise
of its adjudicatory or quasi-judicial powers." This decision must be a final decision or resolution of the Comelec en banc,
not of a division, certainly not an interlocutory order of a division. The Supreme Court has no power to review via
certiorari, an interlocutory order or even a final resolution of a Division of the Commission on Elections.

The mode by which a decision, order or ruling of the Comelec en banc may be elevated to the Supreme Court is by the
special civil action of certiorari under Rule 65 of the 1964 Revised Rules of Court, now expressly provided in Rule 64, 1997
Rules of Civil Procedure, as amended.

Rule 65, Section 1, 1997 Rules of Civil Procedure, as amended, requires that there be no appeal, or any plain, speedy and
adequate remedy in the ordinary course of law. A motion for reconsideration is a plain and adequate remedy provided
by law. Failure to abide by this procedural requirement constitutes a ground for dismissal of the petition.

In like manner, a decision, order or resolution of a division of the Comelec must be reviewed by the Comelec en banc via
a motion for reconsideration before the final en banc decision may be brought to the Supreme Court on certiorari. The
pre-requisite filing of a motion for reconsideration is mandatory. x x x. 23 (Citations omitted and emphasis supplied)

Here, the Orders dated March 5, 2012 and May 3, 2012 issued by the First Division of the COMELEC were merely
interlocutory orders since they only disposed of an incident in the main case i.e. the propriety of the technica l
examination of the said election paraphernalia. Thus, the proper recourse for the petitioners is to await the decision of
the COMELEC First Division in the election protests filed by Matba and Usman, and should they be aggrieved thereby, to
appeal the same to the COMELEC en banc by filing a motion for reconsideration. 24

The petitioners, citing the case of Kho v. COMELEC, 25 nevertheless insist that this Court may take cognizance of the
instant Petition for Certiorari since the COMELEC en banc is not the proper forum in which the said interlocutory orders
issued by the COMELEC First Division can be reviewed.

The petitioners’ reliance on Kho is misplaced. In Kho, the issue was whether a Division of the COMELEC may admit an
answer with counter-protest which was filed beyond the reglementary period. This Court held that the COMELEC First
Division gravely abused its discretion when it admitted the answer with counter-protest that was belatedly filed.

On the propriety of a filing a Petition for Certiorari with this Court sans any motion for reconsideration having been filed
with the COMELEC en banc, it was held therein that, as an exception, direct resort to this Court via certiorari assailing an
interlocutory order may be allowed when a Division of the COMELEC commits grave abuse of discretion tantamount to
lack of jurisdiction. Thus:

As to the issue of whether or not the case should be referred to the COMELEC en banc, this Court finds the respondent
COMELEC First Division correct when it held in its order dated February 28, 1996 that no final decision, resolution or
order has yet been made which will necessitate the elevation of the case and its records to the Commission en banc. No
less than the Constitution requires that the election cases must be heard and decided first in division and any motion for
reconsideration of decisions shall be decided by the commission en banc. Apparently, the orders dated July 26, 1995,
November 15 1995 and February 28, 1996 and the other orders relating to the admission of the answer with
counter-protest are issuances of a Commission in division and are all interlocutory orders because they merely rule upon
an incidental issue regarding the admission of Espinosa’s answer with counter-protest and do not terminate or finally
dispose of the case as they leave something to be done before it is finally decided on the merits. In such a situation, the
rule is clear that the authority to resolve incidental matters of a case pending in a division, like the questioned
interlocutory orders, falls on the division itself, and not on the Commission en banc. x x x

xxxx

Furthermore, a look at Section 2, Rule 3 of the COMELEC Rules of Procedure confirms that the subject case does not fall
on any of the instances over which the Commission en banc can take cognizance of. It reads as follows:

"Section 2. The Commission en banc. - The Commission shall sit en banc in cases hereinafter specifically provided, or in
pre-proclamation cases upon a vote of a majority of the members of a Commission, or in all other cases where a division
is not authorized to act, or where, upon a unanimous vote of all the members of a Division, an interlocutory matter or
issue relative to an action or proceeding before it is decided to be referred to the Commission en banc." In the instant
case, it does not appear that the subject controversy is one of the cases specifically provided under the COMELEC Rules
of Procedure in which the Commission may sit en banc. Neither is it shown that the present controversy a case where a
division is not authorized to act nor a situation wherein the members of the First Division unanimously voted to refer the
subject case to the Commission en banc. Clearly, the Commission en banc, under the circumstances shown above, can
not be the proper forum which the matter concerning the assailed interlocutory orders can be referred to.

In a situation such as this where the Commission in division committed grave abuse of discretion or acted without or in
excess of jurisdiction in issuing interlocutory orders relative to an action pending before it and the controversy did not
fall under any of the instances mentioned in section 2, Rule 3 of the COMELEC Rules of Procedure, the remedy of the
aggrieved party is not to refer the controversy to the Commission en banc as this is not permissible under its present
rules but to elevate it to this Court via a petition for certiorari under Rule 65 of the Rules of Court. 26(Citations omitted and
emphasis ours)

Thus, exceptionally, this Court may take cognizance of a certiorari action directed against an interlocutory order issued
by a Division of the COMELEC when the following circumstances are present: first, the order was issued without
jurisdiction or in excess of jurisdiction or with grave abuse of discretion tantamount to lack or excess of jurisdiction; and
second, under the COMELEC Rules of Procedure, the subject of the controversy is a matter which (1) the COMELEC en
banc may not sit and consider or (2) a Division is not authorized to act or (3) the members of the Division unanimously
vote to refer to the COMELEC en banc. 27

The exception in Kho does not apply in the instant case since the COMELEC First Division is authorized to act on the
ex-parte motion for the technical examination of the said election paraphernalia. The COMELEC First Division has already
acquired jurisdiction over the election protests filed by Matba and Usman. Concomitant with such acquisition of
jurisdiction is the authority of the COMELEC First Division to rule on the issues raised by the parties and all incidents
arising therefrom, including the authority to act on the ex-parte motion for technical examination of said election
paraphernalia.
In Kho, the COMELEC First Division did not acquire jurisdiction on the answer with counter-protest since it was filed
beyond the reglementary period and, consequently, did not have any authority to act on the issues raised therein and all
incidents arising therefrom. Thus:

It is worthy to note that as early as in the case of Arrieta vs. Rodriguez, this Court had firmly settled the rule that the
counter-protest must be filed within the period provided by law, otherwise, the forum loses its jurisdiction to entertain
the belatedly filed counter-protest. In the case at bar, there is no question that the answer with counter-protest of
Espinosa was filed outside the reglementary period provided for by law. As such, the COMELEC First Division has no
jurisdictional authority to entertain the belated answer with counter-protest much less pass upon and decide the issues
raised therein. It follows therefore that the order of July 26, 1995 which pertains to the admission of the answer with
counter-protest of Espinosa as well as the other consequent orders implementing the order of admission issued by the
COMELEC First Division are void for having been issued without jurisdiction. Even if petitioner Kho did not file a motion
for reconsideration of the order dated July 26, 1995 admitting the answer with counter-protest, the jurisdictional infirmity,
brought about by the late filing of the answer to the protest, persist and can not be cured by the omission on the part of
the protestee-petitioner to seek a reconsideration of the order dated July 26, 1995. 28 (Citation omitted and emphasis
ours)

Even if this Court is to disregard the procedural lapse committed by the petitioners and rule on the issues raised, the
instant petition would still be denied.

The petitioners claim that they were denied due process when the COMELEC granted the motion for technical
examination filed by Matba and Usman without giving them the opportunity to oppose the said motion.

This Court does not agree.

It bears stressing that the COMELEC, in election disputes, is not duty-bound to notify and direct a party therein to file an
opposition to a motion filed by the other party. It is incumbent upon the party concerned, if he/she deems it necessary,
to file an opposition to a motion within five days from receipt of a copy of the same without awaiting for the COMELEC ’
s directive to do so. On this score, Section 3, Rule 9 of COMELEC Resolution No. 8804 29 clearly provides that:

Sec. 3. No hearings on motions. – Motions shall not be set for hearing unless the Commission directs otherwise. Oral
argument in support thereof shall be allowed only upon the discretion of the Commission. The adverse party may file
opposition five days from receipt of the motion, upon the expiration of which such motion is deemed submitted for
resolution. The Commission shall resolve the motion within five days. (Emphasis ours)

If the party concerned, despite receipt of a copy of the motion that was filed with the COMELEC, did not file an
opposition to the said motion, the motion would be deemed submitted for resolution upon the expiration of the peri od
to file an opposition thereto.

It should be stressed that one of the factors that should be considered in election protests is expediency. Proceedings in
election protests are special and expeditious and the early resolution of such cases should not be hampered by any
unnecessary observance of procedural rules. 30 "The proceedings should not be encumbered by delays. All of these are
because the term of elective office is likewise short. There is the personal stake of the contestants which generates feuds
and discords. Above all is the public interest. Title to public elective office must not be left long under cloud. Efficiency of
public administration should not be impaired. It is thus understandable that pitfalls which may retard the determination
of election contests should be avoided." 31

Here, the petitioners did not file an opposition to the said motion for technical examination that was filed by Matba and
Usman on February 24, 2012. It was only after the COMELEC First Division issued its March 5, 2012 Order that the
petitioners decided to register their opposition to the intended technical examination, albeit in the form of a motion for
reconsideration of the said Order. Contrary to the petitioners’ claim, Section 3, Rule 9 of COMELEC Resolution No. 8804
gave them the opportunity to raise their objections to the said motion for technical examination. However, for reasons
known only to them, petitioners did not file any opposition to the said motion. Accordingly, it is the petitioners
themselves and not the COMELEC First Division who should be faulted for their predicament.

Further, this Court cannot see how due process was denied to the petitioners in the issuance of the COMELEC First
Division’s March 5, 2012 Order. The petitioners were able to present their opposition to the said motion for technical
examination in their manifestation and motion for reconsideration which they filed with the COMELEC First Division on
March 9, 2012. Indeed, the petitioners’ objections to the technical examination of the said election paraphernalia were
exhaustively discussed by the COMELEC First Division in its May 3, 2012 Resolution. Having filed a motion for
reconsideration of the COMELEC First Division’s March 5, 2012 Order, the petitioners’ claim of denial of due process is
clearly unfounded.

The petitioners should be reminded that due process does not necessarily mean or require a hearing, but simply an
opportunity or right to be heard. One may be heard, not solely by verbal presentation but also, and perhaps many times
more creditably and predictable than oral argument, through pleadings. In administrative proceedings moreover,
technical rules of procedure and evidence are not strictly applied; administrative process cannot be fully equated with
due process in its strict judicial sense. Indeed, deprivation of due process cannot be successfully invoked where a party
was given the chance to be heard on his motion for reconsideration. 32

Anent the issue on the technical examination of election paraphernalia, the petitioners contend that the COMELEC First
Division cannot order a technical examination of the said election paraphernalia since there is as yet no published rule
therefor. They assert that Section 1, Rule 18 of COMELEC Resolution No. 8804, the rule relied upon by the COMELEC First
Division in ordering a technical examination, is vague as it failed to provide the documents that should be subjected to
technical examination in election protest cases.

At the core of the petitioners’ assertion is the power of the COMELEC First Division to order the technical examination of
the said election paraphernalia. This Court agrees with the petitioners that Section 1, Rule 18 of COMELEC Resolution No.
8804 does not expressly authorize the conduct of technical examination of election paraphernalia as it merely provides
for the procedure to be followed in the presentation and reception of evidence in election protest cases.

Section 1, Rule 18 of COMELEC Resolution No. 8804, in part, reads:

Sec. 1. Presentation and reception of evidence; order of hearing. - The reception of evidence on all matters or issues
raised in the protest and counter-protests shall be presented and offered in a hearing upon completion of (a) the
recount of ballots, or re-tabulation of election documents, or (b) the technical examination, if warranted.
xxxx

While Section 1, Rule 18 of COMELEC Resolution No. 8804 does not explicitly provide for the rule on the technical
examination of election paraphernalia, it does not mean, however, that the COMELEC First Division does not have the
power to order the conduct of such technical examination.

The absence of a rule which specifically mandates the technical examination of the said election paraphernalia does not
mean that the COMELEC First Division is barred from issuing an order for the conduct thereof. The power of the
COMELEC First Division to order the technical examination election paraphernalia in election protest cases stems from its
"exclusive original jurisdiction over all contest relating to the elections, returns and qualifications of all elective regional,
provincial and city officials".33

Otherwise stated, the express grant of power to the COMELEC to resolve election protests carries with it the grant of all
other powers necessary, proper, or incidental to the effective and efficient exercise of the power expressly granted. Verily,
the exclusive original jurisdiction conferred by the constitution to the COMELEC to settle said election protests includes
the authority to order a technical examination of relevant election paraphernalia, election returns and ballots in order to
determine whether fraud and irregularities attended the canvass of the votes.

There is no gainsaying that the COMELEC is mandated by law to resolve election cases expeditiously and promptly. "For
in this specie of controversies involving the determination of the true will of the electorate, time indeed is of paramount
importance second to none perhaps, except for the genuine will of the majority. To be sure, an election controversy
which by its very nature touches upon the ascertainment of the people’s choice, as gleaned from the medium of the
ballot, should be resolved with utmost dispatch, precedence and regard to due process." 34

Concomitant to the COMELEC’s duty to expeditiously resolve election cases is the authority to resort to every reasonable
and efficient means available to it to settle the controversy. The COMELEC is thus enjoined, "not only to maintain its
sense of urgency in resolving these cases, but also to explore every reasonable and feasible means of ascertaining which
candidate was duly elected."35 Thus, this Court has declared:

An election contest, unlike an ordinary civil action, is clothed with a public interest. The purpose of an election protest is
to ascertain whether the candidate proclaimed by the board of canvassers is the lawful choice of the people. What is
sought is the correction of the canvass of votes, which was the basis of proclamation of the winning candidate. An
election contest therefore involves not only the adjudication of private and pecuniary interests of rival candidates but
paramount to their claims is the deep public concern involved and the need of dispelling the uncertainty over the real
choice of the electorate. And the court has the corresponding duty to ascertain by all means within its command who is
the real candidate elected by the people. 36 (Emphasis ours)

Here, the technical examination ordered by the COMELEC First Division, by comparing the signature and the
thumbmarks appearing on the EDCVL as against those appearing on the VRRs and the Book of Voters, is a reasonable,
efficient and expeditious means of determining the truth or falsity of the allegations of fraud and irregularities in the
canvass of the votes in the province of Tawi-Tawi. Accordingly, the COMELEC First Division did not commit any abuse of
discretion when it allowed the technical examination of the said election paraphernalia.
WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The assailed Order dated May 3,
2012 issued by the First Division of the Commission on Elections in EPC Nos. 2010-76 and 2010-77 is AFFIRMED.

SO ORDERED.

G.R. No. 170956 May 12, 2010

FELISA R. FERRER, Petitioner,


vs.
DOMINGO CARGANILLO, SERGIO CARGANILLO, SOLEDAD AGUSTIN AND MARCELINA SOLIS,Respondents.

DECISION

DEL CASTILLO, J.:

The concept of social function of private property which today is presented as one of the possible justifications for
agrarian and urban land reform has its roots in the cosmogenic and philosophical concept which maintains that man
must answer to the Creator for the use of the resources entrusted to him. It is an old concept and is ultimately related to
the genesis of society itself. Hence, the use, enjoyment, occupation or disposition of private property is not absolute. It i s
predicated on the social functions of property. It is restricted in a sense so as to bring about maximum benefits to all and
not to a few chosen individuals.1

This petition concerns four cases, involving herein petitioner Felisa R. Ferrer, jointly heard by the Provincial Agrarian
Reform Adjudicator (PARAD), appealed to the Department of Agrarian Reform Adjudication Board (DARAB) and
subsequently further appealed to the Court of Appeals (CA), to wit:

1. DARAB Case No. 7862 "Felisa R. Ferrer v. Domingo Carganillo and Sergio Carganillo" for Ejectment and Damages;

2. DARAB Case No. 7863 "Felisa R. Ferrer v. Soledad Agustin" for Ejectment and Damages;

3. DARAB Case No. 7864 "Rosa Pajarito, Elvira Madolora and Anastacia Lagado represented by Felisa R. Ferrer v.
Marcelina Solis" for Ejectment and Damages;

4. DARAB Case No. 7865 "Irene Aguinaldo and Felisa R. Ferrer v. Marcelina Solis" for Ejectment and Damages.
For clarity, each case will be tackled independently as each involved different set of facts.

Factual Antecedents

a) DARAB Case No. 7862

In her Complaint,2 petitioner Felisa R. Ferrer (Felisa) alleged that she is the owner of a 6,000-square meters lot under Tax
Declaration No. 42-06462, situated at Brgy. Legaspi, Tayug, Pangasinan and being tenanted by respondent Domingo
Carganillo (Domingo). Without her knowledge and consent, Domingo subleased the subject landholding to his brother,
herein respondent Sergio Carganillo (Sergio) for ₱15,000.00. Felisa only knew of this fact when she visited the place and
found Sergio in actual possession and cultivation of the landholding in question.

In his Answer,3 Domingo denied that he mortgaged his possessory rights to Sergio and asserted that he is still in actual,
continuous and peaceful possession of subject property.

Meanwhile, upon a verbal complaint lodged by Felisa with the Municipal

Agrarian Reform Office (MARO) of Tayug, Pangasinan, MARO Legal Officer Dionisio G. Estimada (Estimada) conducted
an investigation on the matter.

In his December 19, 1997 Investigation Report, 4 Estimada stated that based on the testimony he had gathered from other
people, the cultivation and possession of the subject landholding was subleased by Domingo to Sergio as the former
was applying for work abroad. 5 In fact, Domingo admitted the existence of the sublease. 6 Thus, based on the foregoing,
Estimada recommended that Sergio and Domingo be ejected from the subject landholding. 7

The Affidavit of Angela N. Clarion (Clarion) was also submitted to corroborate the Investigation Report. 8 Clarion averred
that Domingo mortgaged his tenancy rights over the subject agricultural land to Sergio, and that the latter is presently
cultivating the said land by virtue of such mortgage. 9

Ruling of the PARAD

In an Order10 dated January 20, 1998, the PARAD required the parties to submit their respective position papers within 20
days from said date. Felisa filed her position paper for all the four cases, attaching thereto the Investigation Report of
Estimada, as well as the corroborating affidavits of Clarion and Gelacio Gano (Gano). Sergio, on the other hand, admitted
that he helps his older brother, Domingo, in cultivating the landholding11 but he denied subleasing the same from
Domingo.12

In addition, respondents presented the affidavits of (1) Mariano Orina

(Mariano), tenant of the adjacent agricultural land, who attested that Domingo is the one who supervises the activities in
his tenanted land;13 (2) Barangay Agrarian Reform Council (BARC) Chairman Valentin Costales (Costales), who stated that
he does not know of any violation that Domingo has committed against the landowner; 14and (3) Barangay
Kagawad Arsenio R. Frago (Frago), who maintained that Domingo has not violated any provision of the Land Reform
Code.15
On April 8, 1998, PARAD Rodolfo A. Caddarao (Caddarao) issued a Decision 16 holding that:

In a situation such as this, the complainant has the burden of proof to show by convincing evidence the truth of her
allegations. In the case at bar the complainant failed to prove by clear and convincing evidence that there is subleasing
or mortgage of the property by the respondent tenant. Hence, the herein action must necessarily fail.

WHEREFORE, premises considered, the complaint in the instant case is hereby DISMISSED for lack of evidence and merit.

SO ORDERED.

Aggrieved, Felisa appealed to the DARAB.

Ruling of the DARAB

In her appeal memorandum17 dated October 7, 1998, Felisa asserted that the PARAD erred in failing to give credence to
the Investigation Report of the MARO legal officer. She likewise presented for the first time an original copy of
the Katulagan18 (Agreement) to prove that Domingo obtained a loan in the amount of ₱15,000.00 from Sergio. Felisa
argued that she has established, by more than substantial evidence, that Domingo has indeed conveyed his leasehold
rights to Sergio for said amount.

On January 27, 2004, the DARAB rendered its Decision19 affirming the findings of the PARAD that Felisa failed to
substantiate her allegation of subleasing.

Felisa thence elevated the matter to the CA through a Petition for Review20 dated December 6, 2004.

Ruling of the Court of Appeals

On August 22, 2005, the CA rendered a Decision 21 affirming the DARAB Decision. The dispositive portion of the CA
Decision reads:

WHEREFORE, premises considered, the petition is hereby DISMISSED. The assailed Decision dated January 27, 2004 and
the Resolution dated October 18, 2004 are hereby AFFIRMED. 22

Our Ruling

a) DARAB Case No. 7862

Petitioner argues that the CA erred in not finding that Domingo subleased or mortgaged his landholding rights to Sergio
which warrants their ejectment from the subject landholding. Petitioner asserts that: (1) the law is explicit that the tenant
and his immediate family must work directly on the land; (2) Sergio cannot pass as Domingo’s immediate family; (3) as
evidenced by the Katulagan, Sergio has been cultivating the land for more than two years prior to the filing of the
complaint; and (4) when Domingo subleased the land to Sergio, he is considered as having abandoned the land as a
tenant.23 She further stresses that respondents’ admission, coupled with the finding of the DARAB that Sergio is tilling
the land, proved subtenancy. Consequently, she prays that the lease tenancy relationship between the contending
parties be declared terminated.

Domingo, on the other hand, denies that he subleased or mortgaged his tenancy rights to anyone. He claims that he
complied with all his obligations under the leasehold agreement over the subject agricultural land, and thus prays for the
dismissal of the case.

The petition is impressed with merit.

The DARAB erred in disregarding the Katulagan (Agreement) as evidence.

The DARAB held that the Katulagan is inadmissible in evidence because it was not formally offered before the PARAD,
citing our ruling in People v. Mongado. 24 On appeal, however, the CA considered the Katulagan, but found the same to
be a mere promissory note tending to prove indebtedness and not as an evidence of mortgage.

We cannot subscribe with the reasoning of the DARAB. The Rules of Court, particularly the Revise d Rules on Evidence,
are specifically applicable to judicial proceedings, to wit:

Section 1. Evidence defined. – Evidence is the means, sanctioned by these rules, of ascertaining in a judicial proceeding
the truth respecting a matter of fact.

Sec. 2. Scope. – The rules of evidence shall be the same in all courts and in all trials and hearings except as otherwise
provided by law or these rules.25 (Emphasis supplied)

In quasi judicial proceedings, the said rules shall not apply except "by analogy or in a suppletory character and whenever
practicable and convenient".26 In the instant case, the then prevailing DARAB Rules of Procedures 27provide that:

Section 2. Construction. These Rules shall be liberally construed to carry out the objectives of agrarian reform and to
promote just, expeditious and inexpensive adjudication and settlement of agrarian cases, disputes or controversies.

xxxx

Section 3. Technical Rules Not Applicable . The Board and its Regional and Provincial Adjudicators shall not be bound by
technical rules of procedure and evidence as prescribed in the Rules of Court, but shall proceed to hear and decide all
agrarian cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the
facts of every case in accordance with justice and equity.

a) If and when a case comes up for adjudication wherein there is no applicable provision under these rules, the
procedural law and jurisprudence generally applicable to agrarian disputes shall be applied;

b) The Adjudication Board (Board), and its Regional Agrarian Reform Adjudicators (RARADs) and Provincial Agrarian
Reform Adjudicators (PARADs) hereinafter referred to as Adjudicators, shall have the authority to adopt any appropriate
measure or procedure in any given situation or matter not covered by these Rules. All such special measures or
procedures and the situations to which they have been applied must be reported to the Board; and
c) The provisions of the Rules of Court shall not apply even in a suppletory character unless adopted herein or by
resolution of the Board. However, due process of the law shall be observed and followed in all instances. (Emphasis
supplied)

The DARAB Rules of Procedures explicitly provides that the Agrarian Reform Adjudicators are not bound by technical
rules of procedure and evidence in the Rules of Court nor shall the latter apply even in a suppletory manner. Thus, we
find that the DARAB erred in holding the Katulagan as inadmissible since it was not formally offered and
admitted.28 Moreover, reliance on our ruling in People v. Mongado, i.e., that "[t]he court shall consider no evidence
which has not been formally offered," is misplaced. We simply cannot find any legal basis for the DARAB to cite our
ruling in a criminal case;29 the fundamental rule found in Rule 132 of the Rules of Court does not find any application in
this agrarian case.

Petitioner has sufficiently proven by clear and convincing evidence the fact of subleasing.

The PARAD summed up the evidence presented by both parties as follows:

In the instant case, the evidence for the complainant are as follows:

1. Exhibit 1 – Photocopy of an Investigation Report dated December 19, 1997 submitted by Legal Officer I Dionisio
Estimada to the Legal Services Division of DAR wherein he stated in his findings that "Verily, the tenants, particularly
Domingo Carganillo, who actually and finally accepted that he subleased the land to another is clear and blatant
violation against the landowner and co-owner for that matter". Hence, he recommended that Domingo Carganillo and
Sergio Carganillo be ejected from the landholding.

2. Exhibit 2 – Affidavit dated January 21, 1998 of one Angela [Clarion] wherein she stated that she knew for a fact that
Domingo Carganillo mortgaged his tenancy rights in 1995 to his brother Sergio Carganillo.

On the part of the respondent Domingo Carganillo, his evidence are:

1. Exhibit 1 – The affidavit of one Sergio Carganillo, the other respondent and brother of respondent Domingo
Carganillo denying that the land was mortgaged by his brother to him and stated that he usually help his brother to do
some works in the landholding.

2. Exhibit 2 – Affidavit dated February 3, 1998 of one Mariano Orina stating that being a tenant in the adjoining
landholding, he knows that Domingo Carganillo is always present doing or supervising the activities in his field.

3. Exhibit 3 – Sworn statement of Valentin Costales, the incumbent Barangay Agrarian Reform Council Chairman of the
place where the property is located attesting that Domingo and Sergio Carganillo never violated any agrarian laws.

4. Exhbit 4 – Sworn statement issued by one of the incumbent Barangay Kagawads having jurisdiction of the land in suit,
stating also to the fact that respondents never violated any agrarian laws.

The PARAD assessed the evidence submitted and held that Felisa failed to discharge the burden of proof of establishing
her allegations, to wit:
After a careful assessment of the facts and evidence presented, the Board is of the view and so holds that there is no
evidence showing that respondent Domingo Carganillo subleased the land to his brother Sergio Carganillo. The
investigation report dated December 19, 1997 of Legal Officer I Dionisio Estimada (Exhibit 1 of complaint) is not
conclusive. His conclusion that Domingo Carganillo accepted to him that he subleased the property could not be
accepted by this Board as fact. There is no evidence showing that Domingo Carganillo accepted said matter to him. The
Board cannot be compelled to accept the report as true since, in the first place it had not ordered such investigation.

On appeal, the DARAB concurred with the findings of the PARAD stating that:

One of the contentions invoked by the complainant-appellant is that the landholding in question was subleased by
herein respondent-appellee to his co-respondent Sergio Carganillo, who is in actual possession and cultivation thereof.
This contention, however, cannot be given due consideration. The Honorable Adjudicator a quo correctly ruled that
there was no subleasing in this case.

At this juncture, it is better to define what a sub-lessee means. In the case of Santiago vs. Rodrigo, et al., CA-G.R. No.
33651-R, June 3, 1965, "sub-tenant or sub-lessee" has been defined as "a person who rents all, or a portion of the leased
premises, from the lessor for a term less than the original one, leaving a reversionary interest in the first lessee."
Sub-leasing therefore, creates a new estate dependent upon, out of, and distinct from, the original leasehold. However,
this is not true in the case at bar. Granting that Sergio Carganillo is working on the land tenanted by
respondent-appellee, such is not in the nature of being a sub-lessee, but is merely helping his brother as an immediate
member of the family to cultivate the land. The employment of respondent-appellee’s brother to cultivate the
landholding in question is not in any way prejudicial to the interest of the landowner. Also, it was ruled that the
employment by the lessee of the members of his immediate farm household does not come within the prohibit ion (De
Guzman v. Santos, 6 SCRA 796, November 30, 1962).

Since the issue of sub-leasing was not properly proved by substantial evidence, the same cannot be given favorable
consideration.

On further appeal, the CA held thus:

Clearly, petitioner’s assertion that respondent Domingo subleased the subject landholding to respondent Sergio cannot
be given weight. She failed to prove with sufficient evidence neither the fact of subleasing the subject landholding nor
the mortgaging of the possessory rights thereof to respondent Sergio. The document belatedly presented by petitioner
and denominated as "Katulagan", is merely a promissory note which is a proof of indebtedness and not as evidence to
prove mortgage.

We disagree with the findings of fact of the CA and the agencies below. The confluence of evidence shows that Felisa has
clearly and convincingly established her allegation that Domingo subleased his landholding to Sergio, to wit:

a) The investigation conducted by MARO Legal Officer Estimada shows that Domingo admitted that the cultivation and
possession of the subject landholding was subleased to Sergio as he was then applying for work abroad. 30
b) In her complaint, Felisa stressed that in one of her visits to the subject landholding prior to the filing of the said
complaint, she discovered that Sergio, the sublessee, was in actual possession and cultivation of the landholding in
question.31 Petitioner further contended that Domingo subleased the said agricultural leasehold to Sergio for the amount
of ₱15,000.00.32

c) The Katulagan or Agreement establishes that indeed Domingo was indebted to Sergio in the amount of ₱15,000.00.

d) The affidavit of Clarion, a resident of the municipality where the subject landholding lies, further corroborates the said
facts when she narrated the series of events leading up to Sergio’s possession of said agricultural land:

xxxx

That I know for a fact that the above-described parcel of land was under cultivation by one RICARDO PADILLO of Brgy.
Amistad, Tayug, Pangasinan, formerly, but when the same went abroad, he transferred his tenancy right to DOMINGO
CARGANILLO, who in the year 1995 mortgaged his tenancy rights to SERGIO CARGANILLO, his own brother;

That at present, the said parcel of land is under the cultivation of said SERGIO CARGANILLO;

xxxx

Domingo did not even affirm or deny in his answer that Estimada conducted an investigation and during such
investigation, he admitted that he subleased subject landholding. It is totally against our human nature to just remain
reticent and say nothing in the face of false accusations. The natural instinct of man impels him to resist an unfounded
imputation. Hence, silence in such cases is almost always construed as implied admission of the truth thereof.

Likewise, the attestations of BARC Chairman Costales and Barangay Kagawad Frago that Domingo never violated his
agreement with Felisa or any provision of the Land Reform Code, are conclusions of law bereft of any factual basis. Time
and again, we have held that general statements, which are mere conclusions of law and not factual proof, are unavailing
and do not suffice.

In view of the sublease, Domingo and Sergio should be dispossessed of the subject agricultural landholding.

Republic Act (RA) No. 3844 or the Agricultural Land Reform Code 33 is the

governing statute in actions involving leasehold of agricultural land. The pertinent provisions thereof state as follows:

Sec. 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender
of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown
that:

xxxx
(7) the lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty
seven.34 (Emphasis supplied)

Sec. 37. Burden of Proof. — The burden of proof to show the existence of a lawful cause for the ejectment of an
agricultural lessee shall rest upon the agricultural lessor.

The prohibition against subleasing an agricultural lease has already been in our statute books even prior to the
enactment of RA 3844. RA 1199, of The Agricultural Tenancy Act enacted in 1954, similarly provides that:

SECTION 24. Prohibitions to Tenant: —

xxxx

(2) It shall be unlawful for a share-tenant to employ a sub-tenant to furnish labor or any phase of the work required of
him under this Act, except in cases of illness or any temporary incapacity on his part, in which eventuality the tenant or
any member of his immediate farm household is under obligation to report such illness or incapacity to the landholder.
Payment to the sub-tenant, in whatever form, for services rendered on the land under this circumstance, shall be for the
account of the tenant. (Emphasis supplied)

However, Section 435 of RA 3844 declared all share tenancy to be contrary to public policy and, in its stead, provided for
the compulsory conversion of the sharing system into leasehold system where the tenant continues in possession of the
land for cultivation.

In this case, Domingo subleased his agricultural landholding to Sergio. It is prohibited, except in the case of illness or
temporary incapacity where he may employ laborers. Domingo does not claim illness or temporary incapacity in his
Answer. Therefore, we hereby declare the dispossession of Domingo and Sergio from the subject agricultural land of the
leaseholder.

b) DARAB Case No. 7863

Felisa is the owner of a parcel of land with an approximate area of 4,667 square meters registered under Transfer
Certificate of Title No. T-51201.36 She alleged that the duly instituted lessee of the agricultural land is the late Isabelo
Ramirez (Isabelo).37 During Isabelo’s lifetime, he subleased said landholding to Soledad Agustin (Soledad), without Felisa’
s knowledge and consent.38 She argued that the said act of her now deceased tenant is a ground for ejectment of
Soledad, who is a mere sublessee.39

Ruling of the PARAD

After service of summons, Soledad filed her Answer dated January 20, 1998 affirming that Isabelo was the duly instituted
tenant of the subject landholding. 40
Upon his death, his possessory rights passed on to his surviving spouse, who was
not named in the Answer.41 Soledad likewise alleged that said surviving spouse continues to cultivate the subject
landholding.42
In compliance with the PARAD’s Order dated January 20, 1998 43 requiring the parties to submit their respective position
papers, Felisa filed a position paper for all four cases, 44 attaching thereto a copy of the Investigation Report of
Estimada45 and corroborating affidavit of Gano. 46

The Investigation Report of the MARO Legal Officer Estimada stated that the lawful tenant was the late Isabelo and not
Soledad. Meanwhile, Gano declared in his affidavit that he knew that Isabelo mortgaged his tenancy rights and
possession to Soledad. He further averred that Soledad is presently cultivating said landholding, having acquired her
tenancy rights from Isabelo through the alleged mortgage.

On the other hand, Soledad submitted the following affidavits: (1) her own affidavit wherein she denied that she is Felisa’
s tenant and contended that the true tenant is her sister-in-law Marina O. Ramirez (Marina), the widow of her brother,
the deceased Isabelo; (2) Marina, who affirmed that she is the true tenant of Felisa as evidenced by the renewal of their
leasehold contract dated May 30, 1997 and corroborated Soledad’s statement that the latter does not possess any
landholding owned or administered by Felisa; (3) BARC Chairman Costales, who declared that as per their records,
Soledad is not the registered tenant of the petitioner nor has Soledad managed the activities of the said landholding; (4)
Timoteo Orina, owner of the adjoining agricultural land, who attested that Soledad never became a tenant, tiller or
manager of subject landholding; and (5) Silverio C. Bugayong, incumbent Barangay Kagawad of Brgy. Amistad, who
stated that Marina continued tilling the subject land after the death of her husband. 47 In addition, Soledad submitted the
leasehold contract dated May 30, 1997 ( Tulag ti Panagabang ti Talon ), which showed that the leasehold formerly held by
the deceased Isabelo is now with his widow, Marina.

On April 13, 1998, PARAD Caddarao, dismissed the complaint for lack of merit.48

Aggrieved, petitioner filed a Notice of Appeal dated April 30, 1998 with the PARAD signifying her intention to elevate the
latter’s April 13, 1998 Decision.49

Ruling of the DARAB

On January 7, 2004, the DARAB promulgated a Decision dismissing the appeal for lack of merit. 50

Ruling of the Court of Appeals

In her Memorandum, petitioner asserted that the DARAB failed to resolve the issue of non-payment of lease raised in the
companion cases.51 The respondents did not file their memorandum.

On August 22, 2005, the CA rendered a Decision affirming the DARAB Decision.

Our Ruling

b) DARAB Case No. 7863

Felisa submits that the CA gravely erred in affirming the DARAB Decision dated January 7, 2004 by assuming that the
case against Soledad was already subsumed in the said Decision and in not ordering or remanding the case to the
DARAB for disposition or decision. Hence, Felisa now prays that we take a second "hard look" at the assailed CA Decision
and Resolution in order to avoid a miscarriage of justice.

The new evidence presented by the petitioner in the Supplemental Motion for Reconsideration with Manifestation to the
DARAB cannot be admitted.

On March 24, 2004, Felisa filed a Supplemental Motion for Reconsideration with Manifestation with the DARAB, allegedly
as an expanded discussion on what she averred in her Motion for Reconsideration. 52

We note though that aside from amplifying her arguments, petitioner likewise attached and referred to new pieces of
evidence in the form of: (1) affidavit of Rudy O. Tubiera dated September 14, 2001; 53 (2) affidavit of Liberato Cabigas; 54 (3)
affidavit of Alberto A. Millan dated July 26, 2002 55 and (4) survey plan.56

Section 12, Rule VIII of the 1994 DARAB New Rules of Procedures provide that "only one motion for reconsideration shall
be allowed a party which shall be based on the ground that: (a) the findings of facts in the said decision, order or
resolution are not supported by substantial evidence, or (b) the conclusions stated therein are against the law and
jurisprudence". As expressed by the Rule, the office of the Motion for Reconsideration is not for the reception of new
evidence. Hence, when Felisa submitted new pieces of evidence in her Supplemental Motion for Reconsideration, she
went beyond the stated purpose of the Motion for Reconsideration. In which case, we rule that the new evidence
presented by Felisa in the Supplemental Motion for Reconsideration with Manifestation to the DARAB cannot be
admitted.

Petitioner has not established her claim of sublease.

We exhaustively went over the Petition for Review and Felisa’s Memorandum submitted to the CA and found the same
bereft of any issue, whether of fact or law, involving the case against Soledad. In her petition before the CA, Felisa
presented the following arguments: (1) The DARAB erred in holding that there exists no valid ground to warrant the
ejectment of Domingo and Sergio; and (2) The DARAB erred in considering only the issue of subleasing without giving
credence to the issue of non-payment of lease rentals as ground for ejectment. Nowhere in the discussion portion of
either pleadings can the name Soledad be found. Moreover, the issue presented in the case against Soledad is alleged
subleasing and not non-payment of lease rentals. If there is no issue presented, then there is no controversy to resolve.

Similarly, in her appeal by certiorari before this Court, Felisa did not expound specifically on her issues with the decisions
of the agencies below with respect to Soledad. Petitioner, however, questions the CA’s affirmation of the DARAB
Decision dated January 27, 2004.

We reiterate that the petitioner, as agricultural lessor, has the burden of

proof to show the existence of a lawful cause for the ejectment of an agricultural lessee. 57 In support of her allegations,
Felisa presented the Investigation Report of MARO Legal Officer Estimada and an affidavit of a resident of
the barangay where both the original leaseholder Isabelo and the alleged sublessee, Soledad, reside. The full text of the
Investigation Report with respect to his factual findings on the case against Soledad is as follows:
In the dispute against Soledad Agustin, the lawful tenant was Isabelo Ramirez and not Soledad Agustin. In the
conference/mediation that was conducted it was discovered that the cultivator and possessor of the land is actually
Isabelo Ramirez. This is also being covered by an Agricultural leasehold Contract.

The findings of fact as expressed above are not relevant and material to the question of sublease which the petitioner
alleges.

On the other hand, the affidavit of Gano reads as follows:

xxxx

That I know for a fact that the above-described parcel of land was being cultivated formerly by the late, Isabelo Ramirez,
a resident of Brgy. Amistad, Tayug, Pangasinan, Philippines;

That I also have the knowledge that prior to the death of said Isabelo Ramirez, the same mortgaged his tenancy rights
and possession to Soledad Agustin and in fact, said Soledad Agustin is at present cultivating and in possession of the
above-described landholding;

That to the best of my knowledge, the transfer of tenancy rights and possession from Isabelo Ramirez to Soledad
Agustin by way of mortgage was made without the knowledge and consent of the owners thereof;

That I know of the above facts because being a resident of the same barangay with the former tenant and the present
tenant of the said landholding, it is of common knowledge in our community that Soledad Agustin is presently
cultivating the same landholding and that she acquired such tenancy rights from its former tenant by way of mortgage;

xxxx

In contrast to the Carganillo case above, the evidence presented by Felisa with respect to Soledad is uncorroborated and
unsubstantial. Hence, we rule that Felisa has not discharged her burden of establishing her claim of sublease.

c) DARAB Case No. 7864 and d) DARAB Case No. 7865

In DARAB Case No. 7864, the first case against respondent Marcelina Solis (Marcelina), Felisa represented that the tenant
of the landholding, Pedro Solis (Pedro), died in June 1997 and was survived by his wife, Marcelina. 58 She further alleged
that Marcelina took over the cultivation of the 14,000-square meter landholding without her knowledge and consent. 59 In
addition, during the lifetime of Pedro, the latter failed to pay lease rentals for three consecutive years from 1995 to
1997.60 Hence, the case for ejectment against Marcelina. 61

With respect to the second case (DARAB Case No. 7865), Irene Aguinaldo and Felisa co-owned a 6,830.5-square meter
landholding tenanted by Marcelina. 62 Felisa averred that Marcelina has not fully paid the rental for the use of the land on
the third cropping season.63 Hence, the second case for ejectment against Marcelina.64

Ruling of the PARAD


In her Answer, Marcelina specifically denied Felisa’s allegation of arrears in lease rentals from 1995 to 1997.65 With respect
to the second complaint, she admitted that while it is true that there were times that the subject landholding were
planted with palay on third cropping, this is not regular. 66 Moreover, she averred that if ever the said landholding were
planted with palay on third cropping and yields produce, the landowner is given her due share. 67

After submission of their respective position papers, the PARAD promulgated a Decision dated April 14, 1998 dismi ssing
both cases for lack of merit and evidence. 68

Rulings of the DARAB and the Court of Appeals

The DARAB dismissed the appeal for lack of merit and affirmed the Decision of the PARAD in toto.69 On Petition for
Review under Rule 43 to the CA, the appellate court affirmed the ruling of the DARAB with respect to the i ssue of
non-payment of lease rentals. On which basis, the CA dismissed the petition.

Our Ruling

c) DARAB Case No. 7864 and d) DARAB Case No. 7865

DARAB Case No. 7864 should be dismissed for failure of Felisa to properly indicate the appealing party.

With respect to the first case against Marcelina, we resolve to dismiss the appeal of Felisa. Section 5 of Rule 45 provides
that the failure of the petitioner to comply, among others, with the contents of the petition for review on certiorari shall
be sufficient ground for the dismissal thereof. Section 4 of the same rule mandates, among others, that the petition
should state the full name of the appealing party as the petitioner. In this case, Felisa indicated in the caption as well as in
the parties portion of the petition that she is the landowner. Even in the verification and certification of non-forum
shopping, Felisa attested that she is the petitioner in the instant case. However, it appears in the PARAD records that the
owners of the subject 14,000-square meter agricultural land are Rosa R. Pajarito (Pajarito), Elvira A. Madolora (Madolora)
and Anastacia F. Lagado (Lagado). 70 Felisa is only the representative of the said landowners with respect to the first case
against Marcelina.71 Thus, for failure of Felisa to indicate the appealing party with respect to the said case, the appeal
must perforce be dismissed. However, such failure does not affect the appeal on the other three cases as Felisa is the
owner/co-owner of the landholdings subject of said three cases.

Procedural lapse aside, DARAB Case No. 7864 should still be dismissed for failure of Felisa to establish her principals’
claim.

In her Complaint dated October 6, 1997, Felisa, in representation of landowners Pajarito, Madolora and Lagado, alleged
that Pedro failed to pay the lease rental for the 14,000-square meter land for agricultural years 1995, 1996 and
1997.72 Subsequently, Pedro died and his widow, Marcelina took over the tenancy and cultivation of the said lan d.73 On
the other hand, Marcelina sufficiently rebutted the allegation of non-payment by presenting evidence to show that the
landowners’ share was received by therein complainants’ administrator, to wit:

Exhibit "1" – Receipt dated March 30, 1995 issued by Irene M. Aguinaldo evidencing receipt of their share of the produce
of the subject land;
Exhibit "4" – Receipt dated October 21, 1995 issued by Irene M. Aguinaldo evidencing receipt of their share of the
produce;

Exhibit "5" – Receipt dated March 23, 1996 issued by Irene M. Aguinaldo evidencing receipt of their share of the
produce;

Exhibit "7" – Receipt dated November 17, 1996 issued by Irene M. Aguinaldo evidencing receipt of their share of the
produce;

Exhibit "8" – Receipt dated April 10, 1997 issued by Irene M. Aguinaldo evidencing receipt of their share of the produce;

We hence agree with the PARAD that therein complainants were unable to produce substantial proof to support their
allegation of non-payment.

DARAB Case No. 7865 should likewise be dismissed for failure of Felisa to establish her claim.

With respect to the second case against Marcelina, Felisa alleged that the landholding in question is principally devoted
to the planting of palay three times a year. 74 However, Marcelina did not deliver her share in the third cropping. 75

In her Answer, Marcelina admitted that she is the tenant of the subject parcel of land co-owned by Felisa and Irene
Aguinaldo.76 Marcelina, however, averred that while it was true that there were times that the landholding was planted
with palay on third cropping, this was not regular. 77 She further asserted that she would give to the landowners their due
shares if ever there was third cropping. 78

In an Order dated January 20, 1998, the PARAD directed the parties to submit their position papers, affidavits of
witnesses and other evidence to support their respective claims. 79

Felisa submitted her position paper 80 for the four cases subject of this Decision, together with the Investigation Report of
Estimada81 and the affidavit of Camilo G. Taganas. 82 The Investigation Report declared that the former tenant who was
the husband of Marcelina did not pay any rental to Felisa 83 because he recognized only the other co-owners of the land,
who among others are the sisters of Felisa. 84 In addition, in the affidavit of Camilo G. Taganas, the authorized
administrator of the subject parcel of land, he declared that Marcelina did not deliver the share of the landowners on the
subject landholding.85

On the other hand, Marcelina filed her individual compliance, supported by the following affidavits and the purposes for
which they were offered:

Exhibit "1" – Notice of threshing and reaping dated March 14, 1995 addressed to Mrs. Irene Aguinaldo, administrator
and landowner of the property in question.

Exhibit "2" -- Receipt dated March 30, 1995 issued by Mrs. Irene Aguinaldo acknowledging that respondent has duly
complied with her obligations for this season.

Exhibit "3" -- Notice of reaping and threshing dated Nov. 6, 1995 to the landowner.
Exhibit "4" – Receipt issued to respondent by Mrs. Irene Aguinaldo dated Nov. 10, 1995 acknowledging the fact that
shares due to them was duly given and delivered.

Exhibit "5" – Receipt dated March 19, 1996 duly issued by Mrs. Irene Aguinaldo, the landowner/administrator of the
subject property.

Exhibit "6" -- Notice of reaping and threshing dated March 5, 1996 to prove that respondent has been religiously fulfilling
her obligations.

Exhibit "7" -- Notice sent to Mrs. Aguinaldo dated Sept. 2, 1996 informing him that since they unreasonably refused to
receive the shares due them, it was sold and the proceeds thereof was deposited in the bank.

Exhibit "8" -- Notice of reaping and threshing dated Nov. 7, 1996 proving that respondent has been faithfully complying
with her obligations.

Exhibit "9" -- Acknowledgment and/or receipt duly issued by the landowner/administrator, Mrs. Irene Aguinaldo dated
November 17, 1996 to prove that the obligations of the respondent for this date has been faithfully complied with.

Exhibit "10" -- Receipt dated April 4, 1997 issued and signed by the landowner/administrator, Mrs. Irene Aguinaldo,
acknowledging the delivery of the legal shares due them;

Exhibit "11" -- Notice of threshing and reaping dated March 26, 1997 showing that obligations to do so was [sic]complied
with.

Exhibit "12" -- Notice of reaping and threshing dated Oct. 14, 1997 to prove that landowner of the landholding in
question was duly notified.

Exhibit "13" -- Certification from the office of the BARC and issued by the BARC Chairman himself attesting to the fact
that shares due to landowners for Oct., 1997 was sold and deposited because of the unjustified refusal to receive them.

Exhibit "14" -- Receipt bearing the amount which represents the legal shares of the landowners and deposited in the
bank.

Exhibit "15" -- The name of the bank "ROSBANK" from which the proceeds of the sold shares due to the landowner was
deposited and it was deposited by Pedro Solis and/or Marcelina Solis in the name of Irene Aguinaldo.

Exhibit "16" -- The passbook with account no. T-01689-5, containing the amount deposited due to the landowners for
those years stated therein.

Exhibit "17" -- Leasehold contract or Tulag ti Panagabang ti Talon, executed by and between Irene Aguinaldo and Pedro
Solis, landowner and tenant, respectively. The purpose is to prove that tenancy relationships exists and the same passes
to respondent Marclina Solis, the surviving spouse of Pedro Solis upon his death.
Exhibit "18" -- Investigation report conducted by the office of the BARC. The purpose of which is to show that the then
tenant and now succeeded by his wife Marcelina Solis, has been duly complying with their obligations as bonafide tenant
thereof.

Exhibit "19" -- A sworn statement made by one Herminigildo P. Vinluan, a resident and landowner of the lot adjacent or
adjoining to the subject property, attesting to the fact that the then tenant and now succeeded by herein respondent
never failed to comply with their obligations.1avvphi1

Exhibit "20" -- A sworn statement made by one Arsenio B. Orina, incumbent Brgy. Kgd. of the barangay where the
property is located attesting that respondent is indeed the bonafide tenant of Mrs. Irene Aguinaldo.

Exhibit "21" -- Affidavit of Valentine O. Costales, the incumbent BARC Chairman of Brgy. Amistad, Tayug, Pangasinan,
proving and attesting the fact that Pedro Solis and now succeeded by his wife Marcelina Solis is the bonafide tenant of
the subject landholding and that they are complying faithfully and religiously with their obligations as such.

Exhibit "22" -- The sworn statement of Marcelina Solis, the respondent and successor of the former tenant, swearing to
the Hon. Board and to the public, that she never failed or neglected any of the obligations imposed by law.

As held earlier, the petitioner, as agricultural lessor, has the burden of proof to show the existence of a lawful cause for
the ejectment of an agricultural lessee. In the instant case, we have carefully studied the evidence presented by the
petitioner and found the same wanting on the matter of third cropping over the subject land. Other than the bare
allegations in her complaint before the PARAD, Felisa did not present any evidence to establish her claim that the subject
agricultural land can regularly support a third cropping. Neither did she present evidence to establish that their leasehold
agreement includes a provision on third cropping. Hence, her allegation of non-payment of the leasehold rentals for the
third cropping likewise finds no support in evidence.

In addition, we find that the evidence presented by Felisa is inconsistent on major points. In her Complaint dated
October 3, 1997, Felisa alleged that Marcelina is not delivering the shares of the land with respect to the third
cropping.86 However, the said statement is contradicted in the Estimada Investigation Report where it was indicated that
Marcelina is not giving any rentals/shares to Felisa.

The contention of non-payment of the leasehold shares of the landowner has been effectively rebutted by the evidence
presented by Marcelina. Through Marcelina’s evidence, we have established that she had regularly complied with the
leasehold contract, as supported by:

1. Notice of Reaping dated March 14, 1995


Receipt of Rental dated March 30, 1995 for 2nd crop 94-95

2. Notice of Reaping dated Nov. 6, 1995


Receipt of Rental dated November 10, 1995 for 1st crop 95

3. Notice of Reaping dated March 5, 1996


Receipt of Rental dated March 19, 1996 for 2nd crop 95-96
4. Notice of Reaping dated November 7, 1996
Receipt of Rental dated November 17, 1996 for 1st crop 96

5. Notice of Reaping dated March 26, 1997


Receipt of Rental dated April 5, 1997 for 2nd crop 96-97

6. Notice of Reaping dated October 14, 1997


Rental for 1st crop 1997 deposited in bank in land co-owner Irene Aguinaldo’s name, as per BARC Certification dated
October 27, 1997.

In addition, we have held earlier that the additional pieces of evidence Felisa attached and referred to in her
Supplemental Motion for Reconsideration with Manifestation cannot be admitted as reception of new evidence is not
within the office of a Motion for Reconsideration.

On the basis of the evidence presented, we cannot find sufficient evidence to support Felisa’s claims. Hence, we agree
with the factual findings of the CA and the agrarian tribunals that Felisa failed to discharge the burden of proving her
claim with the necessary quantum of proof.

With respect to all four cases, petitioner further alleges that (1) the Decision of the DARAB dated January 27, 2004 and of
the CA dated August 22, 2005 only disposed of the first case; and (2) the DARAB failed to issue a consolidation order
informing the parties of the consolidation of the four appealed cases considering that these four cases have different
parties and causes of action.87

Article VIII, Section 14 of the Constitution states that "no decision shall be rendered by any court without expressing
clearly and distinctly the facts and the law on which it is based". Petitioner argues that the CA "practically closed its eyes"
in affirming the Board’s Decision.881avvphi1

We do not agree. The Decision of the CA detailed the evidence presented by the parties. Thereafter, it weighed the
respective pieces of evidence submitted by the petitioner and the respondent and chose the one that to its mind,
deserved credence. Said Decision contained findings of facts as well as an application of case law. The Decision states,
thus:

With respect to the issue of non-payment of lease rentals, We affirm the ruling of the DARAB as follows:

With respect to Case No. 01-1567, we find [that] the allegations of complainant that respondent’s husband, Pedro Solis,
deliberately failed to pay lease rentals for the crop years 1995, 1996 and 1997 bereft of any evidence. The compl ainants
were unable to produce any proof to prove their accusations.

On the other hand, respondent has shown (be) substantial evidence that she or her husband have complied with the
duties of lawful tenant. The evidence submitted by respondents (Exhibits "1" to "10") duly show that the representatives of
the complainants, Mrs. Irene R. Aguinaldo, received the landowner’s share for agricultural year 1995 to 1997. This is
shown specifically by Exhibits "1", "4", "5", "7" and "8". Moreover, the complainants were informed of the date of reaping
and threshing as shown by other evidence.
As to case No. 01-1568, the Board again fails to find any evidence showing that respondent Marcelina Solis deliberately
failed to deliver the produce for the third cropping. The bare allegations of the complainant are insufficient to prove that
the said tenants have been remiss [sic] in her duties.

Respondent Marcelina Solis, on the other hand, has substantially proven by her evidence her compliance with her
obligation as a tenant. She has informed the complainants through their administrator, Mrs. Irene Aguinaldo, the date of
threshing and reaping (Exhibits "1", "3", "6", "8", "11" and "12"). She also submitted evidence to show that the landowner’s
share is received by complainant’s administrator (Exhibit "2", "4", "5", "9" and "10"). Other evidence submitted by
respondent is Exh. "7", wherein she informed Mrs. Aguinaldo that she deposited the proceeds of the landowner ’s share
with the bank because she (Mrs. Aguinaldo) refused to received (sic) it (Decision dated April 14, 1998, pp. 4-5, Rollo pp.
61-62).

In appeals of agrarian cases, this Court cannot make its own factual findings and substitute the same for that of the
DARAB, as the only function of this Court is to determine whether the DARAB’s findings of fact are supported by
substantial evidence (Reyes vs. Reyes, 388 SCRA 471). Substantial Evidence is that amount of relevant evidence that a
reasonable mind might accept as adequate to support a conclusion (Resngit-Marquez vs. Llamas, Jr., 385 SCRA 6). 89

In any event, there was an earlier statement of the facts and the law involved in the decisions rendered by the PARAD
dated April 8, 1998, April 13, 1998 and April 14, 1998. In these decisions, the facts and the law on which they were based
were clearly and distinctly stated. Furthermore, in this case, the Court has exhaustively gone through the records and
made its own findings of facts, rather than further delay the disposition of the case by remanding the records for further
proceedings.

With regard to the issue of consolidation, we find in the records that although petitioner filed separate notices of appeal
for the four cases, she but filed one consolidated Appeal Memorandum dated October 7, 1998 to the DARAB, putting
into the caption all the appealed cases. 90 She persisted in consolidating the said cases in her Motion for Reconsideration
of the DARAB Decision, Supplemental Motion for Reconsideration with Manifestation dated March 24, 2004, 91 Petition
for Review dated December 6, 2004 to the CA, 92 Motion for Reconsideration ( ad cautelam) dated September 13
200593 and the Petition for Review on Certiorari dated January 20, 2006 to this Court. 94 In all of these pleadings where
petitioner consolidated the said four cases, petitioner sought the jurisdiction of this Court and the agencies below for
relief. Gainsaid on equitable ground of estoppel, she cannot now come to this Court assailing the consolidation of said
cases, which was brought about by her own acts.

WHEREFORE, we partially GRANT the petition.

1. In DARAB Case No. 7862, we hereby AUTHORIZE THE DISPOSSESSION of respondents Domingo and Sergio Carganillo
from the subject landholding.

2. In DARAB Case No. 7863, we AFFIRM the dismissal of the complaint against respondent Soledad Agustin for failure of
the petition to establish her claim.
3. In DARAB Case No. 7864, we AFFIRM the dismissal of the complaint against respondent Marcelina Solis for failure of
the petitioner to establish her claim and to properly indicate the appealing party in violation of Section 4 in relation to
Section 5 Rule 45 of the Rules of Court.

4. In DARAB Case No. 7865, we AFFIRM the dismissal of the complaint against respondent Marcelina Solis for failure of
the petitioner to establish her claim.

G.R. No. 207264 October 22, 2013

REGINA ONGSIAKO REYES, Petitioner,


vs.
COMMISSION ON ELECTIONS and JOSEPH SOCORRO B. TAN, Respondents.

RESOLUTION

PEREZ, J.:

This is a Motion for Reconsideration of the En Bane Resolution of 25 June 2013 which stated that: IN VIEW OF THE
FOREGOING, the instant petition is DISMISSED, finding no grave abuse of discretion on the part of the Commission on
Elections. The 14 May 2013 Resolution of the COMELEC En Banc affirming the 27 March 2013 Resolution of the COMELEC
First Division is upheld."

In her Motion for Reconsideration, petitioner summarizes her submission, thus:

"81. Stated differently, the Petitioner x x x is not asking the Honorable Court to make a determination as regards her
qualifications, she is merely asking the Honorable Court to affirm the jurisdiction of the HRET to solely and exclusively
pass upon such qualifications and to set aside the COMELEC Resolutions for having denied Petitioner her right to due
process and for unconstitutionally adding a qualification not otherwise required by the constitution." 1(as originally
underscored)

The first part of the summary refers to the issue raised in the petition, which is:

"31. Whether or not Respondent Comelec is without jurisdiction over Petitioner who is duly proclaimed winner and who
has already taken her oath of office for the position of Member of the House of Representatives for the lone
congressional district of Marinduque." 2

Tied up and neatened the propositions on the COMELEC-or-HRET jurisdiction go thus: petitioner is a duly proclaimed
winner and having taken her oath of office as member of the House of Representatives, all questions regarding her
qualifications are outside the jurisdiction of the COMELEC and are within the HRET exclusive jurisdiction.

The averred proclamation is the critical pointer to the correctness of petitioner's submission. The crucial question is
whether or not petitioner could be proclaimed on 18 May 2013. Differently stated, was there basis for the proclamation of
petitioner on 18 May 2013?
Dates and events indicate that there was no basis for the proclamation of petitioner on 18 May 2013. Without the
proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath of office, there ca n be no
valid and effective assumption of office.

We have clearly stated in our Resolution of 5 June 2013 that:

"More importantly, we cannot disregard a fact basic in this controversy – that before the proclamation of petitioner on
18 May 2013, the COMELEC En Banc had already finally disposed of the issue of petitioner's lack of Filipino citizenship
and residency via its Resolution dated 14 May 2013. After 14 May 2013, there was, before the COMELEC, no longer any
pending case on petitioner's qualifications to run for the position of Member of the House of Representatives. x x x As
the point has obviously been missed by the petitioner who continues to argue on the basis of her due proclamation, the
instant motion gives us the opportunity to highlight the undeniable fact we here repeat that the proclamation which
petitioner secured on 18 May 2013 was WITHOUT ANY BASIS.

1. Four (4) days BEFORE the 18 May 2013 proclamation, or on 14 May 2013, the COMELEC En Banc has already denied for
lack o merit the petitioner's motion to reconsider the decision o the COMELEC First Division that CANCELLED petitioner's
certificate of candidacy.

2. On 18 May 2013, there was already a standing and unquestioned cancellation of petitioner's certificate o candidacy
which cancellation is a definite bar to her proclamation. On 18 May 2003, that bar has not been removed, there was not
even any attempt to remove it.

3. The COMELEC Rules indicate the manner by which the impediment to proclamation may be removed. Rule 18, Section
13 (b) provides:

"(b) In Special Actions and Special Cases a decision or resolution of the Commission En Bane shall become final and
executory after five (5) days from its promulgation unless restrained by the Supreme Court."

Within that five (5 days, petitioner had the opportunity to go to the Supreme Court for a restraining order that will
remove the immediate effect of the En Banc cancellation of her certificate of candidacy. Within the five (5) days the
Supreme Court may remove the barrier to, and thus allow, the proclamation of petitioner. That did not happen.
Petitioner did not move to have it happen.

It is error to argue that the five days should pass before the petitioner is barred from being proclaimed. Petitioner lost in
the COMELEC as of respondent. Her certificate of candidacy has been ordered cancelled. She could not be proclaimed
because there was a final finding against her by the COMELEC. 3 She needed a restraining order from the Supreme Court
to avoid the final finding. After the five days when the decision adverse to her became executory, the need for Supreme
Court intervention became even more imperative. She would have to base her recourse on the position th at the
COMELEC committed grave abuse of discretion in cancelling her certificate of candidacy and that a restraining order,
which would allow her proclamation, will have to be based on irreparable injury and demonstrated possibility of grave
abuse of discretion on the part of the COMELEC. In this case, before and after the 18 May 2013 proclamation, there was
not even an attempt at the legal remedy, clearly available to her, to permit her proclamation. What petitioner did was to
"take the law into her hands" and secure a proclamation in complete disregard of the COMELEC En Bane decision that
was final on 14 May 2013 and final and executory five days thereafter.

4. There is a reason why no mention about notice was made in Section 13(b) of Rule 18 in the provision that the
COMELEC En Bane or decision "SHALL become FINAL AND EXECUTORY after five days from its promulgation unless
restrained by the Supreme Court." On its own the COMELEC En Bane decision, unrestrained, moves from promulgation
into becoming final and executory. This is so because in Section 5 of Rule 18 it is stated:

Section 5. Promulgation. -The promulgation of a decision or resolutions of the Commission or a division shall be made
on a date previously fixed, of which notice shall be served in advance upon the parties or their attorneys personally or by
registered mail or by telegram.

5. Apart from the presumed notice of the COMELEC En Bane decision on the very date of its promulgation on 14 May
2013, petitioner admitted in her petition before us that she in fact received a copy of the decision on 16 May 20 13. 4 On
that date, she had absolutely no reason why she would disregard the available legal way to remove the restraint on her
proclamation, and, more than that, to in fact secure a proclamation two days thereafter. The utter disregard of a final
COMELEC En Bane decision and of the Rule stating that her proclamation at that point MUST be on permission by t he
Supreme Court is even indicative of bad faith on the part of the petitioner.

6. The indicant is magnified by the fact that petitioner would use her tainted proclamation as the very reason to support
her argument that she could no longer be reached by the jurisdiction of the COMELEC; and that it is the HRET that has
exclusive jurisdiction over the issue of her qualifications for office.

7. The suggestions of bad faith aside, petitioner is in error in the conclusion at which she directs, as well as in her
objective quite obvious from such conclusion. It is with her procured proclamation that petitioner nullifies the
COMELEC's decision, by Division and then En Banc and pre-empts any Supreme Court action on the COMELEC decision.
In other words, petitioner repudiates by her proclamation all administrative and judicial actions thereon, past and present.
And by her proclamation, she claims as acquired the congressional seat that she sought to be a candidate for. As already
shown, the reasons that lead to the impermissibility of the objective are clear. She cannot sit as Member of the House of
Representatives by virtue of a baseless proclamation knowingly taken, with knowledge of the existing legal impediment.

8. Petitioner, therefore, is in error when she posits that at present it is the HRET which has exclusive jurisdiction over her
qualifications as a Member of the House of Representatives. That the HRET is the sole judge of all contests relating to the
election, returns and qualifications of the Members of the House of Representatives is a written constitutional provision.
It is, however unavailable to petitioner because she is NOT a Member of the House at present. The COMELEC never
ordered her proclamation as the rightful winner in the election for such membership.5 Indeed, the action for cancellation
of petitioner's certificate of candidacy, the decision in which is the indispensable determinant of the right of petitioner to
proclamation, was correctly lodged in the COMELEC, was completely and fully litigated in the COMELEC and was finally
decided by the COMELEC. On and after 14 May 2013, there was nothing left for the COMELEC to do to decide the case.
The decision sealed the proceedings in the COMELEC regarding petitioner's ineligibility as a candidate for Representative
of Marinduque. The decision erected the bar to petitioner's proclamation. The bar remained when no restraining order
was obtained by petitioner from the Supreme Court within five days from 14 May 2013.
9. When petitioner finally went to the Supreme Court on 10 June 2013 questioning the COMELEC First Division ruling and
the 14 May 2013 COMELEC En Bane decision, her baseless proclamation on 18 May 2013 did not by that fact of
promulgation alone become valid and legal. A decision favorable to her by the Supreme Court regarding the decision of
the COMELEC En Bane on her certificate of candidacy was indispensably needed, not to legalize her proclamation on 18
May 2013 but to authorize a proclamation with the Supreme Court decision as basis.

10. The recourse taken on 25 June 2013 in the form of an original and special civil action for a writ of Certiorari through
Rule 64 of the Rules of Court is circumscribed by set rules and principles.

a) The special action before the COMELEC which was a Petition to Cancel Certificate of Candidacy was a SUMMARY
PROCEEDING or one heard summarily. The nature of the proceedings is best indicated by the COMELEC Rule on Special
Actions, Rule 23, Section 4 of which states that the Commission may designate any of its officials who are members of
the Philippine Bar to hear the case and to receive evidence. COMELEC Rule 17 further provides in Section 3 that when the
proceedings are authorized to be summary, in lieu of oral testimonies, the parties may, after due notice, be required to
submit their position paper together with affidavits, counter-affidavits and other documentary evidence; x x x and that
this provision shall likewise apply to cases where the hearing and reception of evidence are delegated by the
Commission or the Division to any of its officials x x x.

b) The special and civil action of Certiorari is defined in the Rules of Court thus:

When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.

The accepted definition of grave abuse of discretion is: a capricious and whimsical exercise of judgment so patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as where the
power is exercised in an arbitrary and despotic manner because of passion or hostility. 6

It is the category of the special action below providing the procedural leeway in the exercise of the COMELEC summary
jurisdiction over the case, in conjunction with the limits of the Supreme Court's authority over the FINAL COMELEC ruling
that is brought before it, that defines the way petitioner's submission before the Court should be adjudicated. Thus
further explained, the disposition of 25 June 2013 is here repeated for affirmation:

Petitioner alleges that the COMELEC gravely abused its discretion when it took cognizance of "newly-discovered
evidence" without the same having been testified on and offered and admitted in evidence. She assails the admission of
the blog article of Eli Obligacion as hearsay and the photocopy of the Certification from the Bureau of Immigration. Sh e
likewise contends that there was a violation of her right to due process of law because she was not given the opportunity
to question and present controverting evidence.

Her contentions are incorrect.


It must be emphasized that the COMELEC is not bound to strictly adhere to the technical rules of procedure in the
presentation of evidence. Under Section 2 of Rule I the COMELEC Rules of Procedure shall be liberally construed in order
x x x to achieve just, expeditious and inexpensive determination and disposition of every action and proceeding brought
before the Commission. In view of the fact that the proceedings in a petition to deny due course or to cancel certificate
of candidacy are summary in nature, then the newly discovered evidence was properly admitted by respondent
COMELEC.

Furthermore, there was no denial of due process in the case at bar as petitioner was given every opportunity to argue
her case before the COMELEC. From 10 October 2012 when Tan's petition was filed up to 27 March 2013 when the F irst
Division rendered its resolution, petitioner had a period of five (5) months to adduce evidence. Unfortunately, she did not
avail herself of the opportunity given her.

Also, in administrative proceedings, procedural due process only requires that the party be given the opportunity or right
to be heard. As held in the case of Sahali v. COMELEC:

The petitioners should be reminded that due process does not necessarily mean or require a hearing, but simply an
opportunity or right to be heard. One may be heard, not solely by verbal presentation but also, and perhaps many times
more creditably and predictable than oral argument, through pleadings. In administrative proceedings moreover,
technical rules of procedure and evidence are not strictly applied; administrative process cannot be fully equated with
due process in its strict judicial sense. Indeed, deprivation of due process cannot be successfully invoked where a party
was given the chance to be he rd on his motion for reconsideration. (Emphasis supplied)

As to the ruling that petitioner s ineligible to run for office on the ground of citizenship, the COMELEC First Division,
discoursed as follows:

"x x x for respondent to reacquire her Filipino citizenship and become eligible for public office the law requires that she
must have accomplished the following acts: (1) take the oath of allegiance to the Republic of the Philippines before the
Consul-General of the Philippine Consulate in the USA; and (2) make a personal and sworn renunciation of her American
citizenship before any public officer authorized to administer an oath.

In the case at bar, there s no showing that respondent complied with the aforesaid requirements. Early on in the
proceeding, respondent hammered on petitioner's lack of proof regarding her American citizenship, contending that it is
petitioner's burden to present a case. She, however, specifically denied that she has become either a permanent resident
or naturalized citizen of the USA.

Due to petitioner's submission of newly-discovered evidence thru a Manifestation dated February 7, 2013, however,
establishing the fact that respondent is a holder of an American passport which she continues to use until June 30 2012
petitioner was able to substantiate his allegations. The burden now shifts to respondent to present substantial evidence
to prove otherwise. This, the respondent utterly failed to do, leading to the conclusion inevitable that respondent falsely
misrepresented in her COC that she is a natural-born Filipino citizen. Unless and until she can establish that she had
availed of the privileges of RA 9225 by becoming a dual Filipino-American citizen, and thereafter, made a valid sworn
renunciation of her American citizenship, she remains to be an American citizen and is, therefore, ineligible to run for and
hold any elective public office in the Philippines." (Emphasis in the original.)
Let us look into the events that led to this petition: In moving for the cancellation of petitioner's COC, respondent
submitted records of the Bureau of Immigration showing that petitioner is a holder of a US passport, and that her status
is that of a balikbayan. At this point, the burden of proof shifted to petitioner, imposing upon her the duty to prove that
she is a natural-born Filipino citizen and has not lost the same, or that she has re-acquired such status in accordance with
the provisions of R.A. No. 9225. Aside from the bare allegation that she is a natural-born citizen, however, petitioner
submitted no proof to support such contention. Neither did she submit any proof as to the inapplicability of R.A. No.
9225 to her.

Notably, in her Motion for Reconsideration before the COMELEC En Bane, petitioner admitted that she is a holder of a
US passport, but she averred that she is only a dual Filipino-American citizen, thus the requirements of R.A. No. 9225 do
not apply to her. Still, attached to the said motion is an Affidavit of Renunciation of Foreign Citizenship dated 24
September 2012. Petitioner explains that she attached said Affidavit if only to show her desire and zeal to serve the
people and to comply with rules, even as a superfluity. We cannot, however, subscribe to petitioner's explanation. If
petitioner executed said Affidavit if only to comply with the rules, then it is an admission that R.A. No. 9225 applies to her.
Petitioner cannot claim that she executed it to address the observations by the COMELEC as the assailed Resolutions
were promulgated only in 2013, while the Affidavit was executed in September 2012.1âwphi1

Moreover, in the present petition, petitioner added a footnote to her oath of office as Provincial Administrator, to this
effect: This does not mean that Petitioner did not, prior to her taking her oath of office as Provincial Administrator, take
her oath of allegiance for purposes of re-acquisition of natural-born Filipino status, which she reserves to present in the
proper proceeding. The reference to the taking of oath of office is in order to make reference to what is already part of
the records and evidence in the present case and to avoid injecting into the records evidence on matters of fact that was
not previously passed upon by Respondent COMELEC. This statement raises a lot of questions -Did petitioner execute an
oath of allegiance for re-acquisition of natural-born Filipino status? If she did, why did she not present it at the earliest
opportunity before the COMELEC? And is this an admission that she has indeed lost her natural-born Filipino status?

To cover-up her apparent lack of an oath of allegiance as required by R.A. No. 9225, petitioner contends that, since she
took her oath of allegiance in connection with her appointment as Provincial Administrator of Marinduque, she is
deemed to have reacquired her status as a natural-born Filipino citizen.

This contention is misplaced. For one, this issue is being presented for the first time before this Court, as it was never
raised before the COMELEC. For another, said oath of allegiance cannot be considered compliance with Sec. 3 of R.A. No.
9225 as certain requirements have to be met as prescribed by Memorandum Circular No. AFF-04-01, otherwise known as
the Rules Governing Philippine Citizenship under R.A. No. 9225 and Memorandum Circular No. AFF-05-002 (Revised
Rules) and Administrative Order No. 91, Series of 2004 issued by the Bureau of Immigration. Thus, petitioner s oath of
office as Provincial Administrator cannot be considered as the oath of allegiance in compliance with R.A. No. 9225.

These circumstances, taken together, show that a doubt was clearly cast on petitioner s citizenship. Petitioner, however,
failed to clear such doubt.7

11. It may need pointing out that there is no conflict between the COMELEC and the HRET insofar as the petitioner s
being a Representative of Marinduque is concerned. The COMELEC covers the matter of petitioner s certificate of
candidacy, and its due course or its cancellation, which are the pivotal conclusions that determines who can be lega lly
proclaimed. The matter can go to the Supreme Court but not as a continuation of the proceedings in the COMELEC,
which has in fact ended, but on an original action before the Court grounded on more than mere error of judgment but
on error of jurisdiction for grave abuse of discretion. At and after the COMELEC En Bane decision, there is no longer any
certificate cancellation matter than can go to the HRET. In that sense, the HRET s constitutional authority opens, over the
qualification of its MEMBER, who becomes so only upon a duly and legally based proclamation, the first and unavoidable
step towards such membership. The HRET jurisdiction over the qualification of the Member of the House of
Representatives is original and exclusive, and as such, proceeds de novo unhampered by the proceedings in the
COMELEC which, as just stated has been terminated. The HRET proceedings is a regular, not summary, proceeding. It will
determine who should be the Member of the House. It must be made clear though, at the risk of repetitiveness, that no
hiatus occurs in the representation of Marinduque in the House because there is such a representative who shall sit as
the HRET proceedings are had till termination. Such representative is the duly proclaimed winner resulting from the
terminated case of cancellation of certificate of candidacy of petitioner. The petitioner is not, cannot, be that
representative. And this, all in all, is the crux of the dispute between the parties: who shall sit in the House in
representation of Marinduque, while there is yet no HRET decision on the qualifications of the Member.

12. As finale, and as explained in the discussion just done, no unwarranted haste can be attributed, as the dissent does so,
to the resolution of this petition promulgated on 25 June 2013. It was not done to prevent the exercise by the HRET of its
constitutional duty. Quite the contrary, the speedy resolution of the petition was done to pave the way for the
unimpeded performance by the HRET of its constitutional role. The petitioner can very well invoke the authority of the
HRET, but not as a sitting member of the House of Representatives. 8

The inhibition of this ponente was moved for. The reason for the denial of the motion was contained in a letter to the
members of the Court on the understanding that the matter was internal to the Court. The ponente now seeks the
Courts approval to have the explanation published as it is now appended to this Resolution.

The motion to withdraw petition filed AFTER the Court has acted thereon, is noted. It may well be in order to remind
petitioner that jurisdiction, once acquired, is not lost upon the instance of the parties, but continues until the c ase is
terminated.9 When petitioner filed her Petition for Certiorari jurisdiction vested in the Court and, in fact, the Court
exercised such jurisdiction when it acted on the petition. Such jurisdiction cannot be lost by the unilateral withdrawal of
the petition by petitioner.

More importantly, the Resolution dated 25 June 2013, being a valid court issuance, undoubtedly has legal consequences.
Petitioner cannot, by the mere expediency of withdrawing the petition, negative and nullify the Court's Resolution and its
legal effects. At this point, we counsel petitioner against trifling with court processes. Having sought the jurisdiction of
the Supreme Court, petitioner cannot withdraw her petition to erase the ruling adverse to her interests. Obviously, she
cannot, as she designed below, subject to her predilections the supremacy of the law.

WHEREFORE, The Motion for Reconsideration is DENIED. The dismissal of the petition is affirmed. Entry of Judgment is
ordered.

SO ORDERED.
G.R. No. 216914, December 06, 2016

SUBIDO PAGENTE CERTEZA MENDOZA AND BINAY LAW OFFICES, Petitioner,

v.

THE COURT OF APPEALS, HON. ANDRES B. REYES, JR., IN HIS CAPACITY AS PRESIDING JUSTICE OF THE COURT OF
APPEALS, AND THE ANTI-MONEY LAUNDERING COUNCIL, REPRESENTED BY ITS MEMBERS, HON. AMANDO M.
TETANGCO, JR., GOVERNOR OF THE BANGKO SENTRAL NG PILIPINAS, HON. TERESITA J. HERBOSA, CHAIRPERSON OF
THE SECURITIES AND EXCHANGE COMMISSION, AND HON. EMMANUEL F. DOOC, INSURANCE COMMISSIONER OF
THE INSURANCE COMMISSION, Respondents.

DECISION

PEREZ, J.:

Challenged in this petition for certiorari1 and prohibition under Rule 65 of the Rules of Court is the constitutionality of
Section 11 of Republic Act (R.A.) No. 9160, the Anti-Money Laundering Act, as amended, specifically the Anti-Money
Laundering Council's authority to file with the Court of Appeals (CA) in this case, an ex-parte application for inquiry into
certain bank deposits and investments, including related accounts based on probable cause.

In 2015, a year before the 2016 presidential elections, reports abounded on the supposed disproportionate wealth of
then Vice President Jejomar Binay and the rest of his family, some of whom were likewise elected public officers. The
Office of the Ombudsman and the Senate conducted investigations 2 and inquiries3 thereon ostensibly based on their
respective powers delineated in the Constitution.
From various news reports announcing the inquiry into then Vice President Binay's bank accounts, including accounts of
members of his family, petitioner Subido Pagente Certeza Mendoza & Binay Law Firm (SPCMB) was most concerned with
the article published in the Manila Times on 25 February 2015 entitled "Inspect Binay Bank Accounts" which read, in
pertinent part:

xxx The Anti-Money Laundering Council (AMLC) asked the Court of Appeals (CA) to allow the [C]ouncil
to peek into the bank accounts of the Binays, their corporations, and a law office where a family
member was once a partner.

xxxx

Also the bank accounts of the law office linked to the family, the Subido Pagente Certeza Mendoza &
Binay Law Firm, where the Vice President's daughter Abigail was a former partner. 4

The following day, 26 February 2015, SPCMB wrote public respondent, Presiding Justice of the CA, Andres B. Reyes, Jr.:

The law firm of Subido Pagente Certeza Mendoza and Binay was surprised to receive a call from Manila
Times requesting for a comment regarding a [supposed petition] filed by the Republic of the Philippines
represented by the Anti-Money Laundering Council before the Court of Appeals seeking to examine the
law office's bank accounts.

To verify the said matter, the law office is authorizing its associate Atty. Jose Julius R. Castro to inquire on
the veracity of said report with the Court of Appeals. He is likewise authorized to secure copies of the
relevant documents of the case, such as the petition and orders issued, if such a case exists.

As this is a matter demanding serious and immediate attention, the Firm respectfully manifests that if no
written response is received within 24-hours from receipt of this letter, we shall be at liberty to assume
that such a case exists and we shall act accordingly.

Hoping for your immediate action.

Respectfully yours,
For the Firm

CLARO F. CERTEZA5

Within twenty four (24) hours, Presiding Justice Reyes wrote SPCMB denying its request, thus:

Anent your request for a comment on a supposed petition to inquire into your law office's bank
accounts, please be informed that a petition of this nature is strictly confidential in that when processing
the same, not even the handling staff members of the Office of the Presiding Justice know or have any
knowledge who the subject bank account holders are, as well as the bank accounts involved.
Please be informed further that clearly under the rules, the Office of the Presiding Justice is strictly
mandated not to disclose, divulge, or communicate to anyone directly or indirectly, in any manner or by
any means, the fact of the filing of any petition brought before this Court by the Anti-Money Laundering
Council, its contents and even its entry in the logbook.

Trusting that you find satisfactory the foregoing explanation. 6

By 8 March 2015, the Manila Times published another article entitled, "CA orders probe of Binay's assets" reporting that
the appellate court had issued a Resolution granting the ex-parte application of the AMLC to examine the bank accounts
of SPCMB:

The Court of Appeals (CA) has officially issued an order for examination of Vice President Jejomar
Binay's bank accounts.

In granting the petition of the Anti-Money Laundering Council (AMLC), the CA also ordered the
inspection of the bank deposits of Binay's wife, children, and a law office connected to him.

xxx xxx xxx

The bank accounts of the law office linked to Binay - the Subido Pagente Certeza Mendoza &
Binay where Binay's daughter, Makati City (Metro Manila) Rep. Mar-len Abigail Binay was a partner, are
also included in the probe, the sources said.7

Forestalled in the CA thus alleging that it had no ordinary, plain, speedy, and adequate remedy to protect its rights and
interests in the purported ongoing unconstitutional examination of its bank accounts by public respondent Anti -Money
Laundering Council (AMLC), SPCMB undertook direct resort to this Court via this petition for certiorari and prohibition
on the following grounds:

1. THE ANTI-MONEY LAUNDERING ACT IS UNCONSTITUTIONAL INSOFAR AS IT ALLOWS THE


EXAMINATION OF A BANK ACCOUNT WITHOUT ANY NOTICE TO THE AFFECTED
PARTY:cralawlawlibrary

1. IT VIOLATES THE PERSON'S RIGHT TO DUE PROCESS; AND

2. IT VIOLATES THE PERSON'S RIGHT TO PRIVACY.

2.
3. EVEN ASSUMING ARGUENDO THAT THE ANTI-MONEY LAUNDERING ACT IS CONSTITUTIONAL, THE
RESPONDENTS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION CONSIDERING THAT:cralawlawlibrary
THE REFUSAL OF RESPONDENT PRESIDING JUSTICE TO PROVIDE PETITIONER WITH A COPY OF
THE EX-PARTE APPLICATION FOR BANK EXAMINATION FILED BY RESPONDENT AMLC AND ALL OTHER
1.
PLEADINGS, MOTIONS, ORDERS, RESOLUTIONS, AND PROCESSES ISSUED BY THE RESPONDENT COURT OF
APPEALS IN RELATION THERETO VIOLATES PETITIONER'S RIGHT TO DUE PROCESS;

A CARTE BLANCHE AUTHORITY TO EXAMINE ANY AND ALL TRANSACTIONS PERTAINING TO PETITIONER'S BANK
2.
ACCOUNTS VIOLATES THE ATTORNEY-CLIENT PRIVILEGE WHICH IS SACROSANCT IN THE LEGAL PROFESSION;

A BLANKET AUTHORITY TO EXAMINE PETITIONER'S BANK ACCOUNTS, INCLUDING ANY AND ALL TRANSACTIONS
3. THEREIN FROM ITS OPENING UP TO THE PRESENT, PARTAKES THE NATURE OF A GENERAL WARRANT THAT IS
CLEARLY INTENDED TO AID A MERE FISHING EXPEDITION;

THERE IS NOTHING IN THE ANTI-MONEY LAUNDERING ACT THAT ALLOWS OR JUSTIFIES THE WITHHOLDING OF
INFORMATION AND/OR ANY COURT RECORDS OR PROCEEDINGS PERTAINING TO AN EXAMINATION OF A BANK
4.
ACCOUNT, ESPECIALLY IF THE COURT HAS ALREADY GRANTED THE AUTHORITY TO CONDUCT THE
EXAMINATION;

THE PETITIONER DID NOT COMMIT, NOR HAS THE PETITIONER BEEN IMPLEADED IN ANY COMPLAINT
5.
INVOLVING ANY PREDICATE CRIME THAT WOULD JUSTIFY AN INQUIRY INTO ITS BANK ACCOUNTS; AND

THE EXAMINATION OF THE PETITIONER'S BANK ACCOUNTS IS A FORM OF POLITICAL PERSECUTION OR


7.
HARASSMENT.8

4.

In their Comment, the AMLC, through the Office of the Solicitor General (OSG), points out a supposed jurisdictional
defect of the instant petition, i.e., SPCMB failed to implead the House of Representatives which enacted the AMLA and its
amendments. In all, the OSG argues for the dismissal of the present petition, highlighting that the AMLC's inquiry into
bank deposits does not violate due process nor the right to privacy:
1. Section 11's allowance for AMLC's ex-parte application for an inquiry into particular bank deposits and investments is
investigative, not adjudicatory;

2. The text of Section 11 itself provides safeguards and limitations on the allowance to the AMLC to inquire into bank
deposits: (a) issued by the CA based on probable cause; and (b) specific compliance to the requirements of Sections 2
and 3, Article III of the Constitution;

3. The ex-parte procedure for investigating bank accounts is necessary to achieve a legitimate state objective;

4. There is no legitimate expectation of privacy as to the bank records of a depositor;

5. The examination of, and inquiry, into SPCMB's bank accounts does not violate Attorney-Client Privilege; and

6. A criminal complaint is not a pre-requisite to a bank inquiry order.

In their Reply, SPCMB maintains that the ex-parte proceedings authorizing inquiry of the AMLC into certain bank
deposits and investments is unconstitutional, violating its rights to due process and privacy.

Before anything else, we here have an original action turning on three crucial matters: (1) the petition reaches us from a
letter of the Presiding Justice of the CA in response to a letter written by SPCMB; (2) SPCMB's bank account has been
reported to be a related account to Vice President Binay's investigated by the AMLC for anti-money laundering activities;
and (3) the constitutionality of Section 11 of the AMLA at its recent amendment has not been squarely raised and
addressed.

To obviate confusion, we act on this petition given that SPCMB directly assails the constitutionality of Section 11 of the
AMLA where it has been widely reported that Vice President Binay's bank accounts and all related accounts therewith are
subject of an investigation by the AMLC. In fact, subsequent events from the filing of this petition have shown that these
same bank accounts (including related accounts) were investigated by the Ombudsman and both Houses of the
Legislature. However, at the time of the filing of this petition, SPCMB alleged that its accounts have been inquired into
but not subjected to a freeze order under Section 10 of the AMLA. Thus, as previously noted, with its preclusion of legal
remedies before the CA which under the AMLA issues the ex-parte bank inquiry and freeze orders, Sections 10 and 11,
respectively, SPCMB establishes that it has no plain, speedy and adequate remedy in the ordinary course of l aw to
protect its rights and interests from the purported unconstitutional intrusion by the AMLC into its bank accounts.

The foregoing shall be addressed specifically and bears directly on the disposition of the decision herein.

Additionally, we note that the OSG did not question how this petition reaches us from a letter of the appellate court's
Presiding Justice, only that, procedurally, SPCMB should have impleaded Congress.

On the sole procedural issue of whether SPCMB ought to have impleaded Congress, the contention of the OSG though
novel is untenable. All cases questioning the constitutionality of a law does not require that Congress be impleaded for
their resolution. The requisites of a judicial inquiry are elementary:

1. There must be an actual case or controversy; party;


2. The question of constitutionality must be raised by the proper party;

3. The constitutional question must be raised at the earliest possible opportunity; and

4. The decision of the constitutional question must be necessary to the determination of the case itself.9

The complexity of the issues involved herein require us to examine the assailed provision vis-a-vis the constitutional
proscription against violation of due process. The statute reads:

SEC. 11. Authority to Inquire into Bank Deposits. - Notwithstanding the provisions of Republic Act No.
1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791; and other laws, the
AMLC may inquire into or examine any particular deposit or investment, including related accounts, with
any banking institution or non-bank financial institution upon order of any competent court based on
an ex parte application in cases of violations of this Act, when it has been established that there is
probable cause that the deposits or investments, including related accounts involved, are related to an
unlawful activity as defined in Section 3(i) hereof or a money laundering offense under Section 4 hereof;
except that no court order shall be required in cases involving activities defined in Section 3(i)(1), (2), and
(12) hereof, and felonies or offenses of a nature similar to those mentioned in Section 3(i)(1), (2), and (12),
which are punishable under the penal laws of other countries, and terrorism and conspiracy to commit
terrorism as defined and penalized under Republic Act No. 9372.

The Court of Appeals shall act on the application to inquire into or examine any deposit or investment
with any banking institution or non-bank financial institution within twenty-four (24) hours from filing of
the application.

To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may, in the course of a periodic or
special examination, check the compliance of a covered institution with the requirements of the AMLA
and its implementing rules and regulations.

For purposes of this section, 'related accounts' shall refer to accounts, the funds and sources of which
originated from and/or are materially linked to the monetary instrument(s) or property(ies) subject of
the freeze order(s).

A court order ex parte must first be obtained before the AMLC can inquire into these related
Accounts: Provided, That the procedure for the ex parte application of the ex partecourt order for the
principal account shall be the same with that of the related accounts.

The authority to inquire into or examine the main account and the related accounts shall comply with
the requirements of Article III, Sections 2 and 3 of the 1987 Constitution, which are hereby incorporated
by reference.10

The due process clause of the Constitution reads:


SECTION 1. No person shall be deprived of life, liberty or property without due process of law, nor shall
any person be denied the equal protection of the laws. 11

The right to due process has two aspects: (1) substantive which deals with the extrinsic and intrinsic validity of the law;
and (2) procedural which delves into the rules government must follow before it deprives a person of its life, liberty or
property.12

As presently worded, Section 11 of the AMLA has three elements: (1) ex-parte application by the AMLC; (2) determination
of probable cause by the CA; and (3) exception of court order in cases involving unlawful activities defined in Sections
3(i)(1), (2), and (12).

As a brief backgrounder to the amendment to Section 11 of the AMLA, the text originally did not specify for
an ex-parte application by the AMLC for authority to inquire into or examine certain bank accounts or investments. The
extent of this authority was the topic of Rep. of the Phils. v. Hon. Judge Eugenio, Jr., et al. (Eugenio)13 where the petitioner
therein, Republic of the Philippines, asseverated that the application for that kind of order under the questioned section
of the AMLA did not require notice and hearing. Eugenio schooled us on the AMLA, specifically on the provisional
remedies provided therein to aid the AMLC in enforcing the law:

It is evident that Section 11 does not specifically authorize, as a general rule, the issuanceex-parte of the
bank inquiry order. We quote the provision in full:

SEC. 11. Authority to Inquire into Bank Deposits. — Notwithstanding the provisions of
Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act
No. 8791, and other laws, the AMLC may inquire into or examine any particular deposit
or investment with any banking institution or non bank financial institution upon order
of any competent court in cases of violation of this Act, when it has been established
that there is probable cause that the deposits or investments are related to an unlawful
activity as defined in Section 3(i) hereof or a money laundering offense under Section 4
hereof, except that no court order shall be required in cases involving unlawful activities
defined in Sections 3(i)1, (2) and (12).

To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire
into or examine any deposit of investment with any banking institution or non bank
financial institution when the examination is made in the course of a periodic or special
examination, in accordance with the rules of examination of the BSP. (Emphasis
supplied)

Of course, Section 11 also allows the AMLC to inquire into bank accounts without having to obtain a
judicial order in cases where there is probable cause that the deposits or investments are related to
kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking
and other violations under R.A. No. 6235, destructive arson and murder. Since such special
circumstances do not apply in this case, there is no need for us to pass comment on this proviso. Suffice
it to say, the proviso contemplates a situation distinct from that which presently confronts us, and for
purposes of the succeeding discussion, our reference to Section 11 of the AMLA excludes said proviso.

In the instances where a court order is required for the issuance of the bank inquiry order, nothing in
Section 11 specifically authorizes that such court order may be issued ex parte. It might be argued that
this silence does not preclude the ex parte issuance of the bank inquiry order since the same is not
prohibited under Section 11. Yet this argument falls when the immediately preceding provision, Section
10, is examined.

SEC 10. Freezing of Monetary Instrument or Property. — The Court of Appeals, upon
application ex parte by the AMLC and after determination that probable cause exists
that any monetary instrument or property is in any way related to an unlawful activity as
defined in Section 3(i) hereof, may issue a freeze order which shall be effective
immediately. The freeze order shall be for a period of twenty (20) days unless extended
by the court.

Although oriented towards different purposes, the freeze order under Section 10 and the bank inquiry
order under Section 11 are similar in that they are extraordinary provisional reliefs which the AMLC may
avail of to effectively combat and prosecute money laundering offenses. Crucially, Section 10 uses
specific language to authorize an ex parte application for the provisional relief therein, a circumstance
absent in Section 11. If indeed the legislature had intended to authorize ex parte proceedings for the
issuance of the bank inquiry order, then it could have easily expressed such intent in the law, as it did
with the freeze order under Section 10.

Even more tellingly, the current language of Sections 10 and 11 of the AMLA was crafted at the same
time, through the passage of R.A. No. 9194. Prior to the amendatory law, it was the AMLC, not the Court
of Appeals, which had authority to issue a freeze order, whereas a bank inquiry order always then
required, without exception, an order from a competent court. It was through the same enactment
that ex parte proceedings were introduced for the first time into the AMLA, in the case of the freeze
order which now can only be issued by the Court of Appeals. It certainly would have been convenient,
through the same amendatory law, to allow a similar ex parte procedure in the case of a bank inquiry
order had Congress been so minded. Yet nothing in the provision itself, or even the available legislative
record, explicitly points to an ex parte judicial procedure in the application for a bank inquiry order,
unlike in the case of the freeze order.

That the AMLA does not contemplate ex parte proceedings in applications for bank inquiry orders is
confirmed by the present implementing rules and regulations of the AMLA, promulgated upon the
passage of R.A. No. 9194. With respect to freeze orders under Section 10, the implementing rules do
expressly provide that the applications for freeze orders be filed ex parte, but no similar clearance is
granted in the case of inquiry orders under Section 11. These implementing rules were promulgated by
the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange
Commission, and if it was the true belief of these institutions that inquiry orders could be issued ex
parte similar to freeze orders, language to that effect would have been incorporated in the said Rules.
This is stressed not because the implementing rules could authorize ex parte applications for inquiry
orders despite the absence of statutory basis, but rather because the framers of the law had no intention
to allow such ex parte applications.

Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC to enforce the provisions of
the AMLA specifically authorize ex parte applications with respect to freeze orders under Section 10 but
make no similar authorization with respect to bank inquiry orders under Section 11.

The Court could divine the sense in allowing ex parte proceedings under Section 10 and in proscribing
the same under Section 11. A freeze order under Section 10 on the one hand is aimed at preserving
monetary instruments or property in any way deemed related to unlawful activities as defined in Section
3(i) of the AMLA. The owner of such monetary instruments or property would thus be inhibited from
utilizing the same for the duration of the freeze order. To make such freeze order anteceded by a
judicial proceeding with notice to the account holder would allow for or lead to the dissipation of such
funds even before the order could be issued. (Citations omitted.)

Quite apparent from the foregoing is that absent a specific wording in the AMLA allowing for ex-parteproceedings in
orders authorizing inquiry and examination by the AMLC into certain bank deposits or investments, notice to the
affected party is required.

Heeding the Court's observance in Eugenio that the remedy of the Republic then lay with the legislative, Congress
enacted Republic Act No. 10167 amending Section 11 of the AMLA and specifically inserted the word ex-parte appositive
of the nature of this provisional remedy available to the AMLC thereunder.

It is this current wording of Section 11 which SPCMB posits as unconstitutional and purportedly actually proscribed
in Eugenio.

We do not subscribe to SPCMB's position.

Succinctly, Section 11 of the AMLA providing for ex-parte application and inquiry by the AMLC into certain bank deposits
and investments does not violate substantive due process, there being no physical seizure of property involved at that
stage. It is the preliminary and actual seizure of the bank deposits or investments in question which brings these within
reach of the judicial process, specifically a determination that the seizure violated due process. 14 In
fact, Eugenio delineates a bank inquiry order under Section 11 from a freeze order under Section 10 on both remedies'
effect on the direct objects, i.e. the bank deposits and investments:

On the other hand, a bank inquiry order under Section 11 does not necessitate any form of physical
seizure of property of the account holder. What the bank inquiry order authorizes is the examination of
the particular deposits or investments in banking institutions or non-bank financial institutions. The
monetary instruments or property deposited with such banks or financial institutions are not seized in a
physical sense, but are examined on particular details such as the account holder's record of deposits
and transactions. Unlike the assets subject of the freeze order, the records to be inspected under a bank
inquiry order cannot be physically seized or hidden by the account holder. Said records are in the
possession of the bank and therefore cannot be destroyed at the instance of the account holder alone
as that would require the extraordinary cooperation and devotion of the bank. 15

At the stage in which the petition was filed before us, the inquiry into certain bank deposits and investments by the
AMLC still does not contemplate any form of physical seizure of the targeted corporeal property. From this cite, we
proceed to examine whether Section 11 of the law violates procedural due process.

As previously stated, the AMLA now specifically provides for an ex-parte application for an order authorizing inquiry or
examination into bank deposits or investments which continues to pass constitutional muster.

Procedural due process is essentially the opportunity to be heard. 16 In this case, at the investigation stage by the AMLC
into possible money laundering offenses, SPCMB demands that it have notice and hearing of AMLC's investigation into
its bank accounts.

We are not unaware of the obiter in Eugenio17 and cited by SPCMB, voicing misgivings on an interpretation of the former
Section 11 of the AMLA allowing for ex-parte proceedings in bank inquiry orders, to wit:

There certainly is fertile ground to contest the issuance of an ex-parte order. Section 11 itself requires
that it be established that "there is probable cause that the deposits or investments are related to
unlawful activities," and it obviously is the court which stands as arbiter whether there is indeed such
probable cause. The process of inquiring into the existence of probable cause would involve the
function of determination reposed on the trial court. Determination clearly implies a function of
adjudication on the part of the trial court, and not a mechanical application of a standard
pre-determination by some other body. The word "determination" implies deliberation and is, in normal
legal contemplation, equivalent to "the decision of a court of justice."

The court receiving the application for inquiry order cannot simply take the AMLC's word that probable
cause exists that the deposits or investments are related to an unlawful activity. It will have to exercise its
own determinative function in order to be convinced of such fact. The account holder would be certainly
capable of contesting such probable cause if given the opportunity to be apprised of the pending
application to inquire into his account; hence a notice requirement would not be an empty spectacle. It
may be so that the process of obtaining the inquiry order may become more cumbersome or
prolonged because of the notice requirement, yet we fail to see any unreasonable burden cast by such
circumstance. After all, as earlier stated, requiring notice to the account holder should not, in any way,
compromise the integrity of the bank records subject of the inquiry which remain in the possession and
control of the bank. (Emphasis supplied)

On that score, the SPCMB points out that the AMLC 's bank inquiry is preliminary to the seizure and deprivation of its
property as in a freeze order under Section 10 of the AMLA which peculiarity lends itself to a sui generis proceeding akin
to the evaluation process in extradition proceedings pronounced in Secretary of Justice v. Hon. Lantion.18 Under the
extradition law, the Secretary of Foreign Affairs is bound to make a finding that the extradition request and its supporting
documents are sufficient and complete in form and substance before delivering the same to the Secretary of Justice. We
ruled:

[L]ooking at the factual milieu of the case before us, it would appear that there was failure to abide by
the provisions of Presidential Decree No. 1069. For while it is true that the extradition request was
delivered to the Department of Foreign Affairs on June 17, 1999, the following day or less than 24 hours
later, the Department of Justice received the request, apparently without the Department of Foreign
affairs discharging its duty thoroughly evaluating the same and its accompanying documents. xxx.

xxxx

[T]he record cannot support the presumption of regularity that the Department of Foreign Affairs
thoroughly reviewed the extradition request and supporting documents and that it arrived at a
well-founded judgment that the request and its annexed documents satisfy the requirements of law.
XXX.

The evaluation process, just like the extradition proceedings, proper belongs to a class by itself. It is sui
generis. It is not a criminal investigation, but it is also erroneous to say that it is purely an exercise of
ministerial functions. At such stage, the executive authority has the power: (a) to make a technical
assessment of the completeness and sufficiency of the extradition papers; (b) to outrightly deny the
request if on its face and on the face of the supporting documents the crimes indicated are not
extraditable; and (c) to make a determination whether or not the request is politically motivated, or that
the offense is a military one which is not punishable under non-military penal legislation. Hence, said
process may be characterized as an investigative or inquisitorial process in contrast to a proceeding
conducted in the exercise of an administrative body's quasi-judicial power.

In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of evidence; (b)
determining facts based upon the evidence presented; and (c) rendering an order or decision supported
by the facts proved. Inquisitorial power, which is also known as examining or investigatory power, is one
of the determinative powers of an administrative body which better enables it to exercise its
quasi-judicial authority. This power allows the administrative body to inspect the records and premises,
and investigate the activities, of persons or entities coming under its jurisdiction, or to require disclosure
of information by means of accounts, records, reports, testimony of witnesses, production of documents,
or otherwise.

The power of investigation consists in gathering, organizing, and analyzing evidence, which is a useful
aid or tool in an administrative agency's performance of its rule-making or quasi-judicial functions.
Notably, investigation is indispensable to prosecution.19 (Emphasis supplied, citations omitted)

The submission of AMLC requires a determination whether the AMLC is an administrative body with quasi-judicial
powers; corollary thereto, a determination of the jurisdiction of the AMLC.
Lim v. Gamosa20 is enlightening on jurisdiction and the requirement of a specific grant thereof in the enabling law. We
declared that the creation of the National Commission on Indigenous Peoples (NCIP) by the Indigenous Peoples Rights
Act (IPRA) did not confer it exclusive and original, nor primary jurisdiction, in all claims and disputes involving rights of IPs
and ICCs where no such specific grant is bestowed.

In this instance, the grant of jurisdiction over cases involving money laundering offences is b estowed on the Regional
Trial Courts and the Sandiganbayan as the case may be. In fact, Rule 5 of the IRR is entitled Jurisdiction of Money
Laundering Cases and Money Laundering Investigation Procedures:

Rule 5.a. Jurisdiction of Money Laundering Cases. The Regional Trial Courts shall have the jurisdiction to
try all cases on money laundering. Those committed by public officers and private persons who are in
conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan.

Rule 5.b. Investigation of Money Laundering Offenses. - The AMLC shall investigate:

(1) suspicious transactions;


(2) covered transactions deemed suspicious after an investigation conducted by the
AMLC;
(3) money laundering activities; and
(4) other violations of the AMLA, as amended.

The confusion on the scope and parameters of the AMLC's investigatory powers and whether such seeps into and
approximates a quasi-judicial agency's inquisitorial powers lies in the AMLC's investigation and consequent initial
determination of whether certain activities are constitutive of anti-money laundering offenses.

The enabling law itself, the AMLA, specifies the jurisdiction of the trial courts, RTC and Sandiganbayan, over money
laundering cases, and delineates the investigative powers of the AMLC.

Textually, the AMLA is the first line of defense against money laundering in compliance with our international obligation.
There are three (3) stages of determination, two (2) levels of investigation, falling under three (3) jurisdictions:

1. The AMLC investigates possible money laundering offences and initially determines whether there is probable cause to
charge any person with a money laundering offence under Section 4 of the AMLA, resulting in the filing of a complaint
with the Department of Justice or the Office of the Ombudsman; 21

2. The DOJ or the Ombudsman conducts the preliminary investigation proceeding and if after due notice and hearing
finds probable cause for money laundering offences, shall file the necessary information before the Regional Trial Courts
or the Sandiganbayan;22

3. The RTCs or the Sandiganbayan shall try all cases on money laundering, as may be applicable. 23

Nowhere from the text of the law nor its Implementing Rules and Regulations can we glean that the AMLC exercises
quasi-judicial functions whether the actual preliminary investigation is done simply at its behest or conducted by the
Department of Justice and the Ombudsman.
Again, we hark back to Lantion citing Ruperto v. Torres,23-a where the Court had occasion to rule on the functions of an
investigatory body with the sole power of investigation:

[Such a body] does not exercise judicial functions and its power is limited to investigating facts and
making findings in respect thereto. The Court laid down the test of determining whether an
administrative body is exercising judicial functions or merely investigatory functions: Adjudication
signifies the exercise of power and authority to adjudicate upon the rights and obligations of the parties
before it. Hence, if the only purpose for investigation is to evaluate evidence submitted before it based
on the facts and Circumstances presented to it, and if the agency is not authorized to make a final
pronouncement affecting the parties, then there is an absence of judicial discretion and judgment.

adjudicate in regard to the rights and obligations of both the Requesting State and the prospective
extraditee. Its only power is to determine whether the papers comply with the requirements of the law
and the treaty and, therefore, sufficient to be the basis of an extradition petition. Such finding is thus
merely initial and not final. The body has no power to determine whether or not the extradition should
be effected. That is the role of the court. The body's power is limited to an initial finding of whether or
not the extradition petition can be filed in court.

It is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure is


characterized by certain peculiarities. Primarily, it sets into motion the wheels of the extradition process.
Ultimately, it may result in the deprivation of liberty of the prospective extraditee. This deprivation can
be effected at two stages: First, the provisional arrest of the prospective extraditee pending the
submission of the request. This is so because the Treaty provides that in case of urgency, a contracting
party may request the provisional arrest of the person sought pending presentation of the request
(Paragraph [1], Article 9, RP-US Extradition Treaty), but he shall be automatically discharged after 60
days if no request is submitted (Paragraph 4). Presidential Decree No. 1069 provides for a shorter period
of 20 days after which the arrested person could be discharged (Section 20[d]). Logically, although th e
Extradition Law is silent on this respect, the provisions only mean that once a request is forwarded to the
Requested State, the prospective extraditee may be continuously detained, or if not, subsequently
rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only be discharged if no
request is submitted. Practically, the purpose of this detention is to prevent his possible flight from the
Requested State. Second, the temporary arrest of the prospective extraditee during the pendency of the
extradition petition in court (Section 6, Presidential Decree No. 1069).

Clearly, there is an impending threat to a prospective extraditee's liberty as early as during the
evaluation stage. It is not only an imagined threat to his liberty, but a very imminent one.

Because of these possible consequences, we conclude that the evaluation process is akin to an
administrative agency conducting an investigative proceeding, the consequences of which are
essentially criminal since such technical assessment sets off or commences the procedure for, and
ultimately, the deprivation of liberty of a prospective extraditee, As described by petitioner himself, this
is a "tool" for criminal law enforcement. In essence, therefore, the evaluation process partakes of t he
nature of a criminal investigation. In a number of cases, we had occasion to make available to a
respondent in an administrative case or investigation certain constitutional rights that are ordinarily
available only in criminal prosecutions. Further, as pointed out by Mr. Justice Mendoza during the oral
arguments, there are rights formerly available only at the trial stage that had been advanced to an
earlier stage in the proceedings, such as the right to counsel and the right against
self-incrimination.24 (Citations omitted)

In contrast to the disposition in Lantion that the evaluation process before the Department of Foreign Affairs is akin to an
administrative agency conducting investigative proceedings with implications on the consequences of criminal
liability, i.e., deprivation of liberty of a prospective extraditee, the sole investigative functions of the AMLC finds more
resonance with the investigative functions of the National Bureau of Investigation (NBI).

That the AMLC does not exercise quasi-judicial powers and is simply an investigatory body finds support in our ruling
in Shu v. Dee.25 In that case, petitioner Shu had filed a complaint before the NBI charging respondents therein with
falsification of two (2) deeds of real estate mortgage submitted to the Metropolitan Bank and Trust Company
(Metrobank). After its investigation, the NBI came up with a Questioned Documents Report No. 746-1098 finding that the
signatures of petitioner therein which appear on the questioned deeds are not the same as the standard sample
signatures he submitted to the NBI. Ruling on the specific issue raised by respondent therein that they had been denied
due process during the NBI investigation, we stressed that the functions of this agency are merely investigatory and
informational in nature:

[The NBI] has no judicial or quasi-judicial powers and is incapable of granting any relief to any party. It
cannot even determine probable cause. The NBI is an investigative agency whose findings are merely
recommendatory. It undertakes investigation of crimes upon its own initiative or as public welfare may
require in accordance with its mandate. It also renders assistance when requested in the investigation or
detection of crimes in order to prosecute the persons responsible.

Since the NBI's findings were merely recommendatory, we find that no denial of the respondent's due
process right could have taken place; the NBI's findings were still subject to the prosecutor's and the
Secretary of Justice's actions for purposes of finding the existence of probable cause. We find it
significant that the specimen signatures in the possession of Metrobank were submitted by the
respondents for the consideration of the city prosecutor and eventually of the Secretary of Justice
during the preliminary investigation proceedings. Thus, these officers had the opportunity to examine
these signatures.

The respondents were not likewise denied their right to due process when the NBI issued the
questioned documents report. We note that this report merely stated that the signatures appearing on
the two deeds and in the petitioner's submitted sample signatures were not written by one and the
same person. Notably, there was no categorical finding in the questioned documents report that the
respondents falsified the documents. This report, too, was procured during the conduct of the NBI's
investigation at the petitioner's request for assistance in the investigation of the alleged crime of
falsification. The report is inconclusive and does not prevent the respondents from securing a separate
documents examination by handwriting experts based on their own evidence. On its own, the NBI's
questioned documents report does not directly point to the respondents' involvement in the crime
charged. Its significance is that, taken together with the other pieces of evidence submitted by the
parties during the preliminary investigation, these evidence could be sufficient for purposes of finding
probable cause — the action that the Secretary of Justice undertook in the present case.

As carved out in Shu, the AMLC functions solely as an investigative body in the instances mentioned in Rule
5.b.26 Thereafter, the next step is for the AMLC to file a Complaint with either the DOJ or the Ombudsman pursuant to
Rule 6.b.

Even in the case of Estrada v. Office of the Ombudsman,27 where the conflict arose at the preliminary investigation stage
by the Ombudsman, we ruled that the Ombudsman's denial of Senator Estrada's Request to be furnished copies of the
counter-affidavits of his co-respondents did not violate Estrada's constitutional right to due process where the sole issue
is the existence of probable cause for the purpose of determining whether an information should be filed and does not
prevent Estrada from requesting a copy of the counter-affidavits of his co-respondents during the pre-trial or even
during trial. We expounded on the nature of preliminary investigation proceedings, thus:

It should be underscored that the conduct of a preliminary investigation is only for the determination of
probable cause, and "probable cause merely implies probability of guilt and should be determined in a
summary manner. A preliminary investigation is not a part of the trial and it is only in a trial where an
accused can demand the full exercise of his rights, such as the right to confront and cross-examine his
accusers to establish his innocence." Thus, the rights of a respondent in a preliminary investigation are
limited to those granted by procedural law.

A preliminary investigation is defined as an inquiry or proceeding for the purpose of


determining whether there is sufficient ground to engender a well founded belief that a
crime cognizable by the Regional Trial Court has been committed and that the
respondent is probably guilty thereof, and should be held for trial. The quantum of
evidence now required in preliminary investigation is such evidence sufficient to
"engender a well founded belief' as to the fact of the commission of a crime and the
respondent's probable guilt thereof A preliminary investigation is not the occasion for
the full and exhaustive display of the parties' evidence; it is for the presentation of such
evidence only as may engender a well-grounded belief that an offense has been
committed and that the accused is probably guilty thereof. We are in accord with the
state prosecutor's findings in the case at bar that there exists prima facie evidence of
petitioner's involvement in the commission of the crime, it being sufficiently supported
by the evidence presented and the facts obtaining therein.

Likewise devoid of cogency is petitioner's argument that the testimonies of Galarion


and Hanopol are inadmissible as to him since he was not granted the opportunity of
cross-examination.
It is a fundamental principle that the accused in a preliminary investigation has no right
to cross-examine the witnesses which the complainant may present. Section 3, Rule 112
of the Rules of Court expressly provides that the respondent shall only have the right to
submit a counter-affidavit, to examine all other evidence submitted by the complainant
and, where the fiscal sets a hearing to propound clarificatory questions to the parties or
their witnesses, to be afforded an opportunity to be present but without the right to
examine or cross-examine. Thus, even if petitioner was not given the opportunity to
cross-examine Galarion and Hanopol at the time they were presented to testify during
the separate trial of the case against Galarion and Roxas, he cannot assert any legal
right to cross-examine them at the preliminary investigation precisely because such
right was never available to him. The admissibility or inadmissibility of said testimonies
should be ventilated before the trial court during the trial proper and not in the
preliminary investigation.

Furthermore, the technical rules on evidence are not binding on the fiscal who has
jurisdiction and control over the conduct of a preliminary investigation. If by its very
nature a preliminary investigation could be waived by the accused, we find no
compelling justification for a strict application of the evidentiary rules. In addition,
considering that under Section 8, Rule 112 of the Rules of Court, the record of the
preliminary investigation does not form part of the record of the case in the Regional
Trial Court, then the testimonies of Galarion and Hanopol may not be admitted by the
trial court if not presented in evidence by the prosecuting fiscal. And, even if the
prosecution does present such testimonies, petitioner can always object thereto and
the trial court can rule on the admissibility thereof; or the petitioner can, during the trial,
petition said court to compel the presentation of Galarion and Hanopol for purposes of
cross-examination. (Citations and emphasis omitted)

Plainly, the AMLC's investigation of money laundering offenses and its determination of possible money laundering
offenses, specifically its inquiry into certain bank accounts allowed by court order, does not transform it into an
investigative body exercising quasi-judicial powers. Hence, Section 11 of the AMLA, authorizing a bank inquiry court
order, cannot be said to violate SPCMB's constitutional right to procedural due process.

We now come to a determination of whether Section 11 is violative of the constitutional right to privac y enshrined in
Section 2, Article III of the Constitution. SPCMB is adamant that the CA's denial of its request to be furnished copies of
AMLC's ex-parte application for a bank inquiry order and all subsequent pleadings, documents and orders filed and
issued in relation thereto, constitutes grave abuse of discretion where the purported blanket authority under Section 11:
(1) partakes of a general warrant intended to aid a mere fishing expedition; (2) violates the attorney-client privilege; (3) is
not preceded by predicate crime charging SPCMB of a money laundering offense; and (4) is a form of political
harassment [of SPCMB's] clientele.

We shall discuss these issues jointly since the assailed Section 11 incorporates by reference that "[t]he authority to inq uire
into or examine the main and the related accounts shall comply with the requirements of Article III, Sections 2 and 3 of
the 1987 Constitution." On this point, SPCMB asseverates that "there is nothing in the AMLA that allows or justifies the
withholding of information and/or any court records or proceedings pertaining to an examination of a bank account,
especially if the court has already granted the authority to conduct the examination."

The theme of playing off privacy rights and interest against that of the state's interest in curbing money laundering
offenses is recurring.28

The invoked constitutional provisions read:

SEC. 2. The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable cause to be determined personally
by the judge after examination under oath or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched and the person or things to be seized.

SEC. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful
order of the court, or when public policy or order requires otherwise as prescribed by law.

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any
purpose in any proceeding.

Once again, Eugenio29 offers guidance:

The Court's construction of Section 11 of the AMLA is undoubtedly influenced by right to privacy
considerations. If sustained, petitioner's argument that a bank account may be inspected by the
government following an ex parte proceeding about which the depositor would know nothing would
have significant implications on the right to privacy, a right innately cherished by all notwithstanding the
legally recognized exceptions thereto. The notion that the government could be so empowered is cause
for concern of any individual who values the right to privacy which, after all, embodies even the right to
be "let alone," the most comprehensive of rights and the right most valued by civilized people.

One might assume that the constitutional dimension of the right to privacy, as applied to bank deposits,
warrants our present inquiry. We decline to do so. Admittedly, that question has proved controversial in
American jurisprudence. Notably, the United States Supreme Court in U.S. v. Miller held that there was
no legitimate expectation of privacy as to the bank records of a depositor. Moreover, the text of our
Constitution has not bothered with the triviality of allocating specific rights peculiar to bank deposits.

However, sufficient for our purposes, we can assert there is a right to privacy governing bank accounts
in the Philippines, and that such right finds application to the case at bar. The source of such right is
statutory, expressed as it is in R.A. No. 1405 otherwise known as the Bank Secrecy Act of 1955. The right
to privacy is enshrined in Section 2 of that law, to wit:
SECTION 2. All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the Philippines,
its political subdivisions and its instrumentalities, are hereby considered as of an
absolutely confidential nature and may not be examined, inquired or looked into by
any person, government official, bureau or office, except upon written permission of
the depositor, or in cases of impeachment, or upon order of a competent court in cases
of bribery or dereliction of duty of public officials, or in cases where the money
deposited or invested is the subject matter of the litigation.

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state policy in the
Philippines. Subsequent laws, including the AMLA, may have added exceptions to the Bank Secrecy Act,
yet the secrecy of bank deposits still lies as the general rule. It falls within the zones of privacy
recognized by our laws. The framers of the 1987 Constitution likewise recognized that bank accounts are
not covered by either the right to information under Section 7, Article III or under the requirement of full
public disclosure under Section 28, Article II. Unless the Bank Secrecy Act is repealed or amended, the
legal order is obliged to conserve the absolutely confidential nature of Philippine bank deposits.

Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2 of the Bank
Secrecy Act itself prescribes exceptions whereby these bank accounts may be examined by "any person,
government official, bureau or office"; namely when: (1) upon written permission of the depositor; (2) in
cases of impeachment; (3) the examination of bank accounts is upon order of a competent court in
cases of bribery or dereliction of duty of public officials; and (4) the money deposited or invested is the
subject matter of the litigation. Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act,
has been recognized by this Court as constituting an additional exception to the rule of absolute
confidentiality, and there have been other similar recognitions as well.

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may inquire
into a bank account upon order of any competent court in cases of violation of the AMLA, it having
been established that there is probable cause that the deposits or investments are related to unlawful
activities as defined in Section 3(i) of the law, or a money laundering offense under Section 4 thereof.
Further, in instances where there is probable cause that the deposits or investments are related to
kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking
and other violations under R.A. No. 6235, destructive arson and murder, then there is no need for the
AMLC to obtain a court order before it could inquire into such accounts.

It cannot be successfully argued the proceedings relating to the bank inquiry order under Section 11 of
the AMLA is a "litigation" encompassed in one of the exceptions to the Bank Secrecy Act which is when
"the money deposited or invested is the subject matter of the litigation." The orientation of the bank
inquiry order is simply to serve as a provisional relief or remedy. As earlier stated, the application for
such does not entail a full-blown trial.
Nevertheless, just because the AMLA establishes additional exceptions to the Bank Secrecy Act it does
not mean that the later law has dispensed with the general principle established in the older law that
"[a]ll deposits of whatever nature with banks or banking institutions in the Philippines x x x are hereby
considered as of an absolutely confidential nature." Indeed, by force of statute, all bank deposits are
absolutely confidential, and that nature is unaltered even by the legislated exceptions referred to above.
There is disfavor towards construing these exceptions in such a manner that would authorize unlimited
discretion on the part of the government or of any party seeking to enforce those exceptions and
inquire into bank deposits. If there are doubts in upholding the absolutely confidential nature of bank
deposits against affirming the authority to inquire into such accounts, then such doubts must be
resolved in favor of the former. Such a stance would persist unless Congress passes a law reversing the
general state policy of preserving the absolutely confidential nature of Philippine bank accounts.
(Citations omitted, emphasis supplied)

From the foregoing disquisition, we extract the following principles:

1. The Constitution did not allocate specific rights peculiar to bank deposits;

2. The general rule of absolute confidentiality is simply statutory, 30i.e. not specified in the Constitution, which has been
affirmed in jurisprudence;31

3. Exceptions to the general rule of absolute confidentiality have been carved out by the Legislature which legislation
have been sustained, albeit subjected to heightened scrutiny by the courts; 32 and

4. One such legislated exception is Section 11 of the AMLA.

The warning in Eugenio that an ex-parte proceeding authorizing the government to inspect certain bank accounts or
investments without notice to the depositor would have significant implications on the right to privacy still does not
preclude such a bank inquiry order to be allowed by specific legislation as an exception to the general rule of absolute
confidentiality of bank deposits.

We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing arbitrary in the allowance and
authorization to AMLC to undertake an inquiry into certain bank accounts or deposits. Instead, we found that it provides
safeguards before a bank inquiry order is issued, ensuring adherence to the general state policy of preserving the
absolutely confidential nature of Philippine bank accounts:

(1) The AMLC is required to establish probable cause as basis for its ex-parte application for bank inquiry order;

(2) The CA, independent of the AMLC's demonstration of probable cause, itself makes a finding of probable cause that
the deposits or investments are related to an unlawful activity under Section 3(i) or a money laundering offense under
Section 4 of the AMLA;
(3) A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry court order ex-parte for the
principal account which court order ex-parte for related accounts is separately based on probable cause that such
related account is materially linked to the principal account inquired into; and

(4) The authority to inquire into or examine the main or principal account and the related accounts shall comply with the
requirements of Article III, Sections 2 and 3 of the Constitution.

The foregoing demonstrates that the inquiry and examination into the bank account are not undertaken whimsically and
solely based on the investigative discretion of the AMLC. In particular, the requirement of demonstration by the AMLC,
and determination by the CA, of probable cause emphasizes the limits of such governmental action. We will revert to
these safeguards under Section 11 as we specifically discuss the CA's denial of SPCMB's letter request for information
concerning the purported issuance of a bank inquiry order involving its accounts.

First. The AMLC and the appellate court are respectively required to demonstrate and ascertain probable cause. Ret. Lt.
Gen. Ligot, et al. v. Republic of the Philippines,33 which dealt with the adjunct provisional remedy of freeze order under
Section 10 of the AMLA, defined probable cause, thus:

The probable cause required for the issuance of a freeze order differs from the probable cause required
for the institution of a criminal action, xxx.

As defined in the law, the probable cause required for the issuance of a freeze order refers to "such facts
and circumstances which would lead a reasonably discreet, prudent or cautious man to believe that an
unlawful activity and/or money laundering offence is about to be, is being or has been committed and
that the account or any monetary instrument or property subject thereof sought to be frozen is in any
way related to said unlawful activity and/or money laundering offense."

In other words, in resolving the issue of whether probable cause exits, the CA's statutorily-guided
determination's focus is not on the probable commissions of an unlawful activity (or money laundering)
that the office of the Ombudsman has already determined to exist, but on whether the bank accounts,
assets, or other monetary instruments sought to be frozen are in any way related to any of the illegal
activities enumerated under R.A. 9160, as amended. Otherwise stated, probable cause refers to the
sufficiency of the relation between an unlawful activity and the property or monetary instrument which is
the focal point of Section 10 of RA No. 9160, as amended. xxx. (Emphasis supplied)

Second. As regards SPCMB's contention that the bank inquiry order is in the nature of a general
warrant, Eugenio already declared that Section 11, even with the allowance of an ex parte application therefor, "is not a
search warrant or warrant of arrest as it contemplates a direct object but not the seizure of persons or property." 34 It
bears repeating that the ''bank inquiry order" under Section 11 is a provisional remedy to aid the AMLC in the
enforcement of the AMLA.

Third. Contrary to the stance of SPCMB, the bank inquiry order does not contemplate that SPCMB be first impleaded in a
money laundering case already filed before the courts:
We are unconvinced by this proposition, and agree instead with the then Solicitor General who
conceded that the use of the phrase "in cases of' was unfortunate, yet submitted that it should be
interpreted to mean "in the event there are violations" of the AMLA, and not that there are already cases
pending in court concerning such violations. If the contrary position is adopted, then the bank inquiry
order would be limited in purpose as a tool in aid of litigation of live cases, and wholly inutile as a means
for the government to ascertain whether there is sufficient evidence to sustain an intended prosecution
of the account holder for violation of the AMLA. Should that be the situation, in all likelihood the AMLC
would be virtually deprived of its character as a discovery tool, and thus would become less circumspect
in filing complaints against suspect account holders. After all, under such set-up the preferred strategy
would be to allow or even encourage the indiscriminate filing of complaints under the AMLA with the
hope or expectation that the evidence of money laundering would somehow .surface during the trial.
Since the AMLC could not make use of the bank inquiry order to determine whether there is evidentiary
basis to prosecute the suspected malefactors, not filing any case at all would not be an alternative. Such
unwholesome set-up should not come to pass. Thus Section 11 cannot be interpreted in a way that
would emasculate the remedy it has established and encourage the unfounded initiation of complaints
for money laundering.35 (Citation omitted)

Guided as we are by prior holdings, and bound as we are by the requirements for issuance of a bank inquiry order under
Section 11 of the AMLA, we are hard pressed to declare that it violates SPCMB's right to privacy.

Nonetheless, although the bank inquiry order ex-parte passes constitutional muster, there is nothing in Section 11 nor
the implementing rules and regulations of the AMLA which prohibits the owner of the bank account, as in his instance
SPCMB, to ascertain from the CA, post issuance of the bank inquiry order ex-parte, if his account is indeed the subject of
an examination. Emphasized by our discussion of the safeguards under Section 11 preceding the issuance of such an
order, we find that there is nothing therein which precludes the owner of the account from challenging the basis for the
issuance thereof.

The present controversy revolves around the issue of whether or not the appellate court, through the Presiding Justice,
gravely abused its discretion when it effectively denied SPCMB's letter-request for confirmation that the AMLC had
applied (ex-parte) for, and was granted, a bank inquiry order to examine SPCMB's bank accounts relative to the
investigation conducted on Vice-President Binay's accounts.

We recall the Presiding Justice's letter to SPCMB categorically stating that "under the rules, the Office of the Presiding
Justice is strictly mandated not to disclose, divulge, or communicate to anyone directly or indirectly, in any manner or by
any means, the fact of the filing of the petition brought before [the Court of Appeals] by the [AMLC], its contents and
even its entry in the logbook." Note that the letter did not cite the aforementioned rules that were supposedly crystal
clear to foreclose ambiguity. Note further that Rules 10.c.3 and 10.d of the IRR on Authority to File Petitions for Freeze
Order provides that:

Rule 10.c. Duty of Covered Institutions upon receipt thereof. —


Rule 10.c.1. Upon receipt of the notice of the freeze order, the covered institution concerned shall
immediately freeze the monetary instrument or property and related accounts subject thereof.

Rule 10.c.2. The covered institution shall likewise immediately furnish a copy of the notice of the freeze
order upon the owner or holder of the monetary instrument or property or related accounts subject
thereof.

Rule 10.c.3. Within twenty-four (24) hours from receipt of the freeze order, the covered institution
concerned shall submit to the Court of Appeals and the AMLC, by personal delivery, a detailed written
return on the freeze order, specifying all the pertinent and relevant information which shall include the
following:

(a) the account numbers;


(b) the names of the account owners or holders;
(c) the amount of the monetary instrument, property or related accounts as of the time
they were frozen;
(d) all relevant information as to the nature of the monetary instrument or property;
(e) any information on the related accounts pertaining to the monetary instrument or
property subject of the freeze order; and
(f) the time when the freeze thereon took effect.

Rule 10.d. Upon receipt of the freeze order issued by the Court of Appeals and upon verification by the
covered institution that the related accounts originated from and/or are materially linked to the
monetary instrument or property subject of the freeze order, the covered institution shall freeze these
related accounts wherever these may be found.

The return of the covered institution as required under Rule 10.c.3 shall include the fact of such freezing
and an explanation as to the grounds for the identification of the related accounts.

If the related accounts cannot be determined within twenty-four (24) hours from receipt of the freeze
order due to the volume and/or complexity of the transactions or any other justifiable factor(s), the
covered institution shall effect the freezing of the related accounts, monetary instruments and
properties as soon as practicable and shall submit a supplemental return thereof to the Court of Appeals
and the AMLC within twenty-four (24) hours from the freezing of said related accounts, monetary
instruments and properties.

The foregoing rule, in relation to what Section 11 already provides, signifies that ex-parte bank inquiry orders on related
accounts may be questioned alongside, albeit subsequent to, the issuance of the initial freeze order of the subject bank
accounts. The requirements and procedure for the issuance of the order, including the return to be made thereon lay the
grounds for judicial review thereof. We expound.

An act of a court or tribunal can only be considered tainted with grave abuse of discretion when such act is done in a
capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. It is well-settled that the abuse of
discretion to be qualified as "grave" must be so patent or gross as to constitute an evasion of a positive duty or a virtual
refusal to perform the duty or to act at all in contemplation of law. 36 In this relation, case law states that not every error in
the proceedings, or every erroneous conclusion of law or fact, constitutes grave abuse of discretion. 37 The degree of
gravity, as above-described, must be met.

That the propriety of the issuance of the bank inquiry order is a justiciable issue brooks no argument. A justiciable
controversy refers to an existing case or controversy that is appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory. 38

As previously adverted to in our discussion on the right to privacy, the clash of privacy rights and interest against that of
the government's is readily apparent. However, the statutorily enshrined general rule on absolute confidentiality of bank
accounts remains. Thus, the safeguards instituted in Section II of the AMLA and heretofore discussed provide for certain
well defined limits, as in the language of Baker v. Carr, "judicially discoverable standards" for determining the validity of
the exercise of such discretion by the appellate court in denying the letter-request of SPCMB.39 In short, Section II itself
provides the basis for the judicial inquiry and which the owner of the bank accounts subject of the AMLC inquiry may
invoke.

Undeniably, there is probable and preliminary governmental action against SPCMB geared towards impl ementation of
the AMLA directed at SPCMB's property, although there is none, as yet, physical seizure thereof, as in freezing of bank
accounts under Section 10 of the AMLA. 40 Note, however, that the allowance to question the bank inquiry order we carve
herein is tied to the appellate court's issuance of a freeze order on the principal accounts. Even in Eugenio, while
declaring that the bank inquiry order under Section II then required prior notice of such to the account owner, we
recognized that the determination of probable cause by the appellate court to issue the bank inquiry order can be
contested. As presently worded and how AMLC functions are designed under the AMLA, the occasion for the issuance of
the freeze order upon the actual physical seizure of the investigated and inquired into bank account, calls into motions
the opportunity for the bank account owner to then question, not just probable cause for the issuance of the freeze
order under Section I 0, but, to begin with, the determination of probable cause for an ex-parte bank inquiry order into a
purported related account under Section II.

In enacting the amendment to Section II of the AMLC, the legislature saw it fit to place requirements before a bank
inquiry order may be issued. We discussed these requirements as basis for a valid exception to the general rule on
absolute confidentiality of bank accounts. However, these very safe guards allow SPCMB, post issuance of
the ex-parte bank inquiry order, legal bases to question the propriety of such issued order, if any. To emphasize, this
allowance to the owner of the bank account to question the bank inquiry order is granted only after issuance of the
freeze order physically seizing the subject bank account. It cannot be undertaken prior to the issuan ce of the freeze
order.

While no grave abuse of discretion could be ascribed on the part of the appellate court when it explained in its letter that
petitions of such nature "is strictly confidential in that when processing the same, not even the handling staff members of
the Office of the Presiding Justice know or have any knowledge who the subject bank account holders are, as well as the
bank accounts involved," it was incorrect when it declared that "under the rules, the Office of the Presiding Justice i s
strictly mandated not to disclose, divulge, or communicate to anyone directly or indirectly, in any manner or by any
means, the fact of the filing of any petition brought before [the Court of Appeals] by the Anti-Money Laundering Council,
its contents and even its entry in the logbook." As a result, the appellate court effectively precluded and prevented
SPCMB of any recourse, amounting to a denial of SPCMB's letter request.

We cannot overemphasize that SPCMB, as the owner of the bank account which may be the subject of inquiry of the
AMLC, ought to have a legal remedy to question the validity and propriety of such an order by the appellate court under
Section 11 of the AMLA even if subsequent to the issuance of a freeze order. Moreover, given the scope of inquiry of the
AMLC, reaching and including even related accounts, which inquiry into specifies a proviso that: "[t]hat the procedure for
the ex-parte application of the ex-partecourt order for the principal account shall be the same with that of the related
accounts," SPCMB should be allowed to question the government intrusion. Plainly, by implication, SPCMB can
demonstrate the absence of probable cause, i.e. that it is not a related account nor are its accounts materially linked to
the principal account being investigated.41

In BSB Group, Inc. v. Go,42 we recounted the objective of the absolute confidentiality rule which is protection from
unwarranted inquiry or investigation if the purpose of such inquiry or investigation is merely to determine the existence
and nature, as well as the amount of the deposit in any given bank account:

xxx. There is, in fact, much disfavor to construing these primary and supplemental exceptions in a
manner that would authorize unbridled discretion, whether governmental or otherwise, in utilizing these
exceptions as authority for unwarranted inquiry into bank accounts. It is then perceivable that the
present legal order is obliged to conserve the absolutely confidential nature of bank deposits.

The measure of protection afforded by the law has been explained in China Banking Corporation v.
Ortega. That case principally addressed the issue of whether the prohibition against an examination of
bank deposits precludes garnishment in satisfaction of a judgment. Ruling on that issue in the negative,
the Court found guidance in the relevant portions of the legislative deliberations on Senate Bill No. 351
and House Bill No. 3977, which later became the Bank Secrecy Act, and it held that the absolute
confidentiality rule in R.A. No. 1405 actually aims at protection from unwarranted inquiry or investigation
if the purpose of such inquiry or investigation is merely to determine the existence and nature, as well as
the amount of the deposit in any given bank account. Thus,

x x x The lower court did not order an examination of or inquiry into the deposit of B&B
Forest Development Corporation, as contemplated in the law. It merely required Tan
Kim Liong to inform the court whether or not the defendant B&B Forest Development
Corporation had a deposit in the China Banking Corporation only for purposes of the
garnishment issued by it, so that the bank would hold the same intact and not allow
any withdrawal until further order. It will be noted from the discussion of the conference
committee report on Senate Bill No. 351 and House Bill No. 3977 which later became
Republic Act No. 1405, that it was not the intention of the lawmakers to place banks
deposits beyond the reach of execution to satisfy a final judgment Thus:

x x x Mr. Marcos: Now, for purposes of the record, I should like the
Chairman of the Committee on Ways and Means to clarify this further.
Suppose an individual has a tax case. He is being held liable by the
Bureau of Internal Revenue [(BIR)] or, say, P1,000.00 worth of tax
liability, and because of this the deposit of this individual [has been]
attached by the [BIR].

Mr. Ramos: The attachment will only apply after the court has
pronounced sentence declaring the liability of such person. But where
the primary aim is to determine whether he has a bank deposit in
order to bring about a proper assessment by the [BIR], such inquiry is
not allowed by this proposed law.

Mr. Marcos: But under our rules of procedure and under the Civil Code,
the attachment or garnishment of money deposited is allowed. Let us
assume for instance that there is a preliminary attachment which is for
garnishment or for holding liable all moneys deposited belonging to a
certain individual, but such attachment or garnishment will bring out
into the open the value of such deposit. Is that prohibited by... the law?

Mr. Ramos: It is only prohibited to the extent that the inquiry... is made
only for the purpose of satisfying a tax liability already declared for the
protection of the right in favor of the government; but when the object
is merely to inquire whether he has a deposit or not for purposes of
taxation, then this is fully covered by the law. x x x

Mr. Marcos: The law prohibits a mere investigation into the existence
and the amount of the deposit.

Mr. Ramos: Into the very nature of such deposit. x x x (Citations


omitted)

What is reflected by the foregoing disquisition is that the law plainly prohibits a mere investigation into the existence and
the amount of the deposit. We relate the principle to SPCMB's relationship to the reported principal account under
investigation, one of its clients, former Vice President Binay. SPCMB as the owner of one of the bank accounts reported
to be investigated by the AMLC for probable money laundering offenses should be allowed to pursue remedies
therefrom where there are legal implications on the inquiry into its accounts as a law firm. While we do not lapse into
conjecture and cannot take up the lance for SPCMB on probable violation of the attorney-client privilege based on pure
speculation, the extent of information obtained by the AMLC concerning the clients of SPCMB has not been fully drawn
and sufficiently demonstrated. At the same time, the owner of bank accounts that could be potentially affected has the
right to challenge whether the requirements for issuance of the bank inquiry order were indeed complied with given that
such has implications on its property rights. In this regard, SPCMB's obeisance to promulgated rules on the matter could
have afforded it a remedy, even post issuance of the bank inquiry order.
Rule 10.b. of the IRR defines probable cause as "such facts and circumstances which would lead a reasonably discreet,
prudent or cautious man to believe that an unlawful activity and/or a money laundering offense is abou t to be, is being
or has been committed and that the account or any monetary instrument or property sought to be frozen is in any way
related to said unlawful activity and/or money laundering offense." Evidently, the provision only refers to probable cause
for freeze orders under Section 10 of the AMLA. From this we note that there is a glaring lacunae in our procedural rules
concerning the bank inquiry order under Section 11. Despite the advent of RA No. 10167, amending Section 11 of the
AMLA, we have yet to draft additional rules corresponding to the ex-parte bank inquiry order under Section 11. A.M. No.
05-11-04-SC entitled "Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary
Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering
Offense Under Republic Act No. 9160, as Amended," only covers what is already provided in the title. As we have already
noted, the bank inquiry order must likewise be governed by rules specific to its issuance where the AMLC regularly
invokes this provision and which, expectedly clashes with the rights of bank account holders.

Apart from Section 2, Rule IV of the 2009 Internal Rules of the CA (IRCA) reads:

SEC. 2. Action by the Presiding Justice or Executive Justice. — When a petition involves an urgent
matter, such as an application for writ of habeas corpus, amparo or habeas data or for temporary
restraining order, and there is no way of convening the Raffle Committee or calling any of its members,
the Presiding Justice or the Executive Justice, as the case may be, or in his/her absence, the most senior
Justice present, may conduct the raffle or act on the petition, subject to raffle in the latter case on the
next working day in accordance with Rule III hereof.

(AMLA cases are limited to the first three most senior Justices as stated in the law and are raffled by the
Chairmen of the First, Second and Third Divisions to the members of their Divisions only.)

Nothing in the IRCA justifies the disallowance to SPCMB of information and/or court records or proceedings pertaining
to the possible bank inquiry order covering its bank deposits or investment.

We note that the Presiding Justice's reply to the request for comment of SPCMB on the existence of a petition for bank
inquiry order by the AMLC covering the latter's account only contemplates the provisions of Section 10 of the AMLA, its
IRR and the promulgated rules thereon. Such immediate and definitive foreclosure left SPCMB with no recourse on how
to proceed from what it perceived to be violation of its rights as owner of the bank account examined. The reply of the
Presiding Justice failed to take into consideration Section 54 of A.M. No. 05-11-04-SC on Notice of Freeze Order which
reads:

SEC. 54. Notice of freeze order.- The Court shall order that notice of the freeze order be served
personally, in the same manner provided for the service of the asset preservation order in Section 14 of
this Rule, upon the respondent or any person acting in his behalf and such covered institution or
government agency. The court shall notify also such party in interest as may have appeared before the
court. (Emphasis supplied)

We relate this Section 54 to the already cited Rule 10.d of the IRR
Rule 10.d. Upon receipt of the freeze order issued by the Court of Appeals and upon verification by the
covered institution that the related accounts originated from and/or are materially linked to the
monetary instrument or property subject of the freeze order, the covered institution shall freeze these
related accounts wherever these may be found.

The return of the covered institution as required under Rule 10.c.3 shall include the fact of such freezing
and an explanation as to the grounds for the identification of the related accounts.

If the related accounts cannot be determined within twenty-four (24) hours from receipt of the freeze
order due to the volume and/or complexity of the transactions or any other justifiable factor(s), the
covered institution shall effect the freezing of the related accounts, monetary instruments and
properties as soon as practicable and shall submit a supplemental return thereof to the Court of
Appeals and the AMLC within twenty-four (24) hours from the freezing of said related accounts,
monetary instruments and properties. (Emphasis supplied)

demonstrating that the return of the Freeze Order must provide an explanation as to the grounds for the identification of
the related accounts, or the requirement of notice to a party in interest affected thereby whose bank accounts were
examined. This necessarily contemplates the procedure for a prior bank inquiry order which we ought to provide for.

For exact reference, we cite A.M. No. 05-11-04-SC, Title VIII on Petitions for Freeze Order in the CA which certain
pertinent provisions we adopt and apply suppletorily as a separate Title on Petitions for Bank Inquiry Order:

TITLE VIII
PETITIONS FOR FREEZE ORDER IN THE COURT OF APPEALS

SEC. 43. Applicability. - This Rule shall apply to petitions for freeze order in the Court of Appeals. The
2002 Internal Rules of the Court of Appeals, as amended, shall apply suppletorily in all other aspects.

xxxx

SEC. 46. Contents of the petition. - The petition shall contain the following allegations:

(a) The name and address of the respondent;

A specific description with particularity of the monetary instrument, property or proceeds, their location, the name
(b)
of the owner, holder, lienholder or possessor, if known;

(c) The grounds relied upon for the issuance of a freeze order; and

The supporting evidence showing that the subject monetary instrument, property, or proceeds are in any way
(d) related to or involved in an unlawful activity as defined under Section 3(i) of Republic Act No. 9160, as amende d by
Republic Act No. 9194.
The petition shall be filed in seven clearly legible copies and shall be accompanied by clearly legible copies of
supporting documents duly subscribed under oath.

xxxx

SEC. 49. Confidentiality; prohibited disclosure. - The logbook and the entries therein shall be kept strictly
confidential and maintained under the responsibility of the Presiding Justice or the Executive Justices, as
the case may be. No person, including Court personnel, shall disclose, divulge or communicate to
anyone directly or indirectly, in any manner or by any means, the fact of the filing of the petition for
freeze order, its contents and its entry in the logbook except to those authorized by the Court. Violation
shall constitute contempt of court.

xxxx

SEC. 51. Action by the Court of Appeals.- All members of the Division of the Court to which the assigned
justice belongs shall act on the petition within twenty-four hours after its filing. However, if one member
of the Division is not available, the assigned justice and the other justice present shall act on the petition.
If only the assigned justice is present, he shall act alone. The action of the two justices or of the assigned
justice alone, as the case may be, shall be forthwith promulgated and thereafter submitted on the next
working day to the absent member or members of the Division for ratification, modification or recall.

If the Court is satisfied from the verified allegations of the petition that there exists probable cause that
the monetary instrument, property, or proceeds are in any way related to or involved in any unlawful
activity as defined in Section 3(i) of Republic Act No. 9160, as amended by Republic Act No. 9194, it shall
issue ex parte a freeze order as hereinafter provided.

If the Court finds no substantial merit in the petition, it shall dismiss the petition outright, stating the
specific reasons for such dismissal.

When the unanimous vote of the three justices of the Division cannot be obtained, the Presiding Justice
or the Executive Justice shall designate two justices by raffle from among the other justices of the first
three divisions to sit temporarily with them forming a special division of five justices. The concurrence of
a majority of such special division shall be required for the pronouncement of a judgment or resolution.

SEC. 52. Issuance, form and contents of the freeze order - The freeze order shall:

(a) issue in the name of the Republic of the Philippines represented by the Anti-Money Laundering Council;

describe with particularity the monetary instrument, property or proceeds frozen, as well as the names of their
(b)
owner or owners; and
direct the person or covered institution to immediately freeze the subject monetary instrument, property or
(c)
proceeds or its related web of accounts.

SEC. 53. Freeze order.

Effectivity; post issuance hearing. - The freeze order shall be effective immediately for a period of twenty days.
(a) Within the twenty-day period, the court shall conduct a summary hearing, with notice to the parties, to determine
whether or not to modify or lift the freeze order, or extend its effectivity as hereinafter provided.

Extension. - On motion of the petitioner filed before the expiration of twenty days from issuance of a freeze order,
(b)
the court may for good cause extend its effectivity for a period not exceeding six months.

SEC. 54. Notice of freeze order.- The Court shall order that notice of the freeze order be served
personally, in the same manner provided for the service of the asset preservation order in Section 14 of
this Rule, upon the respondent or any person acting in his behalf and such covered institution or
government agency. The court shall notify also such party in interest as may have appeared before the
court.

SEC. 55. Duty of respondent, covered institution or government agency upon receipt of freeze order. -
Upon receipt of a copy of the freeze order, the respondent, covered institution or government agency
shall immediately desist from and not allow any transaction, withdrawal, deposit, transfer, removal,
conversion, other movement or concealment the account representing, involving or relating to the
subject monetary instrument, property, proceeds or its related web of accounts.

SEC. 56. Consolidation with the pending civil forfeiture proceedings - After the post-issuance hearing
required in Section 53, the Court shall forthwith remand the case and transmit the records to the
regional trial court for consolidation with the pending civil forfeiture proceeding.

SEC. 57. Appeal.- Any party aggrieved by the decision or ruling of the court may appeal to the Supreme
Court by petition for review on certiorari under Rule 45 of the Rules of Court. The appeal shall not stay
the enforcement of the subject decision or final order unless the Supreme Court directs otherwise.

A reverse situation affords us a clearer picture of the arbitrary and total preclusion of SPCMB to question the bank inquiry
order of the appellate court. In particular, in an occasion where the appellate court denies the
AMLC's ex-parte application for a bank inquiry order under Section 11, the AMLC can question this denial and assail such
an order by the appellate court before us on grave abuse of discretion. Among others, the AMLC can demonstrate that it
has established probable cause for its issuance, or if the situation contemplates a denial of an application for a bank
inquiry order into a related account, the AMLC can establish that the account targeted is indeed a related account. The
resolution on these factual and legal issues ought to be reviewable, albeit post issuance of the Freeze Order, akin to the
provision of an Appeal to the Supreme Court under Section 57 of A.M. No. 05-11-04-SC.
Palpably, the requirement to establish probable cause is not a useless supposition. To establish and demonstrate the
required probable cause before issuance of the bank inquiry and the freeze orders is a screw on which the AMLC's
intrusive functions turns. We are hard pressed to justify a disallowance to an aggrieved owner of a bank account to avail
of remedies.

That there are no specific rules governing the bank inquiry order does not signify that the CA cannot confirm to the
actual owner of the bank account reportedly being investigated whether it had in fact issued a bank inquiry order for
covering its accounts, of course after the issuance of the Freeze Order. Even in Ligot,43 we held that by implication, where
the law did not specify, the owner of the "frozen" property may move to lift the freeze order issued under Section 10 of
the AMLA if he can show that no probable cause exists or the 20-day period of the freeze order has already lapsed
without any extension being requested from and granted by the CA. Drawing a parallel, such a showing of the absence
of probable cause ought to be afforded SPCMB.

Ligot clarifies that "probable cause refers to the sufficiency of the relation between an unlawful activity and the property
or monetary instrument which is the focal point of Section 10 of the AMLA, as amended." This same probable caus e is
likewise the focal point in a bank inquiry order to further determine whether the account under investigation is linked to
unlawful activities and/or money laundering offense. Thus, the specific applicability of Sections 52, 53, 54 and 57 Title VIII
of A.M. No. 05-11-04-SC covering the following: (1) Issuance, Form and Content of the Freeze Order; (2) Effectivity of the
Freeze Order and Post Issuance Hearing thereon; (3) Notice of the Freeze Order; and (4) Appeal from the Freeze Order
as separate Rules for Petitions to Question the Bank Inquiry Order. And as held in Eugenio which now applies to the
present Section 11 of the AMLA:

Although oriented towards different purposes, the freeze order under Section 10 and the bank inquiry
order under Section 11 are similar in that they are extraordinary provisional reliefs which the AMLC may
avail of to effectively combat and prosecute money laundering offenses. Crucially, Section 10 uses
specific language to authorize an ex parte application for the provisional relief therein, a circumstance
absent in Section 11. xxx.44

The cited rules cover and approximate the distinction made by Eugenio in declaring that the bank inquiry order is not a
search warrant, and yet there are instituted requirements for the issuance of these orders given that such is now
allowed ex-parte:

The Constitution and the Rules of Court prescribe particular requirements attaching to search warrants
that are not imposed by the AMLA with respect to bank inquiry orders. A constitutional warrant requires
that the judge personally examine under oath or affirmation the complainant and the witnesses he may
produce, such examination being in the form of searching questions and answers. Those are impositions
which the legislative did not specifically prescribe as to the bank inquiry order under the AMLA and we
cannot find sufficient legal basis to apply them to Section 11 of the AMLA. Simply put, a bank inquiry
order is not a search warrant or warrant of arrest as it contemplates a direct object but not the seizure of
persons or property.
Even as the Constitution and the Rules of Court impose a high procedural standard for the
determination of probable cause for the issuance of search warrants which Congress chose not to
prescribe for the bank inquiry order under the AMLA, Congress nonetheless disallowed ex
parte applications for the inquiry order. We can discern that in exchange for these procedural standards
normally applied to search warrants, Congress chose instead to legislate a right to notice and a ri ght to
be heard — characteristics of judicial proceedings which are not ex parte. Absent any demonstrable
constitutional infirmity, there is no reason for us to dispute such legislative policy choices. 45

Thus, as an ex-parte bank inquiry order which Congress has now specifically allowed, the owner of a bank account post
issuance of the freeze order has an opportunity under the Rules to contest the establishment of probable cause.

Again, we cannot avoid the requirement-limitation nexus in Section 11. As it affords the government authority to pursue a
legitimate state interest to investigate money laundering offenses, such likewise provides the limits for the authority
given. Moreover, allowance to the owner of the bank account, post issuance of the bank inquiry order and the
corresponding freeze order, of remedies to question the order, will not forestall and waylay the government's pursuit of
money launderers. That the bank inquiry order is a separate from the freeze order does not denote that it cannot be
questioned. The opportunity is still rife for the owner of a bank account to question the basis for its very inclusion into the
investigation and the corresponding freezing of its account in the process.

As noted in Eugenio, such an allowance accorded the account holder who wants to contest the issuance of the order and
the actual investigation by the AMLC, does not cast an unreasonable burden since the bank inquiry order has already
been issued. Further, allowing for notice to the account holder should not, in any way, compromise the integrity of the
bank records subject of the inquiry which remain in the possession and control of the bank. The account holder so
notified remains unable to do anything to conceal or cleanse his bank account records of suspicious or anomalous
transactions, at least not without the whole hearted cooperation of the bank, which inherently has no vested interest to
aid the account holder in such manner. Rule 10.c. 46 of the IRR provides for Duty of the Covered Institution receiving the
Freeze Order. Such can likewise be made applicable to covered institutions notified of a bank inquiry order.

On the other hand, a scenario where SPCMB or any account holder under examination later shows that the bank inquiry
order was without the required probable cause, the information obtained through the account reverts to, and maintains,
its confidentiality. In short, any and all information obtained therein by the AMLC remains confidential, as if no
examination or inquiry on the bank account or investments was undertaken. The foregoing consequence can be added
as a Section in the Rules entitled "Effect of absence of probable cause."

All told, we affirm the constitutionality of Section 11 of the AMLA allowing the ex-parte application by the AMLC for
authority to inquire into, and examine, certain bank deposits and investments.

Section 11 of the AMLA providing for the ex-parte bank deposit inquiry is constitutionally firm for the reasons already
discussed. The ex-parte inquiry shall be upon probable cause that the deposits or investments are related to an unlawful
activity as defined in Section 3(i) of the law or a money laundering offense under Section 4 of the same law. To effect the
limit on the ex-parte inquiry, the petition under oath for authority to inquire, must, akin to the requirement of a petition
for freeze order enumerated in Title VIII of A.M. No. 05-11-04-SC, contain the name and address of the respondent; the
grounds relied upon for the issuance of the order of inquiry; and the supporting evidence that the subject bank deposit
are in any way related to or involved in an unlawful activity.

If the CA finds no substantial merit in the petition, it shall dismiss the petition outright stating the specific reasons for
such denial. If found meritorious and there is a subsequent petition for freeze order, the proceedings shall be governed
by the existing Rules on Petitions for Freeze Order in the CA. From the issuance of a freeze order, the party aggrieved by
the ruling of the court may appeal to the Supreme Court by petition for review on certiorari under Rule 45 of the Rules of
Court raising all pertinent questions of law and issues, including the propriety of the issuance of a bank inquiry order. The
appeal shall not stay the enforcement of the subject decision or final order unless the Supreme Court directs otherwise.
The CA is directed to draft rules based on the foregoing discussions to complement the existing A.M. No. 05 -11-04-SC
Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or
Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering Offense under Republic Act
No. 9160, as Amended for submission to the Committee on the Revision of the Rules of Court and eventual approval and
promulgation of the Court en banc.

WHEREFORE, the petition is DENIED. Section 11 of Republic Act No. 9160, as amended, is
declared VALID and CONSTITUTIONAL.

SO ORDERED.
D. APPLICABILITY OF ELECTRONIC EVIDENCE

G.R. No. 204894 March 10, 2014

PEOPLE OF THE PHILIPPINES, Appellee,


vs.
NOEL ENOJAS y HINGPIT, ARNOLD GOMEZ y FABREGAS, FERNANDO SANTOS y DELANTAR, and ROGER JALANDONI y
ARI, Appellants.

DECISION

ABAD, J.:

On September 4, 2006 the City Prosecutor of Las Piñas charged appellants Noel Enojas y Hingpit (Enojas), Arnold Gomez
y Fabregas (Gomez), Fernando Santos y Delantar (Santos), and Roger Jalandoni y Ari (Jalandoni) with murder before the
Las Pifias Regional Trial Court (RTC) in Criminal Case 06-0854.1

PO2 Eduardo Gregorio, Jr. (P02 Gregorio) testified that at around 10:30 in the evening of August 29, 2006, he and P02
Francisco Pangilinan (PO2 Pangilinan) were patrolling the vicinity of Toyota Alabang and SM Southmall when they
spotted a taxi that was suspiciously parked in front of the Aguila Auto Glass shop near the intersection of BF Almanza
and Alabang-Zapote Roads. The officers approached the taxi and asked the driver, later identified as accused Enojas, for
his documents. The latter complied but, having entertained doubts regarding the veracity of documents shown them,
they asked him to come with them to the police station in their mobile car for further questioning. 2
Accused Enojas voluntarily went with the police officers and left his taxi behind. On reaching the 7-11 convenience store
on the Zapote-Alabang Road, however, they stopped and PO2 Pangilinan went down to relieve himself there. As he
approached the store’s door, however, he came upon two suspected robbers and shot it out with them. PO2 Pangilinan
shot one suspect dead and hit the other who still managed to escape. But someone fired at PO2 Pangilinan causing his
death.

On hearing the shots, PO2 Gregorio came around and fired at an armed man whom he saw running towards Pilar Village.
He saw another man, who came from the Jollibbee outlet, run towards Alabang-Zapote Road while firing his gun at PO2
Gregorio. The latter returned fire but the men were able to take a taxi and escape. PO2 Gregorio radioed for help and for
an ambulance. On returning to his mobile car, he realized that accused Enojas, the taxi driver they had with them had
fled.

P/Insp. Ferjen Torred (Torred), the Chief of Investigation Division of the Las Piñas Police, testified that he and PO2 Teoson
Rosarito (PO2 Rosarito) immediately responded to PO2 Gregorio’s urgent call. Suspecting that accused Enojas, the taxi
driver who fled, was involved in the attempted robbery, they searched the abandoned taxi and found a mobile phone
that Enojas apparently left behind. P/Ins. Torred instructed PO3 Joel Cambi (PO3 Cambi) to monitor its incoming
messages.3

The police later ascertained that the suspect whom PO2 Pangilinan had killed was someone named Reynaldo Mendoza
who was armed with a .38 caliber revolver. The police found spent 9 mm and M-16 rifle shells at the crime scene.
Follow-up operations at nearby provinces resulted in finding the dead body of one of the suspects, Alex Angeles, at the
Metro South Medical Center along Molino, Bacoor, Cavite.4

PO3 Cambi and PO2 Rosarito testified that they monitored the messages in accused Enojas’ mobile phone and, posing
as Enojas, communicated with the other accused. The police then conducted an entrapment operation that resulted in
the arrest of accused Santos and Jalandoni. Subsequently, the police were also able to capture accused Enojas and
Gomez. The prosecution presented the transcripts of the mobile phone text messages between Enojas and some of his
co-accused.5

The victim’s father, Ricardo Pangilinan, testified that his son was at the time of his death 28 years old, unmarried, and was
receiving police pay of ₱8,000.00 to ₱10,000.00 per month. Ricardo spent ₱99,999 for burial expense, ₱16,000.00 for
the interment services, and ₱50,000.00 for purchase of the cemetery lot. 6

Manifesting in open court that they did not want to adduce any evidence or testify in the case, 7 the accused opted to
instead file a trial memorandum on March 10, 2008 for their defense. They pointed out that they were entitled to an
acquittal since they were all illegally arrested and since the evidence of the text messages were inadmissible, not having
been properly identified.

On June 2, 2008 the RTC rendered judgment, 8 finding all the accused guilty of murder qualified by evident premeditation
and use of armed men with the special aggravating circumstance of use of unlicensed firearms. It thus sentenced them
to suffer the penalty of reclusion perpetua, without the possibility of parole and to indemnify the heirs of PO2 Pangilinan
with ₱165,999.00 as actual damages, ₱50,000.00 as moral damages, ₱25,000.00 as exemplary damages, and ₱
2,080,000.00 as compensation for loss of earning capacity.
Upon review in CA-G.R. CR-H.C. 03377, on June 14, 2012 the Court of Appeals (CA) dismissed the appeal and affirmed in
toto the conviction of the accused. 9 The CA, however, found the absence of evident premeditation since the prosecution
failed to prove that the several accused planned the crime before committing it. The accused appealed from the CA to
this Court.10

The defense points out that the prosecution failed to present direct evidence that the accused Enojas, Gomez, Santos, or
Jalandoni took part in shooting PO2 Pangilinan dead. 11 This may be true but the prosecution could prove their liability by
circumstantial evidence that meets the evidentiary standard of proof beyond reasonable doubt. It has been held that
circumstantial evidence is sufficient for conviction if: 1) there is more than one circumstance; 2) the facts from which the
inferences are derived are proven; and 3) the combination of all the circumstances is such as to produce a conviction
beyond reasonable doubt.12

Here the totality of the circumstantial evidence the prosecution presented sufficiently provides basis for the conviction of
all the accused. Thus:

1. PO2 Gregorio positively identified accused Enojas as the driver of the taxicab suspiciously parked in front of the Aguila
Auto Glass shop. The officers were bringing him with them to the police station because of the questionable documents
he showed upon query. Subsequent inspection of the taxicab yielded Enojas’ mobile phone that contained messages
which led to the entrapment and capture of the other accused who were also taxicab drivers.

2. Enojas fled during the commotion rather than remain in the cab to go to the police station where he was about to be
taken for questioning, tending to show that he had something to hide. He certainly did not go to the police afterwards to
clear up the matter and claim his taxi.

3. PO2 Gregorio positively identified accused Gomez as one of the men he saw running away from the scene of the
shooting.

4. The text messages identified "Kua Justin" as one of those who engaged PO2 Pangilinan in the shootout; the messages
also referred to "Kua Justin" as the one who was hit in such shootout and later died in a hospital in Bacoor, Cavite. These
messages linked the other accused.

5. During the follow-up operations, the police investigators succeeded in entrapping accused Santos, Jalandoni, Enojas,
and Gomez, who were all named in the text messages.

6. The text messages sent to the phone recovered from the taxi driven by Enojas clearly made references to the 7-11
shootout and to the wounding of "Kua Justin," one of the gunmen, and his subsequent death.

7. The context of the messages showed that the accused were members of an organized group of taxicab drivers
engaged in illegal activities.

8. Upon the arrest of the accused, they were found in possession of mobile phones with call numbers that corresponded
to the senders of the messages received on the mobile phone that accused Enojas left in his taxicab. 13
The Court must, however, disagree with the CA’s ruling that the aggravating circumstances of a) aid of armed men and b)
use of unlicensed firearms qualified the killing of PO2 Pangilinan to murder. In "aid of armed men," the men act as
accomplices only. They must not be acting in the commission of the crime under the same purpose as the principal
accused, otherwise they are to be regarded as co-principals or co-conspirators. The use of unlicensed firearm, on the
other hand, is a special aggravating circumstance that is not among the circumstances mentioned in Article 248 of the
Revised Penal Code as qualifying a homicide to murder. 14 Consequently, the accused in this case may be held liable only
for homicide, aggravated by the use of unlicensed firearms, a circumstance alleged in the information.

As to the admissibility of the text messages, the RTC admitted them in conformity with the Court’s earlier Resolution
applying the Rules on Electronic Evidence to criminal actions. 15 Text messages are to be proved by the testimony of a
person who was a party to the same or has personal knowledge of them. 16 Here, PO3 Cambi, posing as the accused
Enojas, exchanged text messages with the other accused in order to identify and entrap them. As the recipient of those
messages sent from and to the mobile phone in his possession, PO3 Cambi had personal knowledge of such messages
and was competent to testify on them.

The accused lament that they were arrested without a valid warrant of arrest.1âwphi1 But, assuming that this was so, it
cannot be a ground for acquitting them of the crime charged but for rejecting any evidence that may have been taken
from them after an unauthorized search as an incident of an unlawful arrest, a point that is not in issue here. At any rate,
a crime had been committed—the killing of PO2 Pangilinan—and the investigating police officers had personal
knowledge of facts indicating that the persons they were to arrest had committed it. 17 The text messages to and from the
mobile phone left at the scene by accused Enojas provided strong leads on the participation and identities of the
accused. Indeed, the police caught them in an entrapment using this knowledge.

The award of damages by the courts below has to be modified to conform to current jurisprudence. 18

WHEREFORE, the Court MODIFIES the Court of Appeals Decision of June 14, 2012 in CA-G.R. CR-HC 03377. The Court
instead FINDS accused-appellants Noel Enojas y Hingpit, Arnold Gomez y Fabregas, Fernando Santos y Delantar, and
Roger Jalandoni y Ari GUILTY of the lesser crime of HOMICIDE with the special aggravating circumstance of use of
unlicensed firearms. Applying the Indeterminate Sentence Law, the Court SENTENCES each of them to 12 years of prision
mayor, as minimum, to 20 years of reclusion temporal, as maximum. The Court also MODIFIES the award of exemplary
damages by increasing it to ₱30,000.00, with an additional ₱50,000.00 for civil indemnity.

SO ORDERED.
G.R. No. 182835 April 20, 2010

RUSTAN ANG y PASCUA, Petitioner,


vs.
THE HONORABLE COURT OF APPEALS and IRISH SAGUD, Respondents.

DECISION

ABAD, J.:

This case concerns a claim of commission of the crime of violence against women when a former boyfriend sent to the
girl the picture of a naked woman, not her, but with her face on it.

The Indictment

The public prosecutor charged petitioner-accused Rustan Ang (Rustan) before the Regional Trial Court (RTC) of Baler,
Aurora, of violation of the Anti-Violence Against Women and Their Children Act or Republic Act (R.A.) 9262 in an
information that reads:
That on or about June 5, 2005, in the Municipality of Maria Aurora, Province of Aurora, Philippines and within the
jurisdiction of this Honorable Court, the said accused willfully, unlawfully and feloniously, in a purposeful and reckless
conduct, sent through the Short Messaging Service (SMS) using his mobile phone, a pornographic picture to one Irish
Sagud, who was his former girlfriend, whereby the face of the latter was attached to a completely naked body of another
woman making it to appear that it was said Irish Sagud who is depicted in the said obscene and pornographic picture
thereby causing substantial emotional anguish, psychological distress and humiliation to the said Irish Sagud.1

The Facts and the Case

The evidence for the prosecution shows that complainant Irish Sagud (Irish) and accused Rustan were classmates at
Wesleyan University in Aurora Province. Rustan courted Irish and they became "on-and-off" sweethearts towards the end
of 2004. When Irish learned afterwards that Rustan had taken a live-in partner (now his wife), whom he had gotten
pregnant, Irish broke up with him.

Before Rustan got married, however, he got in touch with Irish and tried to convince her to elope with him, saying that he
did not love the woman he was about to marry. Irish rejected the proposal and told Rustan to take on his responsibility to
the other woman and their child. Irish changed her cellphone number but Rustan somehow managed to get hold of it
and sent her text messages. Rustan used two cellphone numbers for sending his messages, namely, 0920-4769301 and
0921-8084768. Irish replied to his text messages but it was to ask him to leave her alone.

In the early morning of June 5, 2005, Irish received through multimedia message service (MMS) a picture of a naked
woman with spread legs and with Irish’s face superimposed on the figure (Exhibit A).2 The sender’s cellphone number,
stated in the message, was 0921-8084768, one of the numbers that Rustan used. Irish surmised that he copied the
picture of her face from a shot he took when they were in Baguio in 2003 (Exhibit B). 3

After she got the obscene picture, Irish got other text messages from Rustan. He boasted that it would be easy for him to
create similarly scandalous pictures of her. And he threatened to spread the picture he sent through the internet. One of
the messages he sent to Irish, written in text messaging shorthand, read: " Madali lang ikalat yun, my chatrum ang tarlac
rayt pwede ring send sa lahat ng chatter."4

Irish sought the help of the vice mayor of Maria Aurora who referred her to the police. Under police supervision, Irish
contacted Rustan through the cellphone numbers he used in sending the picture and his text messages. Irish asked
Rustan to meet her at the Lorentess Resort in Brgy. Ramada, Maria Aurora, and he did. He came in a motorcycle. Af ter
parking it, he walked towards Irish but the waiting police officers intercepted and arrested him. They searched him and
seized his Sony Ericsson P900 cellphone and several SIM cards. While Rustan was being questioned at the police station,
he shouted at Irish: "Malandi ka kasi!"

Joseph Gonzales, an instructor at the Aurora State College of Technology, testified as an expert in information
technology and computer graphics. He said that it was very much possible for one to lift the face of a woman from a
picture and superimpose it on the body of another woman in another picture. Pictures can be manipulated and
enhanced by computer to make it appear that the face and the body belonged to just one person.
Gonzales testified that the picture in question (Exhibit A) had two distinct irregularities: the face was not proportionate to
the body and the face had a lighter color. In his opinion, the picture was fake and the face on it had been copied from
the picture of Irish in Exhibit B. Finally, Gonzales explained how this could be done, transferring a picture from a
computer to a cellphone like the Sony Ericsson P900 seized from Rustan.

For his part, Rustan admitted having courted Irish. He began visiting her in Tarlac in October 2003 and their relation
lasted until December of that year. He claimed that after their relation ended, Irish wanted reconciliation. They met in
December 2004 but, after he told her that his girlfriend at that time (later his wife) was already pregnant, Irish walked out
on him.

Sometime later, Rustan got a text message from Irish, asking him to meet her at Lorentess Resort as she needed his help
in selling her cellphone. When he arrived at the place, two police officers approached him, seized his cellphone and the
contents of his pockets, and brought him to the police station.

Rustan further claims that he also went to Lorentess because Irish asked him to help her identify a prankster who was
sending her malicious text messages. Rustan got the sender’s number and, pretending to be Irish, contacted the person.
Rustan claims that he got back obscene messages from the prankster, which he forwarded to Irish from his cellphone.
This explained, he said, why the obscene messages appeared to have originated from his cellphone number. Rustan
claims that it was Irish herself who sent the obscene picture (Exhibit A) to him. He presented six pictures of a woman
whom he identified as Irish (Exhibits 2 to 7). 5

Michelle Ang (Michelle), Rustan’s wife, testified that she was sure Irish sent the six pictures. Michelle claims that she
received the pictures and hid the memory card (Exhibit 8) that contained them because she was jealous and angry. She
did not want to see anything of Irish. But, while the woman in the pictures posed in sexy clothing, in none did she appear
naked as in Exhibit A. Further, the face of the woman in Exhibits 2, 4, 5 and 6 could not be seen. Irish denied that she was
the woman in those four pictures. As for Exhibits 3 and 7, the woman in the picture was fully dressed.

After trial, the RTC found Irish’s testimony completely credible, given in an honest and spontaneous manner. The RTC
observed that she wept while recounting her experience, prompting the court to comment: "Her tears were tangible
expression of pain and anguish for the acts of violence she suffered in the hands of her former sweetheart. The crying of
the victim during her testimony is evidence of the credibility of her charges with the verity borne out of human nature
and experience."6 Thus, in its Decision dated August 1, 2001, the RTC found Rustan guilty of the violation of Section 5(h)
of R.A. 9262.

On Rustan’s appeal to the Court of Appeals (CA), 7 the latter rendered a decision dated January 31, 2008, 8 affirming the
RTC decision. The CA denied Rustan’s motion for reconsideration in a resolution dated April 25, 2008. Thus, Rustan filed
the present for review on certiorari.

The Issues Presented

The principal issue in this case is whether or not accused Rustan sent Irish by cellphone message the picture with her face
pasted on the body of a nude woman, inflicting anguish, psychological distress, and humiliation on her in violation of
Section 5(h) of R.A. 9262.
The subordinate issues are:

1. Whether or not a "dating relationship" existed between Rustan and Irish as this term is defined in R.A. 9262;

2. Whether or not a single act of harassment, like the sending of the nude picture in this case, already c onstitutes a
violation of Section 5(h) of R.A. 9262;

3. Whether or not the evidence used to convict Rustan was obtained from him in violation of his constitutional rights; and

4. Whether or not the RTC properly admitted in evidence the obscene picture presented in the case.

The Court’s Rulings

Section 3(a) of R.A. 9262 provides that violence against women includes an act or acts of a person against a woman with
whom he has or had a sexual or dating relationship. Thus:

SEC. 3. Definition of Terms. – As used in this Act,

(a) "Violence against women and their children" refers to any act or a series of acts committed by any person against a
woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or dating relationship,
or with whom he has a common child, or against her child whether legitimate or illegitimate, within or without the family
abode, which result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse
including threats of such acts, battery, assault, coercion, harassment or arbitrary deprivation of liberty.

xxxx

Section 5 identifies the act or acts that constitute violence against women and these include any form of harassment that
causes substantial emotional or psychological distress to a woman. Thus:

SEC. 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

h. Engaging in purposeful, knowing, or reckless conduct, personally or through another, that alarms or causes substantial
emotional or psychological distress to the woman or her child. This shall include, but not be limited to, the following acts:

xxxx

5. Engaging in any form of harassment or violence;

The above provisions, taken together, indicate that the elements of the crime of violence against women through
harassment are:

1. The offender has or had a sexual or dating relationship with the offended woman;
2. The offender, by himself or through another, commits an act or series of acts of harassment against the woman; and

3. The harassment alarms or causes substantial emotional or psychological distress to her.

One. The parties to this case agree that the prosecution needed to prove that accused Rustan had a "dating relationship"
with Irish. Section 3(e) provides that a "dating relationship" includes a situation where the parties are romantically
involved over time and on a continuing basis during the course of the relationship. Thus:

(e) "Dating relationship" refers to a situation wherein the parties live as husband and wife without the benefit of marriage
or are romantically involved over time and on a continuing basis during the course of the relationship . A casual
acquaintance or ordinary socialization between two individuals in a business or social context is not a dating relationship.
(Underscoring supplied.)

Here, Rustan claims that, being "romantically involved," implies that the offender and the offended woman have or had
sexual relations. According to him, "romance" implies a sexual act. He cites Webster’s Comprehensive Dictionary
Encyclopedia Edition which provides a colloquial or informal meaning to the word "romance" used as a verb, i.e., "to
make love; to make love to" as in "He romanced her."

But it seems clear that the law did not use in its provisions the colloquial verb "romance" that implies a sexual act. It did
not say that the offender must have "romanced" the offended woman. Rather, it used the noun "romance" to describe a
couple’s relationship, i.e., "a love affair."9

R.A. 9262 provides in Section 3 that "violence against women x x x refers to any act or a series of acts committed by any
person against a woman x x x with whom the person has or had a sexual or dating relationship." Clearly, the law itself
distinguishes a sexual relationship from a dating relationship. Indeed, Section 3(e) above defines "dating relationship"
while Section 3(f) defines "sexual relations." The latter "refers to a single sexual act which may or may not result in the
bearing of a common child." The dating relationship that the law contemplates can, therefore, exist even without a sexual
intercourse taking place between those involved.

Rustan also claims that since the relationship between Irish and him was of the "on-and-off" variety (away-bati), their
romance cannot be regarded as having developed "over time and on a continuing basis." But the tw o of them were
romantically involved, as Rustan himself admits, from October to December of 2003. That would be time enough for
nurturing a relationship of mutual trust and love.

An "away-bati" or a fight-and-kiss thing between two lovers is a common occurrence. Their taking place does not mean
that the romantic relation between the two should be deemed broken up during periods of misunderstanding.
Explaining what "away-bati" meant, Irish explained that at times, when she could not reply to Rustan’s messages, he
would get angry at her. That was all. Indeed, she characterized their three-month romantic relation as continuous. 10

Two. Rustan argues that the one act of sending an offensive picture should not be considered a form of harassment. He
claims that such would unduly ruin him personally and set a very dangerous precedent. But Section 3(a) of R.A. 9262
punishes "any act or series of acts" that constitutes violence against women. This means that a single act of harassment,
which translates into violence, would be enough. The object of the law is to protect women and children. Punishing only
violence that is repeatedly committed would license isolated ones.

Rustan alleges that today’s women, like Irish, are so used to obscene communications that her getting one could not
possibly have produced alarm in her or caused her substantial emotional or psychological distress. He claims having
previously exchanged obscene pictures with Irish such that she was already desensitized by them.

But, firstly, the RTC which saw and heard Rustan and his wife give their testimonies was not impressed with their claim
that it was Irish who sent the obscene pictures of herself (Exhibits 2-7). It is doubtful if the woman in the picture was Irish
since her face did not clearly show on them.

Michelle, Rustan’s wife, claimed that she deleted several other pictures that Irish sent, except Exhibits 2 to 7. But her
testimony did not make sense. She said that she did not know that Exhibits 2 to 7 had remained saved after she deleted
the pictures. Later, however, she said that she did not have time to delete them. 11 And, if she thought that she had
deleted all the pictures from the memory card, then she had no reason at all to keep and hide such memory card. There
would have been nothing to hide. Finally, if she knew that some pictures remained in the card, there was no reason for
her to keep it for several years, given that as she said she was too jealous to want to see anything connected to Irish.
Thus, the RTC was correct in not giving credence to her testimony.1avvphi1

Secondly, the Court cannot measure the trauma that Irish experienced based on Rustan’s low regard for the alleged
moral sensibilities of today’s youth. What is obscene and injurious to an offended woman can of course only be
determined based on the circumstances of each case. Here, the naked woman on the picture, her legs spread open and
bearing Irish’s head and face, was clearly an obscene picture and, to Irish a revolting and offensive one. Surely, any
woman like Irish, who is not in the pornography trade, would be scandalized and pained if she sees herself in such a
picture. What makes it further terrifying is that, as Irish testified, Rustan sent the picture with a threat to post it in th e
internet for all to see. That must have given her a nightmare.

Three. Rustan argues that, since he was arrested and certain items were seized from him without any warrant, the
evidence presented against him should be deemed inadmissible. But the fact is that the prosecution did not present in
evidence either the cellphone or the SIM cards that the police officers seized from him at the time of his arrest. The
prosecution did not need such items to prove its case. Exhibit C for the prosecution was but a photograph depicting the
Sony Ericsson P900 cellphone that was used, which cellphone Rustan admitted owning during the pre-trial conference.

Actually, though, the bulk of the evidence against him consisted in Irish’s testimony that she received the obscene picture
and malicious text messages that the sender’s cellphone numbers belonged to Rustan with whom she had been
previously in communication. Indeed, to prove that the cellphone numbers belonged to Rustan, Irish and the police used
such numbers to summon him to come to Lorentess Resort and he did. 12 Consequently, the prosecution did not have to
present the confiscated cellphone and SIM cards to prove that Rustan sent those messages.

Moreover, Rustan admitted having sent the malicious text messages to Irish.13 His defense was that he himself received
those messages from an unidentified person who was harassing Irish and he merely forwarded the same to her, using his
cellphone. But Rustan never presented the cellphone number of the unidentified person who sent the messages to him
to authenticate the same. The RTC did not give credence to such version and neither will this Court. Besides, it was most
unlikely for Irish to pin the things on Rustan if he had merely tried to help her identify the sender.

Four. Rustan claims that the obscene picture sent to Irish through a text message constitutes an electronic document.
Thus, it should be authenticated by means of an electronic signature, as provided under Section 1, Rule 5 of the Rules on
Electronic Evidence (A.M. 01-7-01-SC).

But, firstly, Rustan is raising this objection to the admissibility of the obscene picture, Exhibit A, for the first time bef ore
this Court. The objection is too late since he should have objected to the admission of the picture on such ground at the
time it was offered in evidence. He should be deemed to have already waived such ground for objection. 14

Besides, the rules he cites do not apply to the present criminal action. The Rules on Electronic Evidence applies only to
civil actions, quasi-judicial proceedings, and administrative proceedings. 15

In conclusion, this Court finds that the prosecution has proved each and every element of the crime charged beyond
reasonable doubt.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals in CA-G.R. CR 30567
dated January 31, 2008 and its resolution dated April 25, 2008.

SO ORDERED.

G.R. Nos. 172532 172544-45 November 20, 2013

PRIMO C. MIRO, in his capacity as Deputy Ombudsman for the Visayas, Petitioner,
vs.
MARILYN MENDOZA VDA. DE EREDEROS, CATALINA ALINGASA and PORFERIO I. MENDOZA,Respondents.

DECISION
BRION, J.:

We resolve the petition for review on certiorari 1 assailing the decision2 dated November 22 2005 and the
resolution3dated April 21 2006 of the Court of Appeals CA) in CA-G.R. SP Nos. 83149 83150 and 83576.

The CA decision reversed and set aside the joint decision 4 dated January 9 2004 of the Deputy Ombudsman for the
Visayas (Deputy Ombudsman), Primo C. Miro in OMB-V-A-02-0414-H finding respondents Marilyn Mendoza Vda. de
Erederos Catalina Alingasa and Porferio I Mendoza guilty of the administrative charge of Grave Misconduct. The Deputy
Ombudsman also found Oscar Peque guilty of Simple Misconduct.

The Factual Antecedents

As culled from the records, the antecedents of the present case are as follows:

Mendoza, Director of the Regional Office VII of the Land Transportation Office, Cebu City (LTO Cebu), Erederos,
Mendoza's niece and secretary, Alingasa, LTO clerk, and Peque, Officer-in-Charge, Operation Division of LTO Cebu, were
administratively charged with Grave Misconduct before the Deputy Ombudsman by private complainants, namely:
Maricar G Huete (Liaison Officer of GCY Parts), Ernesto R Cantillas (Liaison Officer of Isuzu Cebu, Inc.), Leonardo Villaraso
(General Manager of TBS Trading), and Romeo C. Climaco (Corporate Secretary of Penta Star). 5 They were likewise
charged with criminal complaints for violation of Section 3(e) of Republic Act No. 3019, otherwise known as the Anti Graft
and Corrupt Practices Act."

The administrative and criminal charges arose from the alleged anomalies in the distribution at the LTO Cebu of
confirmation certificates, an indispensable requirement in the processing of documents for the registration of motor
vehicle with the LTO.

Specifically, the private complainants accused Alingasa of selling the confirmation certificates, supposed to be issued by
the LTO free of charge. This scheme allegedly existed upon Mendoza's assumption in office as Regional Director of LTO
Cebu. They observed that:

(1) Confirmation certificates were sold for the amount of ₱2,500.00 per pad without official receipt;

(2) Alingasa would usually remit the collections to Erederos who would, in turn, remit all the collections to Mendoza; 6

(3) The official receipt for the processing of the confirmation certificates issued to the private complainants
acknowledged only the amount of ₱ 40.00 which they paid for each engine, chassis or new vehicle, as MR.
(Miscellaneous Receipt-LTO Form 67);

(4) Said amount was separate and distinct from the ₱2,500.00 required to be paid for each pad;

(5) The official receipt also served as the basis for the individual stock/sales reports evaluation of Erederos; 7and

(6) The confirmation certificates processed during the previous administration were no longer honored; thus, the private
complainants were constrained to reprocess the same by purchasing new ones.
The NBI/Progress report submitted to the LTO Manila also revealed that the confirmation certificates were given to the
representatives of car dealers, who were authorized to supply the needed data therein. In the Requisition and Issue
Voucher, it was Roque who received the forms. On August 19, 2002, Cantillas executed an Affidavit of Desi stance on the
ground that he was no longer interested in prosecuting the case.

On September 25, 2002, the Deputy Ombudsman ordered the respondents to file their respective counter-affidavits. The
respondents complied with the order and made the required submission.

On December 12, 2002, the case was called for preliminary conference. At the conference, the respondents, thru their
counsels, manifested their intention to submit the case for decision on the basis of the evidence on record after the
submission of their memoranda/position papers.

In the interim, additional administrative and criminal complaints for the same charges were filed by Rova Carmelotes
(Liaison Officer of ZC Trading Center), Mildred Regidor (Liaison Officer of Grand Ace Commercial), Estrella dela Cerna
(Liaison Officer of JRK Automotive Supply), and Vevencia Pedroza (Liaison Officer of Winstar Motor Sales) against the
respondents. These new complaints were consolidated with the complaints already then pending.

In their complaints, the new complainants commonly alleged that they had to pay ₱2,500.00 per pad to Alingasa before
they could be issued confirmation certificates by the LTO Cebu. Alingasa would give her collections to Erederos and to
Mendoza. When they protested, Erederos and Alingasa pointed to Mendoza as the source of the instructions. They were
also told that the confirmation certificates processed during the previous administration would no longer be honored
under Mendoza s administration; hence, they had to buy new sets of confirmation certificates to process the registration
of their motor vehicles with the LTO.

In his counter-affidavit, Mendoza vehemently denied the accusations. He alleged that the confirmation certificates actual
distribution and processing were assigned to Alingasa; the processing entails the payment of ₱40.00 per confirmation
certificate, as administrative fee; payment is only made when the confirmation certificates are filled up and submitted for
processing with the LTO, not upon issuance; and he did not give any instructions to impose additional fees for their
distribution.

He also alleged that the case against him was instigated by Assistant Secretary Roberto T. Lastimosa of the LTO Head
Office so that a certain Atty. Manuel I way could replace him as Regional Director of the L TO Cebu. 8

Mendoza additionally submitted the affidavits of desistance of Carmelotes and Dela Cerna. Carmelotes testified that she
has no evidence to support her allegations against Mendoza. Dela Cerna, on the other hand, stated that she was merely
told to sign a document which turned out to be an affidavit-complaint against the respondents. Subsequently, however,
Dela Cerna executed a second affidavit, retracting her previous statements and narrating how she was threatened by
Peque to sign an affidavit of desistance (1st affidavit).

Erederos and Alingasa commonly contended that they did not collect, demand and receive any money from the
complainants as payment for the confirmation certificates.
Erederos stated that the case against her was initiated by Huete because she found several discrepancies in the
documents she had processed. According to her, the present case was Huete s ploy to avoid any liability.

For their part, Alingasa stressed that her act of maintaining a control book for the releases of the confirmation certificate
pads negates her liability, while Peque denied any participation in the distribution and sale of the confirmation
certificates.

On January 9, 2004, the Deputy Ombudsman rendered a joint decision on the administrative aspect of the cases filed
against the respondents, and a joint resolution on the criminal aspect of the cases.

The Deputy Ombudsman s Ruling

In its joint decision, the Deputy Ombudsman found Mendoza, Erederos and Alingasa guilty of grave misconduct and
imposed the penalty of dismissal from the service. Peque, on the other hand, was only found guilty of simple misconduct
and was meted the penalty of reprimand.

The Deputy Ombudsman believed the complainants allegations that Alingasa collected ₱2,500.00 for the issuance of
confirmation certificates and, thereafter, remitted the collections to Erederos and to Mendoza. He relied largely on the
affidavits supporting the respondents guilt. He found the affidavits and the NBI/Progress report strong enough to
establish the respondents guilt. The Deputy Ombudsman also explained that while the distribution of confirmation
certificates to authorized car dealers is not prohibited, the demand and the collection of payment during their
distribution are anomalous.

The respondents separately moved for reconsideration, but the Deputy Ombudsman denied their motions on March 5,
2004.9

The respondents separately appealed to the CA to challenge the rulings against them.

The CA’s Ruling

On November 22, 2005, the CA granted the respondents petition and reversed the Deputy Ombudsman s joint decision
in the administrative aspect. The CA ruled that the Deputy Ombudsman s finding of grave misconduct was not
supported by substantial evidence because the affidavits, on which the decision was mainly anchored, were not
corroborated by any other documentary evidence. Additionally, the affiants did not appear during the scheduled
hearings. The CA also found that the affiants failed to categorically specify that the respondents personally demanded
from them the payment of ₱2,500.00 -an allegation that the appellate court deemed material in establishing their
personal knowledge. Without this allegation of personal knowledge, the CA held that the statements in the affidavits
were hearsay and, thus, should not be given any evidentiary weight. The dispositive portion of the decision reads:

WHEREFORE, in light of the foregoing premises, the consolidated petitions are GRANTED and accordingly the assailed
Joint Decision dated January 9, 2004 (administrative aspect of the cases filed by the private respondents) is REVERSED
and SET ASIDE.

Consequently, the administrative charges against petitioners are DISMISSED for lack of merit.
With respect to the assailed Joint Resolution also dated January 9, 2004 (criminal aspect) issued by the public respondent,
this Court has no jurisdiction to review the same.10

The Deputy Ombudsman moved for the reconsideration of the decision, but the CA denied the motion in its resolution
of April 21, 2006. The denial led to the filing of the present petition.

The Petitioner’s Arguments

The Deputy Ombudsman posits that the evidence adduced by the complainants satisfied the requisite quantum of proof.
He argues that the complainants personal knowledge can be gleaned from the preface of their narration; hence, their
affidavits could not have been hearsay. Their affidavits read:

3. That in doing my job, I have noticed and witnessed the following anomalies concerning the processing of vehicle
registration, x x x, as follows:

a. That in order to secure the forms of Confirmation of Certificates, you have to buy the same at the present price of ₱
2,500.00 per pad from Catalina Alingasa, an L TO personnel, who will remit her collections to a certain Marilyn Mendoza
Vda. de Erederos, a niece and the Secretary of the Regional Director, Porferio Mendoza;

b. That Confirmation Certificates processed during previous administration would not be honored and under such
situations, they would require that the same be reprocessed which means that we have to buy and use the new forms
supplied by the present administration. 11

The Deputy Ombudsman also argues that his joint decision was not solely based on the complainants affidavits since he
also took into account the NBI/Progress report, which uncovered the alleged anomalies. He posits that these pieces of
evidence, taken together, more than satisfy the required quantum of proof to hold the respondents a dministratively
liable for grave misconduct.

The Case for the Respondents

In their respective comments, the respondents separately argue that the complainants statements in their affidavits lack
material details and particulars, particularly on the time, the date, and the specific transactions.

They commonly alleged that the affidavits, which contained general averments, and the NBI/Progress report that was
based on the same affidavits, failed to meet the quantum of proof required to hold them administratively liable.

For his part, Mendoza argues that since the affidavits failed to categorically state that the complainants personally
witnessed the transfer of money from Alingasa to Erederos and eventually to him, his participation in the anomalous
scheme has not been sufficiently shown; hence, he should not have been found liable.

The Issue

The case presents to us the issue of whether the CA committed a reversible error in dismissing the administrative charge
against the respondents.
The Court's Ruling

We deny the petition. The CA committed no reversible error in setting aside the findings and conclusions of the Deputy
Ombudsman on the ground that they were not supported by substantial evidence.

Doctrine of conclusiveness of administrative findings of fact is not absolute

It is well settled that findings of fact by the Office of the Ombudsman are conclusive when supported by substantial
evidence.12 Their factual findings are generally accorded with great weight and respect, if not finality by the courts, by
reason of their special knowledge and expertise over matters falling under their jurisdiction.

This rule was reiterated in Cabalit v. Commission on Audit-Region VII,13 where we held that: When the findings of fact of
the Ombudsman are supported by substantial evidence, it should be considered as conclusive. This Court recognizes the
expertise and independence of the Ombudsman and will avoid interfering with its findings absent a finding of grave
abuse of discretion. Hence, being supported by substantial evidence, we find no reason to disturb the factual findings of
the Ombudsman which are affirmed by the CA.

This rule on conclusiveness of factual findings, however, is not an absolute one. Despite the respect given to
administrative findings of fact, the CA may resolve factual issues, review and re-evaluate the evidence on record and
reverse the administrative agency s findings if not supported by substantial evidence. Thus, when the findings of fact by
the administrative or quasi-judicial agencies (like the Office of the Ombudsman/Deputy Ombudsman) are not
adequately supported by substantial evidence, they shall not be binding upon the courts. 14

In the present case, the CA found no substantial evidence to support the conclusion that the respondents are guilty of
the administrative charges against them. Mere allegation and speculation is not evidence, and is not equivalent to
proof.15 Since the Deputy Ombudsman’s findings were found wanting by the CA of substantial evidence, the same shall
not bind this Court.

Parameters of a judicial review under a Rule 45 petition

a. Rule 45 petition is limited to questions of law

Before proceeding to the merits of the case, this Court deems it necessary to emphasize that a petition for review under
Rule 45 is limited only to questions of law. Factual questions are not the proper subject of an appeal by certiorari. This
Court will not review facts, as it is not our function to analyze or weigh all over again evidence already considered in the
proceedings below. As held in Diokno v. Hon. Cacdac, 16 a re-examination of factual findings is outside the province of a
petition for review on certiorari to wit:

It is aphoristic that a re-examination of factual findings cannot be done through a petition for review on certiorari under
Rule 45 of the Rules of Court because as earlier stated, this Court is not a trier of facts. xxx The Supreme Court is not
duty-bound to analyze and weigh again the evidence considered in the proceedings below. This is already outside the
province of the instant Petition for Certiorari.
There is a question of law when the doubt or difference arises as to what the law is on a certain set of facts; a question of
fact, on the other hand, exists when the doubt or difference arises as to the truth or falsehood of the alleged
facts.17 Unless the case falls under any of the recognized exceptions, we are limited solely to the review of legal
questions.18

b. Rule 45 petition is limited to errors of the appellate court

Furthermore, the "errors" which we may review in a petition for review on certiorari are those of the CA, and not directly
those of the trial court or the quasi-judicial agency, tribunal, or officer which rendered the decision in the first
instance.19 It is imperative that we refrain from conducting further scrutiny of the findings of fact made by trial courts, lest
we convert this Court into a trier of facts. As held in Reman Recio v. Heirs of the Spouses Agueda and Maria Altamirano
etc. et al.20 our review is limited only to the errors of law committed by the appellate court, to wit:

Under Rule 45 of the Rules of Court, jurisdiction is generally limited to the review of errors of law committed by the
appellate court. The Supreme Court is not obliged to review all over again the evidence which the parties adduced in the
court a quo. Of course, the general rule admits of exceptions, such as where the factual findings of the CA and the trial
court are conflicting or contradictory.

In Montemayor v. Bundalian,21 this Court laid down the guidelines for the judicial review of decisions rendered by
administrative agencies in the exercise of their quasi-judicial powers, as follows:

First, the burden is on the complainant to prove by substantial evidence the allegations in his complaint. Substantial
evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. Second, in
reviewing administrative decisions of the executive branch of the government, the findings of facts made therein are to
be respected so long as they are supported by substantial evidence. Hence, it is not for the reviewing court to weigh the
conflicting evidence, determine the credibility of witnesses, or otherwise substitute its judgment for that of the
administrative agency with respect to the sufficiency of evidence.

Third, administrative decisions in matters within the executive jurisdiction can only be set aside on proof of gross abuse
of discretion, fraud, or error of law. These principles negate the power of the reviewing court to re-examine the
sufficiency of the evidence in an administrative case as if originally instituted therein, and do not authorize the court to
receive additional evidence that was not submitted to the administrative agency concerned. [emphases ours]

The present petition directly raises, as issue, the propriety of the CA s reversal of the Deputy Ombudsman s decision that
found the respondents guilty of grave misconduct. While this issue may be one of law, its resolution also requires us to
resolve the underlying issue of whether or not substantial evidence exists to hold the respondents liable for the charge of
grave misconduct. The latter question is one of fact, but a review is warranted considering the conflicting findings of fact
of the Deputy Ombudsman and of the CA. Accordingly, we now focus on and assess the findings of fact of the Deputy
Ombudsman and of the CA for their merits.

The Deputy Ombudsman’s appreciation of evidence


The Deputy Ombudsman found the respondents guilty of grave misconduct based on the affidavits submitted by the
complainants and the NBI/Progress report. In giving credence to the affidavits, the Deputy Ombudsman ruled that the
complainants have amply established their accusations by substantial evidence.

The CA’s appreciation of evidence

The CA, on the other hand, reversed the Deputy Ombudsman s findings and ruled that no substantial evidence exists to
support the latter’s decision as the affidavits upon which said decision was based are hearsay evidence. It found that the
affidavits lack the important element of personal knowledge and were not supported by corroborating evidence.

We agree with the CA. The findings of fact of the Deputy Ombudsman are not supported by substantial evidence on
record.

Substantial evidence, quantum of proof in administrative cases

Substantial evidence is defined as such amount of relevant evidence which a reasonable mind might accept as adequate
to support a conclusion. It is more than a mere scintilla of evidence.22 The standard of substantial evidence is satisfied
when there is reasonable ground to believe, based on the evidence submitted, that the respondent is responsible for the
misconduct complained of. It need not be overwhelming or preponderant, as is required in an ordinary civil case, 23 or
evidence beyond reasonable doubt, as is required in criminal cases, but the evidence must be enough for a reasonable
mind to support a conclusion.

Section 27 of The Ombudsman Act of 1989 24 provides that:

Findings of fact by the Officer of the Ombudsman when supported by substantial evidence are conclusive. Any order,
directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one (1) month's
salary shall be final and unappealable. [emphasis ours]

The only pieces of evidence presented by the complainants to establish the respondents' guilt of the act charged are: (1)
their complaint-affidavits and the (2) NBl/Progress report. As correctly found by the CA, these pieces of evidence do not
meet the quantum of proof required in administrative cases.

The Evidence Against Mendoza, Erederos and Alingasa

i. Private complainants affidavits

The affidavits show that the complainants lack personal knowledge of the participation of Mendoza and Erederos in the
allegedly anomalous act. These affidavits indicate that the complainants have commonly noticed and witnessed the
anomalous sale transaction concerning the confirmation certificates. Without going into details, they uniformly allege
that to secure the confirmation certificates, an amount of ₱2,500.00 would be paid to Alingasa, an L TO personnel, "who
will remit her collections to a certain Marilyn Mendoza vda. Erederos, a niece and the Secretary of the Regional Director,
Porferio Mendoza."25 While the payment to Alingasa might be considered based on personal knowledge, the alleged
remittance to Erederos and Mendoza -on its face - is hearsay.
Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal knowledge of
he witness

It is a basic rule in evidence that a witness can testify only on the facts that he knows of his own Rersonal knowledge, i.e.
those which are derived from his own perception. 26 A witness may not testify on what he merely learned, read or heard
from others because such testimony is considered hearsay and may not be received as proof of the truth of what he has
learned, read or heard.27 Hearsay evidence is evidence, not of what the witness knows himself but, of what he has heard
from others; it is not only limited to oral testimony or statements but likewise applies to written statements, such as
affidavits.28

The records show that not one of the complainants actually witnessed the transfer of money from Alingasa to Erederos
and Mendoza. Nowhere in their affidavits did they specifically allege that they saw Alingasa remit the collections to
Erederos. In fact, there is no specific allegation that they saw or witnessed Erederos or Mendoza receive money. That the
complainants alleged in the preface of their affidavits that they "noticed and witnessed" the anomalous act complained
of does not take their statements out of the coverage of the hearsay evidence rule. Their testimonies are still "evidence
not of what the witness knows himself but of what he has heard from others." 29 Mere uncorroborated hearsay or rumor
does not constitute substantial evidence. 30

The affidavits also show that the complainants did not allege any specific act of the respondents. All that the affidavits
allege is a description of the allegedly anomalous scheme and the arrangement whereby payments were to be made to
Alingasa. There is no averment relating to any "personal demand" for the amount of ₱2,500.00.

Based on these considerations, we cannot conclude that the complainants have personal knowledge of Erederos' and
Mendoza's participation in the anomalous act. At most, their personal knowledge only extends to the acts of Alingasa
who is the recipient of all payments for the processing of confirmation certificates. This situation, however, is affected by
the complainants' failure to specify Alingasa's act of personally demanding ₱2,500.00 -a crucial element in determining
her guilt or innocence of the grave misconduct charged.

With respect to Pedroza's allegation in her affidavit 31 that Alingasa and Erederos categorically told them that it was
Mendoza who instructed them to collect the ₱2,500.00 for the confirmation certificates, we once again draw a
distinction between utterances or testimonies that are merely hearsay in character or "non-hearsay," and those that are
considered as legal hearsay.

Non-hearsay v. legal hearsay, distinction

To the former belongs the fact that utterances or statements were made; this class of extrajudicial utterances or
statements is offered not s an assertion to prove the truth of the matter asserted, but only as to the fact of the utterance
made. The latter class, on the other hand, consists of the truth of the facts asserted in the statement; this kind pertains t o
extrajudicial utterances and statements that are offered as evidence of the truth of the fact asserted.

The difference between these two classes of utterances lies in the applicability of the rule on exclusion of hearsay
evidence. The first class, i.e. the fact that the statement was made, is not covered by the hearsay ru le, while the second
class, i.e. the truth of the facts asserted in the statement, is covered by the hearsay rule. Pedroza's allegation belongs to
the first class; hence, it is inadmissible to prove the truth of the facts asserted in the statement. The fol lowing discussion,
made m Patula v. People of the Philippines 32 is particularly instructive:

Moreover, the theory of the hearsay rule is that when a human utterance is offered as evidence of the truth of the fact
asserted, the credit of the assertor becomes the basis of inference, and, therefore, the assertion can be received s
evidence only when made on the witness stand, subject to the test of cross-examination. However, if an extrajudicial
utterance is offered, not as an assertion to prove the matter asserted but without reference to the truth of the matter
asserted, the hearsay rule does not apply. For example, in a slander case, if a prosecution witness testifies that he heard
the accused say that the complainant was a thief, this testimony is admissible not to prove that the complainant was
really a thief, but merely to show that the accused uttered those words. This kind of utterance is hearsay in character but
is not legal hearsay. The distinction is, therefore, between (a) the fact that the statement was made, to which the hearsay
rule does not apply, and (b) the truth of the facts asserted in the statement, to which the hearsay rule applies. [citations
omitted]

Failure to identify the affidavits renders them inadmissible under the hearsay evidence rule

We additionally note that the affidavits were never identified by the complainants. All the allegations contained therein
were likewise uncorroborated by evidence, other than the NBI/Progress report.

In Tapiador v. Office of the Ombudsman, 33 we had the occasion to rule on the implications of the affiants' failure to
appear during the preliminary investigation and to identify their respective sworn statements, to wit:

Notably, the instant administrative complaint was resolved by the Ombudsman merely on the basis of the evidence
extant in the record of OMB-ADM-0-94-0983. The preliminary conference required under Republic Act No. 6770 was
dispensed with after the nominal complainant, then BID Resident Ombudsman Ronaldo P. Ledesma, manifested on July
29, 1996 that he was submitting the case for resolution on the basis of the documents on record while the petitioner
agreed to simply file his memorandum. Consequently, the only basis for the questioned resolution of the Ombudsman
dismissing the petitioner from the government service was the unverified complaint-affidavit of Walter H. Beck and that
of his alleged witness, Purisima Terencio.

A thorough review of the records, however, showed that the subject affidavits of Beck and Terencio were not even
identified by the respective affiants during the fact-finding investigation conducted by the BID Resident Ombudsman at
the BID office in Manila. Neither did they appear during the preliminary investigation to identify their respective sworn
statements despite prior notice before the investigating officer who subsequently dismissed the criminal aspect of the
case upon finding that the charge against the petitioner "was not supported by any evidence." Hence, Beck's affidavit is
hearsay and inadmissible in evidence. On this basis alone, the Administrative Adjudication Bureau of the O ffice of the
Ombudsman should have dismissed the administrative complaint against the petitioner in the first instance. (emphasis
supplied)

For the affiants' failure to identify their sworn statements, and considering the seriousness of the charges filed, their
affidavits must not be accepted at face value and should be treated as inadmissible under the hearsay evidence rule.

ii. NBI/Progress report


With regard to the NBI/Progress report submitted by the complainants as corroborating evidence, the same shou ld not
be given any weight. Contrary to the Ombudsman's assertions, the report cannot help its case under the circumstances
of this case as it is insufficient to serve as substantial basis. The pertinent portion of this report reads:

04. P/Sinsp. JESUS KABIGTING and Senior TRO ALFONSO ALIANZA visited JAGNA District Office at Jagna, Bohol wherein
they were able to conduct interview with MR. RODOLFO SANTOS, Officer-In-Charge who has assumed his new post only
in February 2002. During the conduct of the interview, Mr. SANTOS revealed that the anomalous Dos-por-Dos
transactions have been prevented and eliminated when the previous District Manager in the person of Mr. LEONARDO G.
OLAIVAR, who was transferred to Tagbilaran District Office allegedly on a floating status and under the direct control
and supervision of its District Manager, Mr. GA VINO PADEN, Mr. SANTOS allegations of the existence of "Dos-por-Dos"
transactions were supported by the records/documents gathered of which the signatures of Mr. OLAIVAR affixed thereof.
Copies are hereto attached marked as Annexes D-D-6.

xxxx

06. Submitted Affidavits of Ms. MARICAR G. HUETE, a resident of Lahug, Cebu City and liaison Officer of GCY Parts,
Kabancalan Mandaue City and Mr. ERNESTO R. CARTILLAS a resident of Basak, Mandaue City and liaison Officer of Isuzu
Cebu, Inc. in Jagobiao, Mandaue City stated among others and both attested that: Annexes "E-E-1."

In order to secure the forms of Confirmation of Certificates, you have to buy the same at the present cost of ₱2,500.00
per pad from CATALINA ALINGASA, an LTO Personnel, who will remit her collections to a certain MARILYN MENDOZA V
da De EREDEROS, a niece and secretary of the Regional Director, PORFERIO MENDOZA. 34

This quoted portion shows that it was based on complainant Huete's and Cantillas' affidavits. It constitutes double
hearsay because the material facts recited were not within the personal knowledge of the officer s who conducted the
investigation. As held in Africa, et al. v. Caltex Phil.) Inc., et al., 35 reports of investigations made by law enforcement
officers or other public officials are hearsay unless they fall within the scope of Section 44, Rule 130 of the Rules of Court,
to wit: The first question before Us refers to the admissibility of certain reports on the fire prepared by the Manila Police
and Fire Departments and by a certain Captain Tinio of the Armed Forces of the Philippines. xxx.

xxxx

There are three requisites for admissibility under the rule just mentioned: (a) that the entry was made by a public officer,
or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of
his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer
or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or
through official information. (Moran, Comments on the Rules of Court, Vol. 3 [1957] p. 383.)

Of the three requisites just stated, only the last need be considered here. Obviously the material facts recited in the
reports as to the cause and circumstances of the fire were not within the personal knowledge of the officers who
conducted the investigation. Was knowledge of such facts, however, acquired by them through official information? xxx.
The reports in question do not constitute an exception to the hearsay rule; the facts stated therein were not acquired by
the reporting officers through official information, not having been given by the informants pursuant to any duty to do
so. [emphases ours]

The NBI/Progress report, having been submitted by the officials in the performance of their duties not on the basis of
their own personal observation of the facts reported but merely on the basis of the complainants affidavits, is hearsay.
Thus, the Deputy Ombudsman cannot rely on it.

Non-applicability of strict technical rules of procedure in administrative or quasi-judicial bodies is not a license to
disregard certain fundamental evidentiary rules

While administrative or quasi-judicial bodies, such as the Office of the Ombudsman, are not bound by the technical rules
of procedure, this rule cannot be taken as a license to disregard fundamental evidentiary rules; the decision of the
administrative agencies and the evidence it relies upon must, at the very least, be substantial. that:

In Lepanto Consolidated Mining Company v. Dumapis, 36 we ruled that:

While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by the technical rules of
procedure in the adjudication of cases, this procedural rule should not be construed as a license to disregard certain
fundamental evidentiary rules. The evidence presented must at least have a modicum of admissibility for it to have
probative value. Not only must there be some evidence to support a finding or conclusion, but the evidence must be
substantial. Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reason able mind
might accept as adequate to support a conclusion.

Conclusion

With a portion of the complainants affidavits and the NBI/Progress report being hearsay evidence, the only question that
remains is whether the respondents conduct, based on the evidence on record, amounted to grave misconduct,
warranting their dismissal in office.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful behavior or
gross negligence by a public officer. 37 The misconduct is considered as grave if it involves additional elements such as
corruption or willful intent to violate the law or to disregard established rules, which must be proven by substantial
evidence; otherwise, the misconduct is only simple. Corruption, as an element of grave misconduct, consists in the act of
an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some b enefit for
himself or for another person, contrary to duty and the rights of others. 38

Based on these rulings, the Deputy Ombudsman failed to establish the elements of grave misconduct.1âwphi1 To
reiterate, no substantial evidence exists to show that Erederos and Mendoza received collected payments from Alingasa
Their involvement or complicity in the allegedly anomalous scheme cannot be justified under the affidavits of the
complainants and the NBI/Progress report, which are both hearsay.
With respect to Alingasa, in view of the lack of substantial evidence showing that she personally demanded the payment
of ₱2,500.00 – a crucial factor in the wrongdoing alleged – we find that the elements of misconduct, simple or grave,
to be wanting and unproven.

WHEREFORE, in view of the foregoing, we hereby AFFIRM the assailed decision dated November 22, 2005 and the
resolution dated April 21, 2006 of the Court of Appeals in CA-G.R. SP Nos. 83149, 83150 and 83576.

SO ORDERED.

People vs Enojas

Ferrer vs Carganillo

Reyes vs COMELEC

E. CLASSIFICATION OF EVIDENCE

F. ADMISSIBILITY OF EVIDENCE

G. EXCLUSIONARY RULES

Tan v Hosana

[G.R. NO. 146234 : June 29, 2005]

TOLENTINO MENDOZA and SALOME MADAMBA, Petitioners, v. PEOPLE OF THE PHILIPPINES and
SANDIGANBAYAN, Respondents.

DECISION

CARPIO, J.:

This is a Petition for Review 1 to annul the Decision2 dated 11 December 2000 of the Sandiganbayan in Criminal Case No.
16756. The Sandiganbayan found petitioner Tolentino Mendoza ("Mendoza") and Salome Madamba ("Madamba") guilty
beyond reasonable doubt of violation of Section 3(e) of Republic Act No. 3019 ("RA 3019") and sentenced them to suffer
imprisonment for eight years. The Sandiganbayan also perpetually disqualified Mendoza and Madamba from holding
public office and ordered them to solidarily pay the Philippine government P295,597.79, with legal interest from 4 April
1989.

The Antecedent Facts

National Treasurer Rosalina S. Cajucom filed a complaint, docketed as OMB-0-89-01454, before the Ombudsman
charging Mendoza, Madamba, and Marcelina Agustin ("Agustin") with Technical Malversation and violation of RA 3019.
The Ombudsman found probable cause for violation of Section 3(e) of RA 3019. Hence, in a Resolution 3 dated 5 February
1990, the Ombudsman ordered the filing of an Information in the Sandiganbayan against Mendoza, Madamba, Agustin,
Jose Cruz ("Cruz"), Anita Lising ("Lising"), and Horacio Alvarez ("Alvarez").

The Information, dated 25 April 1991, alleged:

That on or about the period comprised from 07 February 1989 to 17 February 1989 and/or for sometime thereafter, in the
City of Manila, Philippines, and within the jurisdiction of this Honorable Court, accused TOLENTINO MENDOZA, JOSE
CRUZ and ANITA LISING, all public officers, being then the National Cashier, COA Vault Auditor and Cashier IV,
respectively, all of the Bureau of Treasury, Palacio del Gobernador, Intramuros, Manila, taking advantage of their public
positions and while in the performance of their official duties as such, conspiring, confederating and conniving with
co-accused private persons SALOME MADAMBA, MARCELINA AGUSTIN and HORACIO ALVAREZ, General Manager,
Executive Care Services, Inc.; Bureau of Treasury Canteen Proprietor; and Proprietor, Triple Crown Services, Inc.,
respectively, did then and there willfully, unlawfully and criminally cause undue injury to the government by fraudulently
causing the encashment of four (4) commercial checks at the Cash Division, Bureau of Treasury, Manila, to wit:

RCBC Check No. 031840 dated 07 February 1989 issued by accused Horacio Alvarez in favor of Executive Care Services
with accused Salome Madamba as General Manager in the amount of P150,000.00, Philippine Currency.

RCBC Check No. 031845 dated 09 February 1989 issued by Horacio Alvarez in favor of Executive Ca[r]e Services with
Salome Madamba as General Manager in the amount of P140,000.00, Philippine Currency.

PNB Check Nos. A280215 and A280216 both dated 17 February 1989 issued by accused Salome Madamba in favor of
Triple Crown Services, Inc. owned and operated by accused Horacio Alvarez in the amount of P75,000.00 each,
Philippine Currency.

accused Tolentino Mendoza, knowing fully well that he had no authority, deliberately affixed his initials on the checks to
insure smooth encashments of the same by his subordinate co-accused Anita Lising who paid the amounts
corresponding thereto, and accused Jose Cruz, having the duty to determine [the] legality of enca shment at post-audit,
willfully, unlawfully affixed his initials thereon to insure non-discovery of the fraud after encashment, without obtaining
the signature of the Asst. National Treasurer, Milagros Baltazar, without which, no commercial check could be encashed
by the Cash Division, Bureau of Treasury, in willful violation of the requirements for encashment of commercial checks
imposed by the Bureau of Treasury, which fraudulent acts committed by accused public officers, gave unwarranted
advantage and benefits to their co-accused private persons thru manifest partiality and evident bad faith as the aforesaid
checks were dishonored by the drawee banks for lack of sufficient funds, to the damage and prejudice of the
government in the total amount of P440,000.00, Philippine Currency.4 (Emphasis in the original)
The Sandiganbayan issued warrants of arrest against Mendoza, Madamba, Cruz, Lising, Agustin, and Alvarez. All of them,
except Cruz who has remained at large, surrendered before the Sandiganbayan and posted bail.

Mendoza, Agustin, and Lising filed separate motions for reinvestigation, which the Sandiganbayan denied. However, the
Sandiganbayan granted Alvarez's motion for reinvestigation, and, after reinvestigation, dropped his name from the
Information.

Mendoza, Madamba, Agustin, and Lising entered pleas of "Not Guilty" during their arraignment on 13 September 1991.

Mendoza and Lising filed separate motions to quash the Information. The Sandiganbayan denied their motions in the
Resolution of 4 February 1992.

Trial commenced and the case was submitted for decision on 28 August 1999. The Sandiganbayan established the
following facts:

In February 1989, accused Tolentino Mendoza was the National Cashier and Anita Lising was a paying teller occupying
the position of Cashier IV at the Bureau of Treasury in Manila. Accused Jose Cruz, who has remained at large, was the
COA Vault Auditor assigned at the said Bureau. Accused Salome Madamba was the General Manager of the Executive
Care Services, Inc., a private corporation rendering janitorial services to the Bureau of Treasury; while accused Marcelina
Agustin was a canteen operator at the same bureau.

On February 7, 1989, Horacio Alvarez of Triple Crown Services, Inc., a company engaged in the same business of
providing janitorial services, issued in favor of Executive Care Services RCBC Check No. [031840] (Exhibit D) in the amount
of P150,000.00. On the same date, Madamba and Agustin signed at the dorsal portion of said check as indorsers, Agustin
being the last indorser. Madamba and Agustin brought the check to the office of Mendoza and after obtaining
Mendoza's approval, Agustin presented the check to the paying teller, Anita Lising, for encashment. Lising paid the
amount of P150,000.00 to Agustin who received it. The following day, the check went through the usual clearing
procedure and was returned unpaid on February 9, 1989 for the reason that it was drawn against insufficient f unds. Upon
Mendoza's instructions, the Clearing Officer of the National Treasury, Maria Lourdes Remo, redeposited the check on
February 10, 1989 but it was again returned unpaid on February 13, 1989, this time for the reason "Account Closed."

Meanwhile, on February 9, 1989, Horacio Alvarez of Triple Crown Services again issued another check, RCBC Check No.
[031845] (Exhibit E) for P140,000.00 payable to Executive Care Services. Like the first check, it was signed at the dorsal
portion by Madamba and Agustin, the latter being the last indorser, approved for encashment by Mendoza, paid by
Lising on the same date and dishonored on February 13, 1989 for being drawn against insufficient funds, redeposited on
February 16, 1989, and again dishonored on February 17, 1989 for the reason, "Account Closed."

On February 17, 1989, Executive Care Services issued a check for P150,000.00 in favor of Triple Crown Services. Madamba
instructed her Liaison Officer at the treasury, Raulito Sanchez, to deliver the check to Triple Crown Services in partial
payment of the emergency loan extended by Triple Crown Services to Executive Care Services. When Agustin saw the
check, she asked that it be given to her because she needed money very badly as her nephew was getting married. After
clearing the matter with Madamba, Sanchez gave the check to Agustin who indorsed it, obtained Mendoza's approval
for its encashment, presented it for payment to Lising, and received the amount of P150,000.00. Later that morning,
Mendoza borrowed this encashed check from Lising but afterwards never returned it. (The check has been missing since
then. For easy reference, it will henceforth be called the "missing check").

It should be noted that the missing check for P150,000.00 is different from Exhibit D which is also a check for P150,000.00.

"AJ DEL ROSARIO TO WITNESS:

Q[:] The one that was cashed?cralawlibrary

A[:] That was already encashed, Your Honor.

Q[:] That check is different from the check, marked Exhibit D?cralawlibrary

A[:] Yes, Your Honor."

(Tsn, p. 14, October 28, 1996.)

The missing check was issued on February 17, 1989 by the Executive Care Services, payable to Triple Crown Services. On
the other hand, the check marked Exhibit D is dated February 7, 1989 and was issued by the Triple Crown Services,
payable to Executive Care Services. Both Exhibit D and the missing check were endorsed and encashed by Agustin. Their
total amount (P300,000.00) when added to the P140,000.00 covered by Exhibit E, sums up to P440,000.00, which is the
total amount paid out by the National Treasury.

On the same day, after the missing check had been encashed, the Vault Auditor, Jose Cruz, told Sanchez to replace it
with two checks of P75,000.00 each, because the amount was too big. After a series of phone calls to Madamba, and on
Madamba's instructions, Sanchez went to the accounting office of the Executive Care Services, in Ermita, Manila, got two
company checks, filled them up and waited for Madamba at their office to sign them. Madamba, however, failed to
return to their office, and getting frantic due to the closing of the bank, he again called Madamba on the telephone.
Madamba told him to sign the checks. As instructed, Sanchez signed the checks with Madamba's name and delivered
the checks to Cruz. At the close of banking hours that afternoon, Cruz handed to Lising the two checks, PNB Checks Nos.
A280215 and A280216 (Exhibits B and C) each in the amount of P75,000.00, to replace the missing check for P150,000.00
that Lising had paid in the morning. These two checks were initialed by Cruz and Mendoza, without the endorsement of
Agustin. When Lising confronted them about this, Cruz and Mendoza assured her that they will take care of obtaining
Agustin's indorsement the next day. When these two PNB checks were presented for payment the following day, the
drawee bank (PNB) returned both of them unpaid for the reason that they were drawn against insufficient funds. They
were also presented for payment the second time, but were again dishonored for the same reason. Not one of the
checks (Exhibits B, C, D and E) passed through the Assistant National Treasurer, Milagros Baltazar, for approval prior to
their encashment, as required in a Memorandum dated May 27, 1998, issued by the Assistant National Treasurer,
specifically addressed to Mendoza as National Cashier, and noted by the Treasurer of the Philippines, Rosalina J.
Cajucom.

The clearing Officer, Maria Lourdes Remo then prepared the debit memoranda (Exhibits J, K and L) addressed to Lising,
the paying teller, but Mendoza did not sign any of them. Consequently, the debit memos were never served on Lising.
Formal demands (Exhibits F, G and H) for the restitution of the amounts covered by the dishonored checks not later than
April 14, 1989 were duly made on accused Mendoza who, through counsel, admitted receipt thereof.

A regular audit of the cash accountabilities of accused Mendoza as National Cashier was conducted in July 1989. The
auditors submitted an audit report (Exhibit 3-Lising), disallowing the amount of P440,000.00, representing the total value
of the four dishonored checks, noted the partial payments made thereon in the amounts of P87,239.36 covered by O.R.
No. 7952856L and P57,162.85 under O.R. No. 7953560L, leaving an unpaid balance of P295,597.[79]. The auditors also
recommended the recovery of the balance through criminal or civil actions, if so warranted.

An administrative investigation was also conducted by the Legal Department of the Treasury in connection with the
encashment of the four checks involved in this case. This resulted in the dismissal of accused Mendoza from his position
as National Cashier for dishonesty (Exhibit I). 5

The Ruling of the Sandiganbayan

The Sandiganbayan found that all elements of Section 3(e) of RA 3019 were present. Mendoza and Lising were both
public officers. Madamba and Agustin, although private persons, were charged with conspiring with Mendoza and Lising.
The checks subject of the present case bore the signatures, initials, or stamp of all the accused. The checks were also
encashed even if they were drawn against insufficient funds. Moreover, Mendoza facilitated the encashment of the
checks without the approval of the Assistant National Treasurer, violating the Bureau of Treasury's Standard Operating
Procedure 3200. The government suffered the loss of P440,000, of which P144,402.21 was reimbursed, leaving an
outstanding balance of P295,597.79. In convicting Mendoza and Madamba, the Sandiganbayan found that both
engaged in the fraudulent scheme to withdraw government funds through the encashment of the worthless commercial
checks in question with the Bureau of Treasury. Madamba was able to encash her checks at the Bureau of Treasury
because of Mendoza's indispensable aid.

However, the Sandiganbayan acquitted Agustin and Lising. The Sandiganbayan found that Agustin did not know that the
checks had no funds. Agustin was merely financially interested in the proceeds of the checks. Lising, on the other hand,
would not have encashed the checks had Mendoza not reassured her.

The Sandiganbayan ruled thus:

WHEREFORE, judgement is hereby rendered finding accused TOLENTINO MENDOZA and SALOME MADAMBA GUILTY
beyond reasonable doubt of [v]iolation of Section 3, paragraph (e), of Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act, and hereby sentences each of them to suffer the penalty of
imprisonment for a period of EIGHT YEARS; to suffer perpetual disqualification from public office; to pay jointly and
severally, the government of the Republic of the Philippines the amount of P295,597.79, representing the unpaid balance
of the total amount of the dishonored checks, with legal interest thereon from April 4, 1989, the last date for payment
stated in the letters of demand, and to pay the costs.

For insufficiency of evidence and on grounds of reasonable doubt, accused ANITA LISING and MARCELINA AGUSTIN are
found NOT GUILTY of the offense charged and are hereby ACQUITTED.
The cash bond posted by accused Lising and Agustin are hereby cancelled and ordered to be returned to them subject
to accounting and auditing rules and procedures.

SO ORDERED.6

Mendoza timely filed this Petition for Review on 25 January 2001. On the other hand, Madamba filed her petition with the
Court only on 15 March 2001. In a Resolution 7 dated 4 April 2001, the Court denied Madamba's petition for having been
filed late and for failure to state the material dates. The Resolution became final on 19 July 2001 and a partial entry of
judgment was made against Madamba.

The Issue

Mendoza states that the principal issue for resolution is "whether the evidence on record is sufficient to sustain a finding
of guilt beyond reasonable doubt." 8

The Ruling of the Court

The petition has no merit.

The present case is a Petition for Review under Section 1 9, Rule 45 of the 1997 Rules of Civil Procedure where only
questions of law may be raised. A question of law exists'

[w]hen the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or
when the issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood
of facts being admitted. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts
or when the query invites calibration of the whole evidence considering mainly the credibility of witnesses, the e xistence
and relevancy of specific surrounding circumstances as well as their relation to each other and to the whole, and the
probability of the situation.10

As exceptions to this rule, the Court may pass upon questions of fact in a Petition for Review when, among others: (1) the
conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly
mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; (5) the findings of
fact are premised on the absence of evidence; and (6) the findings of fact are contradicted by evidence on record. 11

In the present case, Mendoza is asking the Court to reexamine the evidence presented before, and passed upon, by the
Sandiganbayan. However, Mendoza failed to show that the present case falls within any of the above exceptions. Thus,
the petition must fail.

We reiterate that this Court's jurisdiction over the Sandiganbayan's decisions or final orders is limited only to questions of
law. It is not this Court's function to review again the evidence already considered in the proceedings below. The policy
of this Court is to sustain the factual findings of the Sandiganbayan since as a trial court it is in a better position to assess
the evidence before it.

WHEREFORE, we DENY the petition for lack of merit.


SO ORDERED.

H. RELEVANCY OF EVIDENCE
I. COLLATERAL MATTERS/CIRCUMSTANTIAL EVIDENCE

III. WHAT NEED NOT BE PROVED (Rule 129)

A. INTRODUCTION

G.R. No. 189255, June 17, 2015

JESUS G. REYES, Petitioner, v. GLAUCOMA RESEARCH FOUNDATION, INC., EYE REFERRAL CENTER AND MANUEL B.
AGULTO, Respondent.

DECISION

PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to reverse and set aside the Decision 1 and Resolution2 of
the Court of Appeals (CA), dated April 20, 2009 and August 25, 2009, respectively, in CA-G.R. SP No. 104261. The assailed
CA Decision annulled the Decision of the National Labor Relations Commission (NLRC) in NLRC NCR Case No.
05-0441-05 and reinstated the Decision of the Labor Arbiter (LA) in the same case, while the CA Resolution denied
petitioner's motion for reconsideration.

The instant petition arose from a complaint for illegal dismissal filed by petitioner against respondents with the NLRC,
National Capital Region, Quezon City. Petitioner alleged that: on August 1, 2003, he was hired by respondent corporation
as administrator of the latter's Eye Referral Center (ERC); he performed his duties as administrator and continuously
received his monthly salary of P20,000.00 until the end of January 2005; beginning February 2005, respondent withheld
petitioner's salary without notice but he still continued to report for work; on April 11, 2005, petitioner wrote a letter to
respondent Manuel Agulto (Agulto), who is the Executive Director of respondent corporation, informing the latter that he
has not been receiving his salaries since February 2005 as well as his 14 th month pay for 2004; petitioner did not receive
any response from Agulto; on April 21, 2005, petitioner was informed by the Assistant to the Executive Director as well as
the Assistant Administrative Officer, that he is no longer the Administrator of the ERC; subsequently, petitioner's office
was padlocked and closed without notice; he still continued to report for work but on April 29, 2005 he was no longer
allowed by the security guard on duty to enter the premises of the ERC.

On their part, respondents contended that: upon petitioner's representation that he is an expert in corporate
organizational structure and management affairs, they engaged his services as a consultant or adviser in the formulation
of an updated organizational set-up and employees' manual which is compatible with their present condition; based on
his claim that there is a need for an administrator for the ERC, he later designated himself as such on a trial basis; there is
no employer-employee relationship between them because respondents had no control over petitioner in terms of
working hours as he reports for work at anytime of the day and leaves as he pleases; respondents also had no control as
to the manner in which he performs his alleged duties as consultant; he became overbearing and his relationship with
the employees and officers of the company soured leading to the filing of three complaints against him; petitioner was
not dismissed as he was the one who voluntarily severed his relations with respondents.

On January 20, 2006, the LA assigned to the case rendered a Decision 3 dismissing petitioner's complaint. The LA held,
among others, that petitioner failed to establish that the elements of an employer-employee relationship existed
between him and respondents because he was unable to show that he was, in fact, appointed as administrator of the
ERC and received salaries as such; he also failed to deny that during his stint with respondents, he was, at the same time,
a consultant of various government agencies such as the Manila International Airport Authority, Manila Intercontinental
Port Authority, Anti-Terrorist Task Force for Aviation and Air Transportation Sector; his actions were neither supervised
nor controlled by the management of the ERC; petitioner, likewise, did not observe working hours by reporting for work
and leaving therefrom as he pleased; and, he was receiving allowances, not salaries, as a consultant.

On appeal, the NLRC reversed and set aside the Decision of the LA. The NLRC declared petitioner as respondents'
employee, that he was illegally dismissed and ordered respondents to reinstate him to his former position without loss o f
seniority rights and privileges with full backwages. The NLRC held that the basis upon which the conclusion of the LA was
drawn lacked support; that it was incumbent for respondents to discharge the burden of proving that petitioner's
dismissal was for cause and effected after due process was observed; and, that respondents failed to discharge this
burden.4

Respondents filed a motion for reconsideration, but it was denied by the NLRC in its Resolution 5 dated May 30, 2008.

Respondents then filed a Petition for Certiorari6 with the CA.

In its assailed Decision, the CA annulled and set aside the judgment of the NLRC and reinstated the Decision of the LA.
The CA held that the LA was correct in ruling that, under the control test and the economic reality tes t, no
employer-employee relationship existed between respondents and petitioner.

Petitioner filed a motion for reconsideration, but the CA denied it in its Resolution dated August 25, 2009.

Hence, the present petition for review on certiorari based on the following grounds:chanroblesvirtuallawlibrary

THE HONORABLE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN NOT
DISMISSING RESPONDENTS' PETITION FOR CERTIORARI ON THE GROUND THAT
RESPONDENTS SUBMITTED A VERIFICATION THAT FAILS TO COMPLY WITH THE 2004
RULES ON NOTARIAL PRACTICE.cralawlawlibrary

II

THE HONORABLE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN RULING THAT NO
EMPLOYER-EMPLOYEE RELATIONSHIP EXISTS BETWEEN RESPONDENTS AND
PETITIONER.7cralawlawlibrary

As to the first ground, petitioner contends that respondents' petition for certiorari filed with the CA should have been
dismissed on the ground that it was improperly verified because the jurat portion of the verification states only the
community tax certificate number of the affiant as evidence of her identity. Petitioner argues that under the 2004 Rules
on Notarial Practice, as amended by a Resolution 8 of this Court, dated February 19, 2008, a community tax certificate is
not among those considered as competent evidence of identity.

The Court does not agree.

This Court has already ruled that competent evidence of identity is not required in cases where the affiant is personally
known to the notary public.9

Thus, in Jandoquile v. Revilla, Jr.,10 this Court held that:chanroblesvirtuallawlibrary


If the notary public knows the affiants personally, he need not require them to show their valid
identification cards. This rule is supported by the definition of a "jurat" under Section 6, Rule II of
the 2004 Rules on Notarial Practice. A "jurat" refers to an act in which an individual on a single occasion:
(a) appears in person before the notary public and presents an instrument or document; (b) is personally
known to the notary public oridentified by the notary public through competent evidence of identity; (c)
signs the instrument or document in the presence of the notary; and (d) takes an oath or affirmation
before the notary public as to such instrument or document. 11cralawlawlibrary

Also, Section 2(b), Rule IV of the 2004 Rules on Notarial Practice provides as follows:chanroblesvirtuallawlibrary

SEC. 2. Prohibitions -

(a) x x x

(b) A person shall not perform a notarial act if the person involved as signatory to the instrument or
document -

(1) is not in the notary's presence personally at the time of the notarization; and

(2) is not personally known to the notary public or otherwise identified by the notary
public through competent evidence of identity as defined by these Rules.

Moreover, Rule II, Section 6 of the same Rules states that:

SEC 6. Jurat. - "Jurat" refers to an act in which an individual on a single


occasion:chanroblesvirtuallawlibrary

(a) appears in person before the notary public and presents an instrument or document;

(b) is personally known to the notary public or identified by the notary public through
competent evidence of identity as defined by these Rules;

(c) signs the instrument or document in the presence of the notary; and

(d) takes an oath or affirmation before the notary public as to such instrument or
document.

In legal hermeneutics, "or" is a disjunctive that expresses an alternative or gives a choice of one among two or more
things.12 The word signifies disassociation and independence of one thing from another thing in an enumeration. 13

Thus, as earlier stated, if the affiant is personally known to the notary public, the latter need not require the former to
show evidence of identity as required under the 2004 Rules on Notarial Practice, as amended.

Applying the above rule to the instant case, it is undisputed that the attorney-in-fact of respondents who executed the
verification and certificate against forum shopping, which was attached to respondents' petition filed with the CA, is
personally known to the notary public before whom the documents were acknowledged. Both attorney-in-fact and the
notary public hold office at respondents' place of business and the latter is also the legal counsel of respondents.

In any event, this Court's disquisition in the fairly recent case of Heirs of Amada Zaulda v. Isaac Zaulda14regarding the
import of procedural rules vis-a-vis the substantive rights of the parties, is instructive, to wit:chanroblesvirtuallawlibrary

[G]ranting, arguendo, that there was non-compliance with the verification requirement, the rule is that
courts should not be so strict about procedural lapses which do not really impair the proper
administration of justice. After all, the higher objective of procedural rule is to ensure that the
substantive rights of the parties are protected. Litigations should, as much as possible, be decided on
the merits and not on technicalities. Every party-litigant must be afforded ample opportunity for the
proper and just determination of his case, free from the unacceptable plea of technicalities.

In Coca-Cola Bottlers v. De la Cruz, where the verification was marred only by a glitch in the evidence of
the identity of the affiant, the Court was of the considered view that, in the interest of justice, the minor
defect can be overlooked and should not defeat the petition.

The reduction in the number of pending cases is laudable, but if it would be attained by precipitate, if
not preposterous, application of technicalities, justice would not be served. The law abhors technicalities
that impede the cause of justice. The court's primary duty is to render or dispense justice. "It is a more
prudent course of action for the court to excuse a technical lapse and afford the parties a review of the
case on appeal rather than dispose of the case on technicality and cause a grave injustice to the parties,
giving a false impression of speedy disposal of cases while actually resulting in more delay, if not
miscarriage of justice."

What should guide judicial action is the principle that a party-litigant should be given the fullest
opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty,
honor, or property on technicalities. The rules of procedure should be viewed as mere tools designed to
facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities
that tend to frustrate rather than promote substantial justice, must always be eschewed. At this juncture,
the Court reminds all members of the bench and bar of the admonition in the often-cited case
of Alonso v. Villamor:chanroblesvirtuallawlibrary

Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it
deserts its proper office as an aid to justice and becomes its great hindrance and chief
enemy, deserves scant consideration from courts. There should be no vested rights in
technicalities.15cralawlawlibrary

Anent the second ground, petitioner insists that, based on evidence on record, an employer-employee relationship exists
between him and respondents.

The Court is not persuaded.


It is a basic rule of evidence that each party must prove his affirmative allegation. 16 If he claims a right granted by law, he
must prove his claim by competent evidence, relying on the strength of his own evidence and not upon the weakness of
that of his opponent.17 The test for determining on whom the burden of proof lies is found in the result of an inquiry as
to which party would be successful if no evidence of such matters were given. 18 In an illegal dismissal case, the onus
probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. 19 However, before a case
for illegal dismissal can prosper, an employer-employee relationship must first be established. 20 Thus, in filing a
complaint before the LA for illegal dismissal, based on the premise that he was an employee of respondents, it is
incumbent upon petitioner to prove the employer-employee relationship by substantial evidence. 21

In regard to the above discussion, the issue of whether or not an employer-employee relationship existed between
petitioner and respondents is essentially a question of fact. 22 The factors that determine the issue include who has the
power to select the employee, who pays the employee's wages, who has the power to dismiss the employee, and who
exercises control of the methods and results by which the work of the employee is accomplished. 23 Although no
particular form of evidence is required to prove the existence of the relationship, and any competent and releva nt
evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on
substantial evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to
justify a conclusion.24

Generally, the Court does not review factual questions, primarily because the Court is not a trier of facts. 25 However,
where, like here, there is a conflict between the factual findings of the LA and the CA, on one hand, and those of the
NLRC, on the other, it becomes proper for the Court, in the exercise of its equity jurisdiction, to review and re-evaluate
the factual issues and to look into the records of the case and re-examine the questioned findings.26

Etched in an unending stream of cases are four standards in determining the existence of an employer-employee
relationship, namely: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of
wages; (c) the presence or absence of power of dismissal; and, (d) the presence or absence of control of the putative
employee's conduct. Most determinative among these factors is the so-called "control test."27

Indeed, the power of the employer to control the work of the employee is considered the most significant determinant of
the existence of an employer-employee relationship.28 This test is premised on whether the person for whom the services
are performed reserves the right to control both the end achieved and the manner and means used to achieve that
end.29

In the present case, petitioner contends that, as evidence of respondents' supposed control over him, the organizational
plans he has drawn were subject to the approval of respondent corporation's Board of Trustees. However, the Court
agrees with the disquisition of the CA on this matter, to wit:chanroblesvirtuallawlibrary

[Respondents'] power to approve or reject the organizational plans drawn by [petitioner] cannot be the
control contemplated in the "control test." It is but logical that one who commissions another to do a
piece of work should have the right to accept or reject the product. The important factor to consider in
the "control test" is still the element of control over how the work itself is done, not just the end result
thereof.

Well settled is the rule that where a person who works for another performs his job more or less at his
own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
compensated according to the result of his efforts and not the amount thereof, no employer-employee
relationship exists.30cralawlawlibrary

What was glaring in the present case is the undisputed fact that petitioner was never subject to definite working hours.
He never denied that he goes to work and leaves therefrom as he pleases.31 In fact, on December 1-31, 2004, he went on
leave without seeking approval from the officers of respondent company. On the contrary, his letter 32 simply informed
respondents that he will be away for a month and even advised them that they have the option of appointing his
replacement during his absence. This Court has held that there is no employer-employee relationship where the
supposed employee is not subject to a set of rules and regulations governing the performance of his duties under the
agreement with the company and is not required to report for work at any time, nor to devote his time exclusively to
working for the company.33

In this regard, this Court also agrees with the ruling of the CA that:chanroblesvirtuallawlibrary

Aside from the control test, the Supreme Court has also used the economic reality test in determining
whether an employer-employee relationship exists between the parties. Under this test, the economic
realities prevailing within the activity or between the parties are examined, taking into consideration the
totality of circumstances surrounding the true nature of the relationship between the parties. This is
especially appropriate when, as in this case, there is no written agreement or contract on which to base
the relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible
employment relationships for purposes of applying the Labor Code ought to be the economic
dependence of the worker on his employer.

In the instant case, as shown by the resume of [petitioner], he concurrently held consultancy positions
with the Manila International Airport Authority (from 04 March 2001 to September 2003 and from 01
November 2004 up to the present) and the Anti-Terrorist Task Force for Aviation and Air Transportation
Sector (from 16 April 2004 to 30 June 2004) during his stint with the Eye Referral Center (from 01 August
2003 to 29 April 2005). Accordingly, it cannot be said that the [petitioner] was wholly dependent on
[respondent] company.34cralawlawlibrary

In bolstering his contention that there was an employer-employee relationship, petitioner draws attention to the pay
slips he supposedly received from respondent corporation. However, he does not dispute the findings of the CA that
there are no deductions for SSS and withholding tax from his compensation, which are the usual deductions from
employees' salaries. Thus, the alleged pay slips may not be treated as competent evidence of petitioner's claim that he is
respondents' employee.

In addition, the designation of the payments to petitioner as salaries, is not determinative of the existence of an
employer-employee relationship.35 Salary is a general term defined as a remuneration for services given. 36 Evidence of
this fact, in the instant case, was the cash voucher issued in favor of petitioner where it was stated therein that the
amount of P20,000.00 was given as petitioner's allowance for the month of December 2004, although it appears from
the pay slip that the said amount was his salary for the same period.

Additional evidence of the fact that petitioner was hired as a consultant and not as an employee of respondent
corporation are affidavits to this effect which were executed by Roy Oliveres 37 and Aurea Luz Esteva,38 who are Medical
Records Custodian and Administrative Officer, respectively, of respondent corporation. Petitioner insists in its objection
of the use of these affidavits on the ground that they are, essentially, hearsay. However, this Court has ruled that
although the affiants had not been presented to affirm the contents of their affidavits and be cross-examined, their
affidavits may be given evidentiary value; the argument that such affidavits were hearsay was not persuasive. 39 Likewise,
this Court ruled that it was not necessary for the affiants to appear and testify and be cross-examined by counsel for the
adverse party.40 To require otherwise would be to negate the rationale and purpose of the summary nature of the
proceedings mandated by the Rules and to make mandatory the application of the technical rules of evidence.41

These affidavits are corroborated by evidence, as discussed above, showing that petitioner has no definite working hours
and is not subject to the control of respondents.

Lastly, the Court does not agree with petitioner's insistence that his being hired as respondent corporation's
administrator and his designation as such in intra-company correspondence proves that he is an employee of the
corporation. The fact alone that petitioner was designated as an administrator does not necessarily mean that he is an
employee of respondents. Mere title or designation in a corporation will not, by itself, determine the existence of an
employer-employee relationship.42 In this regard, even the identification card which was issued to petitioner is not an
adequate proof of petitioner's claim that he is respondents' employee. In addition, petitioner's designation as an
administrator neither disproves respondents' contention that he was engaged only as a consultant.

As a final point, it bears to reiterate that while the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor
of labor.43 Management also has its rights which are entitled to respect and enforcement in the interest of simple fair
play.44 Out of its concern for the less privileged in life, the Court has inclined, more often than not, toward the worker
and upheld his cause in his conflicts with the employer.45 Such favoritism, however, has not blinded the Court to the rule
that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law
and doctrine.46

WHEREFORE, the instant petition is DENIED. The Decision and Resolution of the Court of Appeals, dated April 20, 2009
and August 25, 2009, respectively, in CA-G.R. SPNo. 104261, are AFFIRMED.

SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 175532 April 19, 2010

ROMEO BASAY, JULIAN LITERAL and JULIAN ABUEVA, Petitioners,


vs.
HACIENDA CONSOLACION, and/or BRUNO BOUFFARD III, JOSE RAMON BOUFFARD, MALOT BOUFFARD, SPOUSES
CARMEN and STEVE BUMANLAG, BERNIE BOUFFARD, ANALYN BOUFFARD, and DONA BOUFFARD, as
Owners, Respondents.

DECISION

DEL CASTILLO, J.:

Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is
incumbent upon the employee to first establish the fact of his or her dismissal.

This Petition for Review on Certiorari1 assails the Decision2 dated June 7, 2006 of the Court of Appeals (CA) in CA-G.R. SP
No. 00313, which affirmed the March 22, 2004 Decision 3 of the National Labor Relations Commission (NLRC), dismissing
the illegal dismissal case filed by petitioners against respondents.

Factual Antecedents

Respondents hired petitioners Romeo Basay (Basay) in 1967 and Julian Literal (Literal) in 1984, as tractor operators, and
petitioner Julian Abueva (Abueva) in 1989, as laborer, in the hacienda devoted for sugar cane plantation.

On August 29, 2001, petitioners filed a complaint 4 for illegal dismissal with monetary claims against respondents. They
alleged that sometime in July 2001, respondents verbally informed them to stop working. Thereafter, they were not given
work assignments despite their status as regular employees. They alleged that their termination was done in violation of
their right to substantive and procedural due process. Petitioners also claimed violation of Minimum Wage Law and
non-payment of overtime pay, premium pay for holiday and rest day, five days service incentive leave pay, separation
pay and 13th month pay. They also prayed for damages and attorney’s fees.
Respondents denied petitioners’ allegations. As regards Abueva, respondents averred that he is not an employee but a
mere contractor in the hacienda. According to respondents, Abueva hired other men to perform weeding jobs and even
entered into contract with neighboring haciendas for similar jobs. Respondents alleged that Abueva ’s name does not
appear in the payroll, thus indicating that he is not an employee. As such, there can be no dismissal to speak of, much
less an illegal dismissal.

With regard to petitioners Literal and Basay, respondents admitted that both are regular employees, each receiving ₱
130.00 per day’s work as evidenced by a Master Voucher.5 However, respondents denied having illegally dismissed them
and asserted that they abandoned their jobs.

Respondents alleged that Literal was facing charges of misconduct, insubordination, damaging and taking advantage of
hacienda property, and unauthorized cultivation of a portion of the hacienda. Literal was ordered to explain; instead of
complying, Literal did not anymore report for work. Instead, he filed a complaint for illegal dismissal.

Respondents asserted that they sent a representative to convince petitioners to return but to no avail. Respondents
maintained that they have been religiously giving 13th month pay to their employees as evidenced by a
voucher6corresponding to year 2000.

Ruling of the Labor Arbiter

On December 19, 2001, the Labor Arbiter rendered a Decision 7 exonerating respondents from the charge of illegal
dismissal as petitioners were the ones who did not report for work despite respondents’ call. The Labor Arbiter, however,
awarded petitioners’ claim of 13th month pay and salary differentials. The dispositive portion of the Labor Arbiter’s
Decision reads:

WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered declaring the Respondent not
guilty of Illegal Dismissal but is however directed to pay the complainants their 13th Month Pay covering the years 1998
and 1999, and their Salary Differentials for 2 years at 6 months per year of service. The computation of the foregoing
monetary awards are as follows:

13th Month Pay: (For Each Complainant)

1998 & 1999 = 2 years or 12 months @ 6 months per year of service

₱145.00/day x 26 days = P3,770.00/mo.


I -

₱45,240.00 =

₱3,770.00/mo. x 12 mos. = ₱7,540.00

II – Salary Differential:
Romeo Basay:

Basic Pay = P145.00/day

₱122.00/day
Salary Received =
(a)

Salary Differential = ₱ 23.00/day

1998 & 1999 = 2 years or 312 days

₱23.00/day x 312 days = ₱7,176.00

Julian Literal:

Basic Pay = P145.00/day

P 91.00/day
Salary Received =
(b)

Salary Differential = P 54.00/day

1998 & 1999 = 2 years or 312 days

₱54.00/day x 312 days = ₱16,848.00

Julian Abueva:

Basic Pay = ₱145.00/day

₱ 91.50/day
Salary Received =
(c)

Salary Differential = ₱ 53.50/day

1998 & 1999 = 2 years or 312 days

₱53.50/day x 312 days = ₱16, 692.00

SUMMARY
ROMEO BASAY:

a) 13th Month Pay = ₱7,540.00

1. ₱7,176.00
Salary Differential =
b)

Total ₱14,716.00

JULIAN LITERAL

a) 13th Month Pay = ₱ 7,540.00

2. P16,848.00
Salary Differential =
b)

Total ₱24,388.00

JULIAN ABUEVA

a) 13th Month Pay = ₱ 7,540.00

₱16,692.00
Salary Differential =

3.

₱24,232.00
b) Total

₱63,336.00
GRAND TOTAL . . . . . . . . . . . . .

Ten Percent (10%) Attorney’s Fees is also adjudicated from the total monetary award.

SO ORDERED.8

Ruling of the National Labor Relations Commission

Both parties sought recourse to the NLRC. Petitioners filed a Partial Appeal 9 to the Decision declaring respondents not
guilty of illegal dismissal. They argued that there was no proof of clear and deliberate intent to abandon their wor k. On
the contrary, their filing of an illegal dismissal case negates the intention to abandon. Petitioners likewise alleged that
respondents failed to observe procedural due process.

Respondents, for their part, filed a Memorandum on Appeal 10 with respect to the award of salary differentials and 13th
month pay to petitioners. Respondents averred that the Labor Arbiter erred in finding that petitioners are entit led to
receive a minimum wage of ₱145.00/day instead of ₱130.00/day which is the minimum wage rate for sugarcane workers
in Negros Oriental per Wage Order No. ROVII-07.11 Respondents likewise presented vouchers 12 to prove payment of 13th
month pay for the years 1998 and 1999.

The NLRC, in its Decision13 dated March 22, 2004, found merit in respondents’ appeal. It ruled that respondents have
satisfactorily proven payment of the correct amount of wages and 13th month pay for the years 1998, 1999 and 2000, as
shown in the Master Voucher indicating the workers’ payroll and the various vouchers for 13th month pay. The NLRC
further ruled that Abueva is not an employee of the hacienda but a mere contractor; thus, he is not entitled to any of his
claims. The NLRC thus affirmed with modification the Decision of the Labor Arbiter, viz:

WHEREFORE, finding complainants not illegally dismissed, judgment is hereby rendered AFFIRMING the Decision of the
Labor Arbiter dated December 13, 2001, with the MODIFICATION that complainants Julian Literal and Romeo Basay are
not entitled to their claims for salary differentials and 13th month pay for lack of legal basis. However, respondents are
ordered to pay complainants Julian Literal and Romeo Basay proportionate 13th month pay computed from January 1,
2001 to August 29, 2001.

All other claims are dismissed for lack of merit.

SO ORDERED.14

Petitioners filed a Motion for Reconsideration 15 which was denied by the NLRC in a Resolution 16 dated September 3,
2004.

Ruling of the Court of Appeals

Aggrieved, petitioners filed with the CA a petition for certiorari. On June 7, 2006, however, the CA dismissed the petition
and affirmed the findings of the NLRC. It opined that respondents have manifested their willingness to retain petitioners
but the latter intentionally abandoned their work. The CA also struck down petitioners’ contention that abandonment is
inconsistent with the filing of a complaint for illegal dismissal as this rule applies only when a complainant seeks
reinstatement and not when separation pay is instead prayed for, as in the case of petitioners. As to the issue posed by
petitioners assailing the admissibility of the Master Voucher due to lack of petitioners’ authentic signatures, the CA
refrained from resolving the matter since the issue was only raised for the first time on appeal.

Petitioners moved for reconsideration, but to no avail.

Issue

Hence, this petition raising the issue of whether petitioners were illegally dismissed and are entitled to their money
claims.
Petitioners contend that the CA erred in affirming the findings of the labor tribunals that they deliberately abandoned
their work on the basis of respondents’ self-serving allegation that they sent emissaries to persuade them to return to
work. They maintain that in the absence of competent evidence to show clear intention to sever the employment
relationship and compliance with the two-notice rule, no abandonment can exist. Moreover, the theory that
abandonment of work is inconsistent with the filing of a complaint for illegal dismissal is applicable in the present case
since what was prayed for in the complaint was reinstatement, contrary to the CA’s finding that they were asking for
separation pay. Petitioners likewise insist that the CA gravely erred in holding that they assailed the admissibility of the
Master Voucher for the first time only during appeal. They claim that such issue was raised in their motion for
reconsideration of the NLRC Decision. Finally, petitioners allege that the fact that they were staying inside the premises of
the hacienda and had been working therein for more than a year is an indication that they are regular employees entitled
to their monetary claims, as correctly found by the Labor Arbiter.

Our Ruling

The petition is partly meritorious.

There was no illegal dismissal.

We are not unmindful of the rule in labor cases that the employer has the burden of proving that the termination was for
a valid or authorized cause; however, it is likewise incumbent upon the employees that they should first establish by
competent evidence the fact of their dismissal from employment. 17 The one who alleges a fact has the burden of proving
it and the proof should be clear, positive and convincing. 18 In this case, aside from mere allegations, no evidence was
proffered by the petitioners that they were dismissed from employment. The records are bereft of any indication that
petitioners were prevented from returning to work or otherwise deprived of any work assignment by respondents.

The CA, in sustaining the Labor Arbiter and NLRC’s finding that there was no illegal dismissal, ruled that respondents
have manifested their willingness to retain petitioners in their employ. Petitioners, however, complained that this finding
is anchored on mere allegations of respondents.

We do not agree. Respondents presented a declaration 19 made under oath by Leopoldo Utlang, Jr., assistant supervisor
of the hacienda, attesting that petitioners were asked to return to do some work for the hacienda but refused to do so
upon the advice of their lawyer. Interestingly too, as late as November of 2001 or even after almost three months from
the filing of the illegal dismissal case, the names of Literal and Basay were still listed and included in respondents’ payroll
as can be gleaned in the Master Voucher covering the employees’ payroll of November 12 to 16, 2001. While a voucher
does not necessarily prove payment, it is an acceptable documentary record of a business transaction. 20 As such, entries
made therein, being entered in the ordinary or regular course of business, enjoy the presumption of regularity.21 Hence,
on the basis of this material proof evincing respondents’ intention to retain petitioners as employees, we are not
convinced that petitioners were told to stop working or were prevented from working in the hacienda. This may well be
an indication of respondents’ lack of intention to dismiss petitioners from employment since they were still considered
employees as of that time. Records are likewise bereft of any showing that to date, respondents had already terminated
petitioners from employment.
We are not persuaded by petitioners’ contention that nothing was presented to establish their intention of abandoning
their work, or that the fact that they filed a complaint for illegal dismissal negates the theory of abandonment.

It bears emphasizing that this case does not involve termination of employment on the ground of abandonment. As
earlier discussed, there is no evidence showing that petitioners were actually dismissed. Petitioners’ filing of a complaint
for illegal dismissal, irrespective of whether reinstatement or separation pay was prayed for, could not by itself be the
sole consideration in determining whether they have been illegally dismissed. All circumstances surrounding the alleged
termination should also be taken into account.

In Abad v. Roselle Cinema,22 we ruled that the substantial evidence proffered by the employer that it had not terminated
the employee should not be ignored on the pretext that the employee would not have filed the complaint for illegal
dismissal if he had not really been dismissed. We held that such non sequitur reasoning cannot take the place of the
evidence of both the employer and the employee.1avvphi1

Given that there was no dismissal to speak of, there can be no question as to the legality or illegality thereof.

Basay and Literal are entitled to salary differentials for two years and proportionate 13th month pay from January 1-29,
2001. Abueva is not an employee, thus not entitled to his claims.

We agree with the petitioners that the issue on the admissibility of the Master Voucher, which does not s how that they
actually received the amount of salary indicated therein, was raised in their motion for reconsideration of the NLRC
Decision dated March 22, 2004 where the labor tribunal ruled that petitioners were duly compensated for their work on
the basis of such voucher. At any rate, even if its admission as evidence is not put into issue, still, the Master Voucher did
not prove that petitioners were indeed paid the correct amount of wages.

A perusal of the Master Voucher shows that it covers the employees’ payroll for the period of November 12-16, 2001
only. Clearly, the Master Voucher cannot constitute as proof that petitioners were duly paid for other periods not
covered by such voucher. No other pertinent vouchers, payrolls, records or other similar documents have been
presented as proof of payment of the correct amount of salaries paid, particularly, for the years 1998 and 1999. As a
general rule, one who pleads payment has the burden of proving it. 23 Consequently, respondents failed to discharge
the burden of proving payment thereby making them liable for petitioners’ claim for salary differentials. We thus
reinstate the Labor Arbiter’s award of salary differentials for 1998 and 1999, computed at 6 months per year of service.
However, the Labor Arbiter’s computation must be modified pursuant to Wage Order No. ROVII-07. Under this wage
order, the minimum wage rate of sugarcane plantation workers is at ₱130.00/day. The correct computation for the salary
differentials due to Basay and Literal, who claimed to have received only ₱122.00 and ₱91.00 per day, respectively,
should be as follows:

For ROMEO BASAY:

Basic Pay = ₱130.00/day

Salary Received = ₱122.00/day


Salary Differential = ₱ 8.00/day

₱8.00/day x 312 days (for 1998 & 1999) = ₱2,496.00

For JULIAN LITERAL:

Basic Pay = ₱130.00/day

₱ 91.00/day
Salary Received =

Salary Differential = ₱ 39.00/day

₱39.00/day x 312 days (for 1998 & 1999) = ₱12,168.00

As regards the 13th month pay, respondents were able to adduce evidence that the benefit was given to the employees
for the years 1998, 1999, and 2000. However, for an employee who has been separated from service before the time for
payment of the 13th month pay, he is entitled to this monetary benefit in proportion to the length of time he worked
during the year, reckoned from the time he started working during the calendar year up to the time of his
separation.24 The NLRC’s award of proportionate 13th month pay computed from January 1, 2001 to August 29, 2001 in
favor of Basay and Literal, is therefore proper.

As for petitioner Abueva, he is not entitled to his claims. The NLRC excluded Abueva in its judgment award, ruling that he
is not an employee but a mere contractor. The existence of an employer-employee relationship is ultimately a question
of fact.25 Settled is the rule that only errors of law are generally reviewed by this Court. 26 Factual findings of
administrative and quasi-judicial agencies specializing in their respective fields, especially when affirmed by the CA, must
be accorded high respect, if not finality. 27

The elements to determine the existence of an employment relationship are: (1) selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’s
conduct.28 In filing a complaint for illegal dismissal, it is incumbent upon Abueva to prove the relationship by substantial
evidence.

In this regard, petitioners claim that Abueva has worked with respondents for more than a year already and was allowed
to stay inside the hacienda. As such, he is a regular employee entitled to monetary claims. However, petitioners have not
presented competent proof that respondents engaged the services of Abueva; that respondents paid his wages or that
respondents could dictate what his conduct should be while at work. In other words, Abueva’s allegations did not
establish that his relationship with respondents has the attributes of employer-employee on the basis of the
above-mentioned four-fold test. Therefore, Abueva was not able to discharge the burden of proving the existence of an
employer-employee relationship. Moreover, Abueva was not able to refute respondents’ assertions that he hires other
men to perform weeding job in the hacienda and that he is not exclusively working for respondents.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 00313 dated
June 7, 2006, finding petitioners Romeo Basay, Julian Literal and Julian Abueva not illegally dismissed and awarding
petitioners Romeo Basay and Julian Literal their proportionate 13th month pay computed from January 1, 2001 to August
29, 2001, is AFFIRMED with MODIFICATION that the petitioners Romeo Basay and Julian Literal are entitled to receive the
amounts of ₱2,496.00 and ₱12,168.00 as salary differentials, respectively.

SO ORDERED.

G.R. No. 177407 February 9, 2011

RICO ROMMEL ATIENZA, Petitioner,


vs.
BOARD OF MEDICINE and EDITHA SIOSON, Respondents.

DECISION

NACHURA, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision 1 dated
September 22, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 87755. The CA dismissed the petition for certiorari
filed by petitioner Rico Rommel Atienza (Atienza), which, in turn, assailed the Orders 2 issued by public respondent Board
of Medicine (BOM) in Administrative Case No. 1882.

The facts, fairly summarized by the appellate court, follow.

Due to her lumbar pains, private respondent Editha Sioson went to Rizal Medical Center (RMC) for check-up on February
4, 1995. Sometime in 1999, due to the same problem, she was referred to Dr. Pedro Lantin III of RMC who, accordingly,
ordered several diagnostic laboratory tests. The tests revealed that her right kidney is normal. It was ascertained,
however, that her left kidney is non-functioning and non-visualizing. Thus, she underwent kidney operation in
September, 1999.

On February 18, 2000, private respondent’s husband, Romeo Sioson (as complainant), filed a complaint for gross
negligence and/or incompetence before the [BOM] against the doctors who allegedly participated in the fateful kidney
operation, namely: Dr. Judd dela Vega, Dr. Pedro Lantin, III, Dr. Gerardo Antonio Florendo and petitioner Rico Rommel
Atienza.
It was alleged in the complaint that the gross negligence and/or incompetence committed by the said doctors, including
petitioner, consists of the removal of private respondent’s fully functional right kidney, instead of the left non-functioning
and non-visualizing kidney.

The complaint was heard by the [BOM]. After complainant Romeo Sioson presented his evidence, private respondent
Editha Sioson, also named as complainant there, filed her formal offer of documentary evidence. Attached to the formal
offer of documentary evidence are her Exhibits "A" to "D," which she offered for the purpose of proving that her kidneys
were both in their proper anatomical locations at the time she was operated. She described her exhibits, as follows:

"EXHIBIT ‘A’ – the certified photocopy of the X-ray Request form dated December 12, 1996, which is also marked as
Annex ‘2’ as it was actually originally the Annex to x x x Dr. Pedro Lantin, III’s counter affidavit filed with the City
Prosecutor of Pasig City in connection with the criminal complaint filed by [Romeo Sioson] with the said office, on which
are handwritten entries which are the interpretation of the results of the ultrasound examination. Incidentally, this exhibit
happens to be the same as or identical to the certified photocopy of the document marked as Annex ‘2’ to the
Counter-Affidavit dated March 15, 2000, filed by x x x Dr. Pedro Lantin, III, on May 4, 2000, with this Honorable Board in
answer to this complaint;

"EXHIBIT ‘B’ – the certified photo copy of the X-ray request form dated January 30, 1997, which is also marked as Annex
‘3’ as it was actually likewise originally an Annex to x x x Dr. Pedro Lantin, III’s counter-affidavit filed with the Office of the
City Prosecutor of Pasig City in connection with the criminal complaint filed by the herein complainant with the said
office, on which are handwritten entries which are the interpretation of the results of the examination. Incidentally, this
exhibit happens to be also the same as or identical to the certified photo copy of the document marked as Annex ‘3’
which is likewise dated January 30, 1997, which is appended as such Annex ‘3’ to the counter-affidavit dated March 15,
2000, filed by x x x Dr. Pedro Lantin, III on May 4, 2000, with this Honorable Board in answer to this complaint.

"EXHIBIT ‘C’ – the certified photocopy of the X-ray request form dated March 16, 1996, which is also marked as Annex
‘4,’ on which are handwritten entries which are the interpretation of the results of the examination.

"EXHIBIT ‘D’ – the certified photocopy of the X-ray request form dated May 20, 1999, which is also marked as Annex
‘16,’ on which are handwritten entries which are the interpretation of the results of the examination. Incidentally, this
exhibit appears to be the draft of the typewritten final report of the same examination which is the document appended
as Annexes ‘4’ and ‘1’ respectively to the counter-affidavits filed by x x x Dr. Judd dela Vega and Dr. Pedro Lantin, III in
answer to the complaint. In the case of Dr. dela Vega however, the document which is marked as Annex ‘4’ is not a
certified photocopy, while in the case of Dr. Lantin, the document marked as Annex ‘1’ is a certified photocopy. Both
documents are of the same date and typewritten contents are the same as that which are written on Exhibit ‘D.’

Petitioner filed his comments/objections to private respondent’s [Editha Sioson’s] formal offer of exhibits. He alleged that
said exhibits are inadmissible because the same are mere photocopies, not properly identified and authenticated, and
intended to establish matters which are hearsay. He added that the exhibits are incompetent to prove the purpose for
which they are offered.

Dispositions of the Board of Medicine


The formal offer of documentary exhibits of private respondent [Editha Sioson] was admitted by the [BOM] per its Order
dated May 26, 2004. It reads:

"The Formal Offer of Documentary Evidence of [Romeo Sioson], the Comments/Objections of [herein petitioner] Atienza,
[therein respondents] De la Vega and Lantin, and the Manifestation of [therein] respondent Florendo are hereby
ADMITTED by the [BOM] for whatever purpose they may serve in the resolution of this case.

"Let the hearing be set on July 19, 2004 all at 1:30 p.m. for the reception of the evidence of the respondents.

"SO ORDERED."

Petitioner moved for reconsideration of the abovementioned Order basically on the same reasons stated in his
comment/objections to the formal offer of exhibits.

The [BOM] denied the motion for reconsideration of petitioner in its Order dated October 8, 2004. It concluded that it
should first admit the evidence being offered so that it can determine its probative value when it decides the case.
According to the Board, it can determine whether the evidence is relevant or not if it will take a look at it through the
process of admission. x x x.3

Disagreeing with the BOM, and as previously adverted to, Atienza filed a petition for certiorari with the CA, assailing the
BOM’s Orders which admitted Editha Sioson’s (Editha’s) Formal Offer of Documentary Evidence. The CA dismissed the
petition for certiorari for lack of merit.

Hence, this recourse positing the following issues:

I. PROCEDURAL ISSUE:

WHETHER PETITIONER ATIENZA AVAILED OF THE PROPER REMEDY WHEN HE FILED THE PETITION FOR CERTIORARI
DATED 06 DECEMBER 2004 WITH THE COURT OF APPEALS UNDER RULE 65 OF THE RULES OF COURT TO ASSAIL THE
ORDERS DATED 26 MAY 2004 AND 08 OCTOBER 2004 OF RESPONDENT BOARD.

II. SUBSTANTIVE ISSUE:

WHETHER THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR AND DECIDED A QUESTION OF
SUBSTANCE IN A WAY NOT IN ACCORDANCE WITH LAW AND THE APPLICABLE DECISIONS OF THE HONORABLE
COURT WHEN IT UPHELD THE ADMISSION OF INCOMPETENT AND INADMISSIBLE EVIDENCE BY RESPONDENT BOARD,
WHICH CAN RESULT IN THE DEPRIVATION OF PROFESSIONAL LICENSE – A PROPERTY RIGHT OR ONE ’ S
LIVELIHOOD.4

We find no reason to depart from the ruling of the CA.

Petitioner is correct when he asserts that a petition for certiorari is the proper remedy to assail the Orders of the BOM,
admitting in evidence the exhibits of Editha. As the assailed Orders were interlocutory, these cannot be the subject of an
appeal separate from the judgment that completely or finally disposes of the case. 5 At that stage, where there is no
appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, the only and remaining remedy left to
petitioner is a petition for certiorari under Rule 65 of the Rules of Court on the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction.

However, the writ of certiorari will not issue absent a showing that the BOM has acted without or in excess of jurisdiction
or with grave abuse of discretion. Embedded in the CA’s finding that the BOM did not exceed its jurisdiction or act in
grave abuse of discretion is the issue of whether the exhibits of Editha contained in her Formal Offer of Documentary
Evidence are inadmissible.

Petitioner argues that the exhibits formally offered in evidence by Editha: (1) violate the best evidence rule; (2) have not
been properly identified and authenticated; (3) are completely hearsay; and (4) are incompetent to prove their purpose.
Thus, petitioner contends that the exhibits are inadmissible evidence.

We disagree.

To begin with, it is well-settled that the rules of evidence are not strictly applied in proceedings before administrative
bodies such as the BOM.6 Although trial courts are enjoined to observe strict enforcement of the rules of evidence, 7in
connection with evidence which may appear to be of doubtful relevancy, incompetency, or admissibility, we have held
that:

[I]t is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but admitting them unless
plainly irrelevant, immaterial or incompetent, for the reason that their rejection places them beyond the consideration of
the court, if they are thereafter found relevant or competent; on the other hand, their admission, if they turn out later to
be irrelevant or incompetent, can easily be remedied by completely discarding them or ignoring them. 8

From the foregoing, we emphasize the distinction between the admissibility of evidence and the probative weight to be
accorded the same pieces of evidence. PNOC Shipping and Transport Corporation v. Court of Appeals 9 teaches:

Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to be considered at all.
On the other hand, the probative value of evidence refers to the question of whether or not it proves an issue.

Second, petitioner’s insistence that the admission of Editha’s exhibits violated his substantive rights leading to the loss of
his medical license is misplaced. Petitioner mistakenly relies on Section 20, Article I of the Professional Regulation
Commission Rules of Procedure, which reads:

Section 20. Administrative investigation shall be conducted in accordance with these Rules. The Rules of Court shall only
apply in these proceedings by analogy or on a suppletory character and whenever practicable and convenient. Technical
errors in the admission of evidence which do not prejudice the substantive rights of either party shall not vitiate the
proceedings.10

As pointed out by the appellate court, the admission of the exhibits did not prejudice the substantive rights of petitioner
because, at any rate, the fact sought to be proved thereby, that the two kidneys of Editha were in their proper anatomical
locations at the time she was operated on, is presumed under Section 3, Rule 131 of the Rules of Court:
Sec. 3. Disputable presumptions. – The following presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:

xxxx

(y) That things have happened according to the ordinary course of nature and the ordinary habits of life.

The exhibits are certified photocopies of X-ray Request Forms dated December 12, 1996, January 30, 1997, March 16, 1996,
and May 20, 1999, filed in connection with Editha’s medical case. The documents contain handwritten entries interpreting
the results of the examination. These exhibits were actually attached as annexes to Dr. Pedro Lantin III’s counter affidavit
filed with the Office of the City Prosecutor of Pasig City, which was investigating the criminal complaint for negligence
filed by Editha against the doctors of Rizal Medical Center (RMC) who handled her surgical procedure. To lay the
predicate for her case, Editha offered the exhibits in evidence to prove that her "kidneys were both in their proper
anatomical locations at the time" of her operation.

The fact sought to be established by the admission of Editha’s exhibits, that her "kidneys were both in their proper
anatomical locations at the time" of her operation, need not be proved as it is covered by mandatory judicial notice. 11

Unquestionably, the rules of evidence are merely the means for ascertaining the truth respecting a matter of fact. 12Thus,
they likewise provide for some facts which are established and need not be proved, such as those covered by jud icial
notice, both mandatory and discretionary. 13 Laws of nature involving the physical sciences, specifically biology, 14 include
the structural make-up and composition of living things such as human beings. In this case, we may take judicial notice
that Editha’s kidneys before, and at the time of, her operation, as with most human beings, were in their proper
anatomical locations.

Third, contrary to the assertion of petitioner, the best evidence rule is inapplicable.1awphil Section 3 of Rule 130 provides:

1. Best Evidence Rule

Sec. 3. Original document must be produced; exceptions. – When the subject of inquiry is the contents of a document,
no evidence shall be admissible other than the original document itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the
offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the
latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without
great loss of time and the fact sought to be established from them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public office.
The subject of inquiry in this case is whether respondent doctors before the BOM are liable for gross negligence in
removing the right functioning kidney of Editha instead of the left non-functioning kidney, not the proper anatomical
locations of Editha’s kidneys. As previously discussed, the proper anatomical locations of Editha’s kidneys at the time of
her operation at the RMC may be established not only through the exhibits offered in evidence.

Finally, these exhibits do not constitute hearsay evidence of the anatomical locations of Editha’s kidneys. To further drive
home the point, the anatomical positions, whether left or right, of Editha’s kidneys, and the removal of one or both, may
still be established through a belated ultrasound or x-ray of her abdominal area.

In fact, the introduction of secondary evidence, such as copies of the exhibits, is allowed. 15 Witness Dr. Nancy Aquino
testified that the Records Office of RMC no longer had the originals of the exhibits "because [it] transferred from the
previous building, x x x to the new building." 16 Ultimately, since the originals cannot be produced, the BOM properly
admitted Editha’s formal offer of evidence and, thereafter, the BOM shall determine the probative value thereof when it
decides the case.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 87755 is AFFIRMED. Costs
against petitioner.

SO ORDERED.

G.R. No. 175021 June 15, 2011

REPUBLIC OF THE PHILIPPINES, represented by the Chief of the Philippine National Police, Petitioner,
vs.
THI THU THUY T. DE GUZMAN, Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari1 filed by Republic of the Philippines, as represented by the Chief of the
Philippine National Police (PNP), of the September 27, 2006 Decision 2 of the Court of Appeals in CA-G.R. CV No. 80623,
which affirmed with modification the September 8, 2003 Decision 3 of the Regional Trial Court (RTC), Branch 222, of
Quezon City in Civil Case No. Q99-37717.

Respondent is the proprietress of Montaguz General Merchandise (MGM), 4 a contractor accredited by the PNP for the
supply of office and construction materials and equipment, and for the delivery of various services such as printing and
rental, repair of various equipment, and renovation of buildings, facilities, vehicles, tires, and spare parts. 5
On December 8, 1995, the PNP Engineering Services (PNPES), released a Requisition and Issue Voucher 6 for the
acquisition of various building materials amounting to Two Million Two Hundred Eighty-Eight Thousand Five Hundred
Sixty-Two Pesos and Sixty Centavos (₱2,288,562.60) for the construction of a four-storey condominium building with
roof deck at Camp Crame, Quezon City.7

Respondent averred that on December 11, 1995, MGM and petitioner, represented by the PNP, through its chief,
executed a Contract of Agreement 8 (the Contract) wherein MGM, for the price of ₱2,288,562.60, undertook to procure
and deliver to the PNP the construction materials itemized in the purchase order9 attached to the Contract. Respondent
claimed that after the PNP Chief approved the Contract and purchase order, 10 MGM, on March 1, 1996, proceeded with
the delivery of the construction materials, as evidenced by Delivery Receipt Nos. 151-153,11Sales Invoice Nos. 038 and
041,12 and the "Report of Public Property Purchase" 13 issued by the PNP’s Receiving and Accounting Officers to their
Internal Auditor Chief. Respondent asseverated that following the PNP’s inspection of the delivered materials on March 4,
1996,14 the PNP issued two Disbursement Vouchers; one in the amount of ₱2,226,147.26 in favor of MGM,15 and the
other, 16 in the amount of ₱62,415.34, representing the three percent (3%) withholding tax, in favor of the Bureau of
Internal Revenue (BIR).17

On November 5, 1997, the respondent, through counsel, sent a letter dated October 20, 1997 18 to the PNP, demanding
the payment of ₱2,288,562.60 for the construction materials MGM procured for the PNP under their December 1995
Contract.

On November 17, 1997, the PNP, through its Officer-in-Charge, replied19 to respondent’s counsel, informing her of the
payment made to MGM via Land Bank of the Philippines (LBP) Check No. 0000530631, 20
as evidenced by Receipt No.
001, 21 issued by the respondent to the PNP on April 23, 1996.22

On November 26, 1997, respondent, through counsel, responded by reiterating her demand 23 and denying having ever
received the LBP check, personally or through an authorized person. She also claimed that Receipt No. 001, a copy of
which was attached to the PNP’s November 17, 1997 letter, could not support the PNP’s claim of payment as the
aforesaid receipt belonged to Montaguz Builders, her other company, which was also doing business with the PNP, and
not to MGM, with which the contract was made.

On May 5, 1999, respondent filed a Complaint for Sum of Money against the petitioner, represented by the Chief of the
PNP, before the RTC, Branch 222 of Quezon City. 24 This was docketed as Civil Case No. Q99-37717.

The petitioner filed a Motion to Dismiss 25 on July 5, 1999, on the ground that the claim or demand set forth in
respondent’s complaint had already been paid or extinguished, 26 as evidenced by LBP Check No. 0000530631 dated
April 18, 1996, issued by the PNP to MGM, and Receipt No. 001, which the respondent correspondingly issued to the PNP.
The petitioner also argued that aside from the fact that the respondent, in her October 20, 1997 letter, demanded the
incorrect amount since it included the withholding tax paid to the BIR, her delay in making such demand "[did] not speak
well of the worthiness of the cause she espouse[d]." 27

Respondent opposed petitioner ’ s motion to dismiss in her July 12, 1999 Opposition28and September 10, 1999
Supplemental Opposition to Motion to Dismiss. 29 Respondent posited that Receipt No. 001, which the petitioner claimed
was issued by MGM upon respondent’s receipt of the LBP check, was, first, under the business name "Montaguz
Builders," an entity separate from MGM. Next, petitioner’s allegation that she received the LBP check on April 19, 1996
was belied by the fact that Receipt No. 001, which was supposedly issued for the check, was dated four days later, or April
23, 1996. Moreover, respondent averred, the PNP’s own Checking Account Section Logbook or the Warrant Register,
showed that it was one Edgardo Cruz (Cruz) who signed for the check due to MGM, contrary to her usual practice of
30

personally receiving and signing for checks payable to her companies.

After conducting hearings on the Motion to Dismiss, the RTC issued an Order 31 on May 4, 2001, denying the petitioner’s
motion for lack of merit. The petitioner thereafter filed its Answer, 32 wherein it restated the same allegations in its Motion
to Dismiss.

Trial on the merits followed the pre-trial conference, which was terminated on June 25, 2002 when the parties failed to
arrive at an amicable settlement.33

On September 3, 2002, shortly after respondent was sworn in as a witness, and after her counsel formally offered her
testimony in evidence, Atty. Norman Bueno, petitioner’s counsel at that time, made the following stipulations in open
court:

Atty. Bueno (To Court)

Your Honor, in order to expedite the trial, we will admit that this witness was contracted to deliver the construction
supplies or materials. We will admit that she complied, that she actually delivered the materials. We will admit that Land
Bank Corporation check was issued although we will not admit that the check was not released to her, as [a] matter of
fact, we have the copy of the check. We will admit that Warrant Register indicated that the check was released although
we will not admit that the check was not received by the [respondent].

Court (To Atty. Albano)

So, the issues here are whether or not the [respondent] received the check for the payment of the construction materials
or supplies and who received the same. That is all.

Atty. Albano (To Court)

Yes, your Honor.

Court (To Atty. Albano)

I think we have an abbreviated testimony here. Proceed. 34 (Emphasis ours.)

The stipulations made by the petitioner through Atty. Bueno were in consonance with the admissions it had previously
made, also through Atty. Bueno, in its Answer, 35 and pre-trial brief36:

Answer:

IX
It ADMITS the allegation in paragraph 9 of the Complaint that [respondent] delivered to the PNP Engineering Service the
construction materials. It also ADMITS the existence of Receipt Nos. 151, 152 and 153 alleged in the same paragraph,
copies of which are attached to the Complaint as Annexes "G," "G-1" and "G-2."37 (Emphasis ours.)

Pre-trial Brief:

III

ADMISSIONS

3.1. Facts and/or documents admitted

For brevity, [petitioner] admit[s] only the allegations in [respondent’s] Complaint and the annexes thereto that were
admitted in the Answer.38 (Emphases ours.)

With the issue then confined to whether respondent was paid or not, the RTC proceeded with the trial.

Respondent, in her testimony, narrated that on April 18, 1996, she went to the PNP Finance Center to claim a check due
to one of her companies, Montaguz Builders. As the PNP required the issuance of an official receipt upon claiming its
checks, respondent, in preparation for the PNP check she expected, already signed Montaguz Builders Official Receipt
No. 001, albeit the details were still blank. However, upon arriving at the PNP Finance Center, respondent was told that
the check was still with the LBP, which could not yet release it. Respondent then left for the Engineering Services Office to
see Captain Rama, along with Receipt No. 001, which she had not yet issued. 39Respondent claimed that after some time,
she left her belongings, including her receipt booklet, at a bench in Captain Rama’s office when she went around the
Engineering Office to talk to some other people. 40 She reasoned that since she was already familiar and comfortable with
the people in the PNPES Office, she felt no need to ask anyone to look after her belongings, as it was her "normal
practice"41 to leave her belongings in one of the offices there. The next day, respondent alleged that when she returned
for the check due to Montaguz Builders that she was not able to claim the day before, she discovered for the first time
that Receipt No. 001, which was meant for that check, was missing. Since she would not be able to claim her check
without issuing a receipt, she just informed the releaser of the missing receipt and issued Receipt No. 002 in its
place.42 After a few months, respondent inquired with the PNP Finance Center about the payment due to MGM under
the Contract of December 1995 and was surprised to find out that the check payable to MGM had already been released.
Upon making some inquiries, respondent learned that the check, payable to MGM, in the amount of ₱2,226,147.26, was
received by Cruz, who signed the PNP’s Warrant Register. Respondent admitted to knowing Cruz, as he was connected
with Highland Enterprises, a fellow PNP-accredited contractor. However, she denied ever having authorized Cruz or
Highland Enterprises to receive or claim any of the checks due to MGM or Montaguz Builders. 43 When asked why she
had not filed a case against Cruz or Herminio Reyes, the owner of Highland Enterprises, considering the admitted fact
that Cruz claimed the check due to her, respondent declared that there was no reason for her to confront them as it was
the PNP’s fault that the check was released to the wrong person. Thus, it was the PNP’s problem to find out where the
money had gone, while her course of action was to go after the PNP, as the party involved in the Contract. 44

On April 29, 2003, petitioner presented Ms. Jesusa Magtira, who was then the "check releaser"45 of the PNP, to prove that
the respondent received the LBP check due to MGM, and that respondent herself gave the check to Cruz. 46 Ms. Magtira
testified that on April 23, 1996, she released the LBP check payable to the order of MGM, in the amount of ₱2,226,147.26,
to the respondent herein, whom she identified in open court. She claimed that when she released the check to
respondent, she also handed her a voucher, and a logbook also known as the Warrant Register, for signing. 47 When
asked why Cruz was allowed to sign for the check, Ms. Magtira explained that this was allowed since the respondent
already gave her the official receipt for the check, and it was respondent herself who gave the logbook to Cruz for
signing.48

The petitioner next presented Edgardo Cruz for the purpose of proving that the payment respondent was claiming
rightfully belonged to Highland Enterprises. Cruz testified that Highland Enterprises had been an accredited contractor
of the PNP since 1975. In 1995, Cruz claimed that the PNPES was tasked to construct "by administration" a condominium
building. This meant that the PNPES had to do all the work, from the canvassing of the materials to the construction of
the building. The PNPES allegedly lacked the funds to do this and so asked for Highland Enterprises’s help.49 In a meeting
with its accredited contractors, the PNPES asked if the other contractors would agree to the use of their business
name50 for a two percent (2%) commission of the purchase order price to avoid the impression that Highland Enterprises
was monopolizing the supply of labor and materials to the PNP. 51Cruz alleged that on April 23, 1996, he and the
respondent went to the PNP Finance Center to claim the LBP check due to MGM. Cruz said that the respondent handed
him the already signed Receipt No. 001, which he filled up. He claimed that the respondent knew that the LBP check was
really meant for Highland Enterprises as she had already been paid her 2% commission for the use of her business name
in the concerned transaction.52

On September 8, 2003, the RTC rendered its Decision, the dispositive of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of [respondent] and against [petitioner]
ordering the latter to pay [respondent] the following sums:

(1) ₱2,226,147.26 representing the principal sum plus interest at 14% per annum from April 18, 1996 until the same shall
have been fully paid;

(2) 20% of the sum to be collected as attorney’s fees; and,

(3) Costs of suit.53

The RTC declared that while Cruz’s testimony seemed to offer a plausible explanation on how and why the LBP check
ended up with him, the petitioner, already admitted in its Answer, and Pre-trial Brief, that MGM, did in fact deliver the
construction materials worth ₱2,288,562.60 to the PNP. The RTC also pointed out the fact that the petitioner made the
same admissions in open court to expedite the trial, leaving only one issue to be resolved: whether the respondent had
been paid or not. Since this was the only issue, the RTC said that it had no choice but to go back to the documents and
the "documentary evidence clearly indicates that the check subject of this case was never received by [respondent]."54 In
addition, the PNP’s own Warrant Register showed that it was Edgardo Cruz who received the LBP check, and Receipt No.
001 submitted by the petitioner to support its claim was not issued by MGM, but by Montaguz Builders, a different entity.
Finally, the RTC held that Cruz’s testimony, which appeared to be an afterthought to cover up the PNP’s blunder, were
irreconcilable with the petitioner’s earlier declarations and admissions, hence, not credit-worthy.
The petitioner appealed this decision to the Court of Appeals, which affirmed with modification the RTC ’s ruling on
September 27, 2006:

WHEREFORE, the decision appealed from is AFFIRMED with the MODIFICATION that the 14% interest per annum
imposed on the principal amount is ordered reduced to 12%, computed from November 16, 1997 until fully paid. The
order for the payment of attorney’s fees and costs of the suit is DELETED.55

The Court of Appeals, in deciding against the petitioner, held that the petitioner’s admissions and declarations, made in
various stages of the proceedings are express admissions, which cannot be overcome by allegations of respondent’s
implied admissions. Moreover, petitioner cannot controvert its own admissions and it is estopped from denying that it
had a contract with MGM, which MGM duly complied with. The Court of Appeals agreed with the RTC that the real issue
for determination was whether the petitioner was able to discharge its contractual obligation with the respondent. The
Court of Appeals held that while the PNP’s own Warrant Register disclosed that the payment due to MGM was received
by Cruz, on behalf of Highland Enterprises, the PNP’s contract was clearly with MGM, and not with Highland Enterprises.
Thus, in order to extinguish its obligation, the petitioner should have directed its payment to MGM unless MGM
authorized a third person to accept payment on its behalf.

The petitioner is now before this Court, praying for the reversal of the lower courts’ decisions on the ground that "the
Court of Appeals committed a serious error in law by affirming the decision of the trial court."56

THE COURT’S RULING:

This case stemmed from a contract executed between the respondent and the petitioner. While the petitioner, in
proclaiming that the respondent’s claim had already been extinguished, initially insisted on having fulfilled its contractual
obligation, it now contends that the contract it executed with the respondent is actually a fictitious contract to conceal
the fact that only one contractor will be supplying all the materials and labor for the PNP condominium project.

Both the RTC and the Court of Appeals upheld the validity of the contract between the petitioner and the respondent on
the strength of the documentary evidence presented and offered in Court and on petitioner’s own stipulations and
admissions during various stages of the proceedings.

It is worthy to note that while this petition was filed under Rule 45 of the Rules of Court, the assertions and arguments
advanced herein are those that will necessarily require this Court to re-evaluate the evidence on record.

It is a well-settled rule that in a petition for review under Rule 45, only questions of law may be raised by the parties and
passed upon by this Court.57

This Court has, on many occasions, distinguished between a question of law and a question of fact. We held that when
there is doubt as to what the law is on a certain state of facts, then it is a question of law; but when the doubt arises as to
the truth or falsity of the alleged facts, then it is a question of fact. 58 "Simply put, when there is no dispute as to fact, the
question of whether or not the conclusion drawn therefrom is correct, is a question of law." 59To elucidate further, this
Court, in Hko Ah Pao v. Ting60 said:
One test to determine if there exists a question of fact or law in a given case is whether the Court can resolve the issue
that was raised without having to review or evaluate the evidence, in which case, it is a question of law; otherwise, it will
be a question of fact. Thus, the petition must not involve the calibration of the probative value of the evidence presented.
In addition, the facts of the case must be undisputed, and the only issue that should be left for the Court to decide is
whether or not the conclusion drawn by the CA from a certain set of facts was appropriate. 61(Emphases ours.)

In this case, the circumstances surrounding the controversial LBP check are central to the issue before us, the resolution
of which, will require a perusal of the entire records of the case including the transcribed testimonies of the witnesses.
Since this is an appeal via certiorari, questions of fact are not reviewable. As a rule, the findings of fact of the Court of
Appeals are final and conclusive 62 and this Court will only review them under the following recognized exceptions: (1)
when the inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of discretion; (3)
when the finding is grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of
Appeals is based on misapprehension of facts; (5) when the findings of fact are conflicting; (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; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findi ngs
of fact are conclusions without citation of specific evidence on which they are based; (9) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a
different conclusion; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence
and are contradicted by the evidence on record. 63

Although petitioner’s sole ground to support this petition was stated in such a manner as to impress upon this Court that
the Court of Appeals committed an error in law, what the petitioner actually wants us to do is to review and re -examine
the factual findings of both the RTC and the Court of Appeals.

Since the petitioner has not shown this Court that this case falls under any of the enumerated exceptions to the rule, we
are constrained to uphold the facts as established by both the RTC and the Court of Appeals, and, consequently, the
conclusions reached in the appealed decision.

Nonetheless, even if we were to exercise utmost liberality and veer away from the rule, the records will show that the
petitioner had failed to establish its case by a preponderance of evidence.64 Section 1, Rule 133 of the Revised Rules of
Court provides the guidelines in determining preponderance of evidence:

SECTION 1. Preponderance of evidence, how determined.— In civil cases, the party having the burden of proof must
establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of
evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’
manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the
nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of
interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also
consider the number of witnesses, though the preponderance is not necessarily with the greater number.

Expounding on the concept of preponderance of evidence, this Court in Encinas v. National Bookstore, Inc., 65 held:
"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either side and is usually
considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the credible
evidence." Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth. It is evidence
which is more convincing to the court as worthy of belief than that which is offered in opposition thereto. 66

The petitioner avers that the Court of Appeals should not have relied "heavily, if not solely" 67 on the admissions made by
petitioner’s former counsel, thereby losing sight of the "secret agreement" between the respondent and Highland
Enterprises, which explains why all the documentary evidence were in respondent’s name.68

The petitioner relies mainly on Cruz’s testimony to support its allegations. Not only did it not present any other witness to
corroborate Cruz, but it also failed to present any documentation to confirm its story. It is doubtful that the petitioner or
the contractors would enter into any "secret agreement" involving millions of pesos based purely on verbal affirmations.
Meanwhile, the respondent not only presented all the documentary evidence to prove her claims, even the petitioner
repeatedly admitted that respondent had fully complied with her contractual obligations.

The petitioner argued that the Court of Appeals should have appreciated the clear and adequate testimony of Cruz, and
should have given it utmost weight and credit especially since his testimony was a "judicial admission against interest –
a primary evidence which should have been accorded full evidentiary value." 69

The trial court’s appreciation of the witnesses’ testimonies is entitled to the highest respect since it was in a better
position to assess their credibility. 70 The RTC held Cruz’s testimony to be "not credit worthy" 71 for being irreconcilable
with petitioner’s earlier admissions. Contrary to petitioner’s contentions, Cruz’s testimony cannot be considered as a
judicial admission against his interest as he is neither a party to the case nor was his admission against his own interest,
but actually against either the petitioner’s or the respondent’s interest. Petitioner’s statements on the other hand, were
deliberate, clear, and unequivocal and were made in the course of judicial proceedings; thus, they qualify as judicial
admissions.72 In Alfelor v. Halasan,73 this Court held that:

A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof;
production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of
controversy. Consequently, an admission made in the pleadings cannot be controverted by the party making such
admission and are conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored,
whether objection is interposed by the party or not. The allegations, statements or admissions contained in a pleading
are conclusive as against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what
was pleaded.74

The petitioner admitted to the existence and validity of the Contract of Agreement executed between the PNP and MGM,
as represented by the respondent, on December 11, 1995. It likewise admitted that respondent delivered the construction
materials subject of the Contract, not once, but several times during the course of the proceedings. The only matter
petitioner assailed was respondent’s allegation that she had not yet been paid. If Cruz’s testimony were true, the
petitioner should have put respondent in her place the moment she sent a letter to the PNP, demanding payment for the
construction materials she had allegedly delivered. Instead, the petitioner replied that it had already paid respondent as
evidenced by the LBP check and the receipt she supposedly issued. This line of defense continued on, with the petitioner
assailing only the respondent’s claim of nonpayment, and not the rest of respondent’s claims, in its motion to dismiss, its
answer, its pre-trial brief, and even in open court during the respondent’s testimony. Section 4, Rule 129 of the Rules of
Court states:

SECTION 4. Judicial Admissions.–An admission, verbal or written, made by a party in the course of the proceedings in the
same case, does not require proof. The admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made.

Petitioner’s admissions were proven to have been made in various stages of the proceedings, and since the petitioner
has not shown us that they were made through palpable mistake, they are conclusive as to the petitioner. Hence, the
only question to be resolved is whether the respondent was paid under the December 1995 Contract of Agreement.

The RTC and the Court of Appeals correctly ruled that the petitioner’s obligation has not been extinguished. The
petitioner’s obligation consists of payment of a sum of money. In order for petitioner’s payment to be effective in
extinguishing its obligation, it must be made to the proper person. Article 1240 of the Civil Code states:

Art. 1240. Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in
interest, or any person authorized to receive it.

In Cembrano v. City of Butuan,75 this Court elucidated on how payment will effectively extinguish an obligation, to wit:

Payment made by the debtor to the person of the creditor or to one authorized by him or by the law to receive it
extinguishes the obligation. When payment is made to the wrong party, however, the obligation is not extinguished as to
the creditor who is without fault or negligence even if the debtor acted in utmost good faith and by mistake as to the
person of the creditor or through error induced by fraud of a third person.

In general, a payment in order to be effective to discharge an obligation, must be made to the proper person. Thus,
payment must be made to the obligee himself or to an agent having authority, express or implied, to receive the
particular payment. Payment made to one having apparent authority to receive the money will, as a rule, be treated as
though actual authority had been given for its receipt. Likewise, if payment is made to one who by law is authorized to
act for the creditor, it will work a discharge. The receipt of money due on a judgment by an officer authorized by law to
accept it will, therefore, satisfy the debt. 76

The respondent was able to establish that the LBP check was not received by her or by her authorized personnel. The
PNP’s own records show that it was claimed and signed for by Cruz, who is openly known as being connected to
Highland Enterprises, another contractor. Hence, absent any showing that the respondent agreed to the payment of the
contract price to another person, or that she authorized Cruz to claim the check on her behalf, the payment, to be
effective must be made to her.77

The petitioner also challenged the RTC’s findings, on the ground that it "overlooked material fact and circumstance of
significant weight and substance."78 Invoking the doctrine of adoptive admission, the petitioner pointed out that the
respondent’s inaction towards Cruz, whom she has known to have claimed her check as early as 1996, should be taken
against her. Finally, the petitioner contends that Cruz’s testimony should be taken against respondent as well, under Rule
130, Sec. 32 of the Revised Rules on Evidence, since she has not presented any "controverting evidence x x x
notwithstanding that she personally heard it."79

The respondent has explained her inaction towards Cruz and Highland Enterprises. Both the RTC and the Court of
Appeals have found her explanation sufficient and this Court finds no cogent reason to overturn the assessment by the
trial court and the Court of Appeals of the respondent’s testimony. It may be recalled that the respondent argued that
since it was the PNP who owed her money, her actions should be directed towards the PNP and not Cruz or Highland
Enterprises, against whom she has no adequate proof. 80 Respondent has also adequately explained her delay in filing an
action against the petitioner, particularly that she did not want to prejudice her other pending transactions with the
PNP.81

The petitioner claims that the RTC "overlooked material fact and circumstance of significant weight and substance," 82 but
it ignores all the documentary evidence, and even its own admissions, which are evidence of the greater weight and
substance, that support the conclusions reached by both the RTC and the Court of Appeals.

We agree with the Court of Appeals that the RTC erred in the interest rate and other monetary sums awarded t o
respondent as baseless. However, we must further modify the interest rate imposed by the Court of Appeals pursuant to
the rule laid down in Eastern Shipping Lines, Inc. v. Court of Appeals 83:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of
interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to
run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. 84

Since the obligation herein is for the payment of a sum of money, the legal interest rate to be imposed, under Article
2209 of the Civil Code is six percent (6%) per annum:

Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six per cent per annum.

Following the guidelines above, the legal interest of 6% per annum is to be imposed from November 16, 1997, the date
of the last demand, and 12% in lieu of 6% from the date this decision becomes final until fully paid.lawphi1

Petitioner’s allegations of sham dealings involving our own government agencies are potentially disturbing and alarming.
If Cruz’s testimony were true, this should be a lesson to the PNP not to dabble in spurious transactions. Obviously, if it
can afford to give a 2% commission to other contractors for the mere use of their business names, then the petitioner is
disbursing more money than it normally would in a legitimate transaction. It is recommended that the pro per agency
investigate this matter and hold the involved personnel accountable to avoid any similar occurrence in the future.

WHEREFORE, the Petition is hereby DENIED and the Decision of the Court of Appeals in C.A. G.R. CV No. 80623 dated
September 27, 2006 is AFFIRMED with the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%) per
annum on the amount of ₱2,226,147.26, computed from the date of the last demand or on November 16, 1997. A
TWELVE PERCENT (12%) per annum interest in lieu of SIX PERCENT (6%) shall be imposed on such amount upon finality
of this decision until the payment thereof.

SO ORDERED.
G.R. No. 217694, January 27, 2016

FAIRLAND KNITCRAFT CORPORATION, Petitioner, v. ARTURO LOO PO, Respondent.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari1 seeking to reverse and set aside the October 31, 2014 Decision 2and the March 6,
2015 Resolution3 of the Court of Appeals (CA), in CA-G.R. SP No. 134701 which affirmed the September 16, 2013
Decision4 of the Regional Trial Court of Pasig City, Branch 67 (RTC) in SCA Case No. 3831. The RTC decision, in turn,
sustained the March 21, 2013 Decision5 of the Metropolitan Trial Court, Branch 72, Pasig City (MeTC), which dismissed the
unlawful detainer case filed by petitioner Fairland Knitcraft Corporation (Fairland) against respondent Arturo Loo Po (Po)
for failure to prove its case by preponderance of evidence.

The Antecedents

In a complaint6 for unlawful detainer, docketed as Civil Case No. 19429, filed before the MeTC, Fairland alleged that it
was the owner of Condominium Unit No. 205 in Cedar Mansion II on Ma. Escriba Street, Pasig City. The said unit was
leased by Fairland to Po by verbal agreement, with a rental fee of P20,000.00 a month, to be paid by Po at the beginning
of each month. From March 2011, Po had continuously failed to pay rent. For said reason, Fairland opted not to renew
the lease agreement anymore.

On January 30, 2012, Fairland sent a formal letter 7 to Po demanding that he pay the amount of P220,000.00, representing
the rental arrears, and that he vacate the leased premises within fifteen (15) days from the receipt of the letter. Despite
receipt of the demand letter and the lapse of the said 15-day period to comply, Po neither tendered payment for the
unpaid rent nor vacated the premises. Thus, on December 12, 2012, Fairland was constrained to file the complaint for
unlawful detainer before the MeTC. Po had until January 7, 2013 to file his answer but he failed to do so. Hence, on
February 6, 2013, Fairland filed a motion to render judgment. 8

In its February 21, 2013 Order,9 the MeTC considered the case submitted for decision.

On March 1, 2013, Po's counsel filed his Entry of Appearance with Motion for Leave of Court to file Comment/Opposition
to Motion to Render Judgment. 10 In the attached Comment/Opposition, Po denied the allegations against him and
commented that there was no supporting document that would show that Fairland owned the property; that there was
no lease contract between them; that there were no documents attached to the complaint which would show that
previous demands had been made and received by him; that the alleged unpaid rental was P220,000.00, but the amount
of damages being prayed for was P440,000.00; that the issue in the case was one of ownership; and that it was the RTC
which had jurisdiction over the case.

The MeTC treated the comment/opposition as Po's answer to the complaint. Considering, however, that the case fell
under the Rules of Summary Procedure, the same was deemed filed out of time. Hence, the motion was denied. 11
The Ruling of the Metropolitan Trial Court

In its March 21, 2013 Decision, the MeTC dismissed the complaint for lack of merit due to Fairland's failure to prove its
claim by preponderance of evidence. The MeTC explained that although the complaint sufficiently alleged a cause of
action, Fairland failed to prove that it was entitled to the possession of the subject property. There was no evidence
presented to support its claim against Po either.

Aggrieved, Fairland seasonably filed its appeal before the RTC under Rule 40 of the Rules of Court. Being an appealed
case, the RTC required the parties to submit their respective memoranda.

In its memorandum,12 Fairland argued that an unlawful detainer case was a special civil action governed by summary
procedure. In cases where a defendant failed to file his answer, there was no need for a declaration of default. Fairland
claimed that the Rules stated that in such cases, judgment should be based on the "facts alleged in the complaint," 13 and
that there was no requirement that judgment must be based on facts proved by preponderance of evidence.
Considering that the presentation of evidence was not required when a defendant in an ejectment case failed to appear
in a preliminary conference, the same should be applied when no answer had been filed.

Fairland continued that the failure to file an answer in an ejectment case was tantamount to an admission by the
defendant of all the ultimate facts alleged in the complaint. There was no more need for evidence in such a situation as
every allegation of ultimate facts in the complaint was deemed established by the defendant's acquiescence.

On July 18, 2013, Po filed his memorandum14 and countered that there was no merit in Fairland's insistence that evidence
was unnecessary when no answer had been filed. The facts stated in the complaint did not warrant a rendition of
judgment in the plaintiffs favor. The court had the discretion to rule on the pleadings based on its evaluation of the
allegation of facts.

Further, all the statements in the complaint were mere allegations which were not substantiated by any competent
evidence. Po asserted that there was no proof presented to show that the subject property was indeed owned by
Fairland; that there was no lease contract between the parties; that he never received the demand letter, dated January
30, 2012; and that the amount stated in the prayer of the complaint did not coincide with the amount of unpaid rent. Po
also reiterated that the case involved an issue of ownership over the condominium unit he was occupying.

The Ruling of the Regional Trial Court

On September 16, 2013, the RTC affirmed the MeTC ruling and agreed that Fairland failed to establish its case by
preponderance of evidence. There was nothing on record that would establish Fairland's right over the property subject
of the complaint. Though it had been consistently ruled that the only issue for resolution in an ejectment case was the
physical or material possession of the property involved, independent of any claim of ownership by any of the
party-litigants, the court may go beyond the question of physical possession provisionally. The RTC concluded that even
assuming that Po was not the lawful owner, his actual physical possession of the subject property created the
presumption that he was entitled to its possession thereof.

Fairland filed a motion for reconsideration 15 attaching its condominium certificate of title16 over the subject property, but
it was denied by the RTC in its Order,17 dated February 24, 2014.

Undaunted, Fairland filed a petition for review 18 under Rule 42 of the Rules of Court before the CA.

The Ruling of the Court of Appeals

In the assailed Decision, dated October 31, 2014, the CA dismissed the petition and ruled that an action for unlawful
detainer would not lie against Po. Notwithstanding the abbreviated proceeding it ordained and the limited pleadings it
allowed, the Rules on Summary Procedure did not relax the rules on evidence. In order for an action for recovery of
possession to prosper, it was indispensable that he who brought the action should prove not only his ownership but also
the identity of the property claimed. The CA concluded, however, that Fairland failed to discharge such bounden duty.

Fairland filed its motion for reconsideration, but it was denied by the CA in its assailed Resolution, dated March 6, 2015.

Hence, this petition.

ARGUMENTS/DISCUSSIONS

IN AN EJECTMENT CASE WHEREIN NO ANSWER WAS SEASONABLY FILED, IT IS AN


ERROR OF LAW TO BASE JUDGMENT ON PREPONDERANCE OF EVIDENCE

II

HOLDING THAT EVIDENCE IN AN EJECTMENT CASE SHOULD HAVE BEEN ATTACHED TO THE
COMPLAINT IS AN ERROR OF LAW.19ChanRoblesVirtualawlibrary

Fairland argues that in ejectment cases, presentation of evidence was undertaken through the submission of position
papers but the same was dispensed with when the defendant failed to file an answer or when either party failed to
appear during the preliminary conference. In an ejectment case, the scope of inquiry should be limited to the sufficiency
of the cause of action stated in the complaint when no seasonable answer was filed. The attachment of documentary
evidence to the Complaint was not a requirement and was even proscribed by law.

In his Comment,20 Po countered that the present petition raised a question of fact. Although couched in different words,
the issues raised here were substantially the same as the issues raised before the CA. There was no legal basis in
Fairland's assertion that evidence was dispensed with when no answer to the complaint had been filed. Such argument
would undermine the inherent authority of the courts to resolve legal issues based on the facts of the case and on the
rules on evidence. Contrary to Fairland's position, the court decided the case on the basis of the complaint which was
found wanting in preponderance of evidence.

In its Reply,21 Fairland posited that the petition did not raise mere questions of fact but one of law as what was being
sought for review was the erroneous dismissal of the ejectment case for lack of preponderance of evidence. Since no
answer was filed and the complaint sufficiently alleged a cause of action for unlawful detainer, it became the duty of the
MeTC to decide the case in its favor.

The Court's Ruling

The petition is meritorious.

Complaint has a valid cause of action for Unlawful Detainer

Section 1 of Rule 70 of the Rules of Court lays down the requirements for filing a complaint for unlawful detainer, to wit:

Section 1. - Who may institute proceedings, and when. - Subject to the provision of the next succeeding
section, a person deprived of the possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any
land or building is unlawfully withheld after the expiration or termination of the right to hold possession,
by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor,
vendor, vendee, or other person, may, at any time within one (l) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, or any person or persons claiming under
them, for the restitution of such possession, together with damages and costs.

Stated differently, unlawful detainer is a summary action for the recovery of possession of real property. This action may
be filed by a lessor, vendor, vendee, or other person from whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied.
The possession of the defendant was originally legal, as his possession was permitted by the plaintiff on account of an
express or implied contract between them. The defendant's possession, however, became illegal when the plaintiff
demanded that the defendant vacate the subject property due to the expiration or termination of the right to possess
under the contract, and the defendant refused to heed such demand. A case for unlawful detainer must be instituted one
year from the unlawful withholding of possession. 22

A complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following: (1) initially, possessi on of
the property by the defendant was by contract with or by tolerance of the plaintiff; (2) eventually, such possession
became illegal upon notice by the plaintiff to the defendant of the termination of the latter's right of possession; (3)
thereafter, the defendant remained in possession of the property, and deprived the plaintiff of the enjoyment thereof;
and (4) within one (1) year from the last demand on defendant to vacate the property, the plaintiff instituted the
complaint for ejectment.23
There is no question that the complaint filed by Fairland adequately alleged a cause of action for unlawful detainer. The
pertinent portion of the said complaint reads:

xxx

3. Plaintiff is the owner of, and had been leasing to the defendant, the premises mentioned above as the
residence of the latter;

4. There is no current written lease contract between plaintiff and the defendant, but the latter agreed to
pay the former the amount of Php2o,ooo.oo as rent at the beginning of each month. Thus, the term of
the lease agreement is renewable on a month-to-month basis;

5. Since March 2011, defendant has not been paying the aforesaid rent despite plaintiffs repeated
demands;

6. Due to defendant's continuous failure to pay rent, plaintiff reached a decision not to renew the lease
agreement. It sent a formal letter, x x x demanding defendant to pay the amount of Php220,000.00,
representing defendant's twelve month rental arrears beginning January 2011, and to vacate the leased
premises, both within fifteen (15) days from receipt of said letter;

7. Despite receipt of the aforesaid demand letter and lapse of the fifteen day period given to comply
with plaintiffs demand, defendant neither tendered payment for the unpaid rent nor vacated the leased
premises. Worse, defendant has not been paying rent up to now;

x x x24ChanRoblesVirtualawlibrary

The above-cited portions of the complaint sufficiently alleged that Fairland was the owner of the subject property being
leased to Po by virtue of an oral agreement. There was a demand by Fairland for Po to pay rent and vacate before the
complaint for unlawful detainer was instituted. The complaint was seasonably filed within the one-year period prescribed
by law. With all the elements present, there was clearly a cause of action in the complaint for unlawful detainer.

Under the Rules of Summary Procedure, the weight of evidence is not considered when a judgment is rendered based
on the complaint

The question now is whether the MeTC correctly dismissed the case for lack of preponderance of evidence. Fairland
posits that judgment should have been rendered in its favor on the basis of the complaint itself and no t on its failure to
adduce proof of ownership over the subject property.

The Court agrees with Fairland's position.

The summons, together with the complaint and its annexes, was served upon Po on December 28, 2012. This
presupposes that the MeTC found no ground to dismiss the action for unlawful detainer. 25Nevertheless, Po failed to file
his answer on time and the MeTC had the option to render judgment motu proprio or on motion of the plaintiff. In
relation thereto, Sections 5 and 6 of the Rules on Summary Procedure provide:

Sec. 5. Answer. - Within ten (10) days from service of summons, the defendant shall file his answer to the
complaint and serve a copy thereof on the plaintiff. Affirmative and negative defenses not pleaded
therein shall be deemed waived, except for lack of jurisdiction over the subject matter. Cross-claims and
compulsory counterclaims not asserted in the answer shall be considered barred. The answer to
counterclaims or cross-claims shall be filed and served within ten (10) days from service of the answer in
which they are pleaded.

Sec. 6. Effect of failure to answer. - Should the defendant fail to answer the complaint within the period
above provided, the court, motu proprio or on motion of the plaintiff, shall render judgment as may be
warranted by the facts alleged in the complaint and limited to what is prayed for therein. The court may
in its discretion reduce the amount of damages and attorney's fees claimed for being excessive or
otherwise unconscionable, without prejudice to the applicability of Section 4, Rule 18 of the Rules of
Court, if there are two or more defendants.

[Emphasis supplied]

Section 6 is clear that in case the defendant failed to file his answer, the court shall render judgment, either motu
proprio or upon plaintiffs motion, based solely on the facts alleged in the complaint and limited to what is prayed for.
The failure of the defendant to timely file his answer and to controvert the claim against him constitutes his acquiescence
to every allegation stated in the complaint. Logically, there is nothing to be done in this situation 26 except to render
judgment as may be warranted by the facts alleged in the complaint. 27

Similarly, under Section 7, Rule 70 of the Rules of Court, which governs the rules for forcible entry and unlawful detainer,
if the defendant fails to answer the complaint within the period provided, the court has no authority to declare the
defendant in default. Instead, the court, motu proprio or on motion of the plaintiff, shall render judgment as may be
warranted by the facts alleged in the complaint and limited to what is prayed for. 28

This has been enunciated in the case of Don Tino Realty and Development Corporation v. Florentino,29citing Bayog v.
Natino,30 where the Court held that there was no provision for an entry of default under the Rules of Summary Procedure
if the defendant failed to file his answer.

In this case, Po failed to file his answer to the complaint despite proper service of summons. He also failed to provide a
sufficient justification to excuse his lapses. Thus, as no answer was filed, judgment must be rendered by the court as may
be warranted by the facts alleged in the complaint.

Failure to attach annexes is not fatal if the complaint alleges a sufficient cause of action; evidence need not be attached
to the complaint

The lower courts erroneously dismissed the complaint of Fairland simply on the ground that it failed to establish by
preponderance of evidence its ownership over the subject property. As can be gleaned above, the rules do not compel
the plaintiff to attach his evidence to the complaint because, at this inception stage, he only has to file his complaint to
establish his cause of action. Here, the court was only tasked to determine whether the complaint of Fairland alleged a
sufficient cause of action and to render judgment thereon.

Also, there was no need to attach proof of ownership in the complaint because the allegations therein constituted a
sufficient cause of action for unlawful detainer. Only when the allegations in the complaint are insufficient to form a
cause of action shall the attachment become material in the determination thereof. Even under Section 4 of the Rules of
Summary Procedure,31 it is not mandatory to attach annexes to the complaint.

In the case of Lazaro v. Brewmaster32 (Lazaro), where judgment was rendered based on the complaint due to the failure
of the defendant to file an answer under the Rules of Summary Procedure, it was written that:

x x x To determine whether the complaint states a cause of action, all documents attached thereto may,
in fact, be considered, particularly when referred to in the complaint. We emphasize, however, that the
inquiry is into the sufficiency, not the veracity of the material allegations in the complaint. Thus,
consideration of the annexed documents should only be taken in the context of ascertaining the
sufficiency of the allegations in the complaint.

[Emphasis supplied]

In Lazaro, the assailed invalid invoices attached to the complaint were not considered because the complaint already
alleged a sufficient cause of action for collection of sum of money. Those assailed documents were not the bases of the
plaintiffs action for sum of money, but were only attached to the complaint to provide evidentiary details on the alleged
transactions.

Similarly, in the case at bench, there was no need for documentary attachments to prove Fairland's ownership over the
subject property. First, the present action is an action for unlawful detainer wherein only de facto or material possession
is required to be alleged. Evidently, the attachment of any deed of ownership to the complaint is not indispensable
because an action for unlawful detainer does not entirely depend on ownership.

Second, Fairland sufficiently alleged ownership and superior right of possession over the subject property. These
allegations were evidently manifest in the complaint as Fairland claimed to have orally agreed to lease the property to Po.
The Court is of the view that these allegations were clear and unequivocal and did not need supporting attachments to
be considered as having sufficiently established its cause of action. Even the MeTC conceded that the complaint of
Fairland stated a valid cause of action for unlawful detainer. 33 It must be stressed that inquiry into the attached
documents in the complaint is for the sufficiency, not the veracity, of the material allegations in the complaint.

Third, considering that Po failed to file an answer within the prescribed period, he was deemed t o have admitted all the
allegations in the complaint including Fairland's claim of ownership. To reiterate, the failure of the defendant to timely fi le
his answer and controvert the claim against him constituted his acquiescence to every allegation stated in the complaint.
In the Entry of Appearance with Motion for Leave of Court to file Comment/Opposition to Motion to Render Judgment,
which was belatedly filed and so was denied by the MeTC, Po merely denied the allegations against him without even
bothering to aver why he claimed to have a superior right of possession of the subject property. 34

Fourth, it is only at the later stage of the summary procedure when the affidavits of witnesses and other evidence on
factual issues shall be presented before the court. Sections 8 and 9 of the Rules on Summary Procedure state:

Sec. 8. Record of preliminary conference. - Within five (5) days after the termination of the preliminary
conference, the court shall issue an order stating the matters taken up therein, x x x

Sec. 9. Submission of affidavits and position papers. - Within ten (10) days from receipt of the order
mentioned in the next preceding section, the parties shall submit the affidavits of their witnesses and
other evidence on the factual issues defined in the order, together with their position papers setting
forth the law and the facts relied upon by them.

[Emphasis supplied]

Again, it is worth stressing that these provisions are exactly Sections 9 and 10 under Rule 70 of the Rules of Court.

Accordingly, it is only at this part of the proceedings that the parties will be required to present and offer their evidence
before the court to establish their causes and defenses. Before the issuance of the record of preliminary conference, the
parties are not yet required to present their respective evidence.

These specific provisions under the Rules of Summary Procedure which are also reflected in Rule 70 of the Rules of Court,
serve their purpose to immediately settle ejectment proceedings. "Forcible entry and unlawful detainer cases are
summary proceedings designed to provide for an expeditious means of protecting actual possession or the right to
possession of the property involved. It does not admit of a delay in the determination thereof. It is a 'time proce dure'
designed to remedy the situation. 35 Thus, as a consequence of the defendant's failure to file an answer, the court is
simply tasked to render judgment as may be warranted by the facts alleged in the complaint and limited to what is
prayed for therein.

As the complaint contains a valid cause of action, a judgment can already be rendered

In order to achieve an expeditious and inexpensive determination of unlawful detainer cases, a remand of this case to the
lower courts is no longer necessary and the case can be determined on its merits by the Court.

To recapitulate, as Po failed to file his answer on time, judgment shall be rendered based only on the complaint of
Fairland without the need to consider the weight of evidence. As discussed above, the complaint of Fairland had a valid
cause of action for unlawful detainer.

Consequently, there is no more need to present evidence to establish the allegation of Fairland of its ownership and
superior right of possession over the subject property. Po's failure to file an answer constitutes an admission of his illegal
occupation due to his non-payment of rentals, and of Fairland's rightful claim of material possession. Thus, judgment
must be rendered finding that Fairland has the right to eject Po from the subject property.

The Judicial Affidavit Rule

On a final note, the Court deems it proper to discuss the relevance of the Judicial Affidavit Rule or A.M. No. 12 -8-8-SC,
where documentary or object evidence are required to be attached. To begin with, the rule is not applicable because
such evidence are required to be attached to a judicial affidavit, not to a complaint. Moreover, as the rule took effect only
on January 1, 2013, it cannot be required in this case because this was earlier filed on December 12, 2012.

Granting that it can be applied retroactively, the rule being essentially remedial, still it has no bearing on the ruling of this
Court.

In the Judicial Affidavit Rule, the attachments of documentary or object evidence to the affidavits is required w hen there
would be a pre-trial or preliminary conference or the scheduled hearing. As stated earlier, where a defendant fails to file
an answer, the court shall render judgment, either motu proprio or upon plaintiffs motion, based solely on the facts
alleged in the complaint and limited to what is prayed for. Thus, where there is no answer, there is no need for a pre-trial,
preliminary conference or hearing. Section 2 of the Judicial Affidavit Rule reads:

Section 2. Submission of Judicial Affidavits and Exhibits in lieu of direct testimonies. - (a) The parties shall
file with the court and serve on the adverse party, personally or by licensed courier service, not later
than five days before pre-trial or preliminary conference or the scheduled hearing with respect to
motions and incidents, the following:

(1) The judicial affidavits of their witnesses, which shall take the place of such witnesses' direct testimonies; and

The parties' documentary or object evidence, if any, which shall be attached to the judicial affidavits and marked
(2) as Exhibits A, B, C, and so on in the case of the complainant or the plaintiff, and as Exhibits 1, 2, 3, and so on in the
case of the respondent or the defendant.

(b) Should a party or a witness desire to keep the original document or object evidence in his possession,
he may, after the same has been identified, marked as exhibit, and authenticated, warrant in his judicial
affidavit that the copy or reproduction attached to such affidavit is a faithful copy or reproduction o f
that original. In addition, the party or witness shall bring the original document or object evidence for
comparison during the preliminary conference with the attached copy, reproduction, or pictures, failing
which the latter shall not be admitted.

This is without prejudice to the introduction of secondary evidence in place of the original when allowed
by existing rules.
WHEREFORE, the petition is GRANTED. The October 31, 2014 Decision and the March 6, 2015 Resolution of the Court of
Appeals in CA-G.R. SP No. 134701 are hereby REVERSED and SET ASIDE. Respondent Arturo Loo Po is ORDERED TO
VACATE Condominium Unit No. 205 located in Cedar Mansion II on Ma. Escriba Street, Pasig City.

Respondent Po is further ORDERED TO PAY the rentals-in-arrears, as well as the rentals accruing in the interim until he
vacates the property. The unpaid rentals shall incur a legal interest of six percent (6%) per annum from January 30, 2012,
when the demand to pay and to vacate was made, up to the finality of this decision. Thereafter, an interest of six percent
(6%) per annum shall be imposed on the total amount due until full payment is made.

SO ORDERED.chanrobl

[G.R. No. 127811. April 29, 1999]


PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs., ISIDRO COMESARIO y DACASIN, accused-appellant.

DECISION

BELLOSILLO, J.:

On 2 May 1989, at ten in the evening, seven-year old Reynaldo Fernandez was found dead near the bank of Oraan
Creek in Brgy. Lelemaan, Manaoag, Pangasinan. His neck was slashed. He drowned. He had been missing as early as
twelve noon that day. At first his parents thought that he was out playing in his grandmothers house. When dusk came,
however, Reynaldo still could not be found.

Rodolfo and Emilia Fernandez, parents of the victim, could not think of somebody else other than
accused-appellant Isidro Comesario y Dacasin as the perpetrator of the crime. Emilia narrated that sometime in February
1989 accused-appellant paid her a nocturnal visit at their house while her husband was away in the
fields. Accused-appellant allegedly offered to sell rice but when Emilia refused to buy for lack of money,
accused-appellant countered that they could have sex instead.Accused-appellant then shoved his hardened penis
against Emilia. Scared, Emilia jumped out of her house.

On 28 April 1989 or three (3) days before Reynaldo was killed, Rodolfo caught accused-appellant cutting his mongo
plants. An altercation ensued during which accused-appellant got so angry that he ran after Rodolfo with scythe in
hand. Accused-appellant then threatened to kill Rodolfo or any member of his family. In the morning of 2 May 1989
Rodolfo saw accused-appellant Isidro Comesario holding a scythe and walking towards Oraan Creek.

With this backdrop, Emilia and Rodolfo could not help concluded that it was accused-appellant who killed their son
Reynaldo.

Prosecution witness Napoleon Veloria testified that at around ten-thirty in the morning of 2 May 1989, while he was
in the vicinity of Oraan Creek, he saw accused-appellant dragging a boy with his left hand while holding a scythe in his
right. He did not recognized Reynaldo although the boy was wearing a striped t-shirt and blue short
pants. Accused-appellant appeared to be angry while the boy was crying. Napoleon thought that the two (2) were just
siblings. He did not see the actual killing as he only learned about the death of Reynaldo the following day. Nevertheless,
he believe accused-appellant was the killer as he was the last person seen together with the victim.

On 22 November 1989 accused-appellant was charged with murder.

On his part, accused-appellant averred that at the time of the incident, he was helping in the construction of their
house together with his father and brothers. He only left their house to gather grass for their farm animals. He did not go
far though as there was enough supply nearby.

On the basis of the foregoing evidence, the court below found accused-appellant guilty as charged and sentenced
him to reclusion perpetua. In this appeal accused-appellant maintains his innocence and asserts that the circumstantial
evidence proffered by the prosecution was too meager to support his conviction.

Doctrinally, an accused is presumed innocent. This presumption prevails unless overturned by competent and
credible proof. To sustain a conviction, the guilt of the accused must be proved beyond reasonable doubt. Any doubt
must be considered in his favor. Evidence showing a mere possibility of guilt is insufficient to warrant a conviction. [1]
Accused-appellants conviction by the trial court hinged on circumstantial evidence. To validly invoke circumstantial
evidence, it must be shown that there is more than one circumstance and the facts from which the inferences are derived
are proven. The combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. [2] The
circumstances must constitute an unbroken chain of events that can lead reasonably to the conclusion pointing to the
accused to the exclusion of all others as the author of the crime. Logically, it is where the evidence is purely
circumstantial that there should be an even greater need than usual to apply with vigor the rule that the prosecution
cannot depend on the weakness of the defense and that any conviction must rest on nothing less than a moral certainty
of guilt of the accused.[3] Like a tapestry made of strands which create a pattern when interwoven, a judgment of
conviction based on circumstantial evidence can be upheld only if the circumstances proved constitute an unbroken
chain which leads to one fair and reasonable conclusion pointing to the accused, to the exclusion of all other, as the
guilty person.[4]

In a nutshell, the evidence for the prosecution is that accused-appellant had motive to kill Reynaldo; he allegedly felt
bad when his advances were spurned by Emilia; three (3) days before the killing, accused-appellant had an altercation
with the father of the victim; and, in the morning of 2 May 1989 accused-appellant was seen dragging a boy with his left
hand while holding a scythe in his right towards Oraan Creek. The lone witness for the prosecution who allegedly saw the
boy dragged could not recognize him. All he could say was that the boy was wearing a striped t-shirt and a pair of blue
short pants.

We believe that under all these circumstances taken together accused-appellant should be acquitted.

First. An accused enjoys the presumption of innocence. He need not proved what is legally presumed. If he so
desires he may present evidence on his behalf, but no matter how weak it is, he still deserves an acquittal. This is because
the prosecution must not rely on the weakness of the evidence for the defense but on the strength of its own
evidence. Unless the prosecution has successfully overturned the presumption of innocence, acquittal is inevitable.

Second. The guilt of the accused must be proved beyond reasonable doubt. There must be moral certainty in our
unprejudiced mind that it was accused-appellant who committed the crime. Absent this required quantum of evidence
would mean exoneration for accused-appellant. The conviction of the accused-appellant having been based on very
tenuous grounds, our judicial conscience cannot rest easy if we sustain his conviction by the court below.

Third. Mere proof of motive, no matter how strong, is not sufficient to support a conviction, most especially if there
is no other reliable evidence from which it may reasonably be deduced that the accused was the malefactor. [5] The
elements constituting the crime must be shown.

Fourth. The invocation of circumstantial evidence is misplaced. As already adverted to, for circumstantial evidence
to be validly invoked there must be more than one circumstance. In the instant case, the prosecution only presented a
single circumstance and that was when Napoleon Veloria supposedly saw accused-appellant dragging a boy wearing a
striped t-shirt and a pair of blue short pants towards Oraan Creek. From ten in the morning until ten in the evening of 2
May 1989 when the lifeless body of Reynaldo was found near Oraan Creek, there was a paucity of evidence. We cannot
decipher a pattern out of this single strand of circumstance as to support the conclusion that it was accused -appellant
who killed Reynaldo. From this angle alone, it is already clear that circumstantial evidence cannot be successfully availed
of.
Last. We are not implying that accused-appellant did not commit the crime. All we are saying is that when
measured against the required quantum of evidence in criminal cases, the case for the prosecution has miserably failed
in all aspects. Simply put, if we are to be guided by the established rules of evidence, we can safely say that the guilt of
accused-appellant was not proved beyond reasonable doubt. We find occasion then to reiterate what we have said
in People v. Masalihit:[6]

Before we condemn x x x the crime must first be positively established and that the accused is guilty sans any scintilla of
doubt. This is elementary and fundamental in our criminal justice systems. Any suspicion or belief that that accused is
guilty no matter how strong cannot substitute for the quantum of evidence that is required to prove his guilt beyond
reasonable doubt.

Accused-appellant should not be punished for the failure of the prosecution to dispose of its burden to overcome the
constitutional presumption of innocence and to establish his guilt of the accused beyond reasonable doubt. This Court
has always stood by the rule that it is better to acquit a guilty person than to convict an innocent one.

WHEREFORE, the assailed decision of the Regional Trial Court of Urdaneta, Pangasinan, finding accused-appellant
ISIDRO COMESARIO Y DACASIN guilty murder is REVERSED and SET ASIDE for gross insufficiency of evidence;
consequently, he is ACQUITTED of the crime charged and is ordered IMMEDIATELY RELEASED FROM CUSTODY unless
lawfully held for another cause.

The Director of the Bureau of Corrections is DIRECTED to implement this Decisions and to report to this Court the
action taken hereon immediately but not later than five (5) days from receipt hereof.

Cost de oficio.

SO ORDERED.
[G.R. No. 142039. May 27, 2004]

MODESTO Moody MABUNGA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

CARPIO MORALES, J.:

The Court of Appeals having, by Decision of June 30, 1999, [1] affirmed that of the Regional Trial Court of
Romblon[2] convicting appellant Modesto Mabunga of robbery with force upon things under Article 299 of the Revised
Penal Code, he comes to this Court on a petition for review.

In the morning of October 2, 1994, employees of the Bureau of Fire Protection (BFP) including Davy Villaruel
(Villaruel) discovered that the hasp of the door of the BFP office in Barangay Capaclan, Romblon, Romblon was
destroyed, and that the only typewriter in their office, a Triumph bearing Serial Number 340118640, was missing.

From the testimonies of prosecution witnesses tricycle driver Sixto Bernardo (Bernardo), Diana Malay (Diana),
Villaruel, Sylvia Silverio Comienzo (Sylvia), and SPO2 Eleazar Madali, the prosecution presented its case as follows:

Around 3:00 oclock in the afternoon of October 15, 1994, as Diana was in front of her store in Capaclan, Romblon,
Romblon waiting for a tricycle, she saw appellant, a dealer of marble slabs, who was carrying a box which bore the
marking HOPE and tied with gray straw string, board a pedicab driven by Bernardo. Having heard from her husband
Rodolfo Malay who works with the BFP that appellant was the prime suspect of the police for the robbery at the BFP,
Diana immediately informed her husband of what she saw. She was thereupon instructed by her husband to follow
appellant.[3]

As Diana noticed that the pedicab was heading for the pier, she proceeded on foot to the house of Villaruel [4] whom
she informed of what she had witnessed.
After the lapse of about 5 minutes, [5] Villaruel, on board his scooter, proceeded to the pier. By that time appellant
had reached the pier, alighted from Bernardos tricycle, and unloaded the HOPE box.

In the meantime, Diana contacted Chief of Police Major Ernesto Madrona at his house. [6]

Appellant, not long after alighting from the tricycle at the pier, reboarded the same tricycle[7] driven by Bernardo,
without the box, and headed for his house at Capaclan. Diana, in fact, saw him on board the tricycle on his way home.

Diana later boarded the tricycle of Bernardo after the latter brought home appellant, and repaired to the pier. There,
by the gate, she saw Villaruel who confirmed to her that he had verified from Bernardo, whom he earlier saw by the same
gate, that the latter indeed conveyed appellant to the pier, with a HOPE box.

Diana also learned from Villaruel that he really saw the box brought by [appellant]. She thus returned on foot to the
house of Major Madrona who instructed SPO2 Eleazar Madali and PO2 Eustaquio Rogero to surreptitiously watch a box
of Hope brand cigarettes placed under a bench inside the PPA passengers terminal owned by [appellant] and wait until
somebody gets said box and load it aboard the vessel M/V Peafrancia 8. [8]

On Villaruels entering the terminal [9] he was told by Sylvia, the cashier on duty at the restaurant therein, that a man,
whom she later identified to be appellant through a photograph shown to her that same day, entrusted the box to her,
he telling her that it contained a damaged electric fan. [10]

Villaruel thereupon kept watch over the box, as SPO2 Madali and PO2 Rogero later did discreetly, until M/V
Peafrancia departed for Batangas at 8:00 p.m., with appellant on board the same. About an hour later, PPA officers
Reynaldo Dianco and Leo Vedito Fontellera arrived at the terminal and the box was turned over by them to SPO2 Madali
and PO2 Rogero. The box, when opened, contained the lost BFP typewriter.

On February 7, 1995, appellant was charged with robbery before the Regional Trial Court of Romblon, Romblon
under an information reading:

That on or about the 1st day of October, 1994, at around 12:00 midnight, in [B]arangay Capaclan, municipality of Romblon,
province of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, with intent [to]
gain, did then and there willfully, unlawfully and feloniously enter the Office of the Bureau of Fire Protection by forcibly
breaking the door hasp of the main door and upon having gained entry therein, take, steal and carry away one (1)
typewriter (Triumph brand) with Serial No. 340118640, valued at P5,894.00, Philippine currency, belonging to and owned
by the government, without its consent, and to the damage and prejudice of the government in the aforestated
amount.[11]

On arraignment on February 21, 1995, appellant, with the assistance of counsel, pleaded not guilty. [12] Thereafter,
trial ensued.

Appellant interposed alibi with respect to the date and place of occurrence of the alleged robbery.While he
admitted bringing to the pier on October 15, 1994 a box, he claimed, however, that it bore the marking CHAMPION, not
HOPE. At the witness stand, he gave the following tale:

He left Romblon on September 24, 1994 and arrived in Manila the next day. After the lapse of 12 hours, he went to
the Cubao station of the Batangas Laguna Tayabas Bus (BLTB) Company and boarded a bus bound for Matnog,
Sorsogon. He reached Matnog on the afternoon of September 27, 1994 and stayed there overnight before proceeding
to Allen, Samar which he reached on September 28, 1994. He then boarded a jeep bound for San Jose, Northern Samar
where he stayed for one (1) hour, after which he proceeded to Calbayog City which he reached on September 29,
1994. He transferred to another jeep bound for Tacloban and arrived there on September 30, 1994. For a day he stayed
in Tacloban to rest, after which he proceeded to Palo, Leyte to visit his project. He arrived in Palo on October 1, 1994. The
next day, he went to Tacloban City and purchased materials for polishing marble. He returned to Palo and supervised his
marble project for a week. When the project was finished, he returned to Cebu on October 6, 1994 and the next day
boarded the ferry [Backwagon] Bay for Romblon. He reached Romblon on October 9, 1994. [13]

In support of his alibi, he presented bus tickets and purchase receipts of materials, viz:

Exhibit 1 BLTB ticket No. 60850, dated September 26, 1994, (Cubao to Matnog, Sorsogon)

Exhibit 2 Bus ticket dated September 28, 1994 issued by E. Tabinas Enterprises to Moody Mabunga (Matnog,
Sorsogon, to Allen, Samar).

Exhibit 3 Invoice No. 18639 issued on October 2, 1993 by Terrazzo Construction and Marble Supply to Moody
Mabunga.[14]

Appellant further claimed that on the afternoon of October 15, 1994, he, along with his son, boarded the pedicab of
Bernardo to which they loaded a box marked CHAMPION containing marble novelties to be brought to Manila via Viva
Penafrancia 8; on reaching the pier, he laid down the box at the gate of the PPA and stood beside it as he waited for the
ship to dock; and when he later boarded the ship, he placed the box at the back of his cot.[15]

Finding appellant guilty beyond reasonable doubt of robbery, Branch 81 of the RTC Romblon sentenced him to
suffer an indeterminate penalty of from 4 years and 2 months of prison correccional, as minimum to 8 years and 1 day of
prision mayor, as maximum, with the accessory penalties of the law, and to pay the costs. [16]

The Court of Appeals, in affirming the decision of the trial court, relied on Section 3(j) Rule 131 of the Revised Rules
on Evidence which reads:

SEC. 3. Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may be contradicted
and overcome by other evidence:

xxx

(j) That a person in possession of a thing taken in the doing of a recent wrongful act is the taker and the doer of the
whole act; otherwise, that things which a person possesses, or exercises acts of ownership over, are owned by him;

The appellate court having denied his motion for reconsideration, [17] appellant lodged the present appeal, ascribing
to it the following errors:

1. THE COURT OF APPEALS GRAVELY ERRED WHEN IT DISREGARDED THE UNIMPUGNED ALIBI OF THE
ACCUSED, NOTWITHSTANDING THE ABSENCE OF POSITIVE IDENTIFICATION.

2. THE COURT OF APEALS GRAVELY ERRED WHEN IT ADMITTED IN EVIDENCE THE TYPEWRITER, WHICH WAS
SEARCHED WITHOUT WARRANT AND IN THE ABSENCE OF THE ACCUSED.
3. THE COURT OF APPEALS GRAVELY ERRED WHEN IT PRESUMED THE ELEMENT OF INTENT TO GAIN, WHEN
THE SUPPOSED ACT OF THE ACCUSED IN LEAVING THE BOX TO A STRANGER AND NEVER COMING
BACK TO CLAIM IT NEGATED THE NOTION OF ANIMUS LUCRANDI.[18] (Underscoring supplied)

The appeal is impressed with merit.

While courts have consistently looked upon alibi with suspicion not only because it is inherently weak and unreliable
as a defense, but because it can easily be fabricated, [19] the basic rule is for the prosecution, upon which lies the onus, to
establish all the elements of a crime to thereby hold him guilty beyond reasonable doubt. Such burden does not shift as
it remains with the prosecution. Tasked with the burden of persuasion, the prosecution must thus rely on the strength of
its evidence and not on the weakness of the defense. [20]

Admittedly, the evidence for the prosecution is circumstantial. The alleged robbery was discovered when the
employees of the BFP reported for work on October 2, 1994 and noticed that the hasp of the office door was broken and
the typewriter was missing.

On the sole basis of the presumption laid down under above-quoted Section 3(j) of Rule 131 of the Revised Rules on
Evidence, the appellate court affirmed the conviction of appellant.

A presumption is an assumption of fact that the law requires to be made from another fact or group of facts found
or otherwise established in the action. [21] It is an inference as to the existence of a fact not actually known, arising from its
usual connection with another which is known, or a conjecture based on past experience as to what course of human
affairs ordinarily take.[22]

A presumption has the effect of shifting the burden of proof to the party who would be disadvantaged by a finding
of the presumed fact. The presumption controls decision on the presumed fact unless there is counterproof that the
presumed fact is not so.[23]

In criminal cases, however, presumptions should be taken with caution especially in light of serious concerns that
they might water down the requirement of proof beyond reasonable doubt. As special considerations must be given to
the right of the accused to be presumed innocent, there should be limits on the use of presumptions against an accused.

Although possession of stolen property within a limited time from the commission of the theft or robbery is not in
itself a crime, it being possible to possess the same and remain innocent, such possession may be sufficient for the
formation of an inference that the possessor is the thief unless the evidence satisfactorily proves that the property wa s
acquired by the accused by legal means.

How the presumption under Section 3(j) Rule 131 is to be understood, United States v. Catimbang[24] explains:

According to the modern view convictions in cases of this kind are not sustained upon a presumption of law as to the
guilt of the accused. The conviction rests wholly upon an inference of fact as to the guilt of the accused. If as a matter of
probability and reasoning based on the fact of possession of the stolen goods, taken in connection with other evidence,
it may fairly be concluded beyond reasonable doubt that the accused is guilty of the theft, judgment or conviction may
properly be entered. x x x

The inference of guilt is one of fact and rests upon the common experience of men. But the experience of men has
taught them that an apparently guilty possession may be explained so as to rebut such an inference and an accused
person may therefore put witness on the stand or go to the witness stand himself to explain his possession, and any
reasonable explanation of his possession, inconsistent with his guilty connection with the commission of the crime, will
rebut the inference as to his guilt which the prosecution seeks to have drawn from his guilty possession of the stolen
goods.

It is in this sense that it is sometimes said that the unexplained possession of recently stolen goods will sustain a
conviction of the crime of larceny. [25] (Emphasis and underscoring supplied)

Before an inference of guilt arising from possession of recently stolen goods can be made, however, the following
basic facts need to be proven by the prosecution: (1) that the crime was committed; (2) that the crime was committed
recently; (3) that the stolen property was found in the possession of the defendant; and (4) that the defendant is unable
to explain his possession satisfactorily. [26]

For purposes moreover of conclusively proving possession, the following considerations have to be emphasized: (1)
the possession must be unexplained by any innocent origin; (2) the possession must be fairly recent; and (3) the
possession must be exclusive.[27]

Contrary to the findings of both the trial and appellate courts, the People failed to prove beyond reasonable doubt
that appellant was caught in exclusive possession of the recently stolen good.

While possession need not mean actual physical control over the thing for it may include constructive possession, it
is still necessary that for possession to be deemed constructive the accused knowingly has the power and the intention
at a given time to exercise dominion or control over a thing, either directly or through another person.[28]

The case of U.S. v. Simbahan[29] cited by the appellate court has a different factual setting and is, therefore,
inapplicable to the present case. In Simbahan, the accused, for a consideration of P50.00 pesos, disclosed to the owner
of the missing carabao its precise location. There, this Court held: The word possession as used above can not be limited
to manual touch or personal custody. One who puts or deposits the stolen property in a place of concealment may be
deemed to have such property in his possession. x x x All the facts and circumstances [including the absence of a
satisfactory explanation of his possession] show conclusively that he had possession of said caraballa and fully justify his
conviction.[30]

The accused in Simbahan exercised exclusive dominion and control over the thing lost. Appellant in the present
case did not.

The HOPE box was not concealed and anyone entering and leaving the PPA terminal had access to it, it having been
placed just below one of the benches, around three meters from the cashier, Sylvia.

To assume that in a busy place, such as the PPA terminal, the HOPE box that was opened by the police authorities
and found to contain the missing typewriter is the same box allegedly entrusted by appellant to the cashier is to form an
inference which is, however, doubtful, more than six hours having elapsed from the time the box was allegedly left at
around 3:00 oclock in the afternoon until it was opened by the police authorities at around 9:00 oclock in the evening
after appellant had already boarded the ship.
A presumption cannot be founded on another presumption. It cannot thus be concluded that from the time the box
was left under the bench, appellant was still in constructive possession thereof, the exercise of exclusive dominion or
control being absent.

Adding serious doubt to the prosecutions claim is that what was allegedly seen being carried by appellant and
entrusted to the cashier was not the stolen typewriter but merely a HOPE box.

A review of the transcript of stenographic notes in fact shows that there are flaws in the prosecutions theory as well
as inconsistencies in the prosecution witnesses testimonies that do not warrant appellants conviction.

Why appellant was considered a suspect by the police, no explanation has been proferred. The records, however,
indicate that appellant had previously been indicted before the Municipal Trial Court for theft. [31] On that basis alone, it
is non sequitor to point to him as a suspect.

At all events, apart from appellants supposed possession of the HOPE box on October 15, 1994, no other evidence
was adduced by the prosecution linking him to the robbery. The teaching of Askew v. United States[32] must thus be
heeded:

We have heretofore adverted to the possession of the instruments or of the fruits of a crime as affording ground to
presume the guilt of the possessor; but on this subject no certain rule can be laid down of universal application; the
presumption being not conclusive but disputable, and therefore to be dealt with by the jury alone, as a mere inference of
fact. Its force and value will depend on several considerations. In the first place, if the fact of possession stands alone,
wholly unconnected with any other circumstances, its value or persuasive power is very slight; for the real criminal may
have artfully placed the article in the possession or upon the premises of an innocent person, the better to conceal his
own guilt. It will be necessary, therefore, for the prosecutor to add the proof of other circumstances indicative of guilt, in
order to render the naked possession of the thing available towards a conviction.[33] (Emphasis and underscoring
supplied)

That the fact of possession alone, wholly unconnected with any other circumstances, cannot be relied with
certititude to convict one with robbery is echoed in People v. Geron:[34]

At any rate, the mere possession by the accused of items allegedly stolen, without more, cannot conduce to a single
conclusion that robbery indeed took place or at least was the primary motive for the killings. In the absence of positive
and indubitable evidence showing unlawful taking by the accused by means of violence against or intimidation of
persons, the prosecution cannot rely with certitude on the fact of possession alone. The Courts application of the
presumption that a person found in possession of the personal effects belonging to the person robbed and killed is
considered the author of the aggression, the death of the person, as well as the robbery committed, has been
invariably limited to cases where such possession is either unexplained or that the proferred explanation is rendered
implausible in view of independent evidence inconsistent thereto.[35] (Emphasis and underscoring supplied)

The appellate court ruled that since it was sufficiently established that appellant was in possession of the typewriter
two weeks after it was stolen, he had the burden of proving that he was not the one responsible for the heist.[36] While a
presumption imposes on a party against whom it is directed the burden of going forward with evidence to rebut such
presumption, the burden of producing evidence of guilt does not extend to the burden of proving the accuseds
innocence of the crime as the burden of persuasion does not shift and remains throughout the trial upon the
prosecution.

Compounding doubts on the case for the prosecution is its witnesses differing versions on how and where the box
was opened, a fact necessarily important in determining whether its content was indeed the stolen typewriter.

On one hand, a member of the PNP, SPO2 Eleazar Madali, testified during the direct examination by Prosecutor Sy
that the box was opened at the police station:

Q And what time did the M/V P[e]afrancia 8 le[ave]?

A About 8:00 oclock in the evening.

Q And what time was that when you entered the PPA terminal to see the carton?

A May be 3:30 oclock, more or less, the vessel has not arrive[d] yet.

Q - And also because the vessel has left and the carton [w]as not brought out, what did you do?

A We coordinate[d] with the PPA about the box that was not taken and it was turned over to us and we
brought it to the police station.

Q Who was your companion in bringing the box to the police station?

A SPO1 Rogero, our investigator Victor Miano, Fireman Sim, Dave Villaruel then we proceeded to the guard of
the Romblon Police Station.

Q And what was done with the box in the police station?

A When we arrived in the PNP Police Station we have the box opened before the guard and the content of the
box was a typewriter.[37] (Underscoring supplied)

On the other hand, the cashier, Sylvia Silverio Comienzo, testified that the police authorities opened the box inside
her small room in the terminal.

DIRECT EXAMINATION BY PROSECUTOR SY:

Q The day in which you have identified him as Modesto Mabunga, [did he] retrieved (sic) that carton from you
that same day or afternoon?

A No, sir.

Q Who got the carton?

A The policemen, sir.

Q And what did the policemen do when they got the carton?

A They opened it, sir.

Q If you could remember, who were those policemen who got and opened the carton?

A Madrona, Eustaqio and Mike Villaruel.

Q Where did they open that carton?


A Inside the terminal because I have a small room there.[38] (Underscoring supplied)

On additional direct examination, Sylvia remained adamant in saying that the box was opened in her small room
inside the terminal.

ADDITIONAL DIRECT EXAMINATION


BY PROSECUTOR SY:

Q When the policemen as you said got this carton and opened it, where did the policemen precisely get the
carton, from what place precisely?

A Taken from under the bench.

COURT:

Q Where this Moody placed it?

A Yes, sir.

PROSECUTOR SY CONTINUING:

Q Were you personally present when the policemen got the carton from under the bench where Moody
placed it?

A Yes, sir.

Q And where did the policemen open the carton?

A In our small room.

Q Where you personally present when the policemen go the carton and opened it on that room?

A Yes, sir.

Q Were you personally present when the straw that was used in tying the carton was cut or untie or loosen by
the policemen?

A I was there.

COURT:

Q Why were you there present?

A Because I saw to it what was the content of that box and if it was really an electric fan. [39](Underscoring
supplied)

Without doubt, the trial court is in the best position to assess the credibility of witnesses firsthand and observe their
demeanor, conduct and attitude under grilling examination. An examination of the records shows, however, that, as
indicated by the trial judges following comments on prosecution witness Villaruels answers to the quest ions posed to
him during his direct examination, the prosecution evidence leaves much to be desired.

COURT: Very familiar. This witness is a very typical witness. You are just waiting for Atty. Sy to finish his question
for you to say what you have been in your mind regardless of the question but you will just
continue what you have already in your mind without thinking about the question. But remember
his question, when the question is asked it will appear in your mind, it should be the other way
around, do you understand? You forget what is in your mind, concentrate on the question. You
listen to the question. You are like a tape recorder. You just switch on and then you continue, no
you wait for the question.[40]

Then again, during the cross examination of the same witness, the trial court gave the following observation on his
demeanor:

COURT: The statement of the Court that you are like a fish in outer space is more applicable to you.You are like
a fish in outer space, meaning, you are a police science graduate, meaning, that your career is to be
a policeman and a police officer, an officer of the law. You are now in the court of law, you should
then feel comfortable in a court of law like a fish in the water you should be comfortable in a court
of law because that is part of your career but the way we look at it you are like a lawyer who just
graduated, took the bar and then become an office employee not practicing law in the courtroom
so that when the lawyer comes to Court, he will not come to Court, he is afraid of the courtroom
although he is a lawyer he is afraid of the courtroom. [41] (Underscoring supplied)

Finally, logic, common knowledge and human experience teach that it is unlikely that a robber would represent
himself to be the owner of a stuff which he knows contains stolen property and seek the help of a third person to look
after it.

In fine, the life, liberty and property of a citizen may not be taken away on possibilities, conjectures or even,
generally speaking, a bare probability. [42]

At all events, appellants alibi, for which he submitted documentary evidence, has not been discredited by the
prosecution.

WHEREFORE, the decision on review is hereby REVERSED and SET ASIDE and appellant, Modesto Moody Mabunga,
is hereby ACQUITTED of the crime of robbery.

SO ORDERED.

G.R. No. L-5371 March 26, 1953

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
AQUINO MINGOA, defendant-appellant.

Marcelino Lontok for appellant.


Office of the First Assistant Solicitor General Ruperto Kapunan, Jr. and Solicitor Federico V. Sian for appellee.
REYES, J.:

Found short in his accounts as officer-in-charge of the office of the municipal treasurer of Despujols, Romblon, and
unable to produce the missing fund amounting to P3,938 upon demand by the provincial auditor, the defendant Aquino
Mingoa was prosecuted for the crime of malversation of public funds in the Court of First Instance of Romblon, and
having been found guilty as charged and sentenced to the corresponding penalty, he appealed to the Court of Appeals.
But that court certified the case here on the ground that it involved a constitutional question.

The evidence shows that it is not disputed that upon examination of his books and accounts on September 1, 1949,
defendants, as accountable officer, was found short in the sum above-named and that, required to produce the missing
fund, he was not able to do so. He explained to the examining officer that some days before he had, by mistake, put the
money in a large envelope which he took with him to show and that he forgot it on his seat and it was not there anymore
when he returned. But he did not testify in court and presented no evidence in his favor.

We agree with the trial judge that defendant's explanation is inherently unbelievable and cannot overcome the
presumption of guilt arising from his inability to produce the fund which was found missing. As His Honor observes, if the
money was really lost without defendant's fault, the most natural thing for him to do would be to so inform his superiors
and apply for release from liability. But this he did not do. Instead, he tried to borrow to cover the shortage. And on the
flimsy excuse that he preferred to do his own sleuthing, he even did not report the loss to the police. Considering further
as the prosecution points out in its brief, that defendant had at first tried to avoid meeting the auditor who wanted to
examine his accounts, and that for sometime before the alleged loss many teachers and other employees of the town
had not been paid their salaries, there is good ground to believe that defendant had really malversed the fund in
question and that his story about its loss was pure invention.

It is now contended, however, that lacking direct evidence of actual misappropriation the trial court convicted defendant
on mere presumptions, that is, presumptions of criminal intent in losing the money under the circumstances alleged and
presumptions of guilt from the mere fact that he failed, upon demand to produce the sum lacking. The criticism as to the
first presumption is irrelevant, for the fact is that trial court did not believe defendant's explanation that the money was
lost, considering it mere cloak to cover actual misappropriation. That is why the court said that "whether or not he
(defendant) is guilty of malversation for negligence is of no moment . . . " And as to the other presumption, the same is
authorized by article 217 of the Revised Penal Code, which provides:

The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon
demand by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to
personal use.

The contention that this legal provision violates the constitutional right of the accused to be presumed innocent until the
contrary is proved cannot be sustained. The question of the constitutionality of the statute not having been raised in the
court below, it may not be considered for the first time on appeal. (Robb vs. People, 68 Phil., 320.)

In many event, the validity of statutes establishing presumptions in criminal cases is now settled matter, Cooley, in his
work on constitutional limitations, 8th ed., Vo. I, pp. 639-641says that "there is no constitutional objection to the passage
of law providing that the presumption of innocence may be overcome by contrary presumption founded upon the
experience of human conduct, and enacting what evidence shall be sufficient to overcome such presumpt ion of
innocence." In line with this view, it is generally held in the United States that the legislature may enact that when certain
facts have been proven they shall be prima facie evidence of the existence of the guilt of the accused and shift the
burden of proof provided there be rational connection between that facts proved and the ultimate fact presumed so that
the inference of the one from proof of the others is not unreasonable and arbitrary because of lack of connection
between the two in common experience. (See annotation on constitutionality of statutes or ordinances making one fact
presumptive or prima facie evidence of another, 162 A.L.R. 495-535; also, State vs. Brown, 182 S.E., 838, with reference to
embezzlement.) The same view has been adopted here as may be seen from the decisions of this court in the
U.S. vs. Tria, 17 Phil., 303; U.S. vs. Luling, 34 Phil., 725; and People vs. Merilo, G.R. No. L-3489, promulgated June 28, 1951.

The statute in the present case creates a presumption of guilt once certain facts are proved. It makes the failure of public
officer to have duly forthcoming, upon proper demaand, any public funds or property with which he is chargeable prima
facie evidence that he has put such missing funds or property to personal use. The ultimate fact presumed is that officer
has malversed the funds or property entrusted to his custody, and the presumption is made to arise from proof that he
has received them and yet he has failed to have them forthcoming upon proper demand. Clearly , the fact presumed is
but a natural inference from the fact proved, so that it cannot be said that there is no rational connection between the
two. Furthermore, the statute establishes only a prima facie presumption, thus giving the accused an opportunity to
present evidence to rebut it. The presumption is reasonable and will stand the test of validity laid down in the above
citations.

There being no reversible error in the decision appealed from, the same is hereby affirmed, with costs.

G.R. No. 164575 December 6, 2006

ROBERT P. WA-ACON, petitioner,


vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION

VELASCO, JR., J.:

The Case

This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks the reversal of the April 22, 2004
Decision1 of the Sandiganbayan convicting petitioner Robert P. Wa-acon of Malversation under Article 217 of the Revised
Penal Code for misappropriating PhP 92,199.20, which forms part of his accountabilities as Special Collecting Officer of
the National Food Authority (NFA); and the July 23, 2004 Resolution 2 of said graft court denying Wa-acon's plea for
reconsideration in Criminal Case No. 14375.

The Facts

The information against the accused Wa-acon reads as follows:

That on about the period from July 19, 1979 to September 28, 1981, in the City of Manila, Philippines and within the
jurisdiction of this Honorable Court, accused Robert P. Wa-acon, a public officer, being a Special Collecting Officer,
National Food Authority (NFA) and stationed at Canonigo, Paco, Manila and as such was accountable and responsible of
rice stocks and empty sacks for which he received and entrusted to him, by reason of his official position, did then and
there willfully, unlawfully and feloniously, with grave abuse of confidence, misappropriate, misapply, embezzle and
convert to his own personal use and benefit the aforesaid stocks of rice and empty sacks with a total aggregate money
value of P114,303.00, to the damage and prejudice of the government in the aforementioned amount.

CONTRARY TO LAW.3

The facts of the case as found by the Sandiganbayan are:

On the period from July 19, 1979 to September 28, 1981, accused Robert P. Wa-acon was a Special Collecting Officer of
the National Food Authority (NFA) and was assigned at the Kadiwa Center at Moriones, Tondo, Manila. One of his duties
was to receive grains, consisting of rice and mongo, which shall then be sold to the public on retail. The proceeds of the
sale of the grains shall then be collected by the same accused.

On September 28, 1981, by virtue of a Travel Order, a team of Auditors from the Commission of Audit, composed of
Dionisio A. Nillo, as team leader, Mercedes Punzalan, Audit Examiner II, Herminia Gonzales, Audit Examiner II and Raquel
Cruz, Clerk II, as members, conducted an examination of the accountabilities of various Special Collecting Officers of the
NFA, one of whom was accused Robert P. Wa-acon. The said examination was conducted at the Office of the Regional
Auditor, NFA Metro Manila Office at Paco, Manila. In that office, the audit team asked the presence of accused Robert P.
Wa-acon by virtue of a demand letter dated September 1981, demanding the latter to produce cash, cash items, stocks
and empty sacks and other pertinent papers. As testified by Prosecution witness Dionisio A. Nillo, accused Robert P.
Wa-acon told the audit team that "he has no cash on hand at the time pertaining to his accountability as Special
Collecting Officer. Hence, it was indicated in the Cash Count Sheet that there was no cash counted during the cash
examination.
Based on the examination conducted on the various Warehouse Stock Issues, Empty Sacks Receipts, Official Receipts
submitted and the Certificate of Inventory of Stocks and Empty Sacks dated September 18, 1981, containing the signature
of accused Robert P. Wa-acon and witnessed by Virgilio Cacanendin, Special Investigator, Manolito Diaz, Bookkeeper,
Louie Pastofide, Proceso A. Saavedra, Audit Examiner II and Gloria T. Reyes, Audit Examiner I, the audit team rendered a
Report of Examination, Form 74-A of the Cash and Accounts of accused Robert P. Wa-acon. All of the aforementioned
documents were submitted by Proceso Saavedra, a resident Audit Examiner of the NFA Metro Manila Office, Paco,
Manila, to the Audit team headed by Dionisio A. Nillo. In connection with the Audit conducted, the Audit Team prepared
the following Schedules: Schedule 1: Statement of Rice received by Robert A. Wa-acon, Schedule 1-A: Statement of
Rice/mongo Received by Robert P. Wa-acon, Schedules 2: Statement of Remittances of Proceeds from Sales of Robert P.
Wa-acon, Schedule 3: Statement of Refunds made by Robert P. Wa-acon, Schedule I: Statement of Empty Sacks
Returned by Robert P. Wa-acon, and Summary of Empty Sacks Accountability of Robert P. Wa-acon and the Revised
Summary of Cash Examination of Robert P. Wa-acon.

The Report of the Examination of the Cash and Accountabilities of accused Robert P. Wa-acon shows that the latter
incurred a cash shortage of One Hundred Fourteen Thousand Three Hundred Three Pesos (P114,303.00). In the Revised
Summary of the Cash Examination of accused Robert P. Wa-acon, the cash shortage was changed to One Hundred Two
Thousand and One Hundred Ninety Nine Pesos and Twenty Centavos (P102,199.20) after deducting the cost of sixty (60)
bags of regular milled rice value of Six Thousand Nine Hundred (P6,900.00) and the monetary value of the empty sacks
returned by accused Robert P. Wa-acon, which is Five Thousand Two Hundred Three Pesos and Eighty Centavos
(P5,203.80). However, accused Robert P. Wa-acon made a refund of the amount of Ten Thousand Pesos (P10,000.00).
Therefore, the total shortage amount[ed] to Ninety Two Thousand One Hundred Ninety Nine Pesos and Twenty
Centavos (P92,199.20).4

During the trial before the Sandiganbayan, petitioner denied that he misapplied and converted for his personal use the
stocks of rice and empty sacks as he had been faithfully remitting all the proceeds of the rice he sold to consumers. 5

Petitioner also contended that the shortage discovered by the Audit Team may be attributed to the discrepancy in the
actual weight of the rice actually delivered to him and that of the weight reflected in the receipts. In other words, he
claimed that the rice delivered to him weighed less than that for which he signed. He alleged that he discovered the
shortage of five (5) to ten (10) kilos per sack only upon delivery of the rice to the station/outlet. Petitioner explained th at
he could not check the weight of the sacks delivered to him as the weighing scale in their office had a maximum capacity
of only twelve (12) kilograms. Petitioner claimed that he informed his superiors of such shortage verbally, but was
unheeded.6

Petitioner further claimed that the only reason he signed for the sacks of rice, despite the shortage, was because he was
told that he would not be paid his salary if he would not sign, added to the fact that he was then hungry —all of which
prompted Wa-acon to sign the audit report of the Audit Team. 7 As to the missing empty sacks, petitioner argued that
those were in the custody of the delivery man who had a logbook where Special Collecting Officers sign as proof that the
delivery man had taken the sacks.8

The Sandiganbayan Ruling


Citing the presumption under the last paragraph of Article 217 of the Revised Penal Code that "the failure of the public
officer to have duly forthcoming any public funds which he is chargeable upon demand by any duly authorized officer,
shall be prima facie evidence that he has put such missing funds or property to personal use" and the inability of accused
Wa-acon to "rebut the presumption that he had put the rice stocks and the empty sacks to personal use," the
Sandiganbayan found him guilty of malversation of public funds under the Revised Penal Code. In the graft court's April
22, 2004 Decision, the dispositive portion reads:

WHEREFORE, judgment is hereby rendered finding the accused Robert P. Wa-acon, GUILTY beyond reasonable doubt of
the crime of Malversation of Public Funds as defined in and penalized by Article 217 of the Revised Penal Code and, there
being no modifying circumstance, is hereby sentenced to suffer an indeterminate penalty of from TWELVE (12) YEARS
and ONE (1) DAY of reclusion temporal minimum, as the minimum to SEVENTEEN (17) YEARS, FOUR (4) MONTHS and
ONE (1) DAY of reclusion temporalmaximum, as the maximum and to suffer perpetual special disqualification. The
accused Robert P. Wa-acon is likewise ordered to pay a FINE equal to the amount of the funds malversed, which is
Ninety Two Thousand One Hundred Ninety Nine Pesos and Twenty Centavos (P 92,199.20) and to indemnify the
National Food Authority (NFA) the amount of Ninety Two Thousand One Hundred Ninety Nine Pesos and Twenty
Centavos (P92,199.20) with interest thereon.

SO ORDERED.9

Correspondingly, petitioner filed his May 20, 2004 Motion for Reconsideration 10 of the Decision, reiterating his defenses
raised during the trial.

On July 23, 2004, the Sandiganbayan issued the assailed Resolution denying petitioner's Motion for Reconsideration on
the ground that accused Wa-acon raised no new substantial issues and cogent reasons to justify the reversal of the April
22, 2004 Decision.

Thus, Wa-acon filed the instant petition.

The Court's Ruling

Petitioner Wa-acon presented a lone issue to be resolved: his guilt was not proven beyond reasonable doubt; thus, the
assailed Decision and Resolution convicting him of malversation must be reversed.

In seeking the recall of his conviction, accused petitioner asserts that the unremitted amounts for the rice stocks and the
money allegedly gained from the empty sacks were not used for his personal use and therefore, the fourth element of
malversation—that the accused appropriated, took, or misappropriated public funds or property for which he was
accountable—was not proven. According to petitioner, while he might have violated certain auditing rules and
regulations, this violation is not tantamount to malversation. He leans on the rulings in Madarang v.
Sandiganbayan,11 and Agullo v. Sandiganbayan12 that "it is essential to prove that there had been a conversion of public
fund to personal use" and that "conversion must be affirmatively proved"; otherwise, the presumption is "deemed never
to have existed at all."

Article 217 of the Revised Penal Code whereas provides:


Malversation of public funds or property. – Presumption of malversation. – Any public officer who, by reason of the
duties of his office, is accountable for public funds or property, shall appropriate the same, or shall take or
misappropriate or shall consent, or through abandonment or negligence, shall permit any other person to take such
public funds or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such
funds or property x x x

xxxx

The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon
demand by any duly authorized officer shall be prima facie evidence that he has put such missing funds or property to
personal uses (emphasis supplied).

The elements to constitute malversation under Article 217 of the Revised Penal Code are as follows:

The elements common to all acts of malversation – under Article 217 are: (a) that the offender be a public officer; (b)
that he had custody or control of funds or property by reason of the duties of his office; (c) these funds were public funds
or property for which he was accountable; and (d) that he appropriated, took, misappropriated or consented or through
abandonment or negligence, permitted another person to take them. 13

Accused petitioner has conceded that the first three (3) elements of the crime of malversation exist but asseverates that
the fourth element —that he appropriated, took, or misappropriated the public funds for which he was made
accountable by the Commission on Audit (COA) to his own personal use––was not proven beyond reasonable doubt.

Unfortunately, petitioner's postulation has no legal mooring. Article 217, as amended by Republic Act 1060, no longer
requires proof by the State that the accused actually appropriated, took, or misappropriated public funds or property.
Instead, a presumption, though disputable and rebuttable, was installed that upon demand by any duly authorized
officer, the failure of a public officer to have duly forthcoming any public funds or property— with which said officer is
accountable—should be prima facie evidence that he had put such missing funds or properties to personal use. When
these circumstances are present, a "presumption of law" arises that there was malversation of public funds or properties
as decreed by Article 217. A "presumption of law" is sanctioned by a statute prescribing that "a certain inference must be
made whenever facts appear which furnish the basis of the interference." This is to be set apart fr om a "presumption of
fact" which is a "[conclusion] drawn from particular circumstances, the connection between them and the sought for fact
having received such a sanction in experience as to have become recognized as justifying the assumption." 14 When there
is a presumption of law, the onus probandi (burden of proof), generally imposed upon the State, is now shifted to the
party against whom the interference is made to adduce satisfactory evidence to rebut the presumption and hence, to
demolish the prima facie case.

After the government auditors discovered the shortage and demanded an explanation, petitioner Wa-acon was not able
to make money readily available,15 immediately refund the shortage, 16 or explain satisfactorily the cash deficit.17 These
facts or circumstances constitute prima facie evidence that he converted such funds to his personal use.

Prima facie evidence is defined as:


Evidence good and sufficient on its face. Such evidence as, in the judgment of the law, is sufficient to establish a given
fact, or the group or chain of facts constituting the party's claim or defense, and which if not rebutted or contradicted,
will remain sufficient. Evidence which, if unexplained or uncontradicted, is sufficient to sustain a judgment in favor of the
issue it supports, but which may be contradicted by other evidence (emphasis supplied).18

Neither can accused petitioner claim that such presumption under Article 217 violates the constitutional guarantee of
presumption of innocence for "the establishment of a prima facie case does not take away the presumption of innocence
which may x x x be such as to rebut and control it." 19 Such prima facie evidence, if unexplained or uncontradicted, "can
counterbalance the presumption of innocence to warrant a conviction." 20

Since the facts adduced by the State brought about a prima facie evidence which is considered sufficient to sustain
petitioner's conviction under Article 217, it is incumbent upon petitioner Wa-acon to destroy the presumption of law.

In his quest to exculpate himself from the legal assumption of criminal liability for the missing funds, he i nsisted that: 1)
the sacks of rice were less than that declared in the receipts when they were delivered to him; 2) he sold the rice at the
older and lower prices, as he was not informed of changes in the prices of the rice; and 3) the empty sacks of rice were in
the possession of the delivery men. However, petitioner merely settled for his bare uncorroborated testimony during the
trial before the Sandiganbayan. He never bothered to adduce other pieces of evidence to fortify his defenses. Petitioner
did not produce the delivery men whom he claims had in their possession the empty sacks or any acknowledgement
receipt for said bags. Moreover, petitioner did not bring forward his co-workers to attest to and confirm the practice of,
and substantiate petitioner's story of receiving sacks of rice without weighing them and that the bags received weighed
less than that reflected in the receipt. The established rule is that "[d]enials, if unsubstantiated by clear and convincing
evidence, are deemed negative and self-serving evidence unworthy of credence." 21 The court a quo is correct in holding
that as compared to credible witnesses like the COA auditors who testified on affirmative matters, the self-serving
negative testimony of accused petitioner Wa-acon has no substantial weight or credit. 22

"Negative testimony" is made clear as testimony that a fact did not exist, that a thing was not done, that no one did not
hear––is admissible and, in the absence of opposing testimony, is usually regarded as of sufficient probative force to
sustain a verdict. It is however, a long recognized general rule of evidence that all other things being equal, positive
evidence is stronger than negative evidence. 23

Since Wa-acon lamentably fell short of adducing the desired quantum of evidence, his weak and unconvincing testimony
standing alone did not overthrow the presumption that he misappropriated public funds.

As a last ditch effort to exonerate himself, petitioner anchored his defense on Madarang24 and Agullo,25 where public
employees charged of malversation were cleared of criminal liability.

In these two (2) cases cited by petitioner, we elucidated the legal presumption of assumed criminal liability for
accountable funds under the last paragraph of Article 217 of the Revised Penal Code. In Madarang, we explained:

Concededly, the first three elements are present in the case at bar. Lacking any evidence, however, of shortage, or taking,
appropriation, or conversion by petitioner or loss of public funds, there is no malversation ( Narciso vs. Sandiganbayan,
229 SCRA 229 [1994]). True, the law creates a presumption that the mere failure of an accountable officer to produce
public funds which have come into his hand on demand by an officer duly authorized to examine his accounts is prima
facie evidence of conversion. The presumption is, of course, rebuttable. Accordingly, if petitioner is able to present
adequate evidence that can nullify any likelihood that he had put the funds or property to personal use, then that
presumption would be at an end and the prima facie case is effectively negated.26

In Agullo, we amplified that:

Thus, in a string of categorical pronouncements, this Court has consistently and emphatically ruled that the presumption
of conversion incarnated in Article 217, paragraph (4) of the Revised Penal Code is — by its very nature — rebuttable.
To put it differently, the presumption under the law is not conclusive but disputable by satisfactory evidence to the effect
that the accused did not utilize the public funds or property for his personal use, gain or benefit.

Accordingly, if the accused is able to present adequate evidence that can nullify any likelihood that he had put the funds
or property to personal use, then that presumption would be at an end and the prima facie case is effectively negated.
This Court has repeatedly said that when the absence of funds is not due to the personal use thereof by the accused, the
presumption is completely destroyed; in fact, the presumption is never deemed to have existed at all. 27

Unfortunately, petitioner's vaunted reliance on Madarang and Agullo does not provide legal relief as the facts in these
cases are not on all fours with his case. The accused parties in said cases were able to produce satisfactory evidence
ample enough to prove that the missing funds were not converted to their personal uses and thus, the legal
presumption was effectively negated.

In Madarang, the accused, based on the COA audit report, was charged with malversation of PhP 20,700.00 representing
advance rental payments for the lease of real property owned by the City of Cebu for which he was respo nsible as a
barangay captain. When the accused was asked to account for such missing funds, he introduced convincing evidence
that the funds were utilized by the barangay for its projects and for the benefit of his constituents, namely: for materials
for the water system of the barangay hall, barangay police uniforms, and payment for medicine. Therefore, the legal
presumption was successfully overturned.

Likewise, in Agullo, the accused, who was the disbursing officer of then Ministry of Public Works and Highways, Regional
Office No. VIII, Candahug, Palo, Leyte, was charged based on audit, with malversation of PhP 26,404.26 representing the
salaries of the personnel in her office. The accused admitted that the funds were lost; however, she was able to prove
that she suffered a stroke while going to her office. This was corroborated by the barangay captain of the place where
she suffered a stroke, as well as medical certificates to prove the illness. She was acquitted because the loss of funds was
not due to malversation.

In contrast, petitioner anchored his defenses solely on his own bare testimony unsubstantiated by other parol,
documentary, or object evidence to prop up such self-serving allegations. Without doubt, the rulings
in Madarangand Agullo cannot be considered precedents to the case at bar because the facts in said cases are not the
same or substantially similar to petitioner Wa-acon's situation.

Without any strong and convincing proof to bring down the disputable presumption of law, the Court is left with no
other option but to sustain petitioner's conviction.
WHEREFORE, We DENY the petition and the assailed April 22, 2004 Decision and the July 23, 2004 Resolution of the
Sandiganbayan in Criminal Case No. 14375 are AFFIRMED IN TOTO.

No pronouncement as to costs.

SO ORDERED.

B. KINDS OF JUDICIAL NOTICE


C. MANDATORY JUDICIAL NOTICE

ATIENZA vs BOARD OF MEDICINE

G.R. No. 178830 July 14, 2008

ROLEX SUPLICO, Petitioner,


vs.
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY, represented by NEDA SECRETARY ROMULO L. NERI, and the
NEDA-INVESTMENT COORDINATION COMMITTEE, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS
(DOTC), represented by DOTC SECRETARY LEANDRO MENDOZA, including the COMMISSION ON INFORMATION AND
COMMUNICATIONS TECHNOLOGY, headed by its Chairman, RAMON P. SALES, THE TELECOMMUNICATIONS OFFICE,
BIDS AND AWARDS FOR INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT), headed by DOTC ASSISTANT
SECRETARY ELMER A. SONEJA as Chairman, and the TECHNICAL WORKING GROUP FOR ICT, AND DOTC ASSISTANT
SECRETARY LORENZO FORMOSO, AND ALL OTHER OPERATING UNITS OF THE DOTC FOR INFORMATION AND
COMMUNICATIONS TECHNOLOGY, and ZTE CORPORATION, AMSTERDAM HOLDINGS, INC., AND ALL PERSONS
ACTING IN THEIR BEHALF, Respondents.

RESOLUTION

REYES, R.T., J.:

Under consideration is the Manifestation and Motion 1 dated October 26, 2007 of the Office of the Solicitor General (OSG)
which states:

The Office of the Solicitor General (OSG) respectfully avers that in an Indorsement dated October 24, 2007, the Legal
Service of the Department of Transportation and Communications (DOTC) has informed it of the Philippine Government ’
s decision not to continue with the ZTE National Broadband Network Project (see attachment 2). That said, there is no
more justiciable controversy for this Honorable Court to resolve. WHEREFORE, public respondents respectfully pray that
the present petitions be DISMISSED.

On November 13, 2007, the Court noted the OSG’s manifestation and motion and required petitioners in G.R. Nos.
178830, 179317, and 179613 to comment.
On December 6, 2007, Rolex Suplico, petitioner in G.R. No. 178830, filed his Consolidated Reply and
Opposition,3opposing the aforequoted OSG Manifestation and Motion, arguing that:

66. Aside from the fact that the Notes of the Meeting Between President Gloria Macapagal-Arroyo and Chinese
President Hu Jintao held 2 October 2007 were not attached to the 26 October 2007 Manifestation and Motion – thus
depriving petitioners of the opportunity to comment thereon – a mere verbally requested 1st Indorsement is not
sufficient basis for the conclusion that the ZTE-DOTC NBN deal has been permanently scrapped.

67. Suffice to state, said 1st Indorsement is glaringly self-serving, especially without the Notes of the Meeting Between
President Gloria Macapagal-Arroyo and Chinese President Hu Jintao to support its allegations or other proof of the
supposed decision to cancel the ZTE-DOTC NBN deal. Public respondents can certainly do better than that.4

Petitioner Suplico further argues that:

79. Assuming arguendo that some aspects of the present Petition have been rendered moot (which is vehemently
denied), this Honorable Court, consistent with well-entrenched jurisprudence, may still take cognizance thereof. 5

Petitioner Suplico cites this Court’s rulings in Gonzales v. Chavez,6 Rufino v. Endriga,7 and Alunan III v. Mirasol8that
despite their mootness, the Court nevertheless took cognizance of these cases and ruled on the merits due to the Court ’
s symbolic function of educating the bench and the bar by formulating guiding and controlling principles, precepts,
doctrines, and rules.

On January 31, 2008, Amsterdam Holdings, Inc. (AHI) and Nathaniel Sauz, petitioners in G.R. No. 179317, also filed their
comment expressing their sentiments, thus:

3. First of all, the present administration has never been known for candor. The present administration has a very nasty
habit of not keeping its word. It says one thing, but does another.

4. This being the case, herein petitioners are unable to bring themselves to feel even a bit reassured that the government,
in the event that the above-captioned cases are dismissed, will not backtrack, re-transact, or even resurrect the now
infamous NBN-ZTE transaction. This is especially relevant since what was attached to the OSG’s Manifestation and
Motion was a mere one (1) page written communication sent by the Department of Transportation and Communications
(DOTC) to the OSG, allegedly relaying that the Philippine Government has decided not to continue with the NBN project
"x x x due to several reasons and constraints."

Petitioners AHI and Sauz further contend that because of the transcendental importance of the issues raised in the
petition, which among others, included the President’s use of the power to borrow, i.e., to enter into foreign loan
agreements, this Court should take cognizance of this case despite its apparent mootness.

On January 15, 2008, the Court required the OSG to file respondents ’ reply to petitioners ’ comments on its
manifestation and motion.

On April 18, 2008, the OSG filed respondents’ reply, reiterating their position that for a court to exercise its power of
adjudication, there must be an actual case or controversy – one which involves a conflict of legal rights, an assertion of
opposite legal claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-legal
or other similar considerations not cognizable by a court of justice. 9

Respondents also insist that there is no perfected contract in this case that would prejudice the government or public
interest. Explaining the nature of the NBN Project as an executive agreement, respondents stress that it remained in the
negotiation stage. The conditions precedent10 for the agreement to become effective have not yet been complied with.

Respondents further oppose petitioners’ claim of the right to information, which they contend is not an absolute right.
They contend that the matters raised concern executive policy, a political question which the judicial branch of
government would generally hesitate to pass upon.

On July 2, 2008, the OSG filed a Supplemental Manifestation and Motion. Appended to it is the Highlights from the
Notes of Meeting between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao, held in XI Jiao
Guesthouse, Shanghai, China, on October 2, 2007. In the Notes of Meeting, the Philippine Government conveyed its
decision not to continue with the ZTE National Broadband Network Project due to several constraints. The same Notes
likewise contained President Hu Jintao’s expression of understanding of the Philippine Government decision.

We resolve to grant the motion.

Firstly, the Court notes the triple petitions to be for certiorari, prohibition and mandamus, with application for the
issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction. The individual prayers in each of the
three (3) consolidated petitions are:

G.R. No. 178830

WHEREFORE, it is respectfully prayed of this Honorable Court:

1. Upon the filing of this Petition, pursuant to the second paragraph of Rule 58, Section 5 of the Rules of Court, issue
forthwith an ex parte temporary restraining order enjoining respondents, their subordinates, agents, representatives and
any and all persons acting on their behalf from pursuing, entering into indebtedness, disbursing funds, and
implementing the ZTE-DOTC Broadband Deal;

2. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his undersigned counsel
a certified true copy of the contract or agreement covering the NBN project as agreed upon with ZTE Corporation ;

3. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule 56 of the revised Rules
of Court; and,

4. Annul and set aside the award of the ZTE-DOTC Broadband Deal, and compel public respondents to forthwith comply
with pertinent provisions of law regarding procurement of government ICT contracts and public bidding for the NBN
contract.11 (Emphasis supplied)

G.R. No. 179317


WHEREFORE, petitioners Amsterdam Holdings, Inc., and Nathaniel Sauz respectfully pray as follows:

A. upon the filing of this Petition for Mandamus and conditioned upon the posting of a bond in such amount as the
Honorable Court may fix, a temporary restraining order and/or writ of preliminary injunction be issued directing the
Department of Transportation and Communication, the Commission on Information and Communications Technology,
all other government agencies and instrumentalities, their officers, employees, and/or other persons acting for and on
their behalf to desist during the pendency of the instant Petition for Mandamus from entering into any other agreements
and from commencing with any kind, sort, or specie of activity in connection with the National Broadband Network
Project;

B. the instant Petition for Mandamus be given due course; and,

C. after due consideration of all relevant issues, judgment be rendered directing respondents to allow herein petitioners
access to all agreements entered into with the Government of China, the ZTE Corporation, and/or other entities,
government instrumentalities, and/or individuals with regard to the National Broadband Network Project. 12 (Emphasis
supplied)

G.R. No. 179613

WHEREFORE, it is respectfully prayed of this Honorable Court to:

1. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his undersigned counsel
a certified true copy of the contract or agreement covering the NBN project as agreed upon with ZTE Corporation;

2. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule 56 of the Revised Rules
of Court;

3. Annul and set aside the award of the contract for the national broadband network to respondent ZTE Corporation,
upon the ground that said contract, as well as the procedures resorted to preparatory to the execution thereof, is
contrary to the Constitution, to law and to public policy;

4. Compel public respondent to forthwith comply with pertinent provisions of law regarding procurement of government
infrastructure projects, including public bidding for said contract to undertake the construction of the national
broadband network.13 (Emphasis supplied)

On September 11, 2007, the Court issued a TRO 14 in G.R. No. 178830, enjoining the parties from "pursuing, entering into
indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project" as prayed for. Pertinent
parts of the said Order read:

WHEREAS, the Supreme Court, on 11 September 2007, adopted a resolution in the above-entitled case,
to wit:

"G.R. No. 178830 (Rolex Suplico vs. National Economic and Development Authority, represented by
NEDA Secretary Romulo L. Neri, and the NEDA Investment Coordination Committee, Department of
Transportation and Communications (DOTC), represented by DOTC Secretary Leandro Mendoza,
including the Commission on Information and Communications Technology, headed by its Chairman,
Ramon P. Sales, The Telecommunications Office, Bids and Awards for Information and Communications
Technology Committee (ICT), headed by DOTC Assistant Secretary Elmer A. Soneja as Chairman, and
The Technical Working Group for ICT, and DOTC Assistant Secretary Lorenzo Formoso, and All Other
Operating Units of the DOTC for Information and Communications Technology, and ZTE Corporation,
Amsterdam Holdings, Inc., and ARESCOM, Inc.—Acting on the instant petition with prayer for temporary
restraining order and/or writ of preliminary injunction, the Court Resolved, without giving due course to
the petition, to

xxxx

(d) Issue a TEMPORARY RESTRAINING ORDER, effective immediately and continuing until further orders
from this Court, enjoining the (i) National Economic and Development Authority, (ii) NEDA-Investment
Coordination Committee, (iii) Department of Transportation and Communications, Commission on
Information and Communications Technology, (iv) Telecommunications Office, Bids and Awards for
Information and Communications Technology Committee (ICT), (v) Technical Working Group for ICT,
and all other Operating Units of the DOTC for Information and Communications Technology, (vi) ZTE
Corporation; (vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and any and all persons acting on
their behalf from ‘pursuing, entering into indebtedness, disbursing funds, and implementing the
ZTE-DOTC Broadband Deal and Project’ as prayed for."

NOW THEREFORE, effective immediately and continuing until further orders from this Court, You,
Respondents (i) National Economic and Development Authority, (ii) NEDA-Investment Coordination
Committee, (iii) Department of Transportation and Communications, Commission on Information and
Communications Technology, (iv) Telecommunications Office, Bids and Awards for Information and
Communications Technology Committee (ICT), (v) Technical Working Group for ICT, and all other
Operating Units of the DOTC for Information and Communications Technology, (vi) ZTE Corporation;
(vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and any and all persons acting on their behalf
are hereby ENJOINED from "pursuing, entering into indebtedness, disbursing funds, and implementing
the ZTE-DOTC Broadband Deal and Project" as prayed for. 15 (Emphasis supplied.)

Petitioners in G.R. Nos. 178830 and 179613 pray that they be furnished certified true copies of the "contract or agreement
covering the NBN project as agreed upon with ZTE Corporation." It appears that during one of the Senate hearings on
the NBN project, copies of the supply contract 16 were readily made available to petitioners.17Evidently, the said prayer has
been complied with and is, thus, mooted.

When President Gloria Macapagal-Arroyo, acting in her official capacity during the meeting held on October 2, 2007 in
China, informed China’s President Hu Jintao that the Philippine Government had decided not to continue with the
ZTE-National Broadband Network (ZTE-NBN) Project due to several reasons and constraints, there is no doubt that all
the other principal prayers in the three petitions (to annul, set aside, and enjoin the implementation of the ZTE-NBN
Project) had also become moot.
Contrary to petitioners’ contentions that these declarations made by officials belonging to the executive branch on the
Philippine Government’s decision not to continue with the ZTE-NBN Project are self-serving, hence, inadmissible, the
Court has no alternative but to take judicial notice of this official act of the President of the Philippines.

Section 1, Rule 129 of the Rules of Court provides:

SECTION 1. Judicial Notice, when mandatory. – A court shall take judicial notice, without introduction of evidence, of the
existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of
nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the
Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the
measure of time, and the geographical divisions. (Emphasis supplied)

Under the rules, it is mandatory and the Court has no alternative but to take judicial notice of the official acts of the
President of the Philippines, who heads the executive branch of our government. It is further provided in the
above-quoted rule that the court shall take judicial notice of the foregoing facts without introduction of evidence. Since
we consider the act of cancellation by President Macapagal-Arroyo of the proposed ZTE-NBN Project during the
meeting of October 2, 2007 with the Chinese President in China as an official act of the executive department, the Court
must take judicial notice of such official act without need of evidence.

In David v. Macapagal-Arroyo,18 We took judicial notice of the announcement by the Office of the President banning all
rallies and canceling all permits for public assemblies following the issuance of Presidential Proclamation No. 1017 and
General Order No. 5.

In Estrada v. Desierto,19 the Court also resorted to judicial notice in resolving the factual ingredient of the petition.

Moreover, under Section 2, paragraph (m) of Rule 131 of the Rules of Court, the official duty of the executive officials 20 of
informing this Court of the government’s decision not to continue with the ZTE-NBN Project is also presumed to have
been regularly performed, absent proof to the contrary. Other than petitioner AHI’s unsavory insinuation in its comment,
the Court finds no factual or legal basis to disregard this disputable presumption in the present instance.

Concomitant to its fundamental task as the ultimate citadel of justice and legitimacy is the judiciary ’s role of
strengthening political stability indispensable to progress and national development. Pontificating on issues which no
longer legitimately constitute an actual case or controversy will do more harm than good to the nation as a whole. Wise
exercise of judicial discretion militates against resolving the academic issues, as petitioners want this Court to do. This is
especially true where, as will be further discussed, the legal issues raised cannot be resolved without previously
establishing the factual basis or antecedents.

Judicial power presupposes actual controversies, the very antithesis of mootness. In the absence of actual justiciable
controversies or disputes, the Court generally opts to refrain from deciding moot issues. Where there is no more live
subject of controversy, the Court ceases to have a reason to render any ruling or make any pronouncement.

Kapag wala nang buhay na kaso, wala nang dahilan para magdesisyon ang Husgado.
In Republic Telecommunications Holdings, Inc. v. Santiago, 21 the lone issue tackled by the Court of Appeals (CA) was
whether the Securities Investigation and Clearing Department (SICD) and Securities and Exchange Commission (SEC) en
banc committed reversible error in issuing and upholding, respectively, the writ of preliminary injunction. The writ
enjoined the execution of the questioned agreements between Qualcomm, Inc. and Republic Telecommunications
Holdings, Inc. (RETELCOM). The implementation of the agreements was restrained through the assailed orders of the
SICD and the SEC en banc which, however, were nullified by the CA decision. Thus, RETELCOM elevated the matter to
this Court praying for the reinstatement of the writ of preliminary injunction of the SICD and the SEC en banc. However,
before the matter was finally resolved, Qualcomm, Inc. withdrew from the negotiating table. Its withdrawal had thwarted
the execution and enforcement of the contracts. Thus, the resolution of whether the implementation of said agreements
should be enjoined became no longer necessary.

Equally applicable to the present case is the Court ruling in the above-cited Republic Telecommunications. There We
held, thus:

Indeed, the instant petition, insofar as it assails the Court of Appeals’ Decision nullifying the orders of the SEC en banc
and the SICD, has been rendered moot and academic. To rule, one way or the other, on the correctness of the
questioned orders of the SEC en banc and the SICD will be indulging in a theoretical exercise that has no practical worth
in view of the supervening event.

The rule is well-settled that for a court to exercise its power of adjudication, there must be an actual case or controversy
– one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial res olution; the
case must not be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of
justice. Where the issue has become moot and academic, there is no justiciable controversy, and an adjudication thereon
would be of no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy scholarly
interest, however intellectually challenging.

In the ultimate analysis, petitioners are seeking the reinstatement of the writ of injunction to prevent the concerned
parties from pushing through with transactions with Qualcomm, Inc. Given that Qualcomm, Inc. is no longer interested in
pursuing the contracts, there is no actual substantial relief to which petitioners would be entitled and which wo uld be
negated by the dismissal of the petition.

The Court likewise finds it unnecessary to rule whether the assailed Court of Appeals’ Decision had the effect of
overruling the Court’s Resolution dated 29 January 1999, which set aside the TRO issued by the appellate court.

A ruling on the matter practically partakes of a mere advisory opinion, which falls beyond the realm of judicial review.
The exercise of the power of judicial review is limited to actual cases and controversies. Courts have no authority to pass
upon issues through advisory opinions or to resolve hypothetical or feigned problems.

While there were occasions when the Court passed upon issues although supervening events had rendered those
petitions moot and academic, the instant case does not fall under the exceptional cases. In those cases, the Court was
persuaded to resolve moot and academic issues to formulate guiding and controlling constitutional principles, precepts,
doctrines or rules for future guidance of both bench and bar.
In the case at bar, the resolution of whether a writ of preliminary injunction may be issued to prevent the implementation
of the assailed contracts calls for an appraisal of factual considerations which are peculiar only to the transactions and
parties involved in this controversy. Except for the determination of whether petitioners are entitled to a writ of
preliminary injunction which is now moot, the issues raised in this petition do not call for a clarification of any
constitutional principle or the interpretation of any statutory provision.22

Secondly, even assuming that the Court will choose to disregard the foregoing considerations and brush aside mootness,
the Court cannot completely rule on the merits of the case because the resolution of the three petitions involves settling
factual issues which definitely requires reception of evidence. There is not an iota of doubt that this may not be done by
this Court in the first instance because, as has been stated often enough, this Court is not a trier of facts.

Ang pagpapasiya sa tatlong petisyon ay nangangailangan ng paglilitis na hindi gawain ng Hukumang ito.

Respondent ZTE, in its Comment in G.R. No. 178830, 23 correctly pointed out that since petitioner Suplico filed his petition
directly with this Court, without prior factual findings made by any lower court, a determination of pertinent and relevant
facts is needed. ZTE enumerated some of these factual issues, to wit:

(1) Whether an executive agreement has been reached between the Philippine and Chinese governments over the NBN
Project;

(2) Whether the ZTE Supply Contract was entered into by the Republic of the Philippines, through the DOTC, and ZTE
International pursuant to, and as an integral part of, the executive agreement;

(3) Whether a loan agreement for the NBN Project has actually been executed;

(4) Whether the Philippine government required that the NBN Project be completed under a
Build-Operate-and-Transfer Scheme;

(5) Whether the AHI proposal complied with the requirements for an unsolicited proposal under the BOT Law;

(6) Whether the Philippine government has actually earmarked public finds for disbursement under the ZTE Supply
Contract; and

(7) Whether the coverage of the NBN Project to be supplied under the ZTE Supply Contract is more extensive than that
under the AHI proposal or such other proposal submitted therefor.24

Definitely, some very specific reliefs prayed for in both G.R. Nos. 178830 and 179613 require prior determination of facts
before pertinent legal issues could be resolved and specific reliefs granted.

In G.R. No. 178830, petitioner seeks to annul and set aside the award of the ZTE-DOTC Broadband Deal and compel
public respondents to forthwith comply with pertinent provisions of law regarding procurement of government ICT
contracts and public bidding for the NBN contract.
In G.R. No. 179613, petitioners also pray that the Court annul and set aside the award of the contract for the national
broadband network to respondent ZTE Corporation, upon the ground that said contract, as well as the procedures
resorted to preparatory to the execution thereof, is contrary to the Constitution, to law and to public policy. They also ask
the Court to compel public respondent to forthwith comply with pertinent provisions of law regarding procurement of
government infrastructure projects, including public bidding for said contract to undertake the construction of the
national broadband network.

It is simply impossible for this Court "to annul and set aside the award of the ZTE-DOTC Broadband Deal" without any
evidence to support a prior factual finding pointing to any violation of law that could lead to such annulment order. For
sure, the Supreme Court is not the proper venue for this factual matter to be threshed out.

Thirdly, petitioner Suplico in G.R. No. 178830 prayed that this Court order "public respondents to forthwith comply with
pertinent provisions of law regarding procurement of government ICT contracts and public bidding for the NBN
contract."25 It would be too presumptuous on the part of the Court to summarily compel public respondents to comply
with pertinent provisions of law regarding procurement of government infrastructure projects without any factual basis
or prior determination of very particular violations committed by specific government officials of the executive branch.
For the Court to do so would amount to a breach of the norms of comity among co-equal branches of government. A
perceived error cannot be corrected by committing another error. Without proper evidence, the Court cannot just
presume that the executive did not comply with procurement laws. Should the Court allow itself to fall into this trap, it
would plainly commit grave error itself.

Magiging kapangahasan sa Hukumang ito na pilitin ang mga pinipetisyon na tumalima sa batas sa pangongontrata ng
pamahalaan kung wala pang pagtitiyak o angkop na ebidensiya ng nagawang paglabag dito.

Let it be clarified that the Senate investigation in aid of legislation cannot be the basis of Our decision which requires
a judicial finding of facts.

Justice Antonio T. Carpio takes the view that the National Broadband Network Project should be declared null and void .
The foregoing threefold reasons would suffice to address the concern of Our esteemed colleague.

The Court is, therefore, constrained to dismiss the petitions and deny them due course because of mootness and
because their resolution requires reception of evidence which cannot be done in an original petition brought before the
Supreme Court.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued on September 11, 2007 is
DISSOLVED.

SO ORDERED.
[G.R. No. 142295. May 31, 2001]

VICENTE DEL ROSARIO y NICOLAS, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PARDO, J.:

Petitioner Vicente del Rosario y Nicolas appeals via certiorari from a decision of the Court of Appeals [1]affirming with
modification the decision of the Regional Trial Court, Bulacan, Branch 20, Malolos, and finding him guilty beyond
reasonable doubt of violation of P. D. No. 1866, as amended by Republic Act No. 8294 (illegal possession of firearms),
sentencing him to four (4) years, nine (9) months and eleven (11) days of prision correccional, as minimum, to six (6) years,
eight (8) months and one (1) day of prision mayor, as maximum, and to pay a fine of P30,000.00.

On June 17, 1996, Assistant Provincial Prosecutor Eufracio S. Marquez of Bulacan filed with the Regional Trial Court,
Bulacan, Malolos an Information charging petitioner Vicente del Rosario y Nicolas with violation of P. D. No. 186 6, as
follows:

That on or about the 15th day of June 1996, in the municipality of Norzagaray, Province of Bulacan, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully, unlawfully and
feloniously have in his possession under his custody and control, the following, to wit:

a) One (1) pc. Pistol Cal. 45 SN:70G23792 (w/o license)

b) One (1) pc. Revolver Cal. 22 SN:48673 (w/o license)


c) Twenty Seven (27) rds live ammos. For cal. .45

d) Five (5) pcs. Magazines for cal. .45

e) Eight (8) rds live ammunitions for cal. 22

f) Five (5) pcs. Magazines short for cal. 5.56 (M16)

g) Twenty (20) rds live ammunitions for cal 5.56

without first having obtained a proper license therefor.

Contrary to law.[2]

On June 25, 1996, the trial court arraigned the petitioner. He pleaded not guilty.[3] Trial ensued.

The facts, as found by the Court of Appeals, are as follows:

Sometime in May 1996, the police received a report that accused-appellant Vicente del Rosario was in possession of
certain firearms without the necessary licenses. Acting upon the report, P/Sr. Insp. Jerito Adique of the PNP Criminal
Investigation Group at Camp Olivas, Pampanga inquired from the PNP Firearms and Explosive Division wh ether or not
the report was true. On May 10, 1996, P/Sr. Insp. Edwin C. Roque of the PNP Firearms and Explosives Division issued a
certification (Exhibit L) stating that per records in his office, the appellant is not a licensed/registered firearm holder o f
any kind and caliber. Armed with the said certification, P/Sr. Insp. Adique applied for a search warrant to enable his team
to search the house of appellant.

On June 13, 1996, a search warrant (Exhibit A) was issued by Judge Gil Fernandez, Sr. of the Regional Trial Court of
Quezon City, Branch 217, authorizing the search of the residence of appellant at Barangay Tigbe, Norzagaray,
Bulacan.[4] On June 15, 1996, at about 7:00 oclock in the morning, a team led by P/Sr. Insp. Adique went to Norzagaray to
serve the warrant. Before proceeding to the residence of the appellant, the police officers requested Barangay Chairman
Rogelio de Silva and Barangay Councilman Aurelio Panteleon to accompany them in the implementation of the warrant.
Upon arrival at the house of appellant, the police officers introduced themselves to the wife of appellant. When the
appellant came out, P/Sr. Insp. Adique informed him that they had a search warrant and that they were authorized to
search his house. After appellant gave his permission, the police officers conducted a search of the house. The search
yielded the following items: (a) a caliber .45 pistol with Serial No. 703792 with five magazines of caliber .45 (Exhibits B
and H) found at the masters bedroom; (b) five magazines of 5.56 M-16 rifle and two radios (Exhibits C to C-4) found in
the room of appellants daughter; and (c) a caliber .22 revolver with Serial No. 48673 (Exhibit F) containing 8 pieces of live
ammunition (Exhibit M) found in the kitchen of the house. When asked about his license to possess the firearms, the
appellant failed to produce any. This prompted the police officers to seize the subject firearms.

SPO2 Marion Montezon, one of the searching officers, prepared three separate inventories of the seized items (Exhibits
H, M and N). The inventories were signed by P/Sr. Insp. Adique, the appellant and the barangay officials who witnessed
the search. Thereafter SPO2 Montezon prepared a certification of orderly search (Exhibit I) which was signed by the
appellant and the barangay officials attesting to the orderly conduct of the search.
For his defense, appellant contends that he had a license for the caliber .45 pistol recovered in his bedroom and that the
other items seized during the search including the caliber .22 revolver, were merely planted by the police
officers. Appellant likewise assails the manner in which the search was carried out, claiming that the police officers just
barged into his house without asking permission. Furthermore, he claimed that the barangay officials arrived only after
the police already had finished the search.

After trial and on July 2, 1998, the trial court rendered a judgment of conviction, the dispositive portion of which reads:

WHEREFORE, premises considered, the Court finds the accused VICENTE DEL ROSARIO y NICOLAS guilty beyond
reasonable doubt of violation of P. D. No. 1866 as charged under the Information dated June 17, 1996.

Conformably with the provisions of said law, as amended by Republic Act No. 8294, and pursuant to the provisions of
the Indeterminate Sentence Law, the Court hereby sentences the accused to suffer imprisonment of six (6) months
of arresto mayor, as minimum, to six (6) years of prision correctional, as maximum, and to pay a fine of Fifteen Thousand
Pesos (P15,000.00).[5]

On July 20, 1998, petitioner appealed to the Court of Appeals, assailing the decision for being contrary to facts and
the law.[6]

On July 9, 1999, the Court of Appeals promulgated its decision affirming with modification the decision of the trial
court as set out in the opening paragraph of this decision. [7]

On August 10, 1999, petitioner filed with the Court of Appeals a motion for reconsideration and/or new trial. [8] He
contended that the certification issued by the Chief, Firearms and Explosives Division, Philippine National Police stating
that the person named therein had not been issued a firearm license referred to a certain Vicente Vic del Rosario of
barangay Bigte, Norzagaray, Bulacan, not to him. He comes from barangay Tigbe, Norzagaray, Bulacan, and that he has
a valid firearm license.

On February 22, 2000, the Court of Appeals denied the motion for reconsideration for lack of merit. [9]

Hence, this appeal.[10]

Petitioner submits that the search conducted at his residence was illegal as the search warrant was issued in
violation of the Constitution [11] and consequently, the evidence seized was inadmissible. He also submits that he had a
license for the .45 caliber firearm and ammunition seized in his bedroom. The other firearm, a .22 caliber revolver seized
in a drawer at the kitchen of his house, a magazine for 5.56 mm. cal. Armalite rifle, and two 2 -way radios found in his
daughters bedroom, were either planted by the police or illegally seized, as they were not mentioned in the search
warrant.

We find the petition impressed with merit.

We define the issues as follows:

First: whether petitioner had a license for the .45 caliber Colt pistol and ammunition seized in his bedroom; and

Second: whether the .22 caliber revolver seized in a drawer at the kitchen of his house, a magazine for 5.56 mm. cal.
Armalite rifle and two 2-way radios found in his daughters bedroom, were planted by the police or were illegally seized.
We shall resolve the issues in seriatim.

First: The .45 cal. Colt pistol in question was duly licensed.

Normally, we do not review the factual findings of the Court of Appeals and the trial courts. [12] However, this case
comes within the exceptions.[13] The findings of fact by the Court of Appeals will not be disturbed by the Court unless
these findings are not supported by evidence.[14] In this case, the findings of the lower courts even directly contradict the
evidence. Hence, we review the evidence. The trial court held that the copy of the license presented was blurred, and that
in any event, the court could rely on the certification dated May 10, 1996, of P/Sr. Inspector Edwin C. Roque, Chief,
Records Branch, Firearms and Explosives Division, Philippine National Police stating that Vicente Vic del Rosario of
Barangay Bigte, Norzagaray, Bulacan is not a licensed/registered firearm holder of any kind and caliber. [15] As against this,
petitioner submitted that he was not the person referred to in the said certification because he is Vicente del Rosario y
Nicolas from Barangay Tigbe,Norzagaray, Bulacan. The Court takes judicial notice of the existence of both barangay
Tigbe and barangay Bigte, in Norzagaray, Bulacan. [16] In fact, the trial court erred grievously in not taking judicial notice of
the barangays within its territorial jurisdiction, believing the prosecutions submission that there was only barangay Tigbe,
and that barangay Bigte in the certification was a typographical error. [17] Petitioner presented to the head of the raiding
team, Police Senior Inspector Jerito A. Adique, Chief, Operations Branch, PNP Criminal Investigation Command, a valid
firearm license. The court is duty bound to examine the evidence assiduously to determine the guilt or innocence of the
accused. It is true that the court may rely on the certification of the Chief, Firearms and Explosives Division, PNP on the
absence of a firearm license.[18] However, such certification referred to another individual and thus, cannot prevail over a
valid firearm license duly issued to petitioner. In this case, petitioner presented the printed computerized copy of License
No. RCL 1614021915 issued to him on July 13, 1993, expiring in January 1995, by the Chief, Firearms and Explosives Division,
PNP under the signature of Reynaldo V. Velasco, Sr. Supt. (GSC) PNP, Chief, FEO.[19] On the dorsal side of the printed
computerized license, there is stamped the words Validity of computerized license is extended until renewed license is
printed dated January 17, 1995, signed by Police Chief Inspector Franklin S. Alfabeto, Chief, Licence Branch,
FEO.[20] Coupled with this indefinite extension, petitioner paid the license fees for the extension of the license for the next
two-year period.[21]

Consequently, we find that petitioner was the holder of a valid firearm license for the .45 caliber Colt pistol seized in
the bedroom of his house on June 15, 1996. [22] As required, petitioner presented the license to the head of the raiding
team, Police Senior Inspector Jerito A. Adique of the Criminal Investigation Division Group, PNP. [23] As a senior police
officer, Senior Inspector Adique could easily determine the genuineness and authenticity of the computerized printed
license presented. He must know the computerized license printed form. The stamp is clearly visible. He could decipher
the words and the signature of the authorized signing official of the Firearms and Explosives Division, PNP. He belonged
to the same national police organization.

Nevertheless, Senior Insp. Adique rejected the license presented because, according to him, it was expired. However,
assuming that the license presented was expired during the period January 1995 to January 1997, still, possession of the
firearm in question, a .45 caliber Colt pistol with serial No. 70G23792, during that period was not illegal. The firearm was
kept at home, not carried outside residence. On June 15, 1996, at the time of the seizure of the firearm in
question, possession of firearm with an expired license was not considered unlawful,provided that the license had not
been cancelled or revoked. Republic Act No. 8294, providing that possession of a firearm with an expired license was
unlawful took effect only on July 7, 1997. [24] It could not be given retroactive effect. [25]
According to firearm licensing regulations, the renewal of a firearm license was automatically applied for upon
payment of the license fees for the renewal period. The expired license was not cancelled or revoked. It served as
temporary authority to possess the firearm until the renewed license was issued. Meantime, the applicant may keep the
gun at home pending renewal of the firearm license and issuance of a printed computerized license. He was not obliged
to surrender the weapon. Printed at the dorsal side of the computerized license is a notice reading:

IMPORTANT

1. This firearm license is valid for two (2) years. Exhibit this license whenever demanded by proper authority.

2. Surrender your firearm/s to the nearest PNP Unit upon revocation or termination of this license. Under any
of the following instances, your license shall be revoked for which reason your firearm/s is/are subject to
confiscation and its/their forfeiture in favor of the government.

a. Failure to notify the Chief of PNP in writing of your change of address, and/or qualification.

b. Failure to renew this license by paying annual license, fees, within six (6) months from your birth
month. Renewal of your license can be made within your birth month or month preceding your birth month.
Late renewal shall be penalized with 50% surcharge for the first month (from the first day to the last day of
this month) followed by an additional 25% surcharge for all of the succeeding five (5) months compounded
monthly.

c. Loss of firearm/s through negligence.

d. Carrying of firearm/s outside of residence without appropriate permit and/or carrying firearm/s in
prohibited places.

e. Conviction by competent court for a crime involving moral turpitude or for any offense where the penalty
carries an imprisonment of more than six (6) months or fine of at least P1,000.00.

f. Dismissal for cause from the service.

g. Failure to sign license, or sign ID picture or affix right thumbmark.

3. Unauthorized loan of firearm/s to another person is punishable by permanent disqualification and forfeiture
of the firearm in favor of the government.

4. If termination is due to death, your next of kin should surrender your firearm/s to the nearest PNP Unit. For
those within Metro Manila, surrender should be made with FEO, Camp Crame.

5. When firearms become permanently unserviceable, they should be deposited with the nearest PNP Unit and
ownership should be relinquished in writing so that firearms may be disposed of in accordance with law.

6. Application for the purchase of ammunition should be made in case of a resident of Metro Manila direct to
the Chief, FEO and for residents of a Province to secure recommendation letter to the nearest PNP
Provincial Command who will thereafter endorse same to CHIEF, FEO for issuance of the permit. License
must be presented before an authority to purchase ammo could be obtained. [26]

Indeed, as heretofore stated, petitioner duly paid the license fees for the automatic renewal of the firearm license
for the next two years upon expiration of the license in January 1995, as evidenced by official receipt No. 7615186, dated
January 17, 1995.[27] The license would be renewed, as it was, because petitioner still possessed the required
qualifications. Meantime, the validity of the license was extended until the renewed computerized license was printed. In
fact, a renewed license was issued on January 17, 1997, for the succeeding two-year period.[28]

Aside from the clearly valid and subsisting license issued to petitioner, on January 25, 1995, the Chief, Philippine
National Police issued to him a permit to carry firearm outside residence valid until January 25, 1996, for the firearm in
question.[29] The Chief, Philippine National Police would not issue a permit to carry firearm outside residence unless
petitioner had a valid and subsisting firearm license. Although the permit to carry firearm outside residence was valid for
only one year, and expired on January 25, 1996, such permit is proof that the regular firearm license was renewed and
subsisting within the two-year term up to January 1997. A Permit to Carry Firearm Outside Residence presupposes that
the party to whom it is issued is duly licensed to possess the firearm in question. [30] Unquestionably, on January 17, 1997,
the Chief, Firearms and Explosives Division, PNP renewed petitioners license for the .45 cal. Colt pistol in question. [31]

Clearly then, petitioner had a valid firearm license during the interregnum between January 17, 1995, to the issuance
of his renewed license on January 17, 1997.

Finally, there is no rhyme or reason why the Court of Appeals and the trial court did not accept with alacrity the
certification dated June 25, 1996, of P/Sr. Inspector Edwin C. Roque, [32] Chief, Records Branch, Firearms and Explosives
Division, PNP that Vicente N. del Rosario of Barangay Tigbe, Norzagaray, Bulacan is a licensed/registered holder of Pistol,
Colt caliber .45 with serial number 70G23792, covered by computerized license issued dated June 15, 1995, with an expiry
date January 1997.[33] Reinforcing the aforementioned certification, petitioner submitted another certification dated
August 27, 1999, stating that Vicente N. del Rosario of Barangay Tigbe, Norzagaray, Bulacan, was issued firearm license
No. RL-C1614021915, for caliber .45 Pistol with Serial Number 70G23792, for the years covering the period from July 13,
1993 to January 1995, and the extension appearing at the back thereof for the years 1995 to 1997. [34] Had the lower courts
given full probative value to these official issuances, petitioner would have been correctly acquitted, thus sparing this
Court of valuable time and effort.

In crimes involving illegal possession of firearm, the prosecution has the burden of proving the elements thereof,
viz.: (a) the existence of the subject firearm and (b) the fact that the accused who owned or possessed it does not have
the license or permit to possess the same. [35] The essence of the crime of illegal possession is the possession, whether
actual or constructive, of the subject firearm, without which there can be no conviction for illegal possession. After
possession is established by the prosecution, it would only be a matter of course to determine whether the accused has a
license to possess the firearm.[36] Possession of any firearm becomes unlawful only if the necessary permit or license
therefor is not first obtained. The absence of license and legal authority constitutes an essential ingredient of the offense
of illegal possession of firearm and every ingredient or essential element of an offense must be shown by the
prosecution by proof beyond reasonable doubt. Stated otherwise, the negative fact of lack or absence of licen se
constitutes an essential ingredient of the offense which the prosecution has the duty not only to allege but also to prove
beyond reasonable doubt.[37] To convict an accused for illegal possession of firearms and explosives under P. D. 1866, as
amended, two (2) essential elements must be indubitably established, viz.: (a) the existence of the subject firearm or
explosive which may be proved by the presentation of the subject firearm or explosive or by the testimony of witnesses
who saw accused in possession of the same, and (b) the negative fact that the accused had no license or permit to own
or possess the firearm or explosive which fact may be established by the testimony or certification of a representative of
the PNP Firearms and Explosives Unit that the accused has no license or permit to possess the subject firearm or
explosive. x x x We stress that the essence of the crime penalized under P. D. 1866 is primarily the accuseds lack of license
or permit to carry or possess the firearm, ammunition or explosive as possession by itself is not prohibited by
law.[38] Illegal possession of firearm is a crime punished by special law, a malum prohibitum, and no malice or intent to
commit a crime need be proved. [39] To support a conviction, however, there must be possession coupled with intent to
possess (animus possidendi) the firearm.[40]

In upholding the prosecution and giving credence to the testimony of police officer Jerito A. Adigue, the trial court
relied on the presumption of regularity in the performance of official duties by the police officers. [41] This is a flagrant
error because his testimony is directly contradictory to the official records of the Firearms and Explosives Division, PNP,
which must prevail. Morever, the presumption of regularity can not prevail over the Constitutional presumption of
innocence.[42] Right from the start, P/Sr. Insp. Jerito A. Adigue was aware that petitioner possessed a valid license for the
caliber .45 Colt pistol in question. Despite this fact, P/Sr. Insp. Adigue proceeded to detain petitioner and charged him
with illegal possession of firearms. We quote pertinent portions of the testimony of petitioner:

Q: What else did Adigue tell you after showing to him the license of your cal. .45 pistol and the alleged cal. .22 found
in a drawer in your kitchen?

A: He told me that since my firearm is licensed, he will return my firearm, give him ten thousand pesos (P10,000.00)
and for me to tell who among the people in our barangay have unlicensed firearm, sir.

Q: How did he say about the ten thousand pesos?

A: He said palit kalabaw na lang tayo sir.

Q: And what did you answer him?

A: I told him my firearm is licensed and I do not have money, if I have, I will not give him, sir, because he was just
trying to squeeze something from me.

Q: How about the unlicensed firearms in your barangay which he asked from you?

A: I said I do not know any unlicensed firearm in our barangay, sir.

Q: About the .22 cal. pistol, what was your answer to him?

A: I told him that it was not mine, they planted it, sir.

Q: What did he say next?

A: He said that it is your word against mine, the Court will believe me because I am a police officer, sir.

Q: What was your comment to what he said?

A: I said my firearm is licensed and we have Courts of law who do not conform with officials like you and then he
laughed and laughed, sir.[43]
The trial court was obviously misguided when it held that it is a matter of judicial notice that a caliber .45 firearm can
not be licensed to a private individual. [44] This ruling has no basis either in law or in jurisprudence. [45]

Second issue. The seizure of items not mentioned in the search warrant was illegal.

With respect to the .22 caliber revolver with Serial No. 48673, that the police raiding team found in a drawer at the
kitchen of petitioners house, suffice it to say that the firearm was not mentioned in the search warrant applied for and
issued for the search of petitioners house. Section 2, Article III of the Constitution lays down the general rule that a search
and seizure must be carried out through or on the strength of a judicial warrant, absent which such search and seizure
becomes unreasonable within the meaning of said constitutional provision. [46]Supporting jurisprudence thus outlined the
following requisites for a search warrants validity, the absence of even one will cause its downright nullification: (1) it must
be issued upon probable cause; (2) the probable cause must be determined by the judge himself and not by the
applicant or any other person; (3) in the determination of probable cause, the judge must examine, under oath or
affirmation, the complainant and such witnesses as the latter may produce; and (4) the warrant issued must particularly
describe the place to be searched and persons or things to be seized. [47] Seizure is limited to those items particularly
described in a valid search warrant. Searching officers are without discretion regarding what articles they shall
seize.[48] Evidence seized on the occasion of such an unreasonable search and seizure is tainted and excluded for being
the proverbial fruit of a poisonous tree. In the language of the fundamental law, it shall be inadmissible in evidence for
any purpose in any proceeding.[49]

In this case, the firearm was not found inadvertently and in plain view. It was found as a result of a meticulous search
in the kitchen of petitioners house. This firearm, to emphasize, was not mentioned in the search warrant. Hence, the
seizure was illegal.[50] The seizure without the requisite search warrant was in plain violation of the law and the
Constitution.[51] True that as an exception, the police may seize without warrant illegally possessed firearm or any
contraband for that matter, inadvertently found in plain view. However, [t]he seizure of evidence in plain view applies
only where the police officer is not searching for evidence against the accused, but inadvertently comes across an
incriminating object.[52] Specifically, seizure of evidence in plain view is justified when there is:

(a) a prior valid intrusion based on the valid warrantless arrest in which the police are legally present in the
pursuit of their official duties;

(b) the evidence was inadvertently discovered by the police who had the right to be where they are;

(c) the evidence must be immediately apparent, and

(d) plain view justified mere seizure of evidence without further search. [53]

Hence, the petitioner rightly rejected the firearm as planted and not belonging to him. The prosecution was not
able to prove that the firearm was in the effective possession or control of the petitioner without a license. In illegal
possession of firearms, the possessor must know of the existence of the subject firearm in his possession or control. In
People v. de Gracia,[54] we clarified the meaning of possession for the purpose of convicting a person under P. D. No.
1866, thus: x x x In the present case, a distinction should be made between criminal intent and intent to possess. While
mere possession without criminal intent is sufficient to convict a person for illegal possession of a firearm, it must still be
shown that there was animus possidendi or an intent to possess on the part of the accused. x x x x Hence, the kind of
possession punishable under P. D. No. 1866 is one where the accused possessed a firearm either p hysically or
constructively with animus possidendi or intention to possess the same. [55] That is the meaning of animus possidendi. In
the absence of animus possidendi, the possessor of a firearm incurs no criminal liability.

The same is true with respect to the 5.56 cal. magazine found in the bedroom of petitioners daughter. The seizure
was invalid and the seized items were inadmissible in evidence. As explained in People v. Doria,[56] the plain view doctrine
applies when the following requisites concur: (1) the law enforcement officer is in a position where he has a clear view of
a particular area or has prior justification for an intrusion; (2) said officer inadvertently comes across (or sees in plain view)
a piece of incriminating evidence; and (3) it is immediately apparent to such officer that the item he sees may be
evidence of a crime or a contraband or is otherwise subject to seizure.

With particular reference to the two 2-way radios that the raiding policemen also seized in the bedroom of
petitioners daughter, there was absolutely no reason for the seizure. The radios were not contraband per se. The
National Telecommunications Commission may license two-way radios at its discretion. [57] The burden is on the
prosecution to show that the two-way radios were not licensed. The National Telecommunication Commission is the sole
agency authorized to seize unlicensed two-way radios. More importantly, admittedly, the two-way radios were not
mentioned in the search warrant. We condemn the seizure as illegal and a plain violation of a citizens right. Worse, the
petitioner was not charged with illegal possession of the two-way radios.

Consequently, the confiscation of the two 2-way radios was clearly illegal. The possession of such radios is not even
included in the charge of illegal possession of firearms (violation of P. D. No. 1866, as amended) alleged in the
Information.

WHEREFORE, the Court hereby REVERSES the decision of the Court of Appeals in CA-G. R. CR No. 22255,
promulgated on July 09, 1999.

The Court ACQUITS petitioner Vicente del Rosario y Nicolas of the charge of violation of P. D. No. 1866, as amended
by R. A. No. 8294 (illegal possession of firearms and ammunition), in Criminal Case No. 800-M-96, Regional Trial Court,
Bulacan, Branch 20, Malolos.

Costs de oficio.

The Chief, Firearms and Explosives Division, PNP shall return to petitioner his caliber .45 Colt pistol, with Serial
Number No. 70G23792, the five (5) extra magazines and twenty seven (27) rounds of live ammunition, and the two
2-way radios confiscated from him. The Chief, Philippine National Police, or his duly authorized representative shall show
to this Court proof of compliance herewith within fifteen (15) days from notice. The .22 caliber revolver with Serial No.
48673, and eight (8) live ammunition and the magazine for 5.56 mm. caliber Armalite rifle are confiscated in favor of the
government.

SO ORDERED.

G.R. No. 161602 July 13, 2010


ALFREDO T. ROMUALDEZ, Petitioner,
vs.
THE HONORABLE SANDIGANBAYAN (THIRD DIVISION) and THE REPUBLIC OF THE PHILIPPINES,Respondents.

DECISION

ABAD, J.:

This case is about the Ombudsman’s authority to conduct preliminary investigation in a forfeiture case where the
petitioner allegedly amassed ill-gotten wealth before February 25, 1986.

The Facts and the Case

On March 6, 1996 respondent Republic of the Philippines (Republic) filed an action for the forfeiture of alleged unlawfully
acquired property with the Sandiganbayan in Civil Case 0167 against petitioner Alfredo T. Romualdez and his wife Agnes
Sison Romualdez as well as against Romson Realty, Inc., R & S Transport, Inc., Fidelity Management, Inc., and Dio Island
Resort, Inc. (collectively, the Romualdezes) pursuant to Republic Act (R.A.) 1379.1

On January 16, 2000 the Romualdezes filed a motion to dismiss the action on grounds of a) violation of their right to a
speedy disposition of their case; b) lack of jurisdiction of the Sandiganbayan over the action; c) prematurity; d)
prescription; and e) litis pendentia. On September 11, 2002 the Sandiganbayan denied the motion. It also denied on
March 10, 2003 their subsequent motion for reconsideration.

On March 31, 2003 the Romualdezes next filed a motion for preliminary investigation and to suspend proceedings. 2They
claim that since Civil Case 0167 was a forfeiture proceeding filed under R.A. 1379, the Ombudsman should have first
conducted a "previous inquiry similar to preliminary investigations in criminal cases" before the filing of the case pursuant
to Section 2 of the law.3

In its Comment4 on the motion, the Republic pointed out that the Office of the Ombudsman in fact conducted such a
preliminary investigation in 1991 in OMB-0-91-08205 and issued on January 22, 1992 a resolution, recommending the
endorsement of the matter to the Office of the Solicitor General (OSG) for the filing of the forfeiture case.

On August 13, 2003 the Sandiganbayan issued a resolution, 6 denying the Romualdezes’ March 31, 2003 motion. It also
denied by resolution on December 3, 2003 their subsequent motion for reconsideration. 7 Thus, the Romualdezes filed
the present petition for certiorari and prohibition, seeking to annul the Sandiganbayan’s rulings and prevent it from
further proceeding with Civil Case 0167 until another preliminary investigation is conducted in their case.

The Question Presented

The sole question presented in this case is whether or not the preliminary investigation that the Ombudsman conducted
in OMB-0-91-0820 in 1991 satisfied the requirement of the law in forfeiture cases.

The Ruling of the Court


The Romualdezes point out that the Office of the Ombudsman should not have conducted an investigation of their case,
since its authority to investigate ill-gotten or unexplained wealth cases pertained only to wealth amassed after February
25, 1986 and not before that date.8 Since the Romualdezes acquired the allegedly ill-gotten wealth involved in their case
as early as 1970, then the Ombudsman had no authority to conduct the investigation that it did in OMB-0-91-0820. In the
absence of a prior valid preliminary investigation, the forfeiture proceedings in Civil Case 0167 cannot continue.

In addition, the Romualdezes insist that it was improper for the Ombudsman to have conducted its investigation in their
absence. The spouses Alfredo and Agnes Romualdez were in the United States when that investigation took place. They
were thus denied their right to be heard in that investigation.

But, as the Sandiganbayan correctly pointed out, quoting Republic v. Sandiganbayan,9 the Ombudsman has under its
general investigatory powers the authority to investigate forfeiture cases where the alleged ill -gotten wealth had been
amassed before February 25, 1986. Thus:

Nonetheless, while we do not discount the authority of the Ombudsman, we believe and so hold that the exercise of his
correlative powers to both investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained
wealth is restricted only to cases for the recovery of ill-gotten and/or unexplained wealth which were amassed after
February 25, 1986. Prior to said date, the Ombudsman is without authority to initiate such forfeiture proceedings. We,
however, uphold his authority to investigate cases for the forfeiture or recovery of such ill-gotten and/or unexplained
wealth amassed even before the aforementioned date, pursuant to his general investigatory power under Section 15(1) of
Republic Act No. 6770.10 (Emphasis supplied)

And, although it was the Ombudsman who conducted the preliminary investigation, it was the OSG that instituted th e
action in Civil Case 0167 in line with the Court’s ruling in the above-cited Republic and other cases that followed.1avvphi1

The Court cannot also subscribe to the Romualdezes’ claim that they are entitled to a new preliminary investigation
since they had no opportunity to take part in the one held in 1991, in OMB-0-91-0820. They admit that the subpoena for
that investigation had been sent to their last known residence at the time it was conducted. 11 The Republic categorically
insists that the appropriate subpoena had been served on the Romualdezes. 12

Actually, the lament of the spouses was that they left the Philippines because of danger to their lives after the EDSA
revolution of February 1986 and so could not take part in the proceedings against them. While it is true that the Court
characterized the departure of the Romualdezes as forced upon them by the uncertainty of the situation in 1986, it also
said that such was the case only until things shall have stabilized. 13 The Court will take judicial notice of the fact that the
people’s ratification of the 1987 Constitution on February 2, 1987 signaled the return to normalcy of the political situation
in the Philippines. Consequently, the Romualdezes had no valid excuse for not responding to the subpoena served on
them at their last known address in 1991, which they do not deny having received.

The Ombudsman could not be faulted for proceeding with the investigation of the Romualdezes’ cases when they did
not show up despite notice being sent to them at their last known residence. As the Court held in a case:

The New Rules on Criminal Procedure "does not require as a condition sine qua non to the validity of the proceedings [in
the preliminary investigation] the presence of the accused for as long as efforts to reach him were made, and an
opportunity to controvert the evidence of the complainant is accorded him. The obvious purpose of the rule is to block
attempts of unscrupulous respondents to thwart the prosecution of offenses by hiding themselves or by employing
dilatory tactics."14

In sum, no reason exists for suspending or interrupting the conduct of the forfeiture proce edings before the
Sandiganbayan.

WHEREFORE, the Court DISMISSES the petition for lack of merit.

SO ORDERED.
G.R. No. 160684, September 02, 2015

CLT REALTY DEVELOPMENT CORPORATION, Petitioner, v. HI-GRADE FEEDS CORPORATION, REPUBLIC OF THE
PHILIPPINES (THROUGH THE OFFICE OF THE SOLICITOR GENERAL), REGISTRY OF DEEDS OF METRO MANILA, DISTRICT
III, CALOOCAN CITY , AND THE COURT OF APPEALS, Respondents.

DECISION

PEREZ, J.:

The properties in dispute were formerly part of the notorious Maysilo Estate left by Gonzalo Tuason, the vastness of
which measures 1,660.26 hectares, stretching across Caloocan City, Valenzuela, and Malabon, covered by five (5) mother
titles or Original Certificate of Title (OCT). One of the mother titles is OCT No. 994, the mother title in dispute. Later on,
smaller lots forming part of the Maysilo Estate were sold to different persons. Several subsequent subdivisions,
consolidations, and one expropriation of the Estate, spawned numerous legal disputes, living-up to the name "Land of
Caveat Emptor."1 One of these disputed lots was Lot 26, the property subject of this litigation.

Assailed in this Petition for Review on Certiorari are the Decision2 and Resolution3 of the Court of Appeals in CA-G.R. CV
No. 53770 dated 18 June 2003 and 28 October 2003, respectively, which annulled petitioner CLT Realty Development
Corporation's (CLT) TCT No. T-177013 and affirmed Hi-Grade Feeds Corporation's (Hi-Grade) TCTs No. 237450 and No.
T-146941.

The conflict arose due to an overlapping of the properties of CLT and Hi-Grade, which prompted CLT to file a case for
Annulment of Transfer Certificates of Title, Recovery of Possession, and Damages before the Regional Trial Court (RTC)
of Caloocan City, Branch 121, docketed as Civil Case No. C-15463 against Hi-Grade.

Version of Hi-Grade

Respondent Hi-Grade is the registered owner of two (2) parcels of land covered by TCT Nos. 237450 and T-146941,
derived from TCT No. 4211 of the Register of Deeds of the Province of Rizal, registered under t he names of Alejandro
Ruiz (Ruiz) and Mariano Leuterio (Leuterio), which is a derivative title of OCT No. 994, the mother title. 4

Tracing the line of transfer that preceded the title of Hi-Grade, it is averred that TCT No. 4211 was registered under the
names of Ruiz and Leuterio on 9 September 1918. Later, Lot 26 was sold to Francisco Gonzalez (Gonzalez), which resulted
in the cancellation of TCT No. 4211 and its replacement by TCT No. 5261, registered under the name of Gonzalez. 5

Upon Gonzalez's death, TCT No. 5261 was cancelled and replaced by TCT No. 35486, registered under the name of his
surviving spouse Rufina Narciso Vda. De Gonzalez. The land covered by TCT No. 35486 was subdivided into seven (7)
lots under subdivision plan Psd-21154. By virtue of Psd-21154, TCT No. 35486 was cancelled and seven (7) new titles were
issued, TCTs No. 1368 to No. 1374, registered under the children of Gonzalez.

In 1947, the Government expropriated the seven lots. 6 By virtue of the expropriation, TCTs No. 1368 to No. 1374 were
cancelled and replaced by TCTs No. 12836 to No. 12842. Afterwards, by virtue of Consolidated Subdivision Plan Psd (LRC)
Pcd-1828, the Government consolidated the titles and then further subdivided the property into 77 lots.

One of the 77 lots was registered in the name of Benito Villanueva under TCTs No. 23027 to No. 23028, which was
further subdivided into Lot-A and 17-B, pursuant to subdivision plan Psd-276839. One of the properties in dispute is Lot
17-B, which was later on registered in the name of Jose Madulid, Sr. (Madulid, Sr.), under TCT No. C-32979, which was
later on sold to Hi-Grade.

Another lot resulting from the Government's consolidation and subdivision of the Maysilo Estate into 77 lots, is Lot No.
52, which was registered in the name of Inocencio Alvarez (Alvarez) under TCT No. 7363. Soon after, Alvarez sold Lot No.
52 to Madulid, Sr. TCT No. 7363 was cancelled and TCT No. 7364 was issued to Madulid, Sr. Afterwards, Madulid, Sr. sold
the lot to Hi-Grade. This is another one of the properties in dispute.

As a review, first, Hi-Grade traces its title to TCTs No. 7364 and No. C-32979, which were registered in the name Madulid,
Sr., which in turn stemmed from TCT Nos. 36557-63/T-460.

TCT Nos. 36557-63/T-460 were derived from TCTs No. 1368 to No. 1374.

TCTs No. 1368 to No. 1374 stemmed from TCT No. 35486, which was subdivided into smaller lots.

TCT No. 35486 was derived from TCT No. 5261. TCT No. 5261 stemmed from TCT No. 4211.

Finally, TCT No. 4211 was derived from OCT No. 994, the mother title.

Version of CLT

CLT is the registered owner of TCT No. T-177013, by virtue of a Deed of Absolute Sale with Real Estate Mortgage dated 10
December 1988, executed by the former registered owner, Estelita I. Hipolito.

CLT argued that Hi-Grade's title is null and void for being fake and spurious based on the following:

1. As shown in the face of TCT No. 4211, it purports to have been derived from OCT No.
994;ChanRoblesVirtualawlibrary

2. The original copy of OCT No. 994, which is existing and in due form, on file with the Registry of Deeds of
Caloocan City, contains dilapidated pages and no longer contains the pages where Lot No. 26 and some other
lots are supposedly inscribed.

3. Upon examination of the original copy of OCT No. 994, it can be seen that the technical descriptions of the lots
and the certificate itself are entirely written in the English language. On the other hand, the technical descriptions
on the alleged TCTs No. 4211, No. 5261, and No. 35486 are still inscribed in the Spanish language.
4. The dates of the original survey of OCT No. 994, the mother title of TCT No. 4211, i.e., 8-27 September, 4-21
October and 17-18 November 1911, are not indicated on TCTs No. 4211, No. 5261, and No. 35486. Rather, an
entirely different date, 22 December 1917, is indicated at the end of the Spanish technical descriptions on the
alleged TCTs No. 4211, No. 5261, and No. 35486.

5. The parcel of land covered successively by TCTs No. 4211, No. 5261, and No. 35486 is not identified by a lot
number and there is no reference or mention of Lot No. 26 of the Maysilo Estate in the technical description of
said titles.

6. There is no subdivision survey plan number indicated on TCTs No. 4211, No. 5261, and No. 35486 covering the
subdivision of Lot No. 26 of the Maysilo Estate.

7. The plan Psd-21154 which subdivided the lot covered by TCT No. 35486 (formerly covered by TCT No. 4211, then
TCT No. 5261), could not be traced at the official depository of plans, which is the Lands Management Bureau
(LMB). According to the EDPS Listings of the Records Management Division of the LMB, there is no record of
Plan Psd-21154. Said EDPS listings indicate those records which were surveyed after the Second World War. It
appears, from TCTs No. 1368 to No. 1374, plan PSD-21154 was done after the war on 15, 21, 29 September and
5-6 October 1946.

8. The technical descriptions inscribed on TCTs No. 1368 to No. 1374 show that the tie points deviated from the
mother lot's tie point, which is the Bureau of Lands Location Monument ("BLLM") No. 1, Caloocan. Instead,
different location monuments of the adjoining Piedad Estate were used. The tie point used in TCT No. 1368 is
B.M. 10, Piedad Estate; while TCTs No. 1369 and No. 1470 used B.M. No. 8, Piedad Estate; and TCTs No. 1371, No.
1372, No. 1373, and No. 1374 used B.M. No. 7, Piedad Estate. The changing tie points resulted in the shifting of
the position of the seven lots in relation to the mother lot, using their technical descriptions inscribed on the face
of the titles. Thus, when plotted, the seven lots do not fall exactly inside the boundary of the mother lot. The
same is true when the lots described on the titles of Hi-Grade are plotted on the basis of their technical
descriptions inscribed on the titles.

9. TCT No. 4211 contains patent infirmities, inconsistencies, and irregularities indicating that it is a falsified
document representing a fictitious title and is, therefore, null and void. The fact was confirmed by an
examination by the Forensic Chemistry Division of the National Bureau of Investigation, which concluded that
TCT No. 4211 was prepared only sometime in the 1940s and not in 1918, as it is made to appear on the face of the
document. Thus, the series of titles from where Hi-Grade's titles were derived, starting from TCTs No. 4211, No.
5261, and No. 35486, and up to and including the titles of Hi-Grade, are also necessarily null and void.

During trial, CLT presented the following witnesses: (1) Ramon Velazquez (Velazquez), Officer-in-Charge of the Survey
Records Section, Records Management Division of the LMB, who testified that the LMB does not have a copy of Psd
21154; (2) Norberto Vasquez, Jr. (Vasquez), Deputy Register of Deeds of Caloocan City, who identified the various titles
relevant to the case; (3) Juanito Bustalino (Bustalino), a licensed Geodetic Engineer, who testified that CLT engaged his
services to survey the subject property and discovered that there was an overlap between CLT's and Hi-Grade's titles; (4)
Atty. Rafael Antonio M. Santos, one of the counsel of CLT; and (5) Aida R. Villora-Magsipoc, a Forensic Chemist of the
Forensic Division, National Bureau of Investigation, who examined the titles as an expert witness.

On the other hand, Hi-Grade presented its sole witness, Atty. Jose Madulid, counsel for and stockholder of Hi-Grade, and
son of Hi-Grade's predecessor, Jose Madulid, Sr., who testified that his family has been occupying the subject properties
under the concept of an owner for more than twenty-seven (27) years, until the properties were transferred to Hi-Grade.

The Ruling of the RTC

After trial, the RTC7 ruled in favor of CLT. According to the RTC, Hi-Grade's title, the older title, cannot prevail over CLT's
title because it suffers from patent defects and infirmities. Although Hi-Grade paid realty taxes on the subject properties,
it is not considered as a conclusive proof of ownership. The dispositive portion of the Decision of the RTC dated 27
December 1995 reads:

WHEREFORE, premises considered and by preponderance of evidence, judgment is hereby rendered in


favor of the plaintiff CLT REALTY DEVELOPMENT CORP. and against defendants HI-GRADE FEEDS CORP.
et. al., ordering

1. TCT Nos. 237450 and 146941 in the name of the defendant null and void and accordingly
ordering their cancellation;ChanRoblesVirtualawlibrary

2. defendant to vacate the portion of Lot No. 26 presently occupied by it and turn over possession
of the same to the plaintiff; and

3. defendant to pay the costs of suit.

SO ORDERED.8

Aggrieved, Hi-Grade filed a Motion for New Trial and/or Reconsideration on the grounds of newly discovered evidence
and serious and patent errors in the court's appreciation of evidence and factual findings based on the decision of the
court in Civil Case No. C-15491, entitled "CLT v. Sto. Niño Kapithahayan Association." The RTC denied the motion for utter
lack of merit. According to the RTC, the ruling in favor of Hi-Grade in Sto. Niño is not a newly-discovered evidence, as
Hi-Grade could not have failed to produce such evidence if it exercised reasonable diligence. Hi-Grade's reliance in the
aforesaid case is already moot and academic as the court in Sto. Niño already reconsidered its decision and upheld the
validity of CLT's title.

The Ruling of the Court of Appeals

Impelled by the adverse ruling of the RTC, Hi-Grade elevated the case to the Court of Appeals. During the pendency of
the appeal, Hi-Grade filed a Motion to Admit and Take Judicial Notice of Committee Report on Senate Inquiry into
Maysilo Estate Submitted by the Committees on Justice and Human Rights and on Urban Planning, Housing and
Resettlement (Senate Report) on 1 July 1998. The Court of Appeals granted the motion in a Resolution 9 dated 31 August
1998. Included in the Resolution, however, is a statement that although the Court of Appeals takes judicial notice of the
Senate Report, the Court of Appeals is not bound by the findings and conclusions therein. 10
In the meantime, the Office of the Solicitor General (OSG), on behalf of the Republic and in representation of the
Administrator of the Land Registration Authority, filed a Petition for Intervention dated 25 August 1998. The OSG averred
that its intervention is indispensable as it is pursuant to its duty to preserve the integrity of the Torrens system of
registration and to protect the Assurance Fund, in connection with which it can initiate necessary actions for the
annulment of titles irregularly and fraudulently issued. The Court of Appeals granted the OSG motion. The Court of
Appeals resolved the issue on intervention in the appealed Decision dated 18 June 2003. According to the Court of
Appeals, due to the magnitude and significance that will affect the stability and integrity of the Torrens system, the State
has sufficient interest in the case.

Departing from the trial court's findings of fact, the Court of Appeals ruled as baseless the trial court's reliance on the
testimonies of CLT's witnesses, Vasquez and Bustalmo, on the alleged patent infirmities and defects in TCT No. 4211.
According to the Court of Appeals, Vasquez and Bustalino never testified that the issuance of TCT No. 4211 failed to
conform to the registration procedures in 1917, the year it was issued. Also, Vasquez and Bustalino are incompetent to
testify on the customary practices in land registration at that time. Reversing the Decision of the RTC, the Decision of the
Court of Appeals reads:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and a new one entered
DISMISSING CLT's complaint a quo and upholding the validity of TCT Nos. 237450 and T-146941 of
appellant Hi-Grade Feeds Corporation.

Appellant CLT is further ordered to surrender its owner's duplicate copy of TCT No. T-177013 to the
Registrar of Deeds of Caloocan City who is hereby directed to effect its cancellation.

The other incidents are resolved as above indicated. No pronouncements as to costs.

SO ORDERED.11

Hence, the present Petition for Review on Certiorari. In addition to the factual issues raised in the trial court, the Petition
raised the following arguments:

1. The Court of Appeals went beyond the issues resolved by the trial court and formulated its own issue regarding
the date when OCT No. 994 was originally registered which it resolved on the basis of extraneous purported
evidence not presented before the trial court in the instant case, in violation of petitioner CLT Realty's rights to
due process of law.

2. The Court of Appeals perfunctorily, arbitrarily and blindly disregarded the findings of fact and conclusions of the
trial court arrived at after a careful evaluation of the evidence presented by the parties and established on record
and substituted and supplanted the same with its own conclusions based on extraneous evidence not presented
and admitted in evidence before the trial court.

3. The Court of Appeals reversed the decision of the trial court despite the fact that respondent Hi-Grade has failed
to present evidence to refute the established fact that the alleged titles from where its alleged titles are derived
from, i.e., the alleged TCT Nos. 4211, 5261, 35486 and 1368 to 1374, contain patent and inherent technical defects
and infirmities which render them spurious, void and ineffective.

4. The Court of Appeals unjustly made a wholesale rendition in its questioned decision despite the pendency of
important prejudicial motions or incidents which it thereby either peremptorily resolved or rendered moot and
academic, thus, violating petitioner CLT Realty's right to due process of law.

5. The Court of Appeals totally disregarded the rules on evidence and surrendered the independence of the
judiciary by giving full faith and credence to the findings and conclusions contained in the Senate Committee
Report No. 1031 by taking judicial notice of the same, which report was rendered pursuant to proceedings
initiated and conducted without notice to petitioner CLT Realty and thus in gross violation of its right to due
process, and was based on documents that were never authenticated.

6. The Court of Appeals erroneously relied on the allegation raised in the Republic's petitioner for intervention
although the State has no legal interest in the subject matter of the litigation of the instant case and may not
validly intervene in the instant case since the matter in litigation are admittedly privately owned lands which will
not revert to the Republic.

7. The Court of Appeals blindly ignored the fact and worse, failed and refused to rule on the issue that respondent
Hi-Grade is guilty of forum-shopping for which reason the latter's appeal before the Court of Appeals should
have been dismissed.12

Issues

I.

Whether or not the Court of Appeals committed a reversible error when it took judicial notice of the Senate Report

II.

Whether or not the Court of Appeals committed a reversible error when it admitted the Office of the Solicitor General's
Petition for Intervention

III.

Which of the OCTs 994, that dated 19 April 1917 or that dated 3 May 1917, is the valid title?

Our Ruling

First, the incidental matters.


I.

Whether or not the Court of Appeals committed a reversible error when it took judicial notice of the Senate Report

CLT avers that taking judicial notice of the Senate Report is a violation of the Rules of Court and CLT's right to due
process. First, the Senate Report is inadmissible and should not be given any probative value because it was obtained in
violation of Rule 132 of the Rules of Court, considering that the Senate Report is unauthenticated and is thus deemed
hearsay evidence. Contrary to the mandatory procedure under Rule 132 of the Rules of Court, which requires
examination of documentary and testimonial evidence, the Senate Report was not put to proof and CLT was deprived of
the opportunity to conduct a cross-examination on the Senate Report. And it is also contended that the right of CLT to
due process was violated because the proceedings in the Senate were conducted without notice to CLT. Finally, the
admission in evidence of the Senate Report violated the time-honored principle of separation of powers as it is an
encroachment into the jurisdiction exclusive to the courts.

CLT misses the point. Taking judicial notice of acts of the Senate is well within the ambit of the law. Section 1 of Rule 129
of the Revised Rules on Evidence provides:

SECTION 1 . Judicial notice, when mandatory. — A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history, forms of
government and symbols of nationality, the law of nations, the admiralty and maritime courts of the
world and their seals, the political constitution and history of the Philippines, the official acts of
legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time,
and the geographical divisions, (1a) (Emphasis and underscoring supplied)

Judicial notice is the cognizance of certain facts that judges may properly take and act on without proof because these
facts are already known to them; 13 it is the duty of the court to assume something as a matter of fact without need of
further evidentiary support.14 Otherwise stated, by the taking of judicial notice, the court dispenses with the traditional
form of presentation of evidence, i.e. the rigorous rules of evidence and court proceedings such as cross-examination.15

The Senate Report, an official act of the legislative department, may be taken judicial notice of.

CLT posits that the Court of Appeals violated the time-honored principle of separation of powers when it took judicial
notice of the Senate Report. This contention is baseless. We adopt the pronouncements of this Court in Angeles v. The
Secretary of Justice:16

To be sure, this Court did not merely rely on the DOJ and Senate reports regarding OCT No. 994. In the
2007 Manotok case, this Court constituted a Special Division of the Court of Appeals to hear the cases
on remand, declaring as follows:chanRoblesvirtualLawlibrary

Since this Court is not a trier of fact[s], we are not prepared to adopt the findings made by the DOJ and
the Senate, or even consider whether these are admissible as evidence, though such questions may be
considered by the Court of Appeals upon the initiative of the parties, x x x The reports cannot
conclusively supersede or overturn judicial decisions, but if admissible they may be taken into account
as evidence on the same level as the other pieces of evidence submitted by the parties. The fact that
they were rendered by the DOJ and the Senate should not, in itself, persuade the courts to accept them
without inquiry. The facts and arguments presented in the reports must still undergo judicial scrutiny
and analysis, and certainly the courts will have the discretion to accept or reject them. 17 (Emphasis and
underscoring supplied)

Thus, the Senate Report shall not be conclusive upon the courts, but will be examined and evaluated based on its
probative value. The Court of Appeals explained quite pointedly why the taking of judicial notice of the Senate Report
does not violate the republican principle. Thus:

However, the question of the binding effect of that Report upon this Court is altogether a different
matter. Certainly, a determination by any branch of government on a justiciable matter which is properly
before this Court for adjudication does not bind the latter. The finding of the Senate committees may be
the appropriate basis for remedial legislation but when the issue of the validity of a Torrens title is
submitted to a court for resolution, only the latter has the competence to make such a determination
and once final, the same binds not only the parties but all agencies of government. 18

That there is such a document as the Senate Report was all that was conceded by the Court of Appeals. It did not allow
the Senate Report to determine the decision on the case.

II.

Whether or not the Court of Appeals committed a reversible error when it admitted the Office of the Solicito r General's
Petition for Intervention

The Republic maintains that the proliferation of spurious or fake titles covering the infamous Maysilo Estate poses a
serious threat to the integrity of the Torrens system and the Assurance Fund. The Republic asserts that because it is
bound to safeguard and protect the integrity of the Torrens system and Assurance Fund, it is duty-bound to intervene in
the present case. In granting the intervention, the Court of Appeals ruled that considering the magnitude and
significance of the issues spawned by the Maysilo Estate, enough to affect the stability and integrity of the Torrens
system, the Republic is allowed to intervene.

CLT, on the other hand, contends that the Republic's intervention is baseless. According to CLT, the Republic has no legal
interest in the properties as the subject properties are not public lands and as such, will not revert to the Republic.
Further, there is no threat or claim against the Assurance Fund. Anchoring on Presidential Decree No. 478 and
Administrative Code of 1987, CLT claims that the only action which the Office of the Solicitor General may file on behalf
of the Republic in connection with registered lands is an action for the reversion to the Government of lands of the public
domain and improvements thereon, as well as lands held in violation of the Constitution. 19

This time, we agree with CLT.


Intervention is only allowed before or during trial. Citing Sps. Oliva v. CA,20 CLT argues that the Petition for Intervention
was time-barred for having been filed beyond the period prescribed in Section 2, Rule 19 of the Rules of Court, i.e.,
before rendition of judgment. In Oliva, the Court clarified that intervention is unallowable when the case has already
been submitted for decision, when judgment has been rendered, or when judgment has already became final and
executory. And, intervention is only allowed when the intervenors are indispensable parties.

Although we are cognizant of the exception that the Court may wield its power to suspend its own rules and procedure
in lieu of substantial justice and for compelling reasons, 21 the attendant circumstances are not availing in the present case.

The Republic is not an indispensable party in the instant litigation. An indispensable party is a part y-in-interest without
whom no final determination can be had of an action, and who shall be joined either as plaintiffs or defendants. 22 Here,
even without the Republic as participant, a final determination of the issues can be attained.

Anent the opportuness of intervention, the Court held in Cariño v. Ofilada23 that it may be allowed only before or during
trial. The term trial is used in its restricted sense, i.e., the period for the introduction of evidence by both parties. The
period of trial terminates when the judgment begins. As this case was already in its appeal stage when intervention was
sought, it could no longer be allowed.

CLT further avers that because there was no claim against the Assurance Fund, intervention is improper. Section 95 of
P.D. 1529 provides for the grounds when a party can claim against the Assurance Fund:

Section 95. Action for compensation from funds. A person who, without negligence on his part, sustains
loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of
the land under the operation of the Torrens system of arising after original registration of land, through
fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in
any entry or memorandum in the registration book, and who by the provisions of this Decree is barred
or otherwise precluded under the provision of any law from bringing an action for the recovery of such
land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the
recovery of damages to be paid out of the Assurance Fund.

Indeed, whatever party is favored in this case, the losing party may file a claim against the Assurance Fund as the present
case involves the operation of the Torrens system. However, the action to claim against the Assurance Fund may be dealt
with in a separate proceeding.

Now, the merits of this case.

Parenthetically, although the general rule is that the factual findings of the trial court are accorded respect and are not
generally disturbed on appeal, the aforesaid rule does not apply in the case at bar, as the findings of the trial court and
the appellate court are contradictory. 24

We shall now discuss the bottom issues.


III.

Which off the OCTs 994, that dated 19 April 1917 or that dated 3 May 1917, is the valid title?

The mother title, OCT 994

The arguments of the parties come from apparently the same document. Notably, however, the parties' OCTs No. 994
contain different dates of registration, namely:chanRoblesvirtualLawlibrary

CLT's OCT No. 994 is dated 19 April 1917

Hi-Grade's OCT No. 994 is dated 3 May 1917

A title can only have one date of registration, as there can only be one title covering the same property. The date of
registration is reckoned from the time of the title's transcription in the record book of the Registry of Deeds. 25 Therefore,
the date appearing on the face of a title refers to the date of issuance of the decree of registration, as provided in
Sections 41 and 42 of the Land Registration Act or Section 40 of the P.D. 1529:

Section 41. Immediately upon the entry of the decree of registration the clerk shall send a certified copy
thereof, under the seal of the court to the register of deeds for the province, or provinces or city in
which the land lies, and the register of deeds shall transcribe the decree in a book to be called the
"Registration Book," in which a leaf, or leaves, in consecutive order, shall be devoted exclusively to each
title. The entry made by the register of deeds in this book in each case shall be the original certificate of
title, and shall be signed by him and sealed with the seal of the court. x x x

Section 42. The certificate first registered in pursuance of the decree of registration in regard to any
parcel of land shall be entitled in the registration book, "original certificate of title, entered pursuant to
decree of the Court of Land Registration, dated at" (stating the time and place of entry of decree and
the number of case). This certificate shall take effect upon the date of the transcription of the
decree. Subsequent certificates relating to the same land shall be in like form, but shall be entitled
"Transfer from number" (the number of the next previous certificate relating to the same land), and also
the words "Originally registered" (date, volume, and page of registration). (Emphases and underscoring
supplied)

Based on Decree No. 36455 in Land Registration Case No. 4429, the decree registering OCT No. 994, the date of the
issuance is 19 April 1917 while on the other hand, OCT No. 994 was received for transcription by the Register of Deeds on
3 May 1917. In this case, the date which should be reckoned as the date of registration of the title is the date when the
mother title was received for transcription, 3 May 1917. As correctly found by the Court of Appeals:

For sure, the very copy of OCT No. 994, presented by Appellee CLT no less and marked as its Exhibit "D",
shows on its face that the date April 19, 1917 refers to the issuance of the decree of registration by the
Honorable Norberto Romualdez, while May 3, 1917 pertains to the date when the same decree was
Received for transcription in the Office of the Register of Deeds. 26

Therefore, as the date of transcription in the record book of the Registry of Deeds is 3 May 1917, we rule that the genuine
title is the title of Hi-Grade.

The derivative title, TCT No. 4211

As correctly ruled by the Court of Appeals, CLT failed to prove by preponderance of evidence, the alleged defe cts and
infirmities in TCT No. 4211, the title from whence Hi-Grade's titles were derived.

CLT failed to prove that TCT No. 4211 did not conform to the registration procedures at the time it was prepared.
Contrary to the findings of the trial court, the Court cannot give credence to the testimony of CLT's witnesses,
Vasquez27 and Bustalino.28 Vasquez is the Deputy Register of Deeds of Caloocan City, while Bustalino is a Geodetic
Engineer. For their testimonies to matter, CLT must first establish their competence as regards the registration rules in
land registration in 1918, at the time TCT No. 4211 was prepared. CLT failed to discharge such burden.

On CLT's allegation that the Lands Management Bureau (LMB) has no records of Psd 21154, we note that CLT did not
prove that the LMB indeed has no such records. CLT's witness, Velasquez, merely testified that he cannot ascertain
whether or not Psd 21154 was burned or lost during the world war. 29 Just as important, while Psd 21154 could not be
located, it was not only testified to that it may have been lost or burned during the world war; a blue print copy of the
same is being kept in the vault of the Register of Deeds of Pasig City.

As regards the findings of the NBI Forensic Chemist on the age of TCT No. 4211, the Court of Appeals correctly found
that such findings are inconclusive because the Chemist did not conclusively state that TCT No. 4211 could not have been
prepared in 1918.30 Also, the Chemist, in her cross-examination, admitted that she did not know who supplied her copies
of the TCTs and that she has not seen any standard document dated 1918. 31

On the matter regarding the discrepancy between the dates of survey and issuance, tie points, and language used in TCT
No. 4211 and OCT No. 994, CLT's contention must fail for the obvious reason that the basis of CLT's allegation is the
non-existent mother title, OCT No. 994 dated 19 April 1917. Thus, as OCT No. 994 dated 19 April 1917 has been
established as null and void, it cannot serve as precedent for ascertaining the genuineness of TCT No. 4211.

What matters most in this case is that CLT questioned the title of Hi-Grade for the purpose of having CLT's own title
upheld. Instead of establishing the genuineness of its own title, CLT attacked Hi-Grade's titles. However, CLT failed to
establish the chain of titles linking its TCT No. T-177013 to the mother title, OCT No. 994. It failed to prove the
"circumstances under which its predecessor-in-interest acquired the whole of Lot 26 of the Maysilo Estate. Ironically, it is
even by CLT's presentation of OCT No. 994 and of the succession of titles previous to those held by appellant Hi -Grade
that the latter's titles [was] established as genuine derivative titles of OCT No. 994." 32

Indeed, CLT's evidence must stand or fall on its own merits and cannot be allowed to draw strength from the alleged
weakness of the evidence of Hi-Grade. As already shown, such allegation was proven wrong by documents on records.

As opposed to CLT's evidence on the alleged infirmities in Hi-Grade's titles, Hi-Grade presented muniments of title, tax
declarations or realty tax payments, on the subject properties. 33 While tax declarations and receipts are inconclusive
evidence of ownership or of the right to possess land, they are prima facie proof of ownership or possession and may
become the basis of a claim for ownership when it is coupled with proof of actual possession of the property. 34 In the
case at bar, Hi-Grade is the actual possessor of the subject property. 35

To sum up, Hi-Grade was able to establish the chain of titles linking its titles, TCTs No. 237450 and T-14691, to the
derivative title, TCT No. 4211, to the mother title, OCT No. 994. 36 As borne by the records, TCT No. 4211 was registered as
a derivative title of OCT No. 994 on 9 September 1918.37 On the other hand, CLT's title, TCT No. R-17994,38 was registered
also as a derivative title of OCT No. 994 only on 12 September 1978. Thus, the reference of both parties is OCT No. 994,
but with different dates: CLT's OCT No. 994 is dated 19 April 1917, while Hi-Grade's OCT No. 994 is dated 3 May 1917.

This factual issue of which OCT No. 994 is genuine is not a novel matter. This Court, in Angeles v. The Secretary of
Justice,39 citing Manotok Realty, Inc. v. CLT Realty Development Corporation,40 exhaustively passed upon and ruled that
the true and valid OCT No. 994 was dated 3 May 1917, not 19 April 1917.

In the recent case of Syjuco v. Republic of the Philippines,41 this Court, reiterated the rulings in Angeles v. The Secretary
of Justice42and Manotok Realty, Inc. v. CLT Realty Development Corporation, that the true and valid OCT No. 994 was
registered on 3 May 1917, not on 19 April 1917, and that any title that traces its source from OCT No. 994 dated 19 April
1917, is deemed void and inexistent.43

As we have priorly pronounced, any title that traces its source to a void title, is also void. The spring cannot rise higher
than its source. Nemo potest plus juris ad alium transferre quam ipse habet. All titles that trace its source to OCT No. 994
dated 19 April 1917, are therefore void, for such mother title is inexistent. 44 CLT so traces its title to OCT No. 994 dated 19
April 1917, the title of CLT is void.45chanroblesvirtuallawlibrary

WHEREFORE, the petition is hereby DISMISSED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No.
53770, entitled "CLT Realty Development Corporation v. Hi-Grade Feeds Corporation, Register of Deeds of Metro Manila,
District III," dated 18 June 2003 and 28 October 2003, respectively, are hereby AFFIRMED.

SO ORDERED.chanroblesvirtuallawlibrary

G.R. Nos. L-27860 and L-27896 March 29, 1974

PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, Administrator of the Testate Estate of Charles Newton Hodges (Sp.
Proc. No. 1672 of the Court of First Instance of Iloilo), petitioner,
vs.
THE HONORABLE VENICIO ESCOLIN, Presiding Judge of the Court of First Instance of Iloilo, Branch II, and AVELINA A.
MAGNO, respondents.

San Juan, Africa, Gonzales and San Agustin for Philippine Commercial and Industrial Bank.

Manglapus Law Office, Antonio Law Office and Rizal R. Quimpo for private respondents and appellees Avelina A. Magno,
etc., et al.

BARREDO, J.:p

Certiorari and prohibition with preliminary injunction; certiorari to "declare all acts of the respondent court in the Testate
Estate of Linnie Jane Hodges (Sp. Proc. No. 1307 of the Court of First Instance of Iloilo) subsequent to the order of
December 14, 1957 as null and void for having been issued without jurisdiction"; prohibition to enjoin the responden t
court from allowing, tolerating, sanctioning, or abetting private respondent Avelina A. Magno to perform or do any acts
of administration, such as those enumerated in the petition, and from exercising any authority or power as Regular
Administratrix of above-named Testate Estate, by entertaining manifestations, motion and pleadings filed by her and
acting on them, and also to enjoin said court from allowing said private respondent to interfere, meddle or take part in
any manner in the administration of the Testate Estate of Charles Newton Hodges (Sp. Proc. No. 1672 of the same court
and branch); with prayer for preliminary injunction, which was issued by this Court on August 8, 1967 upon a bond of
P5,000; the petition being particularly directed against the orders of the respondent court of October 12, 1966 denying
petitioner's motion of April 22, 1966 and its order of July 18, 1967 denying the motion for reconsideration of said order.

Related to and involving basically the same main issue as the foregoing petition, thirty-three (33) appeals from different
orders of the same respondent court approving or otherwise sanctioning the acts of administration of the respondent
Magno on behalf of the testate Estate of Mrs. Hodges.

THE FACTS

On May 23, 1957, Linnie Jane Hodges died in Iloilo City leaving a will executed on November 22, 1952 pertinently
providing as follows:

FIRST: I direct that all my just debts and funeral expenses be first paid out of my estate.

SECOND: I give, devise and bequeath all of the rest, residue and remainder of my estate, both personal and real,
wherever situated, or located, to my beloved husband, Charles Newton Hodges, to have and to hold unto him, my said
husband, during his natural lifetime.

THIRD: I desire, direct and provide that my husband, Charles Newton Hodges, shall have the right to manage, control,
use and enjoy said estate during his lifetime, and he is hereby given the right to make any changes in the physical
properties of said estate, by sale or any part thereof which he may think best, and the purchase of any other or additional
property as he may think best; to execute conveyances with or without general or special warranty, conveying in fee
simple or for any other term or time, any property which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he may elect to sell. All rents, emoluments and income from said estate shall
belong to him, and he is further authorized to use any part of the principal of said estate as he may need or desire. It is
provided herein, however, that he shall not sell or otherwise dispose of any of the improved property now owned by us
located at, in or near the City of Lubbock, Texas, but he shall have the full right to lease, manage and enjoy the same
during his lifetime, above provided. He shall have the right to subdivide any farm land and sell lots therein. and may sell
unimproved town lots.

FOURTH: At the death of my said husband, Charles Newton Hodges, I give, devise and bequeath all of the rest, residue
and remainder of my estate, both real and personal, wherever situated or located, to be equally divided among my
brothers and sisters, share and share alike, namely:

Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Saddie Rascoe, Era Roman and Nimroy Higdon.

FIFTH: In case of the death of any of my brothers and/or sisters named in item Fourth, above, prior to the death of m y
husband, Charles Newton Hodges, then it is my will and bequest that the heirs of such deceased brother or sister shall
take jointly the share which would have gone to such brother or sister had she or he survived.

SIXTH: I nominate and appoint my said husband, Charles Newton Hodges, to be executor of this, my last will and
testament, and direct that no bond or other security be required of him as such executor.

SEVENTH: It is my will and bequest that no action be had in the probate court, in the administration of my estate, other
than that necessary to prove and record this will and to return an inventory and appraisement of my estate and list of
claims. (Pp. 2-4, Petition.)

This will was subsequently probated in aforementioned Special Proceedings No. 1307 of respondent court on June 28,
1957, with the widower Charles Newton Hodges being appointed as Executor, pursuant to the provisions thereof.

Previously, on May 27, 1957, the said widower (hereafter to be referred to as Hodges) had been appointed Special
Administrator, in which capacity he filed a motion on the same date as follows:

URGENT EX-PARTE MOTION TO ALLOW OR AUTHORIZE PETITIONER TO CONTINUE THE BUSINESS IN WHICH HE WAS
ENGAGED AND TO PERFORM ACTS WHICH HE HAD BEEN DOING WHILE DECEASED WAS LIVING

Come petitioner in the above-entitled special proceedings, thru his undersigned attorneys, to the Hon. Court, most
respectfully states:

1. — That Linnie Jane Hodges died leaving her last will and testament, a copy of which is attached to the petitio n for
probate of the same.

2. — That in said last will and testament herein petitioner Charles Newton Hodges is directed to have the right to
manage, control use and enjoy the estate of deceased Linnie Jane Hodges, in the same way, a provision was placed i n
paragraph two, the following: "I give, devise and bequeath all of the rest, residue and remainder of my estate, to my
beloved husband, Charles Newton Hodges, to have and (to) hold unto him, my said husband, during his natural lifetime."
3. — That during the lifetime of Linnie Jane Hodges, herein petitioner was engaged in the business of buying and
selling personal and real properties, and do such acts which petitioner may think best.

4. — That deceased Linnie Jane Hodges died leaving no descendants or ascendants, except brothers and sisters and
herein petitioner as executor surviving spouse, to inherit the properties of the decedent.

5. — That the present motion is submitted in order not to paralyze the business of petitioner and the deceased,
especially in the purchase and sale of properties. That proper accounting will be had also in all these transactions.

WHEREFORE, it is most respectfully prayed that, petitioner C. N. Hodges (Charles Newton Hodges) be allowed or
authorized to continue the business in which he was engaged and to perform acts which he had been doing while
deceased Linnie Jane Hodges was living.

City of Iloilo, May 27, 1957. (Annex "D", Petition.)

which the respondent court immediately granted in the following order:

It appearing in the urgent ex-parte motion filed by petitioner C. N. Hodges, that the business in which said petitioner and
the deceased were engaged will be paralyzed, unless and until the Executor is named and appointed by the Court, the
said petitioner is allowed or authorized to continue the business in which he was engaged and to perform acts which he
had been doing while the deceased was living.

SO ORDERED.

City of Iloilo May 27, 1957. (Annex "E", Petition.)

Under date of December 11, 1957, Hodges filed as such Executor another motion thus:

MOTION TO APPROVE ALL SALES, CONVEYANCES, LEASES, MORTGAGES THAT THE EXECUTOR HAD MADE FURTHER
AND SUBSEQUENT TRANSACTIONS WHICH THE EXECUTOR MAY DO IN ACCORDANCE WITH THE LAST WISH OF THE
DECEASED LINNIE JANE HODGES.

Comes the Executor in the above-entitled proceedings, thru his undersigned attorney, to the Hon. Court, most
respectfully states:

1. — That according to the last will and testament of the deceased Linnie Jane Hodges, the executor as the surviving
spouse and legatee named in the will of the deceased; has the right to dispose of all the properties left by the deceased,
portion of which is quoted as follows:

Second: I give, devise and bequeath all of the rest, residue and remainder of my estate, both personal and real, wherever
situated, or located, to my beloved husband, Charles Newton Hodges, to have and to hold unto him, my said husband,
during his natural lifetime.
Third: I desire, direct and provide that my husband, Charles Newton Hodges, shall have the right to manage, control, use
and enjoy said estate during his lifetime, and he is hereby given the right to make any changes in the physical properties
of said estate, by sale or any part thereof which he may think best, and the purchase of any other or additional property
as he may think best; to execute conveyances with or without general or special warranty, conveying in fee simple or for
any other term or time, any property which he may deem proper to dispose of; to lease any of the real property for oil,
gas and/or other minerals, and all such deeds or leases shall pass the absolute fee simple title to the interest so conveyed
in such property as he may elect to sell. All rents, emoluments and income from said estate shall belong to him, and he is
further authorized to use any part of the principal of said estate as he may need or desire. ...

2. — That herein Executor, is not only part owner of the properties left as conjugal, but also, the successor to all the
properties left by the deceased Linnie Jane Hodges. That during the lifetime of herein Executor, as Legatee has the right
to sell, convey, lease or dispose of the properties in the Philippines. That inasmuch as C.N. Hodges was and is engaged in
the buy and sell of real and personal properties, even before the death of Linnie Jane Hodges, a motion to authorize said
C.N. Hodges was filed in Court, to allow him to continue in the business of buy and sell, which motion was favorably
granted by the Honorable Court.

3. — That since the death of Linnie Jane Hodges, Mr. C.N. Hodges had been buying and selling real and personal
properties, in accordance with the wishes of the late Linnie Jane Hodges.

4. — That the Register of Deeds for Iloilo, had required of late the herein Executor to have all the sales, leases,
conveyances or mortgages made by him, approved by the Hon. Court.

5. — That it is respectfully requested, all the sales, conveyances leases and mortgages executed by the Executor, be
approved by the Hon. Court. and subsequent sales conveyances, leases and mortgages in compliances with the wishes
of the late Linnie Jane Hodges, and within the scope of the terms of the last will and testament, also be approved;

6. — That the Executor is under obligation to submit his yearly accounts, and the properties conveyed can also be
accounted for, especially the amounts received.

WHEREFORE, it is most respectfully prayed that, all the sales, conveyances, leases, and mortgages executed by the
Executor, be approved by the Hon. Court, and also the subsequent sales, conveyances, leases, and mortgages in
consonance with the wishes of the deceased contained in her last will and testament, be with authorization and approval
of the Hon. Court.

City of Iloilo, December 11, 1967.

(Annex "G", Petition.)

which again was promptly granted by the respondent court on December 14, 1957 as follows:

ORDER

As prayed for by Attorney Gellada, counsel for the Executor for the reasons stated in his motion dated December 11, 1957,
which the Court considers well taken all the sales, conveyances, leases and mortgages of all properties left by the
deceased Linnie Jane Hodges executed by the Executor Charles N. Hodges are hereby APPROVED. The said Executor is
further authorized to execute subsequent sales, conveyances, leases and mortgages of the properties left by the said
deceased Linnie Jane Hodges in consonance with the wishes conveyed in the last will and testament of the latter.

So ordered.

Iloilo City. December 14, 1957.

(Annex "H", Petition.)

On April 14, 1959, in submitting his first statement of account as Executor for approval, Hodges alleged:

Pursuant to the provisions of the Rules of Court, herein executor of the deceased, renders the following account of his
administration covering the period from January 1, 1958 to December 31, 1958, which account may be found in detail in
the individual income tax return filed for the estate of deceased Linnie Jane Hodges, to wit:

That a certified public accountant has examined the statement of net worth of the estate of Linnie Jane Hodges, the
assets and liabilities, as well as the income and expenses, copy of which is hereto attached and made integral part of this
statement of account as Annex "A".

IN VIEW OF THE FOREGOING, it is most respectfully prayed that, the statement of net worth of the estate of Linnie Jane
Hodges, the assets and liabilities, income and expenses as shown in the individual income tax return for the estate of the
deceased and marked as Annex "A", be approved by the Honorable Court, as substantial compliance with the
requirements of the Rules of Court.

That no person interested in the Philippines of the time and place of examining the herein accounts be given notice, as
herein executor is the only devisee or legatee of the deceased, in accordance with the last will and testament already
probated by the Honorable court.

City of Iloilo April 14, 1959.

(Annex "I", Petition.)

The respondent court approved this statement of account on April 21, 1959 in its order worded thus:

Upon petition of Atty. Gellada, in representation of the Executor, the statement of net worth of the estate of Linnie Jane
Hodges, assets and liabilities, income and expenses as shown in the individual income tax return for the estate of the
deceased and marked as Annex "A" is approved.

SO ORDERED.

City of Iloilo April 21, 1959.

(Annex "J", Petition.)


His accounts for the periods January 1, 1959 to December 31, 1959 and January 1, 1960 to December 31, 1960 were
submitted likewise accompanied by allegations identical mutatis mutandis to those of April 14, 1959, quoted above; and
the respective orders approving the same, dated July 30, 1960 and May 2, 1961, were substantially identical to the
above-quoted order of April 21, 1959. In connection with the statements of account just mentioned, the following
assertions related thereto made by respondent-appellee Magno in her brief do not appear from all indications
discernible in the record to be disputable:

Under date of April 14, 1959, C.N. Hodges filed his first "Account by the Executor" of the estate of Linnie Jane Hodges. In
the "Statement of Networth of Mr. C.N. Hodges and the Estate of Linnie Jane Hodges" as of December 31, 1958 annexed
thereto, C.N. Hodges reported that the combined conjugal estate earned a net income of P328,402.62, divided evenly
between him and the estate of Linnie Jane Hodges. Pursuant to this, he filed an "individual income tax return" for
calendar year 1958 on the estate of Linnie Jane Hodges reporting, under oath, the said estate as having earned income
of P164,201.31, exactly one-half of the net income of his combined personal assets and that of the estate of Linnie Jane
Hodges. (p. 91, Appellee's Brief.)

xxx xxx xxx

Under date of July 21, 1960, C.N. Hodges filed his second "Annual Statement of Account by the Executor" of the estate of
Linnie Jane Hodges. In the "Statement of Networth of Mr. C.N. Hodges and the Estate of Linnie Jane Hodges" as of
December 31, 1959 annexed thereto, C.N. Hodges reported that the combined conjugal estate earned a net income of
P270,623.32, divided evenly between him and the estate of Linnie Jane Hodges. Pursuant to this, he filed an "individual
income tax return" for calendar year 1959 on the estate of Linnie Jane Hodges reporting, under oath, the said estate as
having earned income of P135,311.66, exactly one-half of the net income of his combined personal assets and that of the
estate of Linnie Jane Hodges. (pp. 91-92. Appellee's Brief.)

xxx xxx xxx

Under date of April 20, 1961, C.N. Hodges filed his third "Annual Statement of Account by the Executor for the Year 1960"
of the estate of Linnie Jane Hodges. In the "Statement of Net Worth of Mr. C.N. Hodges and the Estate of Linnie Jane
Hodges" as of December 31, 1960 annexed thereto, C.N. Hodges reported that the combined conjugal estate earned a
net income of P314,857.94, divided evenly between him and the estate of Linnie Jane Hodges. Pursuant to this, he filed
an "individual income tax return" for calendar year 1960 on the estate of Linnie Jane Hodges reporting, under oath, the
said estate as having earned income of P157,428.97, exactly one-half of the net income of his combined personal assets
and that of the estate of Linnie Jane Hodges. (Pp. 92-93, Appellee's Brief.)

Likewise the following:

In the petition for probate that he (Hodges) filed, he listed the seven brothers and sisters of Linnie Jane as her "heirs" (see
p. 2, Green ROA). The order of the court admitting the will to probate unfortunately omitted one of the heirs, Roy
Higdon (see p. 14, Green ROA). Immediately, C.N. Hodges filed a verified motion to have Roy Higdon's name included as
an heir, stating that he wanted to straighten the records "in order the heirs of deceased Roy Higdon may not think or
believe they were omitted, and that they were really and are interested in the estate of deceased Linnie Jane Hodges. .
As an executor, he was bound to file tax returns for the estate he was administering under American law. He did file such
as estate tax return on August 8, 1958. In Schedule "M" of such return, he answered "Yes" to the question as to whether
he was contemplating "renouncing the will". On the question as to what property interests passed to him as the surviving
spouse, he answered:

"None, except for purposes of administering the Estate, paying debts, taxes and other legal charges. It is the intention of
the surviving husband of deceased to distribute the remaining property and interests of the deceased in their
Community estate to the devisees and legatees named in the will when the debts, liabilities, taxes and expenses of
administration are finally determined and paid."

Again, on August 9, 1962, barely four months before his death, he executed an "affidavit" wherein he ratified and
confirmed all that he stated in Schedule "M" of his estate tax returns as to his having renounced what was given him by
his wife's will.1

As appointed executor, C.N. Hodges filed an "Inventory" dated May 12, 1958. He listed all the assets of his conjugal
partnership with Linnie Jane Hodges on a separate balance sheet and then stated expressly that her estate which has
come into his possession as executor was "one-half of all the items" listed in said balance sheet. (Pp. 89-90, Appellee's
Brief.)

Parenthetically, it may be stated, at this juncture, that We are taking pains to quote wholly or at least, extensively from
some of the pleadings and orders whenever We feel that it is necessary to do so for a more comprehensive and clearer
view of the important and decisive issues raised by the parties and a more accurate appraisal of their respective positions
in regard thereto.

The records of these cases do not show that anything else was done in the above-mentioned Special Proceedings No.
1307 until December 26, 1962, when on account of the death of Hodges the day before, the same lawyer, Atty. Leon P.
Gellada, who had been previously acting as counsel for Hodges in his capacity as Executor of his wife's estate, and as
such had filed the aforequoted motions and manifestations, filed the following:

URGENT EX-PARTE MOTION FOR THE APPOINTMENT OF A


SPECIAL ADMINISTRATRIX

COMES the undersigned attorney for the Executor in the above-entitled proceedings, to the Honorable Court, most
respectfully states:

1. That in accordance with the Last Will and Testament of Linnie Jane Hodges (deceased), her husband, Charles Newton
Hodges was to act as Executor, and in fact, in an order issued by this Hon. Court dated June 28, 1957, the said Charles
Newton Hodges was appointed Executor and had performed the duties as such.

2. That last December 22, 1962, the said Charles Newton Hodges was stricken ill, and brought to the Iloilo Mission
Hospital for treatment, but unfortunately, he died on December 25, 1962, as shown by a copy of the death certificate
hereto attached and marked as Annex "A".
3. That in accordance with the provisions of the last will and testament of Linnie Jane Hodges, whatever real and personal
properties that may remain at the death of her husband Charles Newton Hodges, the said properties shall b e equally
divided among their heirs. That there are real and personal properties left by Charles Newton Hodges, which need to be
administered and taken care of.

4. That the estate of deceased Linnie Jane Hodges, as well as that of Charles Newton Hodges, have not as yet been
determined or ascertained, and there is necessity for the appointment of a general administrator to liquidate and
distribute the residue of the estate to the heirs and legatees of both spouses. That in accordance with the provisions of
Section 2 of Rule 75 of the Rules of Court, the conjugal partnership of Linnie Jane Hodges and Charles Newton Hodges
shall be liquidated in the testate proceedings of the wife.

5. That the undersigned counsel, has perfect personal knowledge of the existence of the last will and testament of
Charles Newton Hodges, with similar provisions as that contained in the last will and testament of Linnie Jane Hodges.
However, said last will and testament of Charles Newton Hodges is kept inside the vault or iron safe in his office, and will
be presented in due time before this honorable Court.

6. That in the meantime, it is imperative and indispensable that, an Administratrix be appointed for the estate of Linnie
Jane Hodges and a Special Administratrix for the estate of Charles Newton Hodges, to perform the duties required by
law, to administer, collect, and take charge of the goods, chattels, rights, credits, and estate of both spouses, Charles
Newton Hodges and Linnie Jane Hodges, as provided for in Section 1 and 2, Rule 81 of the Rules of Court.

7. That there is delay in granting letters testamentary or of administration, because the last will and testament of
deceased, Charles Newton Hodges, is still kept in his safe or vault, and in the meantime, unless an administratrix (and,) at
the same time, a Special Administratrix is appointed, the estate of both spouses are in danger of being lost, damaged or
go to waste.

8. That the most trusted employee of both spouses Linnie Jane Hodges and C.N. Hodges, who had been employed for
around thirty (30) years, in the person of Miss Avelina Magno, (should) be appointed Administratrix of the estate of
Linnie Jane Hodges and at the same time Special Administratrix of the estate of Charles Newton Hodges. That the said
Miss Avelina Magno is of legal age, a resident of the Philippines, the most fit, competent, trustworthy and well-qualified
person to serve the duties of Administratrix and Special Administratrix and is willing to act as such.

9. That Miss Avelina Magno is also willing to file bond in such sum which the Hon. Court believes reasonable.

WHEREFORE, in view of all the foregoing, it is most respectfully prayed that, Miss AVELINA A. MAGNO be immediately
appointed Administratrix of the estate of Linnie Jane Hodges and as Special Administratrix of the estate of Charles
Newton Hodges, with powers and duties provided for by law. That the Honorable Court fix the reasonable bond of
P1,000.00 to be filed by Avelina A. Magno.

(Annex "O", Petition.)

which respondent court readily acted on in its order of even date thus: .
For the reasons alleged in the Urgent Ex-parte Motion filed by counsel for the Executor dated December 25, 1962, which
the Court finds meritorious, Miss AVELINA A. MAGNO, is hereby appointed Administratrix of the estate of Linnie Jane
Hodges and as Special Administratrix of the estate of Charles Newton Hodges, in the latter case, because the last will of
said Charles Newton Hodges is still kept in his vault or iron safe and that the real and personal properties of both
spouses may be lost, damaged or go to waste, unless a Special Administratrix is appointed.

Miss Avelina A. Magno is required to file bond in the sum of FIVE THOUSAND PESOS (P5,000.00), and after having done
so, let letters of Administration be issued to her." (Annex "P", Petition.)

On December 29, 1962, however, upon urgent ex-parte petition of respondent Magno herself, thru Atty. Gellada, Harold,
R. Davies, "a representative of the heirs of deceased Charles Newton Hodges (who had) arrived from the United State s of
America to help in the administration of the estate of said deceased" was appointed as Co-Special Administrator of the
estate of Hodges, (pp. 29-33, Yellow - Record on Appeal) only to be replaced as such co-special administrator on
January 22, 1963 by Joe Hodges, who, according to the motion of the same attorney, is "the nephew of the deceased
(who had) arrived from the United States with instructions from the other heirs of the deceased to administer the
properties or estate of Charles Newton Hodges in the Philippines, (Pp. 47-50, id.)

Meanwhile, under date of January 9, 1963, the same Atty. Gellada filed in Special Proceedings 1672 a petition for the
probate of the will of Hodges, 2 with a prayer for the issuance of letters of administration to the same Joe Hodges, albeit
the motion was followed on February 22, 1963 by a separate one asking that Atty. Fernando Mirasol be appointed as his
co-administrator. On the same date this latter motion was filed, the court issued the corresponding order of probate and
letters of administration to Joe Hodges and Atty. Mirasol, as prayed for.

At this juncture, again, it may also be explained that just as, in her will, Mrs. Hodges bequeathed her whole estate to her
husband "to have and to hold unto him, my said husband, during his natural lifetime", she, at the same time or in like
manner, provided that "at the death of my said husband — I give devise and bequeath all of the rest, residue and
remainder of my estate, both real and personal, wherever situated or located, to be equally divided among my brothers
and sisters, share and share alike —". Accordingly, it became incumbent upon Hodges, as executor of his wife's will, to
duly liquidate the conjugal partnership, half of which constituted her estate, in order that upon the eventuality of his
death, "the rest, residue and remainder" thereof could be determined and correspondingly distributed or divided among
her brothers and sisters. And it was precisely because no such liquidation was done, furthermore, there is the issue of
whether the distribution of her estate should be governed by the laws of the Philippines or those of Texas, of which State
she was a national, and, what is more, as already stated, Hodges made official and sworn statements or manifestations
indicating that as far as he was concerned no "property interests passed to him as surviving spouse — "except for
purposes of administering the estate, paying debts, taxes and other legal charges" and it was the intention of the
surviving husband of the deceased to distribute the remaining property and interests of the deceased in their
Community Estate to the devisees and legatees named in the will when the debts, liabilities, taxes and expenses of
administration are finally determined and paid", that the incidents and controversies now before Us for resolution arose.
As may be observed, the situation that ensued upon the death of Hodges became rather unusual and so, qu ite
understandably, the lower court's actuations presently under review are apparently wanting in consistency and
seemingly lack proper orientation.
Thus, We cannot discern clearly from the record before Us the precise perspective from which the trial cour t proceeded
in issuing its questioned orders. And, regretably, none of the lengthy briefs submitted by the parties is of valuable
assistance in clearing up the matter.

To begin with, We gather from the two records on appeal filed by petitioner, as appellant in the appealed cases, one with
green cover and the other with a yellow cover, that at the outset, a sort of modus operandi had been agreed upon by
the parties under which the respective administrators of the two estates were supposed to act conj ointly, but since no
copy of the said agreement can be found in the record before Us, We have no way of knowing when exactly such
agreement was entered into and under what specific terms. And while reference is made to said modus operandi in the
order of September 11, 1964, on pages 205-206 of the Green Record on Appeal, reading thus:

The present incident is to hear the side of administratrix, Miss Avelina A. Magno, in answer to the charges contained in
the motion filed by Atty. Cesar Tirol on September 3, 1964. In answer to the said charges, Miss Avelina A. Magno,
through her counsel, Atty. Rizal Quimpo, filed a written manifestation.

After reading the manifestation here of Atty. Quimpo, for and in behalf of the administratrix, Miss Avelina A. Magno, the
Court finds that everything that happened before September 3, 1964, which was resolved on September 8, 1964, to the
satisfaction of parties, was simply due to a misunderstanding between the representative of the Philippine Commercial
and Industrial Bank and Miss Magno and in order to restore the harmonious relations between the parties, the Court
ordered the parties to remain in status quo as to their modus operandi before September 1, 1964, until after the Court
can have a meeting with all the parties and their counsels on October 3, as formerly agreed upon between counsels,
Attys. Ozaeta, Gibbs and Ozaeta, Attys. Tirol and Tirol and Atty. Rizal Quimpo.

In the meantime, the prayers of Atty. Quimpo as stated in his manifestation shall not be resolved by this C ourt until
October 3, 1964.

SO ORDERED.

there is nothing in the record indicating whatever happened to it afterwards, except that again, reference thereto was
made in the appealed order of October 27, 1965, on pages 292-295 of the Green Record on Appeal, as follows:

On record is an urgent motion to allow PCIB to open all doors and locks in the Hodges Office at 206-208 Guanco Street,
Iloilo City, to take immediate and exclusive possession thereof and to place its own locks and keys for security purposes
of the PCIB dated October 27, 1965 thru Atty. Cesar Tirol. It is alleged in said urgent motion that Administratrix Magno of
the testate estate of Linnie Jane Hodges refused to open the Hodges Office at 206-208 Guanco Street, Iloilo City where
PCIB holds office and therefore PCIB is suffering great moral damage and prejudice as a result of said act. It is prayed
that an order be issued authorizing it (PCIB) to open all doors and locks in the said office, to take immediate and
exclusive possession thereof and place thereon its own locks and keys for security purposes; instructing the clerk of court
or any available deputy to witness and supervise the opening of all doors and locks and taking possession of the PCIB.

A written opposition has been filed by Administratrix Magno of even date (Oct. 27) thru counsel Rizal Quimpo stating
therein that she was compelled to close the office for the reason that the PCIB failed to comply with the order of this
Court signed by Judge Anacleto I. Bellosillo dated September 11, 1964 to the effect that both estates should remain
in status quo to their modus operandi as of September 1, 1964.

To arrive at a happy solution of the dispute and in order not to interrupt the operation of the office of both estates, the
Court aside from the reasons stated in the urgent motion and opposition heard the verbal arguments of Atty. Cesar Tirol
for the PCIB and Atty. Rizal Quimpo for Administratix Magno.

After due consideration, the Court hereby orders Magno to open all doors and locks in the Hodge s Office at 206-208
Guanco Street, Iloilo City in the presence of the PCIB or its duly authorized representative and deputy clerk of court Albis
of this branch not later than 7:30 tomorrow morning October 28, 1965 in order that the office of said estates c ould
operate for business.

Pursuant to the order of this Court thru Judge Bellosillo dated September 11, 1964, it is hereby ordered:

(a) That all cash collections should be deposited in the joint account of the estates of Linnie Jane Hodges and estates of
C.N. Hodges;

(b) That whatever cash collections that had been deposited in the account of either of the estates should be withdrawn
and since then deposited in the joint account of the estate of Linnie Jane Hodges and the estate of C.N. Hodges;

(c) That the PCIB should countersign the check in the amount of P250 in favor of Administratrix Avelina A. Magno as her
compensation as administratrix of the Linnie Jane Hodges estate chargeable to the testate estate of Linnie Jane Hodges
only;

(d) That Administratrix Magno is hereby directed to allow the PCIB to inspect whatever records, documents and papers
she may have in her possession in the same manner that Administrator PCIB is also directed to allow Administratrix
Magno to inspect whatever records, documents and papers it may have in its possession;

(e) That the accountant of the estate of Linnie Jane Hodges shall have access to all records of the transactions of both
estates for the protection of the estate of Linnie Jane Hodges; and in like manner the accountant or any authorized
representative of the estate of C.N. Hodges shall have access to the records of transactions of the Linnie Jane Hodges
estate for the protection of the estate of C.N. Hodges.

Once the estates' office shall have been opened by Administratrix Magno in the presence of the PCIB or its duly
authorized representative and deputy clerk Albis or his duly authorized representative, both estates or any of the estates
should not close it without previous consent and authority from this court.

SO ORDERED.

As may be noted, in this order, the respondent court required that all collections from the properties in the name of
Hodges should be deposited in a joint account of the two estates, which indicates that seemingly the so -called modus
operandi was no longer operative, but again there is nothing to show when this situation started.
Likewise, in paragraph 3 of the petitioner's motion of September 14, 1964, on pages 188-201 of the Green Record on
Appeal, (also found on pp. 83-91 of the Yellow Record on Appeal) it is alleged that:

3. On January 24, 1964 virtually all of the heirs of C.N. Hodges, Joe Hodges and Fernando P. Mirasol acting as the two
co-administrators of the estate of C.N. Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie Jane
Hodges and Messrs. William Brown and Ardell Young acting for all of the Higdon family who claim to be the sole
beneficiaries of the estate of Linnie Jane Hodges and various legal counsel representing the aforementioned parties
entered into an amicable agreement, which was approved by this Honorable Court, wherein the parties thereto agreed
that certain sums of money were to be paid in settlement of different claims against the two estates and that the assets
(to the extent they existed) of both estates would be administered jointly by the PCIB as administrator of the estate of
C.N. Hodges and Avelina A. Magno as administratrix of the estate of Linnie Jane Hodges, subject, however, to the
aforesaid October 5, 1963 Motion, namely, the PCIB's claim to exclusive possession and ownership of one hundred
percent (100%) (or, in the alternative, seventy-five percent (75%) of all assets owned by C.N. Hodges or Linnie Jane
Hodges situated in the Philippines. On February 1, 1964 (pp. 934-935, CFI Rec., S.P. No. 1672) this Honorable Court
amended its order of January 24, 1964 but in no way changed its recognition of the afore-described basic demand by
the PCIB as administrator of the estate of C.N. Hodges to one hundred percent (100%) of the assets claimed b y both
estates.

but no copy of the mentioned agreement of joint administration of the two estates exists in the record, and so, We are
not informed as to what exactly are the terms of the same which could be relevant in the resolution of the issues herein.

On the other hand, the appealed order of November 3, 1965, on pages 313-320 of the Green Record on Appeal,
authorized payment by respondent Magno of, inter alia, her own fees as administratrix, the attorney's fees of her lawyers,
etc., as follows:

Administratrix Magno thru Attys. Raul S. Manglapus and Rizal. R. Quimpo filed a Manifestation and Urgent Motion dated
June 10, 1964 asking for the approval of the Agreement dated June 6, 1964 which Agreement is for the purpose of
retaining their services to protect and defend the interest of the said Administratrix in these proceedings and the same
has been signed by and bears the express conformity of the attorney-in-fact of the late Linnie Jane Hodges, Mr. James L.
Sullivan. It is further prayed that the Administratrix of the Testate Estate of Linnie Jane Hodges be directed to pay the
retailers fee of said lawyers, said fees made chargeable as expenses for the administration of the estate of Linnie Jane
Hodges (pp. 1641-1642, Vol. V, Sp. 1307).

An opposition has been filed by the Administrator PCIB thru Atty. Herminio Ozaeta dated July 11, 1964, on the ground
that payment of the retainers fee of Attys. Manglapus and Quimpo as prayed for in said Manifestation and Urgent
Motion is prejudicial to the 100% claim of the estate of C. N. Hodges; employment of Attys. Manglapus and Quimpo is
premature and/or unnecessary; Attys. Quimpo and Manglapus are representing conflicting interests and the estate of
Linnie Jane Hodges should be closed and terminated (pp. 1679-1684, Vol, V, Sp. 1307).

Atty. Leon P. Gellada filed a memorandum dated July 28, 1964 asking that the Manifestation and Urgent Motion filed by
Attys. Manglapus and Quimpo be denied because no evidence has been presented in support thereof. Atty. Manglapus
filed a reply to the opposition of counsel for the Administrator of the C. N. Hodges estate wherein it is claimed that
expenses of administration include reasonable counsel or attorney's fees for services to the executor or administrator. As
a matter of fact the fee agreement dated February 27, 1964 between the PCIB and the law firm of Ozaeta, Gibbs &
Ozaeta as its counsel (Pp. 1280-1284, Vol. V, Sp. 1307) which stipulates the fees for said law firm has been approved by
the Court in its order dated March 31, 1964. If payment of the fees of the lawyers for the administratrix of the estate of
Linnie Jane Hodges will cause prejudice to the estate of C. N. Hodges, in like manner the very agreement which provides
for the payment of attorney's fees to the counsel for the PCIB will also be prejudicial to the estate of Linnie Jane Hodges
(pp. 1801-1814, Vol. V, Sp. 1307).

Atty. Herminio Ozaeta filed a rejoinder dated August 10, 1964 to the reply to the opposition to the Manifestation and
Urgent Motion alleging principally that the estates of Linnie Jane Hodges and C. N. Hodges are not similarly situated for
the reason that C. N. Hodges is an heir of Linnie Jane Hodges whereas the latter is not an heir of the former for the
reason that Linnie Jane Hodges predeceased C. N. Hodges (pp. 1839-1848, Vol. V, Sp. 1307); that Attys. Manglapus and
Quimpo formally entered their appearance in behalf of Administratrix of the estate of Linnie Jane Hodges on June 10,
1964 (pp. 1639-1640, Vol. V, Sp. 1307).

Atty. Manglapus filed a manifestation dated December 18, 1964 stating therein that Judge Bellosillo issued an order
requiring the parties to submit memorandum in support of their respective contentions. It is prayed in this manifestation
that the Manifestation and Urgent Motion dated June 10, 1964 be resolved (pp. 6435-6439, Vol. VII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a counter- manifestation dated January 5, 1965 asking that after the
consideration by the court of all allegations and arguments and pleadings of the PCIB in connection therewith (1) said
manifestation and urgent motion of Attys. Manglapus and Quimpo be denied (pp. 6442-6453, Vol. VII, Sp. 1307). Judge
Querubin issued an order dated January 4, 1965 approving the motion dated June 10, 1964 of the attorneys fo r the
administratrix of the estate of Linnie Jane Hodges and agreement annexed to said motion. The said order further states:
"The Administratrix of the estate of Linnie Jane Hodges is authorized to issue or sign whatever check or checks may be
necessary for the above purpose and the administrator of the estate of C. N. Hodges is ordered to countersign the same.
(pp. 6518-6523, Vol VII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a manifestation and motion dated January 13, 1965 asking that the o rder of
January 4, 1965 which was issued by Judge Querubin be declared null and void and to enjoin the clerk of court and the
administratrix and administrator in these special proceedings from all proceedings and action to enforce or comply with
the provision of the aforesaid order of January 4, 1965. In support of said manifestation and motion it is alleged that the
order of January 4, 1965 is null and void because the said order was never delivered to the deputy clerk Albis of Branch V
(the sala of Judge Querubin) and the alleged order was found in the drawer of the late Judge Querubin in his office when
said drawer was opened on January 13, 1965 after the death of Judge Querubin by Perfecto Querubin, Jr., the son of the
judge and in the presence of Executive Judge Rovira and deputy clerk Albis (Sec. 1, Rule 36, New Civil Code) (Pp.
6600-6606, Vol. VIII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a motion for reconsideration dated February 23, 1965 asking that the order
dated January 4, 1964 be reversed on the ground that:

1. Attorneys retained must render services to the estate not to the personal heir;
2. If services are rendered to both, fees should be pro-rated between them;

3. Attorneys retained should not represent conflicting interests; to the prejudice of the other heirs not represented by
said attorneys;

4. Fees must be commensurate to the actual services rendered to the estate;

5. There must be assets in the estate to pay for said fees (Pp. 6625-6636, Vol. VIII, Sp. 1307).

Atty. Quimpo for Administratrix Magno of the estate of Linnie Jane Hodges filed a motion to submit dated July 15, 1965
asking that the manifestation and urgent motion dated June 10, 1964 filed by Attys. Manglapus and Quimpo and other
incidents directly appertaining thereto be considered submitted for consideration and approval (pp. 6759-6765, Vol. VIII,
Sp. 1307).

Considering the arguments and reasons in support to the pleadings of both the Administratrix and the PCIB, and of Atty.
Gellada, hereinbefore mentioned, the Court believes that the order of January 4, 1965 is null and void for the reason that
the said order has not been filed with deputy clerk Albis of this court (Branch V) during the lifetime of Judge Querubin
who signed the said order. However, the said manifestation and urgent motion dated June 10, 1964 is being treated and
considered in this instant order. It is worthy to note that in the motion dated January 24, 1964 (Pp. 1149- 1163, Vol. V, Sp.
1307) which has been filed by Atty. Gellada and his associates and Atty. Gibbs and other lawyers in addition to the
stipulated fees for actual services rendered. However, the fee agreement dated February 27, 1964, between the
Administrator of the estate of C. N. Hodges and Atty. Gibbs which provides for retainer fee of P4,000 monthly in addition
to specific fees for actual appearances, reimbursement for expenditures and contingent fees has also been approved by
the Court and said lawyers have already been paid. (pp. 1273-1279, Vol. V, Sp. Proc. 1307 pp. 1372-1373, Vol. V, Sp. Proc.
1307).

WHEREFORE, the order dated January 4, 1965 is hereby declared null and void.

The manifestation and motion dated June 10, 1964 which was filed by the attorneys for the administratrix of the testate
estate of Linnie Jane Hodges is granted and the agreement annexed thereto is hereby approved.

The administratrix of the estate of Linnie Jane Hodges is hereby directed to be needed to implement the approval of the
agreement annexed to the motion and the administrator of the estate of C. N. Hodges is directed to countersign the said
check or checks as the case may be.

SO ORDERED.

thereby implying somehow that the court assumed the existence of independent but simultaneous administrations.

Be that as it may, again, it appears that on August 6, 1965, the court, acting on a motion of petitioner for the approval of
deeds of sale executed by it as administrator of the estate of Hodges, issued the following order, also on appeal herein:

Acting upon the motion for approval of deeds of sale for registered land of the PCIB, Administrator of the Testate Estate
of C. N. Hodges in Sp. Proc. 1672 (Vol. VII, pp. 2244-2245), dated July 16, 1965, filed by Atty. Cesar T. Tirol in
representation of the law firms of Ozaeta, Gibbs and Ozaeta and Tirol and Tirol and the opposition thereto of Atty. Rizal
R. Quimpo (Vol. VIII, pp. 6811-6813) dated July 22, 1965 and considering the allegations and reasons therein stated, the
court believes that the deeds of sale should be signed jointly by the PCIB, Administrator of the Testate Estate of C. N.
Hodges and Avelina A. Magno, Administratrix of the Testate Estate of Linnie Jane Hodges and to this effect the PCIB
should take the necessary steps so that Administratrix Avelina A. Magno could sign the deeds of sale.

SO ORDERED. (p. 248, Green Record on Appeal.)

Notably this order required that even the deeds executed by petitioner, as administrator of the Estate of Hodges,
involving properties registered in his name, should be co-signed by respondent Magno.3 And this was not an isolated
instance.

In her brief as appellee, respondent Magno states:

After the lower court had authorized appellee Avelina A. Magno to execute final deeds of sale pursuant to contracts to
sell executed by C. N. Hodges on February 20, 1963 (pp. 45-46, Green ROA), motions for the approval of final deeds of
sale (signed by appellee Avelina A. Magno and the administrator of the estate of C. N. Hodges, first Joe Hodges, then
Atty. Fernando Mirasol and later the appellant) were approved by the lower court upon petition of appellee Magno's
counsel, Atty. Leon P. Gellada, on the basis of section 8 of Rule 89 of the Revised Rules of Court. Subsequently, the
appellant, after it had taken over the bulk of the assets of the two estates, started presenting these motions itself. The
first such attempt was a "Motion for Approval of Deeds of Sale for Registered Land and Cancellations of Mortgages"
dated July 21, 1964 filed by Atty. Cesar T. Tirol, counsel for the appellant, thereto annexing two (2) final deeds of sale and
two (2) cancellations of mortgages signed by appellee Avelina A. Magno and D. R. Paulino, Assistant Vice-President and
Manager of the appellant (CFI Record, Sp. Proc. No. 1307, Vol. V, pp. 1694-1701). This motion was approved by the lower
court on July 27, 1964. It was followed by another motion dated August 4, 1964 for the approval of one final deed of sale
again signed by appellee Avelina A. Magno and D. R. Paulino (CFI Record, Sp. Proc. No. 1307. Vol. V, pp. 1825-1828),
which was again approved by the lower court on August 7, 1964. The gates having been opened, a flood ensued: the
appellant subsequently filed similar motions for the approval of a multitude of deeds of sales and cancellations of
mortgages signed by both the appellee Avelina A. Magno and the appellant.

A random check of the records of Special Proceeding No. 1307 alone will show Atty. Cesar T. Tirol as having presented
for court approval deeds of sale of real properties signed by both appellee Avelina A. Magno and D. R. Paulino in the
following numbers: (a) motion dated September 21, 1964 — 6 deeds of sale; (b) motion dated November 4, 1964 — 1
deed of sale; (c) motion dated December 1, 1964 — 4 deeds of sale; (d) motion dated February 3, 1965 — 8 deeds of
sale; (f) motion dated May 7, 1965 — 9 deeds of sale. In view of the very extensive landholdings of the Hodges spouses
and the many motions filed concerning deeds of sale of real properties executed by C. N. Hodges the lower court has
had to constitute special separate expedientes in Special Proceedings Nos. 1307 and 1672 to include mere motions for
the approval of deeds of sale of the conjugal properties of the Hodges spouses.

As an example, from among the very many, under date of February 3, 1965, Atty. Cesar T. Tirol, as counsel for the
appellant, filed "Motion for Approval of Deeds of Sale for Registered Land and Cancellations of Mortgages" (CFI Record,
Sp. Proc. No. 1307, Vol. VIII, pp. 6570-6596) the allegations of which read:
"1. In his lifetime, the late C. N. Hodges executed "Contracts to Sell" real property, and the prospective buyers under said
contracts have already paid the price and complied with the terms and conditions thereof;

"2. In the course of administration of both estates, mortgage debtors have already paid their debts secured by chattel
mortgages in favor of the late C. N. Hodges, and are now entitled to release therefrom;

"3. There are attached hereto documents executed jointly by the Administratrix in Sp. Proc. No. 1307 and the
Administrator in Sp. Proc. No. 1672, consisting of deeds of sale in favor —

Fernando Cano, Bacolod City, Occ. Negros


Fe Magbanua, Iloilo City
Policarpio M. Pareno, La Paz, Iloilo City
Rosario T. Libre, Jaro, Iloilo City
Federico B. Torres, Iloilo City
Reynaldo T. Lataquin, La Paz, Iloilo City
Anatolio T. Viray, Iloilo City
Benjamin Rolando, Jaro, Iloilo City

and cancellations of mortgages in favor of —

Pablo Manzano, Oton, Iloilo


Ricardo M. Diana, Dao, San Jose, Antique
Simplicio Tingson, Iloilo City
Amado Magbanua, Pototan, Iloilo
Roselia M. Baes, Bolo, Roxas City
William Bayani, Rizal Estanzuela, Iloilo City
Elpidio Villarete, Molo, Iloilo City
Norma T. Ruiz, Jaro, Iloilo City

"4. That the approval of the aforesaid documents will not reduce the assets of the estates so as to prevent any creditor
from receiving his full debt or diminish his dividend."

And the prayer of this motion is indeed very revealing:

"WHEREFORE, it is respectfully prayed that, under Rule 89, Section 8 of the Rules of Court, this honorable court approve
the aforesaid deeds of sale and cancellations of mortgages." (Pp. 113-117, Appellee's Brief.)

None of these assertions is denied in Petitioner's reply brief.

Further indicating lack of concrete perspective or orientation on the part of the respondent court and its hesitancy to
clear up matters promptly, in its other appealed order of November 23, 1965, on pages 334-335 of the Green Record on
Appeal, said respondent court allowed the movant Ricardo Salas, President of appellee Western Institute of Technology
(successor of Panay Educational Institutions, Inc.), one of the parties with whom Hodges had contracts that are in
question in the appeals herein, to pay petitioner, as Administrator of the estate of Hodges and/or respondent Magno, as
Administrator of the estate of Mrs. Hodges, thus:

Considering that in both cases there is as yet no judicial declaration of heirs nor distribution of properties to whomsoever
are entitled thereto, the Court believes that payment to both the administrator of the testate estate of C. N. Hodges and
the administratrix of the testate estate of Linnie Jane Hodges or to either one of the two estates is proper and legal.

WHEREFORE, movant Ricardo T. Salas can pay to both estates or either of them.

SO ORDERED.

(Pp. 334-335, Green Record on Appeal.)

On the other hand, as stated earlier, there were instances when respondent Magno was given authority to act alone. For
instance, in the other appealed order of December 19, 1964, on page 221 of the Green Record on Appeal, the respondent
court approved payments made by her of overtime pay to some employees of the court who had helped in gathering
and preparing copies of parts of the records in both estates as follows:

Considering that the expenses subject of the motion to approve payment of overtime pay dated December 10, 1964, are
reasonable and are believed by this Court to be a proper charge of administration chargeable to the testate estate of the
late Linnie Jane Hodges, the said expenses are hereby APPROVED and to be charged against the testate estate of the
late Linnie Jane Hodges. The administrator of the testate estate of the late Charles Newton Hodges is hereby ordered to
countersign the check or checks necessary to pay the said overtime pay as shown by the bills marked Annex "A", "B" and
"C" of the motion.

SO ORDERED.

(Pp. 221-222, Green Record on Appeal.)

Likewise, the respondent court approved deeds of sale executed by respondent Magno alone, as Administratrix of the
estate of Mrs. Hodges, covering properties in the name of Hodges, pursuant to "contracts to sell" executed by Hodges,
irrespective of whether they were executed by him before or after the death of his wife. The orders of this nature which
are also on appeal herein are the following:

1. Order of March 30, 1966, on p. 137 of the Green Record on Appeal, approving the deed of sale executed by
respondent Magno in favor of appellee Lorenzo Carles on February 24, 1966, pursuant to a "contract to sell" signed by
Hodges on June 17, 1958, after the death of his wife, which contract petitioner claims was cancelled by it for failure of
Carles to pay the installments due on January 7, 1965.

2. Order of April 5, 1966, on pp. 139-140, id., approving the deed of sale executed by respondent Magno in favor of
appellee Salvador Guzman on February 28, 1966 pursuant to a "contract to sell" signed by Hodges on September 13,
1960, after the death of his wife, which contract petitioner claims it cancelled on March 3, 1965 in view o f failure of said
appellee to pay the installments on time.
3. Order of April 20, 1966, on pp. 167-168, id., approving the deed of sale executed by respondent Magno in favor of
appellee Purificacion Coronado on March 28, 1966 pursuant to a "contract to sell" signed by Hodges on August 14, 1961,
after the death of his wife.

4. Order of April 20, 1966, on pp. 168-169, id., approving the deed of sale executed by respondent Magno in favor of
appellee Florenia Barrido on March 28, 1966, pursuant to a "contract to sell" signed by Hodges on February 21, 1958, after
the death of his wife.

5. Order of June 7, 1966, on pp. 184-185, id., approving the deed of sale executed by respondent Magno in favor of
appellee Belcezar Causing on May 2, 1966, pursuant to a "contract to sell" signed by Hodges on February 10, 1959, after
the death of his wife.

6. Order of June 21, 1966, on pp. 211-212, id., approving the deed of sale executed by respondent Magno in favor of
appellee Artheo Thomas Jamir on June 3, 1966, pursuant to a "contract to sell" signed by Hodges on May 26, 1961, after
the death of his wife.

7. Order of June 21, 1966, on pp. 212-213, id., approving the deed of sale executed by respondent Magno in favor of
appellees Graciano Lucero and Melquiades Batisanan on June 6 and June 3, 1966, respectively, pursuant to "contracts to
sell" signed by Hodges on June 9, 1959 and November 27, 1961, respectively, after the death of his wife.

8. Order of December 2, 1966, on pp. 303-304, id., approving the deed of sale executed by respondent Magno in favor
of appellees Espiridion Partisala, Winifredo Espada and Rosario Alingasa on September 6, 1966, August 17, 1966 and
August 3, 1966, respectively, pursuant to "contracts to sell" signed by Hodges on April 20, 1960, April 18, 1960 and August
25, 1958, respectively, that is, after the death of his wife.

9. Order of April 5, 1966, on pp. 137-138, id., approving the deed of sale executed by respondent Magno in favor of
appellee Alfredo Catedral on March 2, 1966, pursuant to a "contract to sell" signed by Hodges on May 29, 1954, before
the death of his wife, which contract petitioner claims it had cancelled on February 16, 1966 for failure of appellee
Catedral to pay the installments due on time.

10. Order of April 5, 1966, on pp. 138-139, id., approving the deed of sale executed by respondent Magno in favor of
appellee Jose Pablico on March 7, 1966, pursuant to a "contract to sell" signed by Hodges on March 7, 1950, after the
death of his wife, which contract petitioner claims it had cancelled on June 29, 1960, for failure of appellee Pablico to pay
the installments due on time.

11. Order of December 2, 1966, on pp. 303-304, id., insofar as it approved the deed of sale executed by respondent
Magno in favor of appellee Pepito Iyulores on September 6, 1966, pursuant to a "contract to sell" signed by Hodges on
February 5, 1951, before the death of his wife.

12. Order of January 3, 1967, on pp. 335-336, id., approving three deeds of sale executed by respondent Magno, one in
favor of appellees Santiago Pacaonsis and two in favor of appellee Adelfa Premaylon on December 5, 1966 and
November 3, 1966, respectively, pursuant to separate "promises to sell" signed respectively by Hodges on May 26, 1955
and January 30, 1954, before the death of his wife, and October 31, 1959, after her death.
In like manner, there were also instances when respondent court approved deeds of sale executed by petitioner alone
and without the concurrence of respondent Magno, and such approvals have not been the subject of any a ppeal. No
less than petitioner points this out on pages 149-150 of its brief as appellant thus:

The points of fact and law pertaining to the two abovecited assignments of error have already been discussed previously.
In the first abovecited error, the order alluded to was general, and as already explained before, it was, as admitted by the
lower court itself, superseded by the particular orders approving specific final deeds of sale executed by the appellee,
Avelina A. Magno, which are subject of this appeal, as well as the particular orders approving specific final deeds of sale
executed by the appellant, Philippine Commercial and Industrial Bank, which were never appealed by the appellee,
Avelina A. Magno, nor by any party for that matter, and which are now therefore final.

Now, simultaneously with the foregoing incidents, others of more fundamental and all embracing significance developed.
On October 5, 1963, over the signature of Atty. Allison J. Gibbs in representation of the law firm of Ozaeta, Gibbs &
Ozaeta, as counsel for the co-administrators Joe Hodges and Fernando P. Mirasol, the following self-explanatory motion
was filed:

URGENT MOTION FOR AN ACCOUNTING AND DELIVERY TO ADMINISTRATION OF THE ESTATE OF C. N. HODGES OF
ALL OF THE ASSETS OF THE CONJUGAL PARTNERSHIP OF THE DECEASED LINNIE JANE HODGES AND C N. HODGES
EXISTING AS OF MAY 23, 1957 PLUS ALL THE RENTS, EMOLUMENTS AND INCOME THEREFROM.

COMES NOW the co-administrator of the estate of C. N. Hodges, Joe Hodges, through his undersigned attorneys in the
above-entitled proceedings, and to this Honorable Court respectfully alleges:

(1) On May 23, 1957 Linnie Jane Hodges died in Iloilo City.

(2) On June 28, 1957 this Honorable Court admitted to probate the Last Will and Testament of the deceased Linni e Jane
Hodges executed November 22, 1952 and appointed C. N. Hodges as Executor of the estate of Linnie Jane Hodges (pp.
24-25, Rec. Sp. Proc. 1307).

(3) On July 1, 1957 this Honorable Court issued Letters Testamentary to C. N. Hodges in the Estate of Linnie Jane Hodges
(p. 30, Rec. Sp. Proc. 1307).

(4) On December 14, 1957 this Honorable Court, on the basis of the following allegations in a Motion dated December 11,
1957 filed by Leon P. Gellada as attorney for the executor C. N. Hodges:

"That herein Executor, (is) not only part owner of the properties left as conjugal, but also, the successor to all the
properties left by the deceased Linnie Jane Hodges ."

(p. 44, Rec. Sp. Proc. 1307; emphasis supplied.)

issued the following order:

"As prayed for by Attorney Gellada, counsel for the Executory, for the reasons stated in his motion dated December 11,
1957 which the court considers well taken, all the sales, conveyances, leases and mortgages of all properties left by the
deceased Linnie Jane Hodges are hereby APPROVED. The said executor is further authorized to execute subsequent
sales, conveyances, leases and mortgages of the properties left by the said deceased Linnie Jane Hodges in consonance
with the wishes contained in the last will and testament of the latter."

(p. 46, Rec. Sp. Proc. 1307; emphasis supplied.)

(5) On April 21, 1959 this Honorable Court approved the inventory and accounting submitted by C. N. Hodges through
his counsel Leon P. Gellada on April 14, 1959 wherein he alleged among other things

"That no person interested in the Philippines of the time and place of examining the herein account, be given notice,
as herein executor is the only devisee or legatee of the deceased, in accordance with the last will and testament already
probated by the Honorable Court."

(pp. 77-78, Rec. Sp. Proc. 1307; emphasis supplied.).

(6) On July 30, 1960 this Honorable Court approved the "Annual Statement of Account" submitted by C. N. Hodges
through his counsel Leon P. Gellada on July 21, 1960 wherein he alleged among other things:

"That no person interested in the Philippines of the time and place of examining the herein account, be given notice
as herein executor is the only devisee or legatee of the deceased Linnie Jane Hodges , in accordance with the last will and
testament of the deceased, already probated by this Honorable Court."

(pp. 81-82. Rec. Sp. Proc. 1307; emphasis supplied.)

(7) On May 2, 1961 this Honorable court approved the "Annual Statement of Account By The Executor for the Year 1960"
submitted through Leon P. Gellada on April 20, 1961 wherein he alleged:

That no person interested in the Philippines be given notice, of the time and place of examining the herein account,
as herein Executor is the only devisee or legatee of the deceased Linnie Jane Hodges, in accordance with the last will and
testament of the deceased, already probated by this Honorable Court .

(pp. 90-91. Rec. Sp. Proc. 1307; emphasis supplied.)

(8) On December 25, 1962, C.N. Hodges died.

(9) On December 25, 1962, on the Urgent Ex-parte Motion of Leon P. Gellada filed only in Special Proceeding No. 1307,
this Honorable Court appointed Avelina A. Magno

"Administratrix of the estate of Linnie Jane Hodges and as Special Administratrix of the estate of Charles Newton Hodges,
in the latter case, because the last will of said Charles Newton Hodges is still kept in his vault or iron safe and that the real
and personal properties of both spouses may be lost, damaged or go to waste, unless a Special Administratrix is
appointed."

(p. 100. Rec. Sp. Proc. 1307)


(10) On December 26, 1962 Letters of Administration were issued to Avelina Magno pursuant to this Honorable Court's
aforesaid Order of December 25, 1962

"With full authority to take possession of all the property of said deceased in any province or provinces in which it may
be situated and to perform all other acts necessary for the preservation of said property, said Administratrix and/or
Special Administratrix having filed a bond satisfactory to the Court."

(p. 102, Rec. Sp. Proc. 1307)

(11) On January 22, 1963 this Honorable Court on petition of Leon P. Gellada of January 21, 1963 issued Letters of
Administration to:

(a) Avelina A. Magno as Administratrix of the estate of Linnie Jane Hodges;

(b) Avelina A. Magno as Special Administratrix of the Estate of Charles Newton Hodges; and

(c) Joe Hodges as Co-Special Administrator of the Estate of Charles Newton Hodges.

(p. 43, Rec. Sp. Proc. 1307)

(12) On February 20, 1963 this Honorable Court on the basis of a motion filed by Leon P. Gellada a s legal counsel on
February 16, 1963 for Avelina A. Magno acting as Administratrix of the Estate of Charles Newton Hodges (pp. 114-116, Sp.
Proc. 1307) issued the following order:

"... se autoriza a aquella (Avelina A. Magno) a firmar escrituras de venta definitiva de propiedades cubiertas por contratos
para vender, firmados, en vida, por el finado Charles Newton Hodges, cada vez que el precio estipulado en cada
contrato este totalmente pagado. Se autoriza igualmente a la misma a firmar escrituras de cancelacion de hipoteca tanto
de bienes reales como personales cada vez que la consideracion de cada hipoteca este totalmente pagada.

"Cada una de dichas escrituras que se otorguen debe ser sometida para la aprobacion de este Juzgado."

(p. 117, Sp. Proc. 1307).

[Par 1 (c), Reply to Motion For Removal of Joe Hodges]

(13) On September l6, 1963 Leon P. Gellada, acting as attorney for Avelina A. Magno as Administratrix of the estate of
Linnie Jane Hodges, alleges:

3. — That since January, 1963, both estates of Linnie Jane Hodges and Charles Newton Hodges have been receiving in
full, payments for those "contracts to sell" entered into by C. N. Hodges during his lifetime, and the purchasers have been
demanding the execution of definite deeds of sale in their favor.

4. — That hereto attached are thirteen (13) copies deeds of sale executed by the Administratrix and by the
co-administrator (Fernando P. Mirasol) of the estate of Linnie Jane Hodges and Charles Newton Hodges respectively, in
compliance with the terms and conditions of the respective "contracts to sell" executed by the parties thereto."
(14) The properties involved in the aforesaid motion of September 16, 1963 are all registered in the name of the deceased
C. N. Hodges.

(15) Avelina A. Magno, it is alleged on information and belief, has been advertising in the newspaper in Iloilo thusly:

For Sale

Testate Estate of Linnie Jane Hodges and Charles Newton Hodges.

All Real Estate or Personal Property will be sold on First Come First Served Basis.

Avelina A. Magno
Administratrix

(16) Avelina A. Magno, it is alleged on information and belief, has paid and still is paying sums of money to sundry
persons.

(17) Joe Hodges through the undersigned attorneys manifested during the hearings before this Honorable Court on
September 5 and 6, 1963 that the estate of C. N. Hodges was claiming all of the assets belonging to the deceased
spouses Linnie Jane Hodges and C. N. Hodges situated in Philippines because of the aforesaid election by C. N. Hodges
wherein he claimed and took possession as sole owner of all of said assets during the administration of the estate of
Linnie Jane Hodges on the ground that he was the sole devisee and legatee under her Last Will and Testament.

(18) Avelina A. Magno has submitted no inventory and accounting of her administration as Administratrix of the estate of
Linnie Jane Hodges and Special Administratrix of the estate of C. N. Hodges. However, from manifestations made by
Avelina A. Magno and her legal counsel, Leon P. Gellada, there is no question she will claim that at least fifty per cent
(50%) of the conjugal assets of the deceased spouses and the rents, emoluments and income therefrom belong to the
Higdon family who are named in paragraphs Fourth and Fifth of the Will of Linnie Jane Hodges (p. 5, Rec. Sp. Proc. 1307).

WHEREFORE, premises considered, movant respectfully prays that this Honorable Court, after due hearing, order:

(1) Avelina A. Magno to submit an inventory and accounting of all of the funds, properties and assets of any character
belonging to the deceased Linnie Jane Hodges and C. N. Hodges which have come into her possession, with full details
of what she has done with them;

(2) Avelina A. Magno to turn over and deliver to the Administrator of the estate of C. N. Hodges all of th e funds,
properties and assets of any character remaining in her possession;

(3) Pending this Honorable Court's adjudication of the aforesaid issues, Avelina A. Magno to stop, unless she first secures
the conformity of Joe Hodges (or his duly authorized representative, such as the undersigned attorneys) as the
Co-administrator and attorney-in-fact of a majority of the beneficiaries of the estate of C. N. Hodges:

(a) Advertising the sale and the sale of the properties of the estates:
(b) Employing personnel and paying them any compensation.

(4) Such other relief as this Honorable Court may deem just and equitable in the premises. (Annex "T", Petition.)

Almost a year thereafter, or on September 14, 1964, after the co-administrators Joe Hodges and Fernando P. Mirasol
were replaced by herein petitioner Philippine Commercial and Industrial Bank as sole administrator, pursuant to an
agreement of all the heirs of Hodges approved by the court, and because the above motion of October 5, 1963 had not
yet been heard due to the absence from the country of Atty. Gibbs, petitioner filed the following:

MANIFESTATION AND MOTION, INCLUDING MOTION TO SET FOR HEARING AND RESOLVE "URGENT MOTION FOR
AN ACCOUNTING AND DELIVERY TO ADMINISTRATORS OF THE ESTATE OF C. N. HODGES OF ALL THE ASSETS OF THE
CONJUGAL PARTNERSHIP OF THE DECEASED LINNIE JANE HODGES AND C. N. HODGES EXISTING AS OF MAY 23, 1957
PLUS ALL OF THE RENTS, EMOLUMENTS AND INCOME THEREFROM OF OCTOBER 5, 1963.

COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to as PCIB), the administrator of the estate
of C. N. Hodges, deceased, in Special Proceedings No. 1672, through its undersigned counsel, and to this Honorable
Court respectfully alleges that:

1. On October 5, 1963, Joe Hodges acting as the co-administrator of the estate of C. N. Hodges filed, through the
undersigned attorneys, an "Urgent Motion For An Accounting and Delivery To Administrator of the Estate of C. N.
Hodges of all Of The Assets Of The Conjugal Partnership of The Deceased Linnie Jane Hodges and C. N. Hodges Existing
as Of May, 23, 1957 Plus All Of The Rents, Emoluments and Income Therefrom" (pp. 536-542, CFI Rec. S. P. No. 1672).

2. On January 24, 1964 this Honorable Court, on the basis of an amicable agreement entered into on January 23, 1964 by
the two co-administrators of the estate of C. N. Hodges and virtually all of the heirs of C. N. Hodges (p. 912, CFI Rec., S. P.
No. 1672), resolved the dispute over who should act as administrator of the estate of C. N. Hodges by appointing the
PCIB as administrator of the estate of C. N. Hodges (pp. 905-906, CFI Rec. S. P. No. 1672) and issuing letters of
administration to the PCIB.

3. On January 24, 1964 virtually all of the heirs of C. N. Hodges, Joe Hodges and Fernando P. Mirasol acting a s the two
co-administrators of the estate of C. N. Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie Jane
Hodges, and Messrs. William Brown and Ardel Young Acting for all of the Higdon family who claim to be the sole
beneficiaries of the estate of Linnie Jane Hodges and various legal counsel representing the aforenamed parties entered
into an amicable agreement, which was approved by this Honorable Court, wherein the parties thereto agreed that
certain sums of money were to be paid in settlement of different claims against the two estates and that the assets (to
the extent they existed)of both estates would be administrated jointly by the PCIB as administrator of the estate of C. N.
Hodges and Avelina A. Magno as administratrix of the estate of Linnie Jane Hodges , subject, however, to the aforesaid
October 5, 1963 Motion, namely, the PCIB's claim to exclusive possession and ownership of one-hundred percent (10017,)
(or, in the alternative, seventy-five percent [75%] of all assets owned by C. N. Hodges or Linnie Jane Hodges situated in
the Philippines. On February 1, 1964 (pp. 934-935, CFI Rec., S. P. No. 1672) this Honorable Court amended its order of
January 24, 1964 but in no way changes its recognition of the aforedescribed basic demand by the PCIB as administrator
of the estate of C. N. Hodges to one hundred percent (100%) of the assets claimed by both estates.
4. On February 15, 1964 the PCIB filed a "Motion to Resolve" the aforesaid Motion of October 5, 1963. This Honorable
Court set for hearing on June 11, 1964 the Motion of October 5, 1963.

5. On June 11, 1964, because the undersigned Allison J. Gibbs was absent in the United States, this Honorable Court
ordered the indefinite postponement of the hearing of the Motion of October 5, 1963.

6. Since its appointment as administrator of the estate of C. N. Hodges the PCIB has not been able to properly carry out
its duties and obligations as administrator of the estate of C. N. Hodges because of the following acts, among others, of
Avelina A. Magno and those who claim to act for her as administratrix of the estate of Linnie Jane Hodges:

(a) Avelina A. Magno illegally acts as if she is in exclusive control of all of the assets in the Philippines of both estates
including those claimed by the estate of C. N. Hodges as evidenced in part by her locking the premises at 206-208
Guanco Street, Iloilo City on August 31, 1964 and refusing to reopen same until ordered to do so by this Honorable Court
on September 7, 1964.

(b) Avelina A. Magno illegally acts as though she alone may decide how the assets of the estate of C.N. Hodges should
be administered, who the PCIB shall employ and how much they may be paid as evidenced in party by her refusal to sign
checks issued by the PCIB payable to the undersigned counsel pursuant to their fee agreement approved by this
Honorable Court in its order dated March 31, 1964.

(c) Avelina A. Magno illegally gives access to and turns over possession of the records and assets of the estate of C.N.
Hodges to the attorney-in-fact of the Higdon Family, Mr. James L. Sullivan, as evidenced in part by the cashing of his
personal checks.

(d) Avelina A. Magno illegally refuses to execute checks prepared by the PCIB drawn to pay expenses of the estate of C.
N. Hodges as evidenced in part by the check drawn to reimburse the PCIB's advance of P48,445.50 to pay the 1964
income taxes reported due and payable by the estate of C.N. Hodges.

7. Under and pursuant to the orders of this Honorable Court, particularly those of January 24 and February 1, 1964, and
the mandate contained in its Letters of Administration issued on January 24, 1964 to the PCIB, it has

"full authority to take possession of all the property of the deceased C. N. Hodges

"and to perform all other acts necessary for the preservation of said property." (p. 914, CFI Rec., S.P. No. 1672.)

8. As administrator of the estate of C. N. Hodges, the PCIB claims the right to the immediate exclusive possession and
control of all of the properties, accounts receivables, court cases, bank accounts and other assets, including the
documentary records evidencing same, which existed in the Philippines on the date of C. N. Hodges' death, December
25, 1962, and were in his possession and registered in his name alone. The PCIB knows of no assets in the Philippines
registered in the name of Linnie Jane Hodges, the estate of Linnie Jane Hodges, or, C. N. Hodges, Executor of the Estate
of Linnie Jane Hodges on December 25, 1962. All of the assets of which the PCIB has knowledge are either registered in
the name of C. N. Hodges, alone or were derived therefrom since his death on December 25, 1962.
9. The PCIB as the current administrator of the estate of C. N. Hodges, deceased, succeeded to all of the rights of the
previously duly appointed administrators of the estate of C. N. Hodges, to wit:

(a) On December 25, 1962, date of C. N. Hodges' death, this Honorable Court appointed Miss Avelina A. Magno
simultaneously as:

(i) Administratrix of the estate of Linnie Jane Hodges (p. 102, CFI Rec., S.P. No. 1307) to replace the deceased C. N.
Hodges who on May 28, 1957 was appointed Special Administrator (p. 13. CFI Rec. S.P. No. 1307) and on July 1, 1957
Executor of the estate of Linnie Jane Hodges (p. 30, CFI Rec., S. P. No. 1307).

(ii) Special Administratrix of the estate of C. N. Hodges (p. 102, CFI Rec., S.P. No. 1307).

(b) On December 29, 1962 this Honorable Court appointed Harold K. Davies as co-special administrator of the estate of
C.N. Hodges along with Avelina A. Magno (pp. 108-111, CFI Rec., S. P. No. 1307).

(c) On January 22, 1963, with the conformity of Avelina A. Magno, Harold K. Davies resigned in favor of Joe Hodges (pp.
35-36, CFI Rec., S.P. No. 1672) who thereupon was appointed on January 22, 1963 by this Honorable Court as special
co-administrator of the estate of C.N. Hodges (pp. 38-40 & 43, CFI Rec. S.P. No. 1672) along with Miss Magno who at
that time was still acting as special co-administratrix of the estate of C. N. Hodges.

(d) On February 22, 1963, without objection on the part of Avelina A. Magno, this Honorable Court appointed Joe
Hodges and Fernando P. Mirasol as co-administrators of the estate of C.N. Hodges (pp. 76-78, 81 & 85, CFI Rec., S.P. No.
1672).

10. Miss Avelina A. Magno, pursuant to the orders of this Honorable Court of December 25, 1962, took possession of all
Philippine Assets now claimed by the two estates. Legally, Miss Magno could take possession of the assets registered in
the name of C. N. Hodges alone only in her capacity as Special Administratrix of the Estate of C.N. Hodges. With the
appointment by this Honorable Court on February 22, 1963 of Joe Hodges and Fernando P. Mirasol as the
co-administrators of the estate of C.N. Hodges, they legally were entitled to take over from Miss Magno the full and
exclusive possession of all of the assets of the estate of C.N. Hodges. With the appointment on January 24, 1964 of the
PCIB as the sole administrator of the estate of C.N. Hodges in substitution of Joe Hodges and Fernando P. Mirasol, the
PCIB legally became the only party entitled to the sole and exclusive possession of all of the assets of the estate of C. N.
Hodges.

11. The PCIB's predecessors submitted their accounting and this Honorable Court approved same, to wit:

(a) The accounting of Harold K. Davies dated January 18, 1963 (pp. 16-33, CFI Rec. S.P. No. 1672); which shows or its face
the:

(i) Conformity of Avelina A. Magno acting as "Administratrix of the Estate of Linnie Jane Hodges and Special
Administratrix of the Estate of C. N. Hodges";

(ii) Conformity of Leslie Echols, a Texas lawyer acting for the heirs of C.N. Hodges; and
(iii) Conformity of William Brown, a Texas lawyer acting for the Higdon family who claim to be the only heirs of Linnie
Jane Hodges (pp. 18, 25-33, CFI Rec., S. P. No. 1672).

Note: This accounting was approved by this Honorable Court on January 22, 1963 (p. 34, CFI Rec., S. P. No. 1672).

(b) The accounting of Joe Hodges and Fernando P. Mirasol as of January 23, 1964, filed February 24, 1964 (pp. 990-1000,
CFI Rec. S.P. No. 1672 and pp. 1806-1848, CFI Rec. S.P. No. 1307).

Note: This accounting was approved by this Honorable Court on March 3, 1964.

(c) The PCIB and its undersigned lawyers are aware of no report or accounting submitted by Avelina A. Magno of her
acts as administratrix of the estate of Linnie Jane Hodges or special administratrix of the estate of C.N. Hodges, unless it
is the accounting of Harold K. Davies as special co-administrator of the estate of C.N. Hodges dated January 18, 1963 to
which Miss Magno manifested her conformity (supra).

12. In the aforesaid agreement of January 24, 1964, Miss Avelina A. Magno agreed to receive P10,000.00

"for her services as administratrix of the estate of Linnie Jane Hodges"

and in addition she agreed to be employed, starting February 1, 1964, at

"a monthly salary of P500.00 for her services as an employee of both estates."

24 ems.

13. Under the aforesaid agreement of January 24, 1964 and the orders of this Honorable Court of same date, the PCIB as
administrator of the estate of C. N. Hodges is entitled to the exclusive possession of all records, properties and assets in
the name of C. N. Hodges as of the date of his death on December 25, 1962 which were in the possession of the
deceased C. N. Hodges on that date and which then passed to the possession of Miss Magno in her capacity as Special
Co-Administratrix of the estate of C. N. Hodges or the possession of Joe Hodges or Fernando P. Mirasol as
co-administrators of the estate of C. N. Hodges.

14. Because of Miss Magno's refusal to comply with the reasonable request of PCIB concerning the assets of the estate of
C. N. Hodges, the PCIB dismissed Miss Magno as an employee of the estate of C. N. Hodges effective August 31, 1964.
On September 1, 1964 Miss Magno locked the premises at 206-208 Guanco Street and denied the PCIB access thereto.
Upon the Urgent Motion of the PCIB dated September 3, 1964, this Honorable Court on September 7, 1964 ordered Miss
Magno to reopen the aforesaid premises at 206-208 Guanco Street and permit the PCIB access thereto no later than
September 8, 1964.

15. The PCIB pursuant to the aforesaid orders of this Honorable Court is again in physical possession of all of the assets of
the estate of C. N. Hodges. However, the PCIB is not in exclusive control of the aforesaid records, properties and assets
because Miss Magno continues to assert the claims hereinabove outlined in paragraph 6, continues to use her own locks
to the doors of the aforesaid premises at 206-208 Guanco Street, Iloilo City and continues to deny the PCIB its right to
know the combinations to the doors of the vault and safes situated within the premises at 206-208 Guanco Street
despite the fact that said combinations were known to only C. N. Hodges during his lifetime.

16. The Philippine estate and inheritance taxes assessed the estate of Linnie Jane Hodges were assessed and paid on the
basis that C. N. Hodges is the sole beneficiary of the assets of the estate of Linnie Jane Hodges situated in the Philippines.
Avelina A. Magno and her legal counsel at no time have questioned the validity of the aforesaid assessment and the
payment of the corresponding Philippine death taxes.

17. Nothing further remains to be done in the estate of Linnie Jane Hodges except to resolve the aforesaid Motion of
October 5, 1963 and grant the PCIB the exclusive possession and control of all of the records, properties and assets of
the estate of C. N. Hodges.

18. Such assets as may have existed of the estate of Linnie Jane Hodges were ordered by this Honorable Court in special
Proceedings No. 1307 to be turned over and delivered to C. N. Hodges alone. He in fact took possession of them before
his death and asserted and exercised the right of exclusive ownership over the said assets as the sole beneficiary of the
estate of Linnie Jane Hodges.

WHEREFORE, premises considered, the PCIB respectfully petitions that this Honorable court:

(1) Set the Motion of October 5, 1963 for hearing at the earliest possible date with notice to all interested parties;

(2) Order Avelina A. Magno to submit an inventory and accounting as Administratrix of the Estate of Linnie Jane Hodges
and Co-Administratrix of the Estate of C. N. Hodges of all of the funds, properties and assets of any character belonging
to the deceased Linnie Jane Hodges and C. N. Hodges which have come into her possession, with full details of what she
has done with them;

(3) Order Avelina A. Magno to turn over and deliver to the PCIB as administrator of the estate of C. N. Hodges all of the
funds, properties and assets of any character remaining in her possession;

(4) Pending this Honorable Court's adjudication of the aforesaid issues, order Avelina A. Magno and her representatives
to stop interferring with the administration of the estate of C. N. Hodges by the PCIB and its duly authorized
representatives;

(5) Enjoin Avelina A. Magno from working in the premises at 206-208 Guanco Street, Iloilo City as an employee of the
estate of C. N. Hodges and approve her dismissal as such by the PCIB effective August 31, 1964;

(6) Enjoin James L. Sullivan, Attorneys Manglapus and Quimpo and others allegedly representing Miss Magno from
entering the premises at 206-208 Guanco Street, Iloilo City or any other properties of C. N. Hodges without the express
permission of the PCIB;

(7) Order such other relief as this Honorable Court finds just and equitable in the premises. (Annex "U" Petition.)

On January 8, 1965, petitioner also filed a motion for "Official Declaration of Heirs of Linnie Jane Hodges Estate" alleging:
COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to as PCIB), as administrator of the estate
of the late C. N. Hodges, through the undersigned counsel, and to this Honorable Court respectfully alleges that:

1. During their marriage, spouses Charles Newton Hodges and Linnie Jane Hodges, American citizens originally from the
State of Texas, U.S.A., acquired and accumulated considerable assets and properties in the Philippines and in the States
of Texas and Oklahoma, United States of America. All said properties constituted their conjugal estate.

2. Although Texas was the domicile of origin of the Hodges spouses, this Honorable Court, in its orders dated March 31
and December 12, 1964 (CFI Record, Sp. Proc. No. 1307, pp. ----; Sp. Proc. No. 1672, p. ----), conclusively found and
categorically ruled that said spouses had lived and worked for more than 50 years in Iloilo City and had, therefore,
acquired a domicile of choice in said city, which they retained until the time of their respective deaths.

3. On November 22, 1952, Linnie Jane Hodges executed in the City of Iloilo her Last Will and Testament, a copy of which
is hereto attached as Annex "A". The bequests in said will pertinent to the present issue are the second, third,
and fourth provisions, which we quote in full hereunder.

SECOND: I give, devise and bequeath all of the rest, residue and remainder of my estate, both personal and real,
wherever situated, or located, to my husband, Charles Newton Hodges, to have and to hold unto him, my said husband
during his natural lifetime.

THIRD: I desire, direct and provide that my husband, Charles Newton Hodges, shall have the right to manage, control,
use and enjoy said estate during his lifetime, and he is hereby given the right to make any changes in the physical
properties of said estate by sale of any part thereof which he think best, and the purchase of any other or additional
property as he may think best; to execute conveyances with or without general or special warranty, conveying in fee
simple or for any other term or time, any property which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he may elect to sell. All rents, emoluments and income from said estate shall
belong to him, and he is further authorized to use any part of the principal of said estate as he may need or desire. It is
provided herein, however, that he shall not sell or otherwise dispose of any of the improved property now owned by us
located at, in or near the City of Lubbock, Texas, but he shall have the full right to lease, manage and enjoy the same
during his lifetime, as above provided. He shall have the right to sub-divide any farmland and sell lots therein, and may
sell unimproved town lots.

FOURTH: At the death of my said husband, Charles Newton Hodges, I give, devise and bequeath all of the rest, residue
and remainder of my estate both real and personal, wherever situated or located, to be equally divided among my
brothers and sisters, share and share alike, namely:

"Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie Rascoe, Era Boman and Nimray Higdon."

4. On November 14, 1953, C. N. Hodges executed in the City of Iloilo his Last Will and Testament, a copy of which is
hereto attached as Annex "B ". In said Will, C. N. Hodges designated his wife, Linnie Jane Hodges, as his beneficiary using
the identical language she used in the second and third provisos of her Will, supra.
5. On May 23, 1957 Linnie Jane Hodges died in Iloilo City, predeceasing her husband by more than five (5) years. At the
time of her death, she had no forced or compulsory heir, except her husband, C. N. Hodges. She was survived also by
various brothers and sisters mentioned in her Will ( supra), which, for convenience, we shall refer to as the HIGDONS.

6. On June 28, 1957, this Honorable Court admitted to probate the Last Will and Testament of the deceased Linnie Jane
Hodges (Annex "A"), and appointed C. N. Hodges as executor of her estate without bond. (CFI Record, Sp. Proc. No. 1307,
pp. 24-25). On July 1, 1957, this Honorable Court issued letters testamentary to C. N. Hodges in the estate of Linnie Jane
Hodges. (CFI Record, Sp. Proc. No. 1307, p. 30.)

7. The Will of Linnie Jane Hodges, with respect to the order of succession, the amount of successional rights, and the
intrinsic of its testamentary provisions, should be governed by Philippine laws because:

(a) The testatrix, Linnie Jane Hodges, intended Philippine laws to govern her Will;

(b) Article 16 of the Civil Code provides that "the national law of the person whose succession is under consideration,
whate