Del Castillo Cases

SECOND DIVISION
G.R. No. 207633, December 09, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JOHNLIE LAGANGGA Y DUMPA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This is an appeal from the Decision1 dated April 16, 2013 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 00940 which
affirmed the January 7, 2011 Decision2 of the Regional Trial Court (RTC), Branch 34, Cabadbaran City, in Criminal Case No,
2004-45 finding appellant Johnlie Lagangga y Dumpa (appellant) guilty beyond reasonable doubt of the crime of rape.
On March 9, 2004, an Information for rape under paragraph 1(a), Article 266-A of the Revised Penal Code was filed against
appellant. The accusatory portion of said Information reads:
That on or about the 9th day of February, 2004, at dawn, at x x x Agusan del Norte, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, by means of force, threat and intimidation, did then and there willfully,
unlawfully and feloniously have carnal knowledge of one "AAA,"3 against her will.
Contrary to law.4ChanRoblesVirtualawl ibra ry
During his arraignment on July 12, 2004, appellant entered a plea of not guilty. Soon after the pre-trial conference, trial on
the merits ensued.
Version of the Prosecution
The prosecution's version of the incident as summarized by the Office of the Solicitor General (OSG) and adopted by the
appellate court is as follows:
On February 9, 2004 at 2:00 A.M., private complainant (AAA), and her three (3) children were sleeping inside the room of
their house xxx when she was awakened by the presence of a man wearing black clothes and a mask. Mistaking him for a
dog, she simply shooed him away until she suddenly felt a knife being poked at her neck. The man took off his makeshift
mask that was made from a t-shirt and because of the light from the kerosene lamp, private complainant recognized him as
her neighbor and appellant Johnlie Lagangga, which prompted her to shout "Oy! Johnlie ikaw man diay na! (So, Johnlie it
was you)." After covering her mouth, appellant boxed her on the stomach near the epigastric region or "kuto-kuto,"
rendering her unconscious.
When the private complainant regained consciousness at around 3:00 A.M., she saw appellant standing outside the room. He
threatened her, saying: "Basig ipablater ko nimo ugma, hasig mosumbong ka, patyon ta na long ka karon. Rung mosumbong
ka, patyong tamong tanan. (What if you will have me blottered tomorrow? What if you will report? I might as well kill you
now, if you will report, then I will kill all of you.)"
Private complainant then noticed that her panty was gone, her private part smelled differently and that "there was the
presence of mucous and probably a secretion of the male organ," concluding that she was used that night.
Private complainant's eldest son (BBB), who slept to the far right of his mother, was awakened along with his other siblings
[by] the commotion and started crying. He saw appellant on top of his unconscious mother, undressing her and doing "a sort
of push and pull movement or "kijo-kijo."
Despite appellant's threat, private complainant went to the house of their Purok president[,] Victoria "Baby" Mordin, to report
the incident. The two then sought the help of Mordin's friend, Senior Police Officer 3 (SPO3) Paterno Magdula. SP03 Magdula
later accompanied them to the Santiago Police Station where the police interviewed and took the affidavits of both Mordin
and the private complainant. Private complainant's son was later fetched by [the] police from their home [and] brought to
the police station, where he gave his sworn statement on the incident.5 ChanRobles Vi rtua lawlib rary
Version of the Defense
In his defense, appellant admitted having sexual intercourse with "AAA" but claimed it to be a consensual congress. As
summarized by the Public Attorney's Office, his version of the incident is as follows:
In sum, his testimony would prove that on February 8, 2004 at around 6:00 o'clock in the evening, he arrived home from
work in the mountain of Matinggi. Nobody was home, so he left and went to the house of the Purok President, Baby Mordin[,]
at [a]round 7:00 o'clock in the evening, and found out that several people had a drinking session there. He took one shot of
Kulafo, an alcoholic beverage, then returned home to take his supper. Thereafter, he went to the artesian well to wash his
body and saw (AAA) fetching water. (AAA) asked him if he saw her husband in the mountain and after he answered in the
negative, (AAA) invited him to go to her house later. At around 10:00 o'clock that evening, he went to the house of (AAA)
and waited for the latter at the sala. (AAA) came out from her room about two minutes later; they talked briefly and then
had sex. There was no light in the sala, only an illumination from outside, and (AAA) undressed herself. Their sexual
intercourse took only a few minutes, then he went home and slept. To his great surprise, he was arrested the following
day.6ChanRoblesVirt ualawli bra ry
Ruling of the Regional Trial Court
On January 7, 2011, the RTC rendered its Decision rinding appellant guilty beyond reasonable doubt of rape and sentencing
him to suffer the penalty of reclusion perpetua. He was also ordered to pay "AAA" the amount of P50,000.00 as civil
indemnity without subsidiary imprisonment in case of insolvency.
Ruling of the Court of Appeals
On appeal, the CA affirmed with modification the RTC Decision by awarding, in addition to the civil indemnity, the amount of
P50,000.00 as moral damages and P30,000.00 as exemplary damages, with interest at 6% per annum on all the amounts
awarded from the date of finality of the judgment until fully paid.
Undeterred, appellant is now before this Court via the preset appeal to gain a reversal of his conviction. He adopts the same
argument he raised in his brief submitted before the CA, viz.:
THE COURT A QUO GRAVELY ERRED IN CONVICTING ACCUSED-APPELLANT DESPITE THE FAILURE OF THE PROSECUTION TO
PROVE HIS GUILT BEYOND REASOABLE DOUBT.7 ChanRoblesVi rtualaw lib rary
Our Ruling
The appeal is barren of merit.
"Since the crime of rape is essentially one committed in relative isolation or even secrecy, it is usually only the victim who
can testify with regard to the fact of the forced coitus. In its prosecution, therefore, the credibility of the victim is almost
always the single and most important issue to deal with."8 "If the testimony of the victim is credible, convincing and
consistent with human nature and the normal course of things, the accused may be convicted solely on the basis thereof."9
Essentially, the argument of appellant as premised, boils down to the issue of credibility. Often, when the credibility of the
witness is in issue, the trial court's assessment is accorded great weight unless it is shown that it overlooked, misunderstood
or misappreciated a certain fact or circumstance of weight which, if properly considered, would alter the result of the case.10
In the present case, the RTC found "AAA's" account of her painful ordeal credible and sincere and gave it full probative
weight. "AAA's" positive identification of appellant as the one who threatened her by poking a knife at her and her testimony
that he boxed her on the abdomen rendering her unconscious and upon regaining consciousness noticed that her
undergarment was removed, are clear and consistent. The CA was convinced of the veracity of "AAA's" testimony. Thus:
Here, private complainant narrated a realistic account of her ordeal in a simple yet clear-cut manner. She expressed her
anger and bitterness towards appellant who, by his dastardly act, ruined her and her family. Nowhere in the course of her
testimony, not even in her cross examination, did it appear that she was impelled by improper motive.
The testimony of a witness who has no motive or reason to falsify or perjure oneself should be given credence. A virtuous
woman will not, as [a] rule, admit in public that she had been raped, as she thereby blemishes her honor and compromises
her future, unless she is telling the truth. It is her natural instinct to protect her honor. The testimony of a married rape
victim is given full weight and credence because no married woman with a husband and children would place herself on x x x
public trial for rape where she would be subjected to suspicion, morbid curiosity, malicious imputations, and close scrutiny of
her personal life, not to speak of a humiliation and scandal she and her family would suffer, if she was merely concocting her
charge and would not be able to prove it in court.11 ChanRoble sVirt ualawli bra ry
The absence of a medical certificate is not fatal to the cause of the prosecution. Case law has it that in view of the intrinsic
nature of rape, the only evidence that can be offered to prove the guilt of the offender is the testimony of the offended party.
"Even absent a medical certificate, her testimony, standing alone, can be made the basis of conviction if such testimony is
credible. Moreover, the absence of external injuries does not negate rape. In fact, even the [presence] of spermatozoa is not
an essential element of rape."12
Appellant contends that he cannot be convicted of a crime entirely different from that alleged in the Information. According
to him, from the tenor of the RTC's January 7, 2011 Decision, it appears that he was convicted of rape while "AAA" was
under the state of unconsciousness. In the Information, however, he was accused of rape committed thru force and
intimidation. He thus claims that his right to due process was violated.
We are not persuaded. An information that fails to allege that the offense was committed while the victim was unconscious is
deemed cured by the failure of the accused to question before the trial court the sufficiency of the information or by his
failure to object to the presentation of evidence tending to establish that the crime was committed through such means.
Apparently, appellant participated in the trial without raising any objection to the prosecution's evidence. Besides, as
correctly observed by the CA, "AAA's" unconsciousness was the direct result of the force employed by appellant when he
boxed the former on her stomach.
More importantly, appellant admitted having sexual intercourse with "AAA" at the latter's house although he claimed that the
sexual intercourse was consensual since they were lovers. The Court cannot subscribe to appellant's "sweetheart" theory and
exculpate him from the charge. For one, such claim is self-serving since it was not substantiated by the evidence on record.
And even if "AAA" and appellant were sweethearts, this fact does not necessarily negate rape. As has been consistently
ruled, "a love affair does not justify rape, for the beloved cannot be sexually violated against her will."13 "[L]ove is not a
license for lust"14 More importantly, what destroyed the veracity of appellant's "sweetheart" defense are "AAA's" credible
declaration that he is not her sweetheart and her vehement denial that he courted her.15
In fine, the Court finds no cogent reason to overturn the RTC's finding, which was affirmed by the CA, that appellant
employed force and intimidation on "AAA," who consequently lost consciousness, to perpetrate the offense charged.
The Penalty
Rape as defined and penalized under paragraph 116 of Article 266-A in relation to Article 266-B17 of the Revised Penal Code,
as amended, is punishable by reclusion perpetua. Consequently, the penalty of reclusion perpetua imposed by the RTC and
affirmed by the CA is proper.
The Civil Liability
With respect to the civil liability of appellant, the Court finds that the CA correctly affirmed the RTC's award of P50,000.00 as
civil indemnity and the CA's additional awards of P50,000.00 as moral damages even without need of further proof and
P30,000.00 as exemplary damages, with interest at 6% per annum on all the damages awarded from the date of finality of
the judgment until fully paid as proper.
WHEREFORE, the appeal is DISMISSED. The assailed Decision of the Court of Appeals dated April 16, 2013 in CA-G.R. CR-
HC No. 00940 is AFFIRMED.
SO ORDERED. chanroblesvi rtua llawli bra ry
G.R. No. 203397, December 09, 2015
AUGUSTO ONG TRINIDAD II, AUGUSTO ONG TRINIDAD III FOR HIMSELF AND REPRESENTING LEVY ONG
TRINIDAD AND ROHMEL ONG TRINIDAD, MARY ANN NEPOMUCENO TRINIDAD FOR HERSELF AND ASSISTING
HER MINOR CHILDREN JOAQUIN GERARD N. TRINIDAD IV, JACOB GABRIEL N. TRINIDAD, AND JERED GYAN N.
TRINIDAD, Petitioners, v. SPOUSES BONIFACIO PALAD AND FELICIDAD KAUSAPIN, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the March 27, 2012 Decision2 and August 24,2012 Resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 92118 which granted respondents' appeal and reversed the July 4, 2008
Decision4 of the Regional Trial Court (RTC) of Lucena City, Branch 53 (RTC) in Civil Case No. 92-71.
Factual Antecedents
On July 23, 1985, respondents - spouses Bonifacio Palad and Felicidad Kausapin (Felicidad) - bought from Renato Ramos
(Ramos) an eight-hectare parcel of land located within Lucena City, which was later registered as Transfer Certificate of Title
No. (TCT) T-47318.5
Respondents later caused the subject property to be surveyed, and it was discovered that a two-hectare portion thereof (the
subject property) was occupied by Augusto Trinidad (Augusto), who converted the same into a fishpond.
On May 29, 1992, respondents filed with the RTC of Lucena City a Complaint6 for recovery of possession with damages
against Augusto, which was docketed as Civil Case No. 92-71 and assigned to RTC Branch 53.
In his Answer,7 Augusto claimed that respondents were not the owners of the subject property; that Felicidad secured her
title through dubious means; that the subject property formed part of a five-hectare piece of property that was given to him
by his father, Atty. Joaquin Trinidad (Atty. Trinidad); that this five-hectare property was acquired by his father from Genaro
Kausapin (Genaro), who was his father's client; that said five-hectare property was declared for taxation purposes by his
father; that since 1980, he (Augusto) has been in possession of the five-hectare property; that he filed criminal cases for
falsification against Felicidad; and that Felicidad was motivated by greed and bad faith in filing the case. Augusto thus prayed
that the complaint be dismissed; that Felicidad's TCT T-47318 be nullified; and that damages and attorney's fees be awarded
to him.
During the proceedings, Augusto passed away and was substituted by his widow - herein petitioner Levy Ong Trinidad - and
children - petitioners Augusto Ong Trinidad II, Augusto Ong Trinidad in, Rohmel Ong Trinidad, and Joaquin Ong Trinidad III.
After trial, or on July 4,2008, the RTC rendered its Decision,8 pronouncing as follows:
This is a complaint for recovery of possession with damages filed by the spouses Bonifacio Palad and Felicidad Kausapin
against Augusto Trinidad as the original defendant. In the course of the trial Augusto C. Trinidad died and his widow, Levy
Ong Trinidad, and their children Rohmel Ong Trinidad, Augusto Ong Trinidad II, Augusto Ong Trinidad III and Joaquin
Trinidad III were substituted as defendants.
xxxx
The land subject of this case is a 2-hectare portion of the eight (8) hectares covered by Transfer Certificate of Title No. T-
47318 now registered in the names of the spouses Bonifacio Palad and Felicidad Kausapin (Exhibit "A").
In their complaint, the plaintiffs merely emphasized the fact that as the registered owners of the parcel of land with an area
of eight (8) hectares including the 2-hectare area in dispute, they are entitled to the possession of the disputed area which,
despite their demands to the defendants to vacate, the defendants have not vacated the area consisting of a well-developed
fishpond.
xxxx
For their part, the defendants posit as follows: During the lifetime of Genaro Kausapin, the father of complainant Felicidad
Kausapin, Genaro Kausapin availed of the legal services of Atty. Joaquin Trinidad in a land dispute involving a 12-hectare
property. For Atty. Trinidad's services, Genaro Kausapin and Atty. Trinidad executed on October 4, 1977 a document
denominated Kasulatan ng Pagbabahagi whereby they partitioned between themselves the 12-hectare property composed of
Lot 13-A, Lot 13-B and Lot 13-C of the Subdivision Plan, (LRC) PSD-254630 confirmed on December 19,1976 by the Land
Registration Commission. As his share in the partition Atty. Trinidad was given Lot 13-A (Exhibit "2").
In 1980 Atty. Trinidad gave to his son August© Trinidad the five (5) hectares given to him by Genaro Kausapin as attorney's
fee. Augusto Trinidad developed a 2-hectare portion of the five hectares into a fishpond spending huge amount of money in
the process.
xxxx
By whichever mode the plaintiffs had come to title the 8-hectare property including the 2-hectare portion in dispute, the
Court, sifting through the evidence presented by the parties, finds:
1. By virtue of the Kasulatan ng Pagbabahagi dated October 4, 1977 Genaro Kausapin and Atty. Joaquin
Trinidad partitioned between themselves the 12-hectare property composed of Lot 13-A, Lot 13-B and Lot
13-C of the Subdivision Plan (LRC) PSD-254630, Atty. Joaquin Trinidad getting Lot 13-A as his attorney's fee
for legal services he rendered to Genaro Kausapin.
2. Atty. Joaquin Trinidad gave to his son Augusto Trinidad his 5- hectare share and Augusto Trinidad,
beginning the year 1980, developed a portion of the area into a fishpond spending a huge amount of money
in the process.
3. On July 23, 1985 the plaintiffs bought an 8-hectare property from Renato Ramos and they had the land
titled in their names on September 11,1985.
4. It was when the plaintiffs had the land they bought from Renato Ramos surveyed that they found out that
the fishpond developed by Augusto Trinidad was embraced in the area of the [land] Renato Ramos sold to
them.
5. Renato Ramos did not know that the area developed by Augusto Trinidad into a fishpond was part of the
land he (Ramos) sold to the plaintiffs. Otherwise, if Renato Ramos knew this, he would not have allowed
Augusto Trinidad to occupy and transform the area into a fishpond and, much more, for him (Renato
Ramos) to have sold the entire property to the plaintiffs for the measly sum of P8,000.00, given the size of
the area and the improvements on the area in dispute. Likewise, it was only after the plaintiffs had caused
the survey of the area they bought that they came to know that the 2-hectare [property] developed by
Augusto Trinidad into a fishpond was within the area they bought.
From the foregoing, it is clear that when Augusto Trinidad entered the property in dispute in 1980 and began to transform it
into a fishpond, this was with the knowledge and consent of Genaro Kausapin, the father of the plaintiff. That what Augusto
Trinidad occupied was Lot 13-C when it should have been Lot 13-A becomes immaterial when it is considered that while the
lots were then designated as Lot 13-A, Lot 13-B and Lot 13-C, obviously Genaro Kausapin and Atty. Joaquin Trinidad and
Augusto Trinidad were not fully aware of the exact metes and bounds of each lot. This was also the case when, before the
area bought by the plaintiffs was surveyed, the vendor Renato Ramos and the plaintiffs as vendees did not know that the
area developed by Augusto Trinidad as a fishpond was within the area sold to the plaintiffs.
Given that the possession by the defendants of the area in question antedates by five years the claim of the plaintiffs to the
disputed property, and given that the parties who should have questioned the entry of the defendants into the property,
namely, Genaro Kausapin or Renato Ramos, did not do so, and considering the valuable improvements made by the
defendants in the area in dispute, the defendants have a better right to possess the disputed area, even as the area had
been included in [the] title issued to the plaintiffs.
WHEREFORE, the complaint is ordered dismissed.
Defendants' counterclaim is likewise ordered dismissed.
SO ORDERED.9 ChanRoblesVi rtualaw lib rary
Riding of the Court of Appeals
Respondents filed an appeal before the CA, docketed as CA-G.R. CV No. 92118, arguing that as registered owners of the
subject two-hectare property, they have a better right thereto; that petitioners' claim that the subject property was part of a
12-hectare piece of property owned by respondent Felicidad's father Genaro, five hectares of which was allegedly awarded by
Genaro to petitioners' father Atty. Trinidad as the latter's attorney's fees in a case, has no basis, as there is no evidence on
record to show that Genaro even owned a parcel of land; that in truth, Genaro was a mere tenant of the original owners of
the 12-hectare property - Juliana Navarro (Navarro), Pedro Loyola, and Ramos; that eventually, Ramos sold an eight-hectare
portion of the property to respondents, which is now the property covered by TCT T-47318 and claimed by petitioners to the
extent of two hectares; that apart from a document denominated as "Kasulatan ng Pagbabahagi" supposedly executed by
Genaro and Atty. Trinidad on October 4,1977, petitioners have not presented any title or any other documentary proof, such
as receipts showing payment of real property taxes, to prove their alleged ownership of the subject property; that
respondents cannot be bound by the supposed agreement between Genaro and Atty. Trinidad because it is void since, being
a mere tenant of the property, Genaro cannot award the same to Atty. Trinidad; that Genaro's status as a mere tenant is
known to Atty. Trinidad, since the latter was Genaro's counsel in a claim involving the subject property docketed as CAR
Case No. 585(62), which was eventually terminated by Genaro's execution in 1963 of a "Kasunduan", wherein he
acknowledged before Ramos and Atty. Trinidad that he was a mere tenant of the Ramos family; that Augusto was a
policeman during his lifetime, and he took over the disputed property by force, and respondents -fearing violence and
bloodshed - opted to resort to court action instead; and that under the Civil Code,10 they are protected as the registered
owners, and petitioners should be considered intruders and builders in bad faith.
During the pendency of the appeal, Joaquin Ong Trinidad HI died and was substituted by his widow and children - herein
petitioners Mary Ann Nepomuceno Trinidad, Joaquin Gerard N. Trinidad IV, Jacob Gabriel N. Trinidad and Jered Gyan N.
Trinidad.
On March 27, 2012, the CA rendered the assailed judgment, declaring as follows:
In this appeal, Spouses Palad assert their Transfer Certificate of Title No. T-47318 which undoubtedly covers appellees' two-
hectare fishpond found within the former's eight-hectare lot. They argue that appellees' predecessors-in-interest, Genaro
Kausapin and Atty. Joaquin Trinidad, were never owners of the eight-hectare lot, including the subject realty, as the property
was owned by Renato Ramos who sold it to them.
On the other hand, appellees reiterate in their brief that their father possessed the fishpond long before Spouses Palad
bought the eight-hectare lot. They also posit that a certificate of title by itself alone does not vest ownership in any person.
We grant the appeal.
Appellants are owners of the eight-hectare lot, including the two-hectare fishpond, by virtue of their Transfer Certificate of
Title No. T-47318. Spouses Esmaquel v. Coprada, explains why:
On the other hand, it is undisputed that the subject property is covered by Transfer Certificate of Title No. T-93542,
registered in the name of the petitioners. As against the respondent's unproven claim that she acquired a portion of the
property from the petitioners by virtue of an oral sale, the Torrens title of petitioners must prevail. Petitioners' title
over the subject property is evidence of their ownership thereof. It is a fundamental principle in land
registration that the certificate of title serves as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein. Moreover, the age-old rule is that the person who
has a Torrens title over a land is entitled to possession thereof.
As a rule, a certificate of title cannot be attacked collaterally. At any rate, in Spouses Sarmiento et al. v. Court of Appeals et
al., a counterclaim assailing a certificate of title is deemed a direct attack. x x x
xxxx
The burden of proof is on appellees to establish by clear and convincing evidence the ground or grounds for annulling a
certificate of title, In Lasquite et al. v. Victory Hills:
The established legal principle in actions for annulment or reconveyance of title is that a party seeking it should
establish not merely by a preponderance of evidence but by clear and convincing evidence that the land sought
to be reconveyed is his. It is rather obvious from the foregoing disquisition that respondent failed to dispense such burden.
Indeed, the records are replete with proof that respondent declared the lots comprising Lot No. 3050 for taxation purposes
only after it had instituted the present case in court. This is not to say of course that tax receipts are evidence of ownership,
since they are not, albeit they are good indicia of possession in the concept of owner, for no one would ordinarily be paying
taxes for a property not in his actual or at least constructive possession. x x x
Here, appellees offered no evidence, much less, clear and convincing evidence, that Spouses Palad's transfer certificate of
title should be annulled. In fact, it is on record that appellees' documents pertain to Lot 13-A, but they occupied Lot 13-C. As
the trial court determined, appellees' only basis for claiming the fishpond was their occupation thereof, though mistakenly
and the absence of the boundaries of Lots 13-A, 13-B and 13-C. But these matters do not and cannot annul Spouses Palad's
transfer certificate of title. They actually imply admission of appellees' intrusion into Lot 13-C under Transfer Certificate of
Title No. T-47318 without any right to own or possess it. Truth to tell, the trial court correctly did not set aside the transfer
certificate of title. Hence, it remains valid and binding with all its legal effects.
ACCORDINGLY, the appeal is GRANTED. The Decision dated July 4, 2008 of the Regional Trial Court, Branch 53, Lucena
City, in Civil Case No. 92-71 is REVERSED AND SET ASIDE. Defendants-appellees Levy Ong Trinidad, Joaquin Trinidad III,
Augusto Trinidad II, Augusto Trinidad III and Rohmel Trinidad, their successors-in-interest, privies and heirs are ordered to
vacate the two-hectare fishpond occupied by them in Lot 13-C under Transfer Certificate of Title No. T-47318. No
costs.
SO ORDERED.11 (Emphasis in the original).

Petitioners filed their Motion for Reconsideration,12 which was denied in the assailed August 24, 2012 Resolution. Hence, the
instant Petition.
In a January 27, 2014 Resolution,13 this Court resolved to give due course to the Petition.
Issues
Petitioners claim that the CA erred:
1. In its ruling that the respondents have a better right of possession over the disputed 2-hectare portion of the 8-
hectare property by the mere fact that said disputed portion is covered by a certificate of title in their names;
2. In its ruling that the petitioners offered no evidence that spouses Palad's transfer certificate of title should be
annulled, and therefore remains valid and binding with all its legal effects, as it failed to consider evidence showing
otherwise;
3. In its ruling that the petitioners should vacate the 2-hectare fishpond, as it failed to consider that the respondents
have no right or cause of action against the petitioners to seek the latter's ejectment from the property in question.14
Petitioners'Arguments
In their Petition and Reply15 seeking reversal of the assailed CA dispositions and reinstatement of the RTC's July 4, 2008
Decision dismissing Civil Case No. 92-71, petitioners essentially argue that respondents may not claim ownership of the
subject property just because it is embraced within their title, TCT T-47318; that TCT T-47318 is null and void since it is the
result of a June 5, 1985 deed of extrajudicial settlement16 and September 9, 1985 segregation agreement17 and not a sale
between respondents and Ramos; that since respondent Felicidad was not an heir of one of the original owners of the
property - Navarro - as erroneously stated in the deeds of extrajudicial settlement and segregation agreement, said
documents are therefore null and void, and could not be the bases for the issuance of TCT T-47318; that the subject
property was not included in the July 23, 1985 sale between respondents and Ramos because its inclusion in TCT T-47318
was discovered only after a survey was conducted after the sale; that since respondents are not the owners of the subject
property, they have no cause of action against petitioners; and that in their answer with counterclaim, they sought to annul
TCT T-47318, claiming that respondents secured same through Felicidad's claim that she is an heir of Navarro - thus, said
allegation made through a valid counterclaim constitutes a direct attack upon the validity of TCT T-47318 which is allowed by
law.
Respondents' Arguments
In their Comment18 seeking denial of the Petition, respondents argue that the CA correctly held that TCT T-47318 serves as
incontrovertible proof of their indefeasible title to the subject property, as well as their right to possession thereof; that
petitioners' claim that their title is void as it arose out of void agreements constitutes a prohibited collateral attack on TCT T-
47318; that the issue of validity or nullity of TCT T-47318 cannot be raised, as said issue was not touched upon by the RTC;
that TCT T-47318 may not be annulled because petitioners' supposed claim of ownership specifically refers to Lot 13-A, while
they wrongly occupied Lot 13-C, which is the subject of TCT T-47318; and that with the finding on record that petitioners
wrongly occupied Lot 13-C, they must be ordered to vacate the same and surrender possession to respondents who are the
registered owners
Our Ruling
The Court denies the Petition.
The fact is undisputed that the subject two-hectare property lies within Lot 13-C which is registered in the name of
respondents as TCT T-47318.
The evidence on record also suggests that contrary to petitioners' claim, the subject property constitutes a portion of an
eight-hectare parcel of land acquired by respondents from Ramos by purchase in 1985, and was not the result of a June 5,
1985 deed of extrajudicial settlement and September 9, 1985 segregation agreement between the original owners and
respondent Felicidad. This is a finding of fact arrived at by both the RTC and the CA - and this is admitted by petitioners in
their Petition, which specifically adopted the findings of fact of the RTC on this score.19
By adopting the findings of fact of the trial court, petitioners are precluded from further arguing that TCT T-47318 is void on
the ground that it was obtained through a simulated extrajudicial settlement agreement; and as far as this Court is
concerned, the fact is settled that respondents acquired the property covered by TCT T-47318 by purchase from Ramos. If
indeed Felicidad was an heir of any of the original owners of the property, then there would have been no need for her to
purchase the same. Besides, the evidence further points to the fact that Felicidad's father Genaro was a mere tenant of the
Ramos family and could not have owned the property in question; and this is precisely why, to own it, she had to purchase
the same from Ramos.
The CA is therefore correct in its pronouncement - citing Spouses Esmaquel and Sordevilla v. Coprada20 - that TCT T-47318
constitutes evidence of respondents' ownership over the subject property, which lies within the area covered by said title;
that TCT T-47318 serves as evidence of indefeasible and incontrovertible title to the property in favor of respondents, whose
names appear therein; and that as registered owners, they are entitled to possession of the subject property. As against
possession claimed by the petitioners, respondents' certificate of title prevails. "[M]ere possession cannot defeat the title of a
holder of a registered [T]orrens title x x x."21
On the other hand, petitioners' claim - their main defense in the suit - is that their predecessor Augusto was the owner of the
subject property. But such claim rests on very shaky ground. First, they claim that the subject property was awarded as
attorney's fees in 1977 to Augusto by Genaro. However, in seeking the annulment of respondents' title, they claim at the
same time that the property was acquired by Felicidad through inheritance from Navarro, who happens to be the
grandmother of Ramos.22 And yet, at the appeal stage before the CA, they adopt without question the RTC's finding that the
subject property was purchased by Felicidad from Ramos. Such a conflicting and flip-flopping stance deserves no serious
consideration. Genaro may not dispose of the property which does not belong to him although he may have executed a
document awarding the same to Augusto. No one can give that which he does not own - nemo dat quod non habet. Finally,
petitioners acknowledge that what Genaro supposedly gave Augusto as the latter's attorney's fees was Lot 13-A, while it
turned out that what Augusto occupied was Lot 13-C, which is registered in respondents' favor as TCT T-47318. Evidently,
Augusto had no right over Lot 13-C which he wrongly occupied; consequently, petitioners, as Augusto's successors-in-
interest, have no viable defense to respondents' claim in Civil Case No. 92-71.
Indeed, the only reason why petitioners won their case in the RTC is that in the court's July 4, 2008 Decision it assumed and
concluded that Genaro was the owner of the subject property which he awarded to Augusto via the supposed October 4,
1977 "Kasulatan ng Pagbabahagi" between Genaro and Augusto - when the evidence points to the fact that the property was
acquired by respondents through purchase from its original owner, Ramos.
Thus, as the CA correctly held, petitioners are mere intruders with respect to the subject property; they have no right to own
or possess the same. On the other hand, as registered owners of the subject property, respondents have the right to
exercise all attributes of ownership including possession which they cannot do while petitioners remain there.
WHEREFORE, the Petition is DENIED. The March 27, 2012 Decision and August 24, 2012 Resolution of the Court of Appeals
in CA-G.R. CV No. 92118 are AFFIRMED IN TOTO. Petitioners and their heirs, successors-in-interest and privies are ordered
to VACATE the two-hectare fishpond as well as any other portion of the property covered by Transfer Certificate of Title No.
T-47318.
SECOND DIVISION
G.R. No. 203115, December 07, 2015
ISLAND OVERSEAS TRANSPORT CORPORATION/PINE CREST SHIPPING CORPORATION/CAPT. EMMANUEL L.

REGIO, Petitioners, v. ARMANDO M. BEJA, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the March 28, 2012 Decision2 and August 13, 2012 Resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 113550 affirming the October 26, 2009 Decision4 and February 15, 2010 Resolution5 of the
National Labor Relations Commission (NLRC), which ordered petitioners Island Overseas Transport Corporation/Pine Crest
Shipping Corporation/Capt. Emmanuel L. Regio (petitioners) to pay respondent Armando M. Beja (Beja) US$110,000.00 as
permanent total disability benefits and 10% thereof as attorney's fees.
Antecedent Facts
On March 6, 2007, Beja entered into a Contract of Employment6 with petitioner Island Overseas Transport Corp. for and on
behalf of its foreign principal, petitioner Pine Crest Shipping Corporation, for a period of nine months as Second Assistant
Engineer for the vessel M/V Atsuta. Beja underwent the pre-employment medical examination, where he was declared fit for
work. He boarded the vessel on March 14, 2007.
In November 2007, Beja experienced pain and swelling of his right knee, which he immediately reported to the Master of the
vessel. On November 10, 2007, he was brought to a hospital in Italy and was diagnosed to have Arthrosynovitis. He
underwent arthrocentesis of the right knee, was referred to an orthopedic surgeon and was advised to take a rest.7 However,
while in Spain, the pain in his right knee recurred and persisted. He was brought to a physician on November 19, 2007 and
was advised to be medically repatriated.
Upon arrival in Manila on November 22, 2007, petitioners referred him to Nicomedes G. Cruz (NGC) Medical Clinic for
evaluation. The Magnetic Resonance Imaging of his right knee showed Chronic Tenosynovitis with Vertical Tear, Postero-
Lateral Meniscus and Probable Tear Anterior Cruciate and Lateral Collateral Ligaments.8 Beja underwent physical therapy and
was advised to undergo operation.9On April 23, 2008, Anterior Cruciate Ligament Reconstruction and Partial Menisectomy of
the Medial Meniscus was done on his right knee at Medical Center Manila.10 After the operation, petitioners sent him for
rehabilitation at St. Luke's Medical Center under the supervision of Dr. Reynaldo R. Rey-Matias (Dr. Matias).
Meantime, while undergoing therapy, or on May 15, 2008, Beja filed a complaint11 against petitioners for permanent total
disability benefits, medical expenses, sickness allowance, moral and exemplary damages and attorney's fees. Beja alleged
that his knee injury resulted from an accident he sustained on board the vessel when a drainage pipe fell on his knee. He
claimed that from the time of his repatriation on November 22, 2007, his knee has not recovered which rendered him
incapable of returning to his customary work as seafarer. This, according to him, clearly entitles him to permanent total
disability benefits pursuant to AMOSUP-JSU Collective Bargaining Agreement (CBA) which provides:
Article 28.1:
chanRob lesvi rtua lLawl ibra ry
A seafarer who surfers permanent disability as a result of an accident whilst in the employment of the Company regardless of
fault, including, accidents occurring while travelling to or from the ship, and whose ability to work as a seafarer is reduced as
a result thereof, but excluding permanent disability due to willful acts, shall in addition to sick pay, be entitled to
compensation, according to the provisions of this Agreement.12 ChanRobles Virtualawl ibra ry
He claimed for compensation in the amount of US$137,500.00 in accordance with the degree of disability and rate of
compensation indicated in the said CBA, to wit:
Disability
In the event a seafarer suffers permanent disability in accordance with the provisions of Article 28 of this Agreement, the
scale of compensation provided for under Article 28.3 shall, unless more favourable benefits are negotiated, be: chanRoble svirtual Lawlib ra ry
xxxx
Effective from 1st January to 31st December, 2007
Degree of Disability Rate of Compensation (US$)
Junior Officers &

% Ratings, AB & Below Senior Officers (4)
Ratings Above AB
100 82,500 110,000 137,500
75 61,900 82,500 103,150
60 49,500 66,000 82,500
50 41,250 55,000 68,750
40 33,000 44,000 55,000
30 24,750 33,000 41,250
20 16,500 22,000 27,500

10 8,250 11,000 13,750
Note: "Senior Officers" for the purpose of this clause means Master, Chief Officer, Chief Engineer and 1st Engineer.13 ChanRoble sVirtualawli bra ry
On May 26, 2008, the company-designated physician, Dr. Nicomedes G. Cruz (Dr. Cruz), issued an assessment of Beja's
disability:
1. Prognosis - guarded.
2. Combined disability grading under the POEA schedule of disabilities:
a. Grade 10 - stretching leg of the ligaments of a knee resulting in instability of the joint.
b. Grade 13 - slight atrophy of calf muscles without apparent shortening or joint lesion or disturbance of weight-bearing
line.14
After more than three months of therapy, Dr. Matias issued on August 28, 2008 a medical report15stating that Beja is still
under pain as verified by the Visual Analog System which measures his pain at 6 out of 10 (10 being the highest measure of
pain) and is having difficulty in his knee movements. Thereafter, on August 30, 2008, Beja consulted an orthopedic surgeon,
Dr. Nicanor F. Escutin (Dr. Escutin), who examined and certified him to be unfit for sea duty in whatever capacity due to pain
and difficulty of the use of his right knee despite the operation and therapy performed on him.16
Proceedings before the Labor Arbiter
During the preliminary conference, petitioners offered to pay Beja the amount of US$13,345.00, corresponding to the
combined disability grading given by Dr. Cruz, which is disability Grade 10 (US$50,000 x 20.15%) and Grade 13 (US$50,000
x 6.72%) under the Schedule of Disability Allowances in the POEA Standard Employment Contract (POEA- SEC). Beja,
however, rejected petitioners' offer and reiterated his claim for total disability benefits as strengthened by the certification of
Dr. Escutin that he suffers from a permanent total disability, which he claimed, confirmed the findings of Dr. Matias.
Petitioners, however, insisted that the combined disability assessment given by Dr. Cruz, who for months continuously
treated and monitored Beja's condition, prevails over that rendered by Dr. Escutin, who examined Beja only once and whose
diagnosis was merely based on the medical reports and findings of the company-designated physicians. Petitioners further
disclaimed Beja's entitlement to disability claim under the CBA as it expressly requires the parties to consult a third doctor
whose opinion shall be binding on them. Since Beja failed to observe this procedure which is also mandated under the POEA-
SEC, the finding of Dr. Cruz deserves utmost respect. Petitioners also asseverated that Beja already received his sickness
allowance by presenting several vouchers.17
In a Decision18 dated February 27, 2009, the Labor Arbiter awarded Beja maximum disability benefits under the CBA. The
Labor Arbiter did not give credence to the assessment given by Dr. Cruz as it was issued after the lapse of 120 days which,
by operation of law, transformed Beja's disability to total and permanent. Moreover, despite continued physical therapy,
Bejars condition did not improve even beyond the 240-day maximum medical treatment period. The Labor Arbiter found
doubtful Dr. Cruz's assessment considering that he was not the one who performed the operation on Beja's knee. The Labor
Arbiter denied Beja's claim for sickness allowance since payment thereof was fully substantiated by evidence presented by
petitioners. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered against the above-named respondents ISLAND OVERSEAS
TRANSPORT CORP. and/or PINE CREST SHIPPING CORP. and/or CAPT. EMMANUEL L. REGIO, who are hereby ordered to pay,
jointly and severally, complainant's Permanent Total Disability benefits in the amount of US DOLLARS ONE HUNDRED THIRTY
SEVEN THOUSAND FIVE HUNDRED (US$137,500.00), in Philippine currency at the prevailing rate of exchange at the time of
payment, plus ten percent (10%) thereof as attorney's fees.
SO ORDERED.19 ChanRoblesVi rtua lawlib rary
Proceedings before the National Labor Relations Commission
On appeal, petitioners attributed error in the Labor Arbiter in granting Beja the maximum disability benefits under the CBA.
Petitioners argued that since Dr. Cruz made an assessment on May 26, 2008 or before the lapse of the maximum 240-day
treatment period from the date of Beja's repatriation on November 22, 2007, mere was no factual basis in ruling that Beja is
entitled to full disability benefits. They cited Vergara v. Hammonia Maritime Services, Inc.,20 where it was pronounced that
only after the lapse of 240 days of continuous medical treatment without any assessment given by the company doctor that
a medically repatriated seafarer could be adjudged as permanently and totally disabled. They also claimed that the CBA is
inapplicable in Beja's case because Beja failed to comply with the procedure regarding the third doctor referral and more
importantly, no proof was adduced to show that his medical condition resulted from an accident Petitioners presented a
certification21 of the Master of vessel M/V Atsuta, Captain Henry M. Tejado, and a written declaration22 of the vessel's Chief
Engineer, Ramon B. Ortega, both confirming that Beja neither met an accident on board nor was injured during his stay in
the vessel under their command. Finally, petitioners contended that assuming that the CBA applies, the award of
US$137,500.00 is erroneous as Beja is not a Senior Officer. In fine, petitioners insisted that the disability assessment given
by Dr. Cruz based on the POEA-SEC is binding and controlling.
Beja, however, disputed petitioners' belated and self-serving denial that an accident took place and insisted that his failure to
resume his work as Second Engineer for more than 240 days resulted in his entitlement to the maximum disability benefit
under the CBA, as correctly ruled by the Labor Arbiter.
In a Decision23 dated October 26, 2009, the NLRC sustained the Labor Arbiter's finding that Beja is permanently and totally
disabled. It found Dr. Cruz's disability assessment premature and inaccurate considering that it was issued only a month
after Beja's surgery when the latter was still under medical evaluation and treatment. On the other hand, it found Dr.
Escutin's evaluation of Beja's condition more credible as it conforms to Dr. Matias' medical report which was rendered after
four months of therapy following the operation. The NLRC likewise ruled that Beja is entitled to compensation under the CBA
for an accident-sustained disability. It noted that his medical records reveal indications of tear and injury on his right knee
that could have resulted from an accident on board. It, however, reduced the award from US$137,500.00 to US$110,000.00
as Beja was only a Second Engineer and not a Senior Officer, thus:
WHEREFORE, premises considered, the Decision appealed from is hereby declared Modified to the extent only that
complainant's permanent total disability award should be US Dollars 110,000.00 (US$110,000.00). All other dispositions are
hereby Affirmed.
Petitioners' motion for reconsideration25 was denied in the NLRC Resolution26 dated February 15, 2010.
Proceedings before the Court of Appeals
Petitioners filed a Petition for Certiorari with Prayer for the Urgent Issuance of a Writ of Preliminary Injunction and/or
Temporary Restraining Order27 to enjoin the enforcement/ execution of the NLRC judgment. In a Resolution28 dated June 23,
2010, the CA denied Petitioners' application for the issuance of a Temporary Restraining Order and/or Writ of Preliminary
Injunction.
On March 28, 2012, the CA rendered a Decision29 denying the Petition for Certiorari and affirming the NLRC ruling. Trie CA
similarly found that Beja's injury resulting from an accident while on board the vessel. It likewise found merit in Dr. Escutin's
disability report declaring Beja unfit to work since his injury has prevented him from performing his customary work as
Second Engineer for more than 240 days and thus entitles him to permanent total disability benefits in accordance with the
CBA.
Petitioners sought reconsideration30 of the CA Decision. In a CA Resolution31 dated August 13, 2012, petitioners' motion was
denied.
Issues
Hence, petitioners filed the present Petition for Review on Certiorari raising the following grounds:
I. In awarding permanent total disability benefits in favor of the Respondent in utter disregard of extant case laws
outlining the instances when and how a temporary total disability can be converted into a permanent total one.
II. In relying on the opinion of Respondent's chosen doctor to justify an award of disability compensation contrary to
the clear edicts of the POEA Contract, the CBA and of the Supreme Court in jurisprudential precedents on the proper
establishment and/or determination of a seafarer's entitlement to disability benefits.
III. In awarding benefits based on the compensation provided in the parties' CBA when the said agreement
unequivocally confines compensation to injuries arising from accident, which is absolutely wanting in this case.
IV. In sustaining the award of attorney's fees albeit [without] legal and factual substantiation.32
Petitioners assert that Beja cannot be automatically declared as permanently and totally disabled by the mere lapse of 120
days without any assessment or certification of fit to work being issued. Citing Vergara, they argue that the 120-day period
may be extended up to the maximum of 240 days if the seafarer requires further medical attention. Since Dr. Cruz's
assessment was issued within the 240-day medical treatment period, albeit beyond 120 days, this could serve as the basis
for determining Beja's disability and the degree thereof. In short, Beja should have been declared as partially disabled with
Grades 10 and 13 disability under the POEA-SEC, as assessed by Dr. Cruz.
Moreover, they posit that Beja's complaint was prematurely filed and lacked cause of action for total and permanent disability
benefits. According to petitioners, the lack of a second opinion from Beja's chosen physician at the time of the filing of the
complaint and a third-doctor opinion is fatal to Beja's cause, for without a binding third opinion, the assessment of the
company-designated physician stands.
Further, they insist that Beja is not entitled to compensation under the parties' CB A which is only confined to injuries arising
from accident.
Our Ruling
The Petition is partially meritorious.

The parties' CBA is inapplicable.
Beja based his claim for full disability benefits under the CBA, claiming that his disability resulted from an accident while in
the employ of petitioners and that petitioners' belated denial cannot negate the applicability of the CBA provisions.
We are not convinced.
While, indeed, petitioners did not dispute, before the Labor Arbiter, the fact that Beja met an accident while performing his
duties, they, however, disputed the same in their appeal with the NLRC by submitting the certifications of the Master of the
vessel and Chief Engineer that no accident happened under their command. We have held that "rules of procedure and
evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand
in the way of equitably and completely resolving the rights and obligations of the parties."33 The Court is, thus, not precluded
to examine and admit this evidence, even if presented only on appeal before the NLRC, if only to dispense substantial justice.
We, however, note that Beja has not presented any proof of his allegation that he met an accident on board the vessel.
There was no single evidence to show that Beja was injured due to an accident while doing his duties in the vessel. No
accident report existed nor any medical report issued indicating that he met an accident while on board. Beja's claim was
simply based on pure allegations. Yet, evidence was submitted by petitioners disputing Beja's allegation. The certifications by
the Master of the vessel and Chief Engineer affirmed that Beja never met an accident on board nor was he injured while in
the performance of his duties under their command. Beja did not dispute these certifications nor presented any contrary
evidence. "It is an inflexible rule that a party alleging a critical fact must support his allegation with substantial evidence, for
any decision based on unsubstantiated allegation cannot stand without offending due process."34
The Court also takes notice of the fact that Beja's medical condition cannot be solely attributable to accidents. His injury
could have possibly been caused by other factors such as chronic wear and tear35and aging.36 Thus, the NLRC's conclusion
that the tear and injury on Beja's knee was caused by an accident on board had no factual basis but was anchored merely on
speculation. The Court cannot, however, rest its rulings on mere speculation and presumption.37
Thus, we find the CBA inapplicable; the determination of Beja's entitlement to disability benefits must, consequently, be
governed by the POEA-SEC and relevant labor laws.
Beja is entitled to a total and permanent disability compensation of US$60,000.00 under the POEA-SEC.
Article 192(c)(1) of the Labor Code provides that:

Art. 192. Permanent total disability. - x x x
(c) The following disabilities shall be deemed total and permanent: chanRoblesv irt ual Lawlib rary
(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for
in the Rules;
The Rule referred to in this Labor Code provision is Section 2, Rule X of the Amended Rules on Employees Compensation
(AREC) implementing Title II, Book IV of the Labor Code, which states:
Sec. 2. Period of Entitlement — (a) The income benefit shall be paid beginning on the first day of such disability. If caused by
an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires
medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary
total disability shall be paid. However, the System may declare the total and permanent status at any time after 120 days of
continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental
functions as determined by the System.
Section 20 B (3) of the POEA-SEC, meanwhile provides that:
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic
wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated
physician but in no case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated
physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the
employer and the seafarer. The third doctor's decision shall be final and binding on both parties.
In Vergara,38 this Court has ruled that the aforequoted provisions should be read in harmony with each other, thus: (a) the
120 days provided under Section 20 B(3) of the POEA-SEC is the period given to the employer to determine fitness to work
and when the seafarer is deemed to be in a state of total and temporary disability; (b) the 120 days of total and temporary
disability may be extended up to a maximum of 240 days should the seafarer require further medical treatment; and (c) a
total and temporary disability becomes permanent when so declared by the company-designated physician within 120 or 240
days, as the case may be, or upon the expiration of the said periods without a declaration of either fitness to work or
disability assessment and the seafarer is still unable to resume his regular seafaring duties.
Thus, although Section 3239 of the POEA-SEC states that only those injuries or disabilities classified as Grade 1 are
considered total and permanent, a partial and permanent disability could, by legal contemplation, become total and
permanent.40 The Court ruled in Kestrel Shipping Co., Inc. v. Munar,41viz.:
Indeed, under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as Grade 1 may be considered
as total and permanent. However, if those injuries or disabilities with a disability grading from 2 to 14, hence, partial and
permanent, would incapacitate a seafarer from performing his usual sea duties for a period of more than 120 or 240 days,
depending on the need for further medical treatment, then he is, under legal contemplation, totally and permanently
disabled. In other words, an impediment should be characterized as partial and permanent not only under the Schedule of
Disabilities found in Section 32 of the POEA-SEC but should be so under the relevant provisions of the Labor Code and the
Amended Rules on Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code. That while the seafarer
is partially injured or disabled, he is not precluded from earning doing the same work he had before his injury or disability or
that he is accustomed or trained to do. Otherwise, if his illness or injury prevents him from engaging in gainful employment
for more than 120 or 240 days, as the case may be, he shall be deemed totally and permanently disabled.
Moreover, the company-designated physician is expected to arrive at a definite assessment of the seafarer's fitness to work
or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarer's medical condition
remains unresolved, the seafarer shall be deemed totally and permanently disabled.42 ChanRobles Vi rtua lawlib rary
Beja was repatriated on November 21, 2007. Roughly a month after his right knee operation or on May 26, 2008, Dr. Cruz
rendered a Grade 10 and 13 partial disability grading of his medical condition. Thereafter, Beja's medical treatment,
supervised by another company-referred doctor, Dr. Matias, continued. On August 28, 2008, Dr. Matias issued a medical
report declaring that Beja has not yet fully recovered despite continued therapy. Hence, although he was given Grades 10
and 13 combined disability rating by Dr. Cruz, this assessment may only be considered as tentative because he still
continued his physical therapy sessions, which even went beyond 240 days.
In Sealanes Marine Services, Inc. v. Dela Torre,43 the seafarer was repatriated on August 4, 2010 and underwent
rehabilitation until July 20, 2011, exceeding the 240 days allowed to declare him either fit to work or permanently disabled. A
partial disability rating of Grade 11 was issued by the company-designated physician on March 10, 2011 but the Court
deemed this assessment only an interim one because of De La Torre's continued physical therapy sessions. The Court then
granted De La Torre the maximum disability compensation because despite his long treatment and rehabilitation, he was
unable to go back to work as a seafarer. In applying the Kestrel ruling, the Court held that if the seafarer's illness or injury
prevents him from engaging in gainful employment for more than 240 days, then he shall be deemed totally and
permanently disabled. The Court ratiocinated that while the seafarer is partially injured or disabled, he must not be precluded
from earning or doing the same work he had before his injury or disability or that which he is accustomed or trained to do.
In Belchem Philippines, Inc. v. Zafra, Jr.,44 the Court stressed that partial disability exists only if a seafarer is found capable
of resuming sea duties within the 120/240-day period. The premise is such that partial injuries did not disable a seafarer to
earn wages in the same kind of work or similar nature for which he was trained.
In this case, there was no assessment that Beja was found fit to resume sea duties before the end of the 240-day period.
Also Beja's allegation that he has not been able to perform his usual activities has not been contradicted by petitioners or by
contrary documentary evidence. In fact, in his medical report dated August 28, 2008, Dr. Matias opined that there was still
difficulty in Beja's knee movements. Beja should, therefore, be deemed to be suffering permanent total disability.
It must also be stressed that Dr. Cruz did not even explain how he arrived at the partial permanent disability assessment of
Beja. Dr. Cruz merely stated that Beja was suffering from impediment Grades 10 and 13 disability but without any
justification for such conclusion. Petitioners' claim that Beja only suffered a partial disability has undoubtedly no basis on
record.
Petitioners still argue that Beja's complaint is premature and as of its filing, no cause of action for total and permanent
disability benefits had set in. They contend that despite the lapse of the 120-day period, Beja was still considered under a
state of temporary total disability at the time he filed his complaint. In this regard, we quote the following pronouncements
in Kestrel, which involved the same circumstances as in the case at bar: chanRoblesv irt ual Lawlib rary
In this case, the following are undisputed: (a) when Munar filed a complaint for total and permanent disability benefits on
April 17, 2007, 181 days had lapsed from the time he signed-off from M/V Southern Unity on October 18, 2006; (b) Dr. Chua
issued a disability grading on May 3, 2007 or after the lapse of 197 days; and (c) Munar secured the opinion of Dr. Chiu on
May 21, 2007; (d) no third doctor was consulted by the parties; and (e) Munar did not question the competence and skill of
the company-designated physicians and their familiarity with his medical condition.
It may be argued that these provide sufficient grounds for the dismissal of Munar's complaint. Considering that the 240-day
period had not yet lapsed when the NLRC was asked to intervene, Munar's complaint is premature and no cause of action for
total and permanent disability benefits had set in. While beyond the 120-day period, Dr. Chua's medical report dated May 3,
2007 was issued within the 240-day period. Moreover, Munar did not contest Dr. Chua's findings using the procedure
outlined under Section 20-B(3) of the POEA-SEC. For being Munar's attending physicians from the time he was repatriated
and given their specialization in spine injuries, the findings of Dr. Periquet and Dr. Lim constitute sufficient bases for Dr.
Chua's disability grading. As Munar did not allege, much less, prove the contrary, there exists no reason why Dr. Chiu's
assessment should be preferred over that of Dr. Chua.
It must be noted, however, that when Munar filed his complaint, Dr. Chua had not yet determined the nature and extent of
Munar's disability. Also, Munar was still undergoing physical therapy and his spine injury had not yet been fully addressed.
Furthermore, when Munar filed a claim for total and permanent disability benefits, more than 120 days had gone by and the
prevailing y rule then was that enunciated by this Court in Crystal Shipping, Inc. v. Natividad that total and permanent
disability refers to the seafarer's incapacity to perform his customary sea duties for more than 120 days. Particularly:
Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of
whether or not he loses the use of any part of his body. As gleaned from the records, respondent was unable to work
from August 18, 1998 to February 22, 1999, at the least, or more than 120 days, due to his medical treatment. This clearly
shows that his disability was permanent.
Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work or similar
nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and
attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is
compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity.
xxxx
Petitioners tried to contest the above findings by showing that respondent was able to work again as a chief mate in March
2001. Nonetheless, this information does not alter the fact that as a result of his illness, respondent was unable to work as a
chief mate for almost three years. It is of no consequence that respondent was cured after a couple of years. The
law does not require that the illness should be incurable. What is important is that he was unable to perform his
customary work for more than 120 days which constitutes permanent total disability. An award of a total and
permanent disability benefit would be germane to the purpose of the benefit, which is to help the employee in making ends
meet at the time when he is unable to work. x x x
Consequently, that after the expiration of the 120-day period, Dr. Chua had not yet made any declaration as to Munar's
fitness to work and Munar had not yet fully recovered and was still incapacitated to work sufficed to entitle the latter to total
and permanent disability benefits.
In addition, that it was by operation of law that brought forth the conclusive presumption that Munar is totally and
permanently disabled, there is no legal compulsion for him to observe the procedure prescribed under Section 20-B(3) of the
POEA-SEC. A seafarer's compliance with such procedure presupposes that the company-designated physician came up with
an assessment as to his fitness or unfitness to work before the expiration of the 120-day or 240-day periods. Alternatively
put, absent a certification from the company-designated physician, the seafarer had nothing to contest and the law steps in
to conclusively characterize his disability as total and permanent.
This Court's pronouncements in Vergara presented a restraint against the indiscriminate reliance on Crystal Shipping such
that a seafarer is immediately catapulted into filing a complaint for total and permanent disability benefits after the
expiration of 120 days from the time he signed off from the vessel to which he was assigned. Particularly, a seafarer's
inability to work and the failure of the company-designated physician to determine fitness or unfitaess to work despite the
lapse of 120 days will not automatically bring about a shift in the seafarer's state from total and temporary to total and
permanent, considering that the condition of total and temporary disability may be extended up to a maximum of 240 days.
Nonetheless, Vergara was promulgated on October 6, 2008, or more than two (2) years from the time Munar filed his
complaint and observance of the principle of prospectivity dictates that Vergara should not operate to strip Munar of his
cause of action for total and permanent disability that had already accrued as a result of his continued inability to perform his
customary work and the failure of the company-designated physician to issue a final assessment.45 (Emphasis in the original)
More importantly, in Montierro v. Rickmers Marine Agency Phils., Inc.46 and Eyana v. Philippine Transmarine Carriers,
Inc.,47 the Court applied the ruling in Kestrel, that if the maritime compensation complaint was filed prior to October 6, 2008,
the rule on the 120-day period, during which the disability assessment should have been made in accordance with Crystal
Shipping, Inc. v. Natividad,48 that is, the doctrine then prevailing before the promulgation of Vergara on October 6, 2008,
stands; if, on the other hand, the complaint was filed from October 6, 2008 onwards, the 240-day rule applies.
In the case at bar, Beja filed the complaint on May 15, 2008. Dr. Cruz issued his assessment only on May 26, 2008 or 187
days from Beja's repatriation on November 21, 2007. Therefore, due to Dr. Cruz's failure to issue a disability rating within
the 120-day period, a conclusive presumption that Beja is totally and permanently disabled arose. Consequently, there was
no need for Beja to secure an opinion from his own doctor or resort to a third doctor as prescribed under Section 20 B (3) of
the POEA-SEC.
In sum, the CA is correct in affirming the NLRC's award of permanent total disability benefit to Beja. It, however, erred in
pertaining to the parties' CBA in granting the award relative to the amount due. The Schedule of Disability Allowances under
Section 32 of the POEA-SEC should instead apply. Under this section, Beja is entitled to US$60,000.00 (US$50,000.00 x
120%) corresponding to Grade 1 Disability assessment.
The award of attorney's fees is likewise justified in accordance with Article 2208 (2)49 and (8)50 of the Civil Code since Beja
was compelled to litigate to satisfy his claims for disability benefits.
WHEREFORE, the Petition is PARTIALLY GRANTED. The March 28, 2012 Decision and August 13, 2012 Resolution of the
Court of Appeals in CA-G.R. SP No. 113550 are MODIFIED in that petitioners, Island Overseas Transport Corp./Pine Crest
Shipping Corp./Capt. Emmanuel L. Regio, are ordered to jointly and solidarily pay respondent Armando M. Beja total and
permanent disability benefits in the amount of US$60,000.00 or its equivalent amount in Philippine currency at the time of
payment, plus 10% thereof as attorney's fees.
SO ORDERED.
SECOND DIVISION
G.R. No. 201652, December 02, 2015
HEIRS OF SIMEON LATAYAN, NAMELY: LEONIDES Q. LATAYAN, ARIEL Q. LATAYAN, AND ETHEL Q. LATAYAN-
AMPIL, REPRESENTED BY THEIR ATTORNEY-IN-FACT, LEONIDES Q. LATAYAN, Petitioners, v. PEING TAN, JOHNNY
TAN, HERMTNIGILDO CASALAN, WEBINO VILLAREAL, DIOSCOROMOLO, DAMACINO BAYAWA, EDGAR NARITA,
YOLANDA NARITA, POLICRONIA CAPIONES, ANDRES LOZANO, GREGORIO YAGAO, EMILIANO GUMATAY, JESUS
ALCONTIN, ADAM DULAUON, MARIO PEREZ, LARRY CEMAFRANCA, FELIXBERTO BULADACO, CIPRIANOAHIT,
BUENAVENTURA B ACALSO AND SALDE ESPIA,**** Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 29, 2011 Decision2 and the April 18, 2012 Resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 02756-MIN. The CA affirmed the May 9, 2005 Decision4 and the January 6, 2009
Resolution5 of the Department of Agrarian Reform and Adjudication Board (DARAB) in DARAB Case No. 10403, which
reversed the July 10, 2000 Decision6 and the September 13, 2000 Resolution7 of the Office of the Provincial Adjudicator
(PARAD) in DARAB Case No. XI-1589-DC-99 which nullified respondents' Certificates of Land Ownership Award (CLOAs).
Factual Antecedents
On January 31, 2000, Simeon Latayan (Simeon), represented by his son and attorney-in-fact, Leonides Latayan, filed an
Amended Complaint8 before the PARAD Davao City, for cancellation of the CLOAs issued to respondents, docketed as DARAB
Case No. XI-1589-DC-99. Simeon alleged that he is the registered owner of two adjoining lots covered by Transfer
Certificates of Title Nos. T-14201 and T-14202 comprising 23.1488 hectares. He contended that the titles to the subject lots
were unilaterally and arbitrarily cancelled without his consent or knowledge, and without notice and placed under the
coverage of the Comprehensive Agrarian Reform Program (CARP) sans payment of just compensation. After the compulsory
acquisition, the subject lots were divided and distributed to respondents. Simeon claimed that the subject properties are
exempt from the CARP because they had been fully developed into an agro-industrial estate, are within the 1,000-meter strip
of the highway, and are currently leased as a commercial farm to the Southern Tropical Fruits, Incorporated (STFI).
Moreover, Simeon argued that respondents could not be properly considered as farmers-beneficiaries as they never occupied
the subject lots nor introduced improvements therein; that if anything, respondents merely wanted to use the law to
unlawfully divest him of his proprietary rights to the subject lots, and enjoy the improvements he had introduced and replace
him as STFI's lessor. Simeon thus prayed that respondents' CLOAs be cancelled and that a preliminary mandatory injunction
be issued in his favor to maintain him in his peaceful and lawful possession of the subject lots, over which he in due course of
law had indeed been lawfully issued certificates of title.
In their Amended Answer,9 respondents denied that Simeon's titles were unilaterally or arbitrarily cancelled. They insisted
that, on the contrary, Simeon's titles were duly and properly cancelled in accordance with law. They claimed that Simeon was
properly furnished a copy of Notice of Coverage; was invited to a conference to discuss the inclusion of the subject properties
under the CARP; and was sent a copy of a Notice to Acquire and Notice of Land Valuation. They also asserted that Simeon's
landholdings is extensive, about 93 hectares of which is agricultural land. They also averred that only a portion of the subject
lots is within the highway's 1,000-meter strip. Finally, they claimed that they were identified by the proper authorities as
qualified beneficiaries. In sum, they opined that Simeon's titles to the subject lots were properly cancelled and their CLOAs
duly issued.
Ruling of the PARAD
On July 10, 2000, the PARAD rendered a Decision10 in favor of Simeon. The PARAD noted that Simeon was never notified of
the coverage by CARP of his properties and that he learned of the same only when he, filed with the Department of Agrarian
Reform (DAR) a petition for exemption of his landholdings from the operation of the CARP. According to the PARAD, that was
the first time Simeon learned that his properties would be taken over by the so-called farmers-beneficiaries. The PARAD
concluded that Simeon was denied due process since there was no observance of the procedural steps for the proper
implementation of the CARP Law. Thus, the cancellation of Simeon's titles was unwarranted.
The dispositive portion of the Decision reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring the compulsory coverage on the land of the complainant [Simeon] a complete nullity and further
declaring the CLOAs issued thereon null and void;
2. Ordering the MARO of Baguio District, Davao City, to re-document and cover the area anew under
compulsory coverage, properly observing the administrative guidelines on the matter.
Respondents moved for reconsideration12 which was denied in the Resolution13 of September 13, 2000.
Proceedings before the DARAB
Respondents filed an appeal with the DARAB.14 While the appeal was pending, Simeon died and was substituted by his sons,
Leonides and Ariel, and his daughter, Ethel, herein petitioners.
In its May 9, 2005 Decision,15 the DARAB set aside the PARAD Decision and dismissed the case for lack of jurisdiction. The
DARAB held -
The issues however in this case partakes the nature [of] agrarian law, which are purely administrative in nature. Hence,
falling within the exclusive jurisdiction of the Honorable DAR Secretary. As correctly noted [by] the [PARAD] there was no
proper observance of administrative processes in terms of coverage as well [as] the identification of farmer[s] -beneficiaries.
These issues [fall] squarely under the jurisdiction of the Honorable DAR Secretary as mandated by DAR Administrative Order
No. 6, Series of 2000, which include the following:
1) classification and identification of landholdings under the CARP, including protests [or] oppositions thereto and petitions
for lifting of coverage;
2) identification, qualification or disqualification of potential farmer[s]-beneficiaries.

Having ruled that the issues are administrative in nature, this Board for that matter has no recourse but to respect the
primary jurisdiction of the administrative agency. x x x
Jurisdiction is conferred by law. x x x
xxxx
WHEREFORE, premises considered[,] the decision of the [PARAD] is SET ASIDE and the case is DISMISSED for lack of
jurisdiction.
Petitioners filed a Motion for Reconsideration17 which was denied in the January 6, 2009 Resolution.18
Proceedings before the CA
Aggrieved, petitioners elevated the DARAB's judgment to the CA via a Petition for Review.19 But in the assailed Decision
dated April 29, 2011,20 the CA upheld the DARAB with modification. The CA ruled:
Verily, the case at bar does not concern an agrarian dispute as there is no established tenancy relationship between
petitioners' father and [respondents]. Neither is the case one for just compensation, contrary to petitioners' assertion. It
originated as an action for cancellation of CLOAs registered with the Register of Deeds, thus seemingly cognizable at the
initial stage by the PARAD and thereafter by the DARAB. However, for the DARAB to have jurisdiction in such cases, they
must relate to an agrarian dispute between [the] landowner and [the] tenants to whom [the] CLOAs have been issued by the
DAR Secretary. The cases involving the issuance, correction and cancellation of the CLOAs by the PAR in the administrative
implementation of agrarian reform laws, rules and regulations to parties who are not agricultural tenants or lessees are
within the jurisdiction of the PAR and not of the DARAB. Moreover, it involves issues with respect to the classification and
identification of landholdings for coverage under the agrarian reform program, and the identification, qualification or
disqualification of private respondents as farmer[s]-beneficiaries. These issues are not cognizable by the PARAD and the
DARAB, but by the DAR Secretary because these are Agrarian Law Implementation (ALI) Cases.
In the present case, the DAR Secretary a[p]proved CLOAs Nos. CL-3731 and CL-3729 in favor of [respondents] in the
exercise of his adrninsitrative powers and in the implementation of the agrarian reform laws. The approval was based on the
investigation of the MARO, over whom the DAR Secretary has supervision and control. The DAR Secretary also had the
authority to withdraw the CLOA[s] upon a finding that the same is contrary to law and DAR orders, circulars and memoranda.
The resolution of such issues by the DAR S[e]cretary will entail the application and implementation of agrarian reform laws, x
x x as well as the implementing orders, circulars and rules and regulations issued by the DAR. xxx
Without doubt, the PARAB committed no reversible error when it set aside the decision of the PARAD and dismissed the case
recognizing that jurisdiction over the matters involved is rightly vested with the DAR Secretary.
Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the defendant or
respondent in his answer or motion to dismiss. x x x Jurisdiction should be determined by considering not only the status or
the relationship of the parties but also the nature of the issues or questions that is the subject of the controversy. The
proceedings before a court or tribunal without jurisdiction, including its decision, are null and void, hence, susceptible to
direct and collateral attacks. x x x
xxxx
It is axiomatic that void judgments never become final and executory and cannot be the source of any right whatsoever. x x
x
xxxx
Thus, since the FARAD had no subject-matter jurisdiction over the complaint for annulment of CLOAs brought before it the
PARAD's decision dated 10 July 2000 invalidating the compulsory coverage on the land of [Simeon] and annulling the CLOAs
issued to private respondents has not vet attained finality.
It should be made clear that this Court is constrained to limit the resolution of this petition [to] the key issue of which, as
between the DARAB and the DAR Secretary, has jurisdiction to resolve the merits of DARAB Case No. 10403. Having
recognized the DAR Secretary's exclusive jurisdicition over that case, the Court believes that the merits of the case are best
left for the DAR Secretary to determine. The DAR Secretary is in a better position to resolve the issues on the validity of the
coverage, and the qualification of private respondents as the identified farmer[s]-beneficiaries for the subject properties,
being the agency lodged with such authority inasmuch as it possesses the necessary expertise on the matter. The Court
adopts such attitude of restraint in deference to a co-equal branch, the Executive Branch of Government, [to] which the DAR
Secretary belongs.
ACCORDINGLY, the petition is DENIED. The Court AFFIRMS the decision of the DARAB in Case No. 10403 WITH
MODIFICATION. The dismissal of DARAB Reg. Case No. XI-1589-DC-99 for lack of jurisdiction is without prejudice to its re-
filing in accordance with DAR Administrative Order No. 6, Series of 2000, within thirty (30) days from the finality of this
Decision.
Petitioners' motion for reconsideration was denied by the CA in its Resolution22 of April 18, 2012.
Proceedings before this Court
Hence, the present recourse, with petitioners now contending that:

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT IT IS THE DAR SECRETARY AND NOT
THE [DARAB] WHICH HAS JURISDICTION OVER CASES INVOLVING CANCELLATION OF CLOAS[J JUST COMPENSATION, ETC.
SAID RULING IS DIAMETRICALLY OPPOSITE [THE] EXPRESS PROVISIONS OF SECTION 50 OF REPUBLIC ACT 6657 AND THE
JURISPRUDENCE PROMULGATED BY [THE] HONORABLE SUPREME COURT, WHICH EXPRESSLY CONFERRED EXCLUSIVE
ORIGINAL JURISDICTION UPON THE DARAB TO HEAR CASES OF THIS NATURE.23 ChanRoblesVi rt ualawlib ra ry
Petitioners'Arguments
In their Petition24 and Memorandum,25 petitioners contend that the CA erred in ruling that the DAR Secretary has jurisdiction
over the instant controversy given that Section 50 of the Comprehensive Agrarian Reform Law, Sections 1 and 2, Rule II of
the 1994 DARAB Rules of Procedure, and jurisprudence all clearly confer such jurisdiction upon the DARAB; that the instant
case is already beyond the coverage of DAR Administrative Order (AO) 06-00, cited by the CA and the DARAB, since the
subject CLOAs had already been registered; that a statute must prevail over an administrative regulation; that since the
DARAB had already validly acquired jurisdiction over the case at the time of the filing of the complaint, then the jurisdiction
so acquired is not affected by any subsequent law or rule that grants another body or tribunal jurisdiction; that the resolution
of the issue of just compensation in agrarian reform land cases is a judicial function hence, the CA erred in concluding that
the issues at hand "[partake] the nature of agrarian law, which [is] purely administrative in nature." Petitioners thus pray for
the reversal of the assailed dispositions. They also pray that the DARAB be ordered to assume jurisdiction over the instant
case and resolve the same.
Respondents 'Arguments
In their Comment26 and Appeal Memorandum,27 respondents maintain that the instant case does not pertain to the fixing of
just compensation; that the cancellation by the PARAD of Simeon's certificates of title to the subject lots and the issuance of
CLOAs in favor of the aforenamed farmers-beneficiaries involved questions regarding the validity of the coverage of the
subject lots under the CARP, vis-a-vis the qualifications of the identified farmers-beneficiaries, hence, within the DAR
Secretary's exclusive and primary jurisdiction; that the issue of jurisdiction may be raised at any stage of the proceedings,
even for the first time on appeal; that the DAR Secretary has jurisdiction over the instant case pursuant to Section 2, Rule I
and Section 6, Rule II of DAR AO 06-00 in relation to Sections 49 and 50 of the CARP; that indeed as held in Heirs of Julian
Dela Cruz v. Heirs of Alberto Cruz,28 cases involving cancellation of CLOAs issued to non-agricultural tenants or lessees are
within the jurisdiction of the DAR Secretary; that the case law rulings cited by petitioners are inapplicable to this case, as
Simeon's original case did not pertain to tenancy relations, nor to any intra-corporate controversy, much less to a joint
venture agreement; and finally, that Magno v. Francisco29 cited by petitioners actually declared that it is the DAR Secretary
that has jurisdiction over issues relating to landowners' retention rights and land exemptions from agrarian reform coverage.
This Court's Ruling

This Petition will not prosper.
The jurisdiction of a court or tribunal over the nature and subject matter of an action is conferred by law. The court or
tribunal must look at the material allegations in the complaint, the issues or questions that are the subject of the
controversy, and the character of the relief prayed for in order to determine whether the nature and subject matter of the
complaint is within its jurisdiction. If the issues between the parties are intertwined with the resolution of an issue within the
exclusive jurisdiction of a court or tribunal, the dispute must be addressed and resolved by the said court or tribunal.30 ChanRoblesVirtualawli bra ry
The Amended Complaint filed with the PARAD on January 31, 2000, contained the following averments:
5. That [Simeon's] titles were unilaterally and arbitrarily cancelled by the [PARO, MARO, DAR Regional Director, and [the]
Register of Deeds] in favor of [respondents] by granting them two (2) Certificate of Land Ownership Award (CLOA) Nos. CL-
3731 and CL-3729 under the [CARP], but without the actual consent, notice, fixing of just compensation, and payment to the
landowner, to the latter's prejudice.
xxxx
a. That the fixing of just compensation by the DAR was not expressly consented to by [Simeon] who, as the landowner,
was without actual and personal notice that the entire area of TCT Nos. T-14201 and T-14202 were placed under the CARP.
Hence, the x x x summary actions in cancelling the two (2) titles of [Simeon] should not be sanctioned by this Board.
6. That the [respondents] were never in occupation of any part or portion of the area covered by TCT Nos. T-14201 and T-
14202 as the alleged farmer[s]-beneficiaries of the land or as farmworkers who have farmed or developed the area in any
manner and by reason of which they have to be regarded by the DAR as qualified beneficiaries under the CARP.
a. Admittedly, the entire area of the land has been fully developed and leased as a commercial farm such that there
was never an occasion that [respondents] had, by themselves, made any agricultural improvements inside the entire area
which would qualify them as farmers-beneficiaries.
[b]. The most of what may be said of the [respondents' claims] as farmers-beneficiaries is that they are illegal
occupants of the area who are not the qualified farmers-beneficiaries x x x [contemplated] under the agrarian laws.
[c]. The truth is that the entire area of the said two (2) titles comprising 23.1488 hectares is already fully and
comprehensively developed by [Simeon] and his family into an agro-industrial estate by way of tilling, cultivating and
preparing the land and planting and devoting [the] same, on rotation basis, to papaya, banana and pineapple, and putting up
or allowing the putting up of a packing plant inside the said area, and with the entire area leased by [Simeon] and his family
to [STFI], long before [respondents'] incredible and preposterous claim of being farmers-beneficiaries inside the area
[covered by] TCT Nos.T-14201 and T-14202.
xxxx
[c]. That [respondents] who, all along, merely intended to succeed to [Simeon's] improvements have, in fact, just wanted to
continue the existing lease of the STFI over the entire area covered by the said two (2) titles, to the actual detriment and
prejudice of [Simeon] and his family.
xxxx
7. That the [PARO, MARO, DAR Regional Director, and Register of Deeds], in applying the CARP to the entire area of the
subject titles under TCT Nos. T-14201 and T-14202, have exceeded or otherwise abused their authority.
a. The entire area covered by said titles is beside the road and/or within the 1,000 meter strip from the highway, already
existing and fully developed as an agro-industrial estate or land which is virtually EXCLUDED from the application of the
CARP by virtue of [PD 399], the pertinent provision of which provides, to quote: chanRo blesvi rtua lLaw lib rary
xxx
LIMITING THE USE OF A STRIP OF ONE THOUSAND METERS OF LAND ALONG ANY EXISTING, PROPOSED OR ON-GOING
PUBLIC HIGHWAY OR ROAD UNTIL THE GOVERNMENT SHALL HAVE [MADE] A COMPETENT STUDY AND HAVE FORMULATED
A COMPREHENSIVE AND INTEGRATED LAND USE AND DEVELOPMENT PLAN.
xxx
Section 3. Likewise, all lands owned by private persons within the strip of one thousand meters along existing, proposed or
on-going public highways or road shall first be available for human settlement sites, land reform, relocation of squatters from
congested urban areas, tourism development, agro-industrial estates, environmental protection and improvement,
infrastructure and other vital projects in support of the socio-economic development program of the government. The owners
of these lands shall not develop or otherwise introduce improvements thereon without previous approval from the proper
government agency, who shall in this case be the Chairman of the Human Settlements and Planning Commission.
xxx
b. That the above-cited law clearly provides [for] the applicable instances under which private lands located within the strip
of one thousand meters along existing, proposed or on-going public highways or road shall first be devoted or made available
for.
c. Admittedly, the entire adjoining and contiguous area covered by TCT Nos. T-14201 and T-14202 which comprises x x x
about 23.1488 is already [a] fully developed agro-industrial estate, complete with packing plant, and as evidenced by the
continuing [lease] of the entire area to [STFI] in consonance [with] such purpose[s] and no other.
d. That the entire area of TCT Nos. T-14201 and T-14202 which is beside the road and/or within the 1,000 meter strip from
the highway and, at the same time, a fully developed agro-industrial estate cannot, therefore, be subjected to CARP
anymore, by sheer force of provision of law under [PD 399], and should be deemed to be EXCLUDED from the coverage of
the CARP.31 ChanRoblesVirtualawl ibra ry
In essence, Simeon's Amended Complaint sets forth the following: (1) that he was not notified that the subject lots had been
placed under the CARP; (2) that he did not expressly consent to the fixing of just compensation; (3) that the DAR had no
justifiable basis for considering the respondents as farmers-beneficiaries since the latter were neither in occupation of the
subject lots nor farmworkers who farmed or developed the pertinent area; (4) that with his family (the present petitioners),
he (Simeon) had fully developed the subject lots into a commercial farm and agro-industrial estate and had leased the same
to STFI; (5) that respondents are illegal occupants or squatters thereon, and are not qualified farmers-beneficiaries; that
respondents merely intended to enjoy the improvements he (Simeon) introduced thereon, and to continue his lease with
STFI; (6) that the Provincial Agrarian Reform Officer (PARO), the Municipal Agrarian Reform Officer (MARO), the DAR
Regional Director, and the Register of Deeds abused their authority by applying the CARP to the entirety of the subject lots;
(7) that the subject lots are excluded from CARP coverage pursuant to Presidential Decree (PD) No. 399 because these lots
are located beside the road and/or within the 1,000-meter strip from the highway, apart from being an already existing and
fully developed agro-industrial estate. What is more, Simeon's Amended Complaint did not raise the issue of tenurial
relationship between him and the aforenamed respondents. Significantly, the Amended Complaint concluded with this prayer
-
WHEREFORE, premises considered and in view of the foregoing, it is respectfully prayed that a writ of preliminary mandatory
injunction be ordered issued by the Honorable Board after the posting of the necessary bond sufficient in amount by the
complainant as determined by the Honorable Adjudicator, during the pendency of the above-entitled case, in order to
preserve the status quo or the last peaceful circumstance prior to the controversial issuance of the questionable two (2)
[CLOAs] by [the PARO, MARO, PAR Regional Director, and Register of Deeds] in favor of [respondents], and also in order not
to render moot and academic the final judgment of the Honorable Board in the instant case; and that after trial on the merits
and/or due evaluation of the facts and laws involved in this case, that -
1. The pertinent CLOA Nos. CL-3731 and CL-3729 be CANCELLED, RECALLED, NULLIFIED, VOIDED or otherwise SET
ASIDE and with the previous two (2) titles which are TCT Nos. T-14201 and T-14202, covering the entire area of
23.1488 hectares involved in this instant case, be ordered declared REINSTATED, REVIVED or otherwise RESTORED
in full legal force and effect.
Complainant prays for reliefs as may be deem[ed] just and equitable under the premises.32 ChanRobles Vi rt ualawlib ra ry
Considering that herein petitioners' predecessor-in-interest (i.e. Simeon) sought to cancel respondents' registered CLOAs on
the grounds: (1) that no agrarian dispute was involved in this case; (2) that the subject lots are exempt from CARP
coverage, and (3) that due process of law was not observed when the original petitioner (Simeon) was divested of the
ownership of the subject lots: it thus stands to reason that it is the DAR Secretary that has jurisdiction to resolve the
controversy pursuant to applicable law, rules, and jurisprudence.
Both illuminating and instructive are these pronouncements by this Court that bear with particular relevance on the petition
at bench -
Section 1, Rule II of the 1994 DARAB Rules of Procedure, the rule in force at the time of the filing of the petition, provides:
Section 1. Primary and Exclusive Original and Appellate Jurisdiction. — The Board shall have primary and exclusive
jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of
the [CARP] under [RA 6657], Executive Order Nos. 228, 229 and 129-A, [RA 3844] as amended by [RA 6389], [PD 27] and
other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall include but not be
limited to cases involving following: c hanRoble svirtual Lawlib rary
xxx
f) Those involving the issuance, correction and cancellation of [CLOAs] and Emancipation Patents (EPs) which are registered
with the Land Registration Authority;
xxx
While the DARAB may entertain petitions for cancellation of CLOAs, as in this case, its jurisdiction is, however, confined only
to agrarian disputes. As explained in the case of Heirs of Dela Cruz v. Heirs of Cruz and reiterated in the recent case
of Bagongahasa v. Spouses Cesar Caguin, for the DARAB to acquire jurisdiction, the controversy must relate to an agrarian
dispute between the landowners and tenants in whose favor CLOAs have been issued by the DAR Secretary. x x x
xxxx
As defined in Section 3 (d) of [RA 6657], an agrarian dispute relates to "any controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship, or otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange
terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired
under the said Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and
other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee."
xxxx
To be sure, the tenurial, leasehold, or agrarian relations referred to may be established with the concurrence of the
following: 1) the parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship is
an agricultural land; 3) there is consent between the parties to the relationship; 4) the purpose of the agricultural
relationship is to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural
lessee; and 6) the harvest is shared between the landowner and the tenant or agricultural lessee. x x x
In this case, a punctilious examination reveals that petitioner's allegations are solely hinged on the erroneous grant by the
DAR Secretary of CLOA No. 00122354 to private respondents on the grounds that she is the lawful owner and possessor of
the subject lot and that it is exempt from the CARP coverage, hi this regard, petitioner has not alleged any tenurial
arrangement between the parties, negating the existence of any agrarian dispute and consequently, the jurisdiction of the
DARAB. Indisputably, the controversy between the parties is not agrarian in nature and merely involves the administrative
implementation of the agrarian reform program which is cognizable by the DAR Secretary. Section 1, Rule II of the 1994
DARAB Rules of Procedure clearly provides that "matters involving strictly the administrative implementation of [RA 6657],
and other agrarian refonn laws and pertinent rules, shall be the exclusive prerogative of and cognizable by the DAR
Secretary."
Furthermore, it bears to emphasize that under the new law, [RA 9700], x x x which took effect on July 1, 2009,
all cases involving the cancellation of CLOAs and other titles issued under any agrarian reform program are now
within the exclusive and original jurisdiction of the DAR Secretary. Section 9 of the said law provides:
Section 9. Section 24 of [RA 6657], as amended, is further amended to read as follows:
xxx
All cases involving the cancellation of registered emancipation patents, certificates of land ownership award,
and other titles issued under any agrarian reform program are within the exclusive and original jurisdiction of
the Secretary of the DAR.
Consequently, the DARAB is bereft of jurisdiction to entertain the herein controversy, rendering its decision null and void.
Jurisdiction lies with the Office of the DAR Secretary to resolve the issues of classification of landholdings for coverage
(whether the subject property is a private or government[-]owned land), and identification of qualified beneficiaries. Hence,
no error can be attributed to the CA in dismissing the case without prejudice to its re-filing x x x.33ChanRobles Vi rtualaw lib rary
And while this Court does indeed seek to expeditiously resolve the case at bench in compliance with its constitutionally-
mandated duty, the well-settled principle of primary jurisdiction, as stressed in Bagongahasa v. Romualdez,34 must likewise
be observed thus:
While it is true that the PARAD and the DARAB lack jurisdiction in this case due to the absence of any tenancy relations
between the parties, lingering essential issues are yet to be resolved as to the alleged lack of notice of coverage to
respondents as landowners and their deprivation of just compensation. Let it be stressed that while these issues were
discussed by the PARAD in his decision, the latter was precisely bereft of any jurisdiction to rule particularly in the absence of
any notice of coverage for being an ALI case. Let it also be stressed that these issues were not met head-on by petitioners.
At this juncture, the issues should not be left hanging at the expense and to the prejudice of respondents.
However, this Court refuses to rule on the validity of the CARP coverage of the subject properties and the issuance of the
assailed CLOAs. The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction
was initially lodged with an administrative body of special competence. The doctrine of primary jurisdiction does not allow a
court to arrogate unto itself authority to resolve a controversy, the jurisdiction over which is initially lodged with an
administrative body of special competence. The Office of the DAR Secretary is in a better position to resolve the particular
issue of non-issuance of a notice of coverage — an ALI case — being primarily the agency possessing the necessary expertise
on the matter. The power to determine such issue lies with the DAR, not with this Court.
Hence, even as this Court affirms the CA's dismissal of the instant case without prejudice, this Court also sees fit to delete
the qualification that petitioners' re-filing of this case be made "in accordance with [DAR AO 06-00], within 30 days from the
finality of [the] decision.35" In the event that petitioners shall indeed opt to re-file this case, the DAR Secretary shall resolve
the matter pursuant to the laws, rules, and jurisprudence applicable at the time of the commencement of the action.
IN VIEW OF ALL OF THE FOREGOING, the Petition is DENIED. The Decision dated April 29, 2011 and Resolution dated
April 18, 2012, of the Court of Appeals in CA-G.R. SP No. 02756-MIN dismissing without prejudice DARAB Case No. XI-1589-
DC-99 due to lack of jurisdiction of the Department of Agrarian Reform Adjudication Board is AFFIRMED with
MODIFICATION that the condition that its re-filing be made in accordance with Department of Agrarian Reform
Administrative Order No. 6, Series of 2000, be DELETED.
SO ORDERED.
SECOND DIVISION
G.R. No. 195654, November 25, 2015
REYNALDO INUTAN, HELEN CARTE, NOEL AYSON, IVY CABARLE, NOELJAMILI, MARITES HULAR,
ROLITOAZUCENA, RAYMUNDO TUNOG, ROGER BERNAL, AGUSTEV ESTRE, MARILOU SAGUN, AND ENRIQUE
LEDESMA, JR., Petitioners, v. NAPAR CONTRACTING & ALLIED SERVICES, NORMAN LACSAMANA,*** JONAS
INTERNATIONAL, INC., AND PHILIP YOUNG, Respondent.
DECISION
DEL CASTILLO, J.:
A judicially approved compromise agreement has the effect and authority of res judicata.2 It is final, binding on the parties,
and enforceable through a writ of execution. Article 2041 of the Civil Code, however, allows the aggrieved party to rescind
the compromise agreement and insist upon his original demand upon failure and refusal of the other party to abide by the
compromise agreement.
This Petition for Review on Certiorari2 assails the August 27, 2010 Decision3 of the Court of Appeals (CA) in CA-G.R. SP No.
106724, which dismissed the Petition for Certiorari filed by Reynaldo Inutan (Inutan), Helen Carte (Carte), Noel Ayson
(Ayson), Ivy Cabarle (Cabarle), Noel Jamili (Jamili), Maritess Hular (Hular), Rolito Azucena (Azucena), Raymundo Tunog
(Tunog), Jenelyn Sancho, Wilmar Bolonias, Roger Bernal (Bernal), Agustin Estre (Estre), Marilou Sagun (Sagun), and Enrique
Ledesma, Jr. (Ledesma), against respondents Napar Contracting & Allied Services (Napar), Norman Lacsamana (Lacsamana),
Jonas International, Inc. (Jonas), and Philip Young (Young), and affirmed the June 26, 2008 Decision4and October 14, 2008
Resolution5 of the National Labor Relations Commission (NLRC) in NLRC CA No. 041474-04 dismissing the consolidated
complaints against respondents for illegal dismissal with money claims on the ground of res judicata. Likewise assailed is the
CA's February 10, 2011 Resolution6 which denied the Motion for Reconsideration.
Factual Antecedents
Petitioners Inutan, Carte, Ayson, Cabarle, Jamili, Hular, Azucena, Tunog, Bernal, Estre, Sagun, and Ledesma were employees
of respondent Napar, a recruitment agency owned and managed by respondent Lacsamana. Napar assigned petitioners at
respondent Jonas, a corporation engaged in the manufacture of various food products with respondent Young as its
President, to work as factory workers, machine operator, quality control inspector, selector, mixer, and warehouseman.
Sometime in September of 2002, petitioners and other co-workers (complainants) filed before the Arbitration Branch of the
NLRC three separate complaints for wage differentials, 13th month pay, overtime pay, holiday pay, premium pay for holiday
and rest day, service incentive leave pay, and unpaid emergency cost of living allowance (ECOLA) against respondents,
docketed as NLRC NCR Case Nos. 09-76698-2002, 09-08152-2002, and 09-08046-2002, which complaints were consolidated
before Labor Arbiter Jaime M. Reyno (LA Reyno).
On January 13, 2003, complainants and respondents entered into a Joint Compromise Agreement7 which reads: chanRoble sv irtua lLawl ibra ry
JOINT COMPROMISE AGREEMENT
COMPLAINANTS and the RESPONDENTS, through their' respective counsel, respectfully submit the following Compromise
Agreement.
WHEREAS, the parties (except Susana Larga) deciding to finally write "finis" to the instant case, have agreed to settle the
instant case and to enter into a Compromise Agreement.
NOW THEREFORE, for and in consideration of the terms and conditions herein below stipulated, the parties do hereby agree:
1. That the complainants should be considered regular employees of Napar Contracting and Allied Services
reckoned from their date of hire and are entitled to all the benefits under the law due to regular employees;
2. That the complainants shall be re-assigned by Napar Contracting and Allied Services and shall ensure that
they will be given work within forty five days (45) or until February 26,2002;
3. That in case Napar Contracting and Allied Services failed to re assign or provide them work, complainants
shall be reinstated in their payroll or be given their salary equivalent to the existing minimum wage x x x;
4. That the complainants shall each receive the amount of SEVEN THOUSAND PESOS as payment for their
monetary claims and which amount shall be considered in any future litigation;
5. That upon signing of this agreement and compliance with the stipulations herein provided, the cases shall be
deemed and considered fully and completely satisfied and the complainants hereby release, remiss and
forever discharge the herein respondents, from any and all claims arising from the above cases;
6. The parties herein respectfully pray unto this Honorable Commission to approve this Compromise Agreement
and thereafter an Order be issued declaring the judgment in the above-entitled cases fully and completely
satisfied.
IN WITNESS WHEREFORE, the parties have hereunto set their hands this 13th day of January 2003.8
cralawlawl ibra ry
ChanRoblesVi rtualawl ib rary
In an Order9 dated January 16, 2003, LA Reyno approved the Joint Compromise Agreement, enjoined the parties to fully
comply with its terms and dismissed the case without prejudice.
In accordance with the Joint Compromise Agreement, complainants, on several instances, reported to Napar. They were paid
P7,000.00 each as part of the agreement but were required by Napar; (1) to submit their respective bio-data/resume and
several documents such as Police Clearance, NBI Clearance, Barangay Clearance, Mayor's Permit, Health Certificate, drug
test results, community tax certificate, eye test results and medical/physical examination results; (2) to attend orientation
seminars; (3) to undergo series of interviews; and (4) to take and pass qualifying examinations, before they could be posted
to their new assignments. These requirements, according to Napar, are needed to properly assess complainants' skills for
new placement with the agency's other clients.
Complainants failed to fully comply, hence they were not given new assignments.
Sensing Napar's insincerity in discharging its obligation in reassigning them, complainants filed anew before the Arbitration
Branch of the NLRC four separate Complaints10 for illegal dismissal, non-payment of 13th month pay, wage differentials,
overtime pay, service incentive leave pay, holiday pay, premium pay for holiday and rest day, and moral and exemplary
damages against respondents, docketed as NLRC NCR Case Nos. 00-0505557-2003, 00-05-06187-2003, 00-05-06605-
2003,11 and 00-07-07792-2003. These complaints were consolidated.
In their Position Paper,12 complainants averred that Napar's failure to reinstate or provide them work without any condition,
in consonance with the terms of the Joint Compromise Agreement, constitutes illegal constructive dismissal. They prayed for
backwages plus separation pay in lieu of reinstatement.
Respondents, in their Position Paper,13 claimed that they have fulfilled their obligation under the agreement when Napar
required complainants to report for work, to submit documentary requirements, to undergo seminars and training, and to
pass qualifying exams. They contended that complainants were the ones who violated the agreement when they refused to
comply with the foregoing requirements in order to assess their working capabilities and skills for their next posting. As such,
they were deemed to have waived their right to be reassigned. They argued that complainants should not have filed new
complaints but should have instead moved for the execution of the Joint Compromise Agreement. They then argued that the
Labor Arbiter who approved the said Joint Compromise Agreement or LA Reyno has exclusive jurisdiction to act on the
complaints.
In a Decision14 dated July 29, 2004, Labor Arbiter Pablo C. Espiritu, Jr. (LA Espiritu) held that the conditions of the Joint
Compromise Agreement particularly regarding reinstatement/reassignment of complainants were violated thereby justifying
rescission of the Joint Compromise Agreement. LA Espiritu noted that complainants were correct in re-filing the complaints as
this was an available remedy under the NLRC Rules of Procedure when their previous complaints were dismissed without
prejudice. He struck down respondents' contention that a motion for execution of the compromise agreement was the proper
remedy, ratiocinating that the dismissal of the cases was approved without prejudice and therefore cannot be the subject of
an execution.
LA Espiritu then ruled that complainants were constructively dismissed as they were placed on temporary off-detail without
any work for more than six months despite being regular employees of Napar. Doubting respondents' intention of reinstating
complainants, LA Espiritu observed that the submission of requirements and compliance with the procedures for rehiring
should not be imposed on complainants who are not newly-hired employees. Thus, Napar and Lacsamana were held jointly
and severally liable to pay complainants their separation pay in lieu of reinstatement due to the already strainedrelations of
the parties.
Respondents Jonas/Young, as indirect employers of complainants, were held jointly and severally liable with
Napar/Lacsamana for wage differentials, 13 month pay differentials, service incentive leave pay, unpaid ECOLA, and holiday
pay to some complainants, less the P7,000.00 already received from respondents. The claims for premium pay for holiday,
rest day, overtime pay, and moral and exemplary damages were denied for lack of merit.

All parties appealed to the NLRC.
Complainants filed a partial appeal, arguing that LA Espiritu erred in not awarding backwages as well as wage and 13th month
pay differentials to nine of them.
Respondents, for their part, argued that LA Espiritu erred in failing to recognize the final and binding effect of the Joint
Compromise Agreement, contending that complainants are barred from rescinding the agreement for having received
P7,000.00 each as partial compliance and refusing to comply with the requirements for their reassignment. Respondents
Napar and Lacsamana, in their Memorandum on Appeal,15 vehemently denied having illegally dismissed complainants and
averred that they have the prerogative to impose certain requirements in order to determine their working skills vis-a-
vis their new postings. And since they refused to comply, they have waived their right to be reassigned. Respondents
Jonas/Young, meanwhile, in its Notice of Appeal Memorandum of Appeal,16 asserted that they cannot be held solidarity liable
with respondents Napar and Lacsamana since only Napar is obligated to reassign complainants under the Joint Compromise
Agreement.
In a Decision17 dated June 26, 2008, the NLRC granted respondents' appeal. It ruled that the approval of the Joint
Compromise Agreement by LA Reyno operates as res judicata between the parties and renders it unappealable and
immediately executory. It held that complainants had no cause of action when they re-filed their complaints for being barred
by res judicata. The NLRC, in disposing of the case, ordered the issuance of a writ of execution to enforce the Joint
Compromise Agreement, thus: chanRoblesv irt ual Lawlib rary
WHEREFORE, premises considered, the appeal of respondents is GRANTED, while that of the complainants is DISMISSED for
lack of merit. The Decision of Labor Arbiter Pablo C. Espiritu, Jr. dated July 29, 2004 is REVERSED and SET ASIDE, and a new
one is rendered DISMISSING the above-entitled complaints for having been barred by res judicata. The Order of Labor
Arbiter Jaime Reyno dated January 16, 2003 finding the Compromise Agreement entered into by the parties on January 13,
2003 to be in order and not contrary to law and approving the same, stands valid, effective and should be enforced. Let the
records of this case be forwarded to the Labor Arbiter for the issuance of a writ of execution to enforce the said Compromise
Agreement.
SO ORDERED.18
cralawlawl ibra ry
ChanRoblesVi rtua lawlib rary
Complainants filed a Motion for Reconsideration,19 averring that the NLRC gravely erred in ordering the issuance of a writ of
execution despite the absence of a final judgment or a judgment on the merits. They stand on their right to rescind the Joint
Compromise Agreement and to insist on their original demands when respondents violated the compromise agreement and
on their right to re-file their cases as sanctioned by the rules in cases of provisional dismissal of cases,
Napar and Lacsamana, on the other hand, filed a Motion for Partial Reconsideration20 praying for the modification of the
NLRC Decision in that complainants be declared to have waived their right to their claims under the Joint Compromise
Agreement for likewise violating the agreement.
Both motions were denied in the NLRC Resolution21 dated October 14, 2008.
In their Petition for Certiorari22 filed before the CA, complainants insisted on their right to rescind the Joint Compromise
Agreement under Article 204123 of the Civil Code and on their right to re-file their complaints under Section 16, Rule V of the
NLRC Rules of Procedure.24
Napar and Lacsamana filed a Comment25 on the Petition. Jonas and Young, however, failed to file a comment. As the CA did
not acquire jurisdiction over Jonas and Young and on the basis of complainants' manifestation that Jonas and Young had
already ceased operation, Jonas and Young were dropped as party respondents by the CA in its Resolution26 of December 16,
2009.
On August 27, 2010, the CA rendered a Decision27 affirming the NLRC. The CA considered the January 16, 2003 Order of LA
Reyno, which approved the Joint Compromise Agreement, as a judgment on the merits, and held that the second set of
complaints was barred by res judicata. According to the C A, the complainants, in re-filing their complaints due to
respondents' unwarranted refusal to provide them work, were essentially seeking to enforce the compromise agreement and
were not insisting on their original demands that do not even include a claim for illegal dismissal. Thus, the CA ruled that
complainants should have moved for the execution of the Joint Compromise Agreement instead of filing a separate and
independent action for illegal dismissal. The CA dismissed the Petition, viz.: chanRob lesvi rtua lLawl ibra ry
WHEREFORE, premises considered, the instant petition for certiorari is DISMISSED for lack of merit. Accordingly, the June
26, 2008 Decision and October 14, 2008 Resolution of public respondent National Labor Relations Commission are
AFFIRMED.
SO ORDERED.28 cralawlawlib rary
Complainants filed a Motion for Reconsideration29 but it was likewise denied by the CA in its Resolution30dated February 10,
2011.
Twelve of the complainants, herein petitioners, instituted the present Petition for Review on Certiorari.
Issues
Petitioners presented the following issues: c hanRoble svirtual Lawlib ra ry
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONERS' COMPLAINT IS ALREADY BARRED
BY RES JUDICATA.
II
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT, IN FILING THE SECOND COMPLAINT, THE
PETITIONERS ARE ENFORCING THE JOINT COMPROMISE AGREEMENT AND NOT RESCINDING IT. THUS, THE PETITIONERS
SHOULD HAVE MOVED FOR THE ISSUANCE OF A WRIT OF EXECUTION BEFORE THE LABOR ARBITER INSTEAD OF FILING A
SECOND COMPLAINT.
III
WHETHER THE PETITIONERS ARE ENTITLED TO SEPARATION PAY IN LIEU OF REINSTATEMENT AND FULL BACKWAGES. 31 cralawlawli bra ry
Petitioners argue that the CA, in ordering the execution of the Joint Compromise Agreement, has deprived them of their right
of rescission under Article 2041 of the Civil Code. They posit that due to the blatant violation by the respondents of the
provisions of the Joint Compromise Agreement, they only exercised the option accorded to them by law of rescinding the
agreement and of insisting upon their original demands by filing anew their Complaints. The inclusion of illegal dismissal in
their causes of action is, for petitioners, a necessary consequence of their subsequent dismissal and the blatant omission of
respondents' commitment to reinstate them. Petitioners thus pray for the payment of separation pay in lieu of reinstatement
and full backwages as a consequence of their illegal dismissal.
Napar and Lacsamana on the other hand, aver that petitioners' sole remedy was to move for the execution of the Joint
Compromise Agreement. They aver that petitioners cannot be allowed to rescind the agreement after having violated the
same and having already enjoyed its benefits. After all, the Joint Compromise Agreement is final, binding and constitutes
as res judicata between them.
Our Ruling
The Petition has merit. Petitioners' right to rescind the Joint Compromise Agreement and right to re-file their complaints must
prevail.
Petitioners validly exercised the

option of rescinding the Joint
CompromiseAgreement under
Article 2041 of the Civil Code
Article 2028 of the Civil Code defines a compromise agreement as a contract whereby the parties make reciprocal
concessions in order to avoid litigation or put an end to one already commenced. If judicially approved, it becomes more
than a binding contract; it is a determination of a controversy and has the force and effect of a judgment.32 Article 227 of the
Labor Code provides that any compromise settlement voluntarily agreed upon by the parties with the assistance of the
Bureau of Labor Relations or the regional office of the Department of Labor and Employment shall be final and binding upon
the parties. Compromise agreements between employers and workers have often been upheld as valid and accepted as a
desirable means of settling disputes.33
Thus, a compromise agreement, once approved, has the effect of res judicata between the parties and should not be
disturbed except for vices of consent, forgery, fraud, misrepresentation, and coercion.34 A judgment upon compromise is
therefore not appealable, immediately executory, and can be enforced by a writ of execution.35 However, this broad precept
enunciated under Article 203736 of the Civil Code has been qualified by Article 2041 of the same Code which recognizes the
right of an aggrieved party to either (1) enforce the compromise by a writ of execution, or (2) regard it as rescinded and
insist upon his original demand, upon the other party's failure or refusal to abide by the compromise. In a plethora of
cases,37 the Court has recognized the option of rescinding a compromise agreement due to non-compliance with its terms.
We explained in Chavez v. Court of Appeals:38 cha nro blesvi rtua llawli bra ry
A compromise has upon the parties the effect and authority of res judicata;but there shall be no execution except in
compliance with a judicial compromise. cra lawlawlib rary
Thus, we have held that a compromise agreement which is not contrary to law, public order, public policy, morals or good
customs is a valid contract which is the law between the parties themselves. It has upon them the effect and authority of res
judicata even if not judicially approved, and cannot be lightly set aside or disturbed except for vices of consent and forgery.
However, in Heirs of Zari, et al v. Santos, we clarified that the broad precept enunciated in Art, 2037 is qualified by Art. 2041
of the same Code, which provides:
If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or
regard it as rescinded and insist upon his original demand.
We explained, viz.:
[B]efore the onset of the new Civil Code, there was no right to rescind compromise agreements. Where a party violated the
terms of a compromise agreement, the only recourse open to the other party was to enforce the terms thereof.
When the new Civil Code came into being, its Article 2041 xxx created for the first time the right of rescission. That provision
gives to the aggrieved party the right to "either enforce the compromise or regard it as rescinded and insist upon his original
demand." Article 2041 should obviously be deemed to qualify the broad precept enunciated in Article 2037 that "[a]
compromise has upon the parties the effect and authority of res judicata.
In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the suit contemplated or
involved in his original demand, as if there had never been any compromise agreement, without bringing an action for
rescission. This is because he may regard the compromise as already rescinded by the breach thereof of the other party. cralawlawl ibra ry
To reiterate, Article 2041 confers upon the party concerned the authority, not only to regard the compromise agreement as
rescinded but also, to insist upon his original demand. We find that petitioners validly exercised this option as there was
breach and non-compliance of the Joint Compromise Agreement by respondents.
It is undisputed that Napar failed to reassign and provide work to petitioners. Napar, however, puts the blame on petitioners
for their alleged deliberate refusal to comply with the requirements for reassignment to other clients. Napar claims that the
imposition of these so-called "reassessment procedures" will efficiently guide them on where to assign petitioners; it likewise
posits that it is a valid exercise of its management prerogative to assign workers to their principal employer.
At the outset, it must be emphasized that there was no indication that petitioners deliberately refused to comply with the
procedures prior to their purported reassignment. Petitioners alleged that they reported to Napar several times waiting for
tlieir assignment and that Napar was giving them a run-around even as they tried to comply with the requirements. These
matters were not disputed by respondents. Thus, we cannot agree with respondents were the ones who violated the
compromise agreement. Moreover, we are not persuaded by Napar's assertion that petitioners' reassignment cannot be
effected without compliance with the requirements set by it. Petitioners are regular employees of Napar; thus, their
reassignment should not involve any reduction in rank, status or salary.39 As aptly noted by LA Espiritu, petitioners are not
newly-hired employees. Considering further that they are ordinary factory workers, they do not need special training or any
skills assessment procedures for proper placement. While we consider Napar's decision to require petitioners to submit
documents and employment clearances, to attend seminars and interviews and take examinations, which according to Napar
is imperative in order for it to effectively carry out its business objective, as falling within the ambit of management
prerogative, this undertaking should not, however, deny petitioners their constitutional right of tenure. Besides, there is no
evidence nor any allegation proffered that Napar has no available clients where petitioners can be assigned to work in the
same position they previously occupied. Plainly, Napar's scheme of requiring petitioners to comply with reassessment
procedures only seeks to prevent petitioners' immediate reassignment.
"We have held that management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and
discipline, dismissal and recall of workers. The exercise of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor."40 Such "cannot be used as a subterfuge by the employer
to rid himself of an undesirable worker."41
Respondents' non-compliance with the strict terms of the Joint Compromise Agreement of reassigning petitioners and
ensuring that they will be given work within the required time constitutes repudiation of the agreement. As such, the
agreement is considered rescinded in accordance with Article 2041 of the Civil Code. Petitioners properly chose to rescind the
compromise agreement and exercised the option of filing anew their complaints, pursuant to Art. 2041. It was error on the
part of the CA to deny petitioners the right of rescission.
Still, respondents insist that petitioners cannot seek rescission for they have already enjoyed the benefits of the Joint
Compromise Agreement. According to respondents, petitioners' acceptance of the amount of P7,000.00 each bars them from
repudiating and rescinding the agreement.
The contention lacks merit for the following reasons. First, petitioners never accepted the meager amount of P7,000.00 as
full satisfaction of their claims as they also expected to be reassigned and reinstated in their jobs. In other words, their
acceptance of the amount of P7,000.00 each should not be interpreted as full satisfaction of all their claims, which included
reinstatement in their jobs. The amount of P7,000.00 is measly compared to the amount of monetary award granted by LA
Espiritu and therefore makes the agreement unconscionable and against public policy,42 At this point, it is worth noting that
even quitclaims are ineffective in barring recovery for the full measure of the worker's rights and that acceptance of benefits
therefrom does not amount to estoppel.43 Lastly, it must be emphasized that the Joint Compromise Agreement expressly
provided that each of the complainants shall receive P7,000.00 as payment for their monetary claims and "which amount
shall be considered in any future litigation."44By virtue of this stipulation, the parties in entering into the agreement did not
rule out the possibility of any future claims in the event of non-compliance. As correctly ruled by LA Espiritu, this proviso
showed that petitioners were not barred from raising their money claims in the future.
Section 16 of Rule V of the NLRC Rules

of Procedure allows petitioners to re-file their
complaints which were previously dismissed
without prejudice
The Court also takes into account the circumstance that petitioners' previous complaints were dismissed without prejudice.
"A dismissal without prejudice does not operate as a judgment on the merits."45 As contrasted from a dismissal with
prejudice which disallows and bars the filing of. a complaint, a dismissal without prejudice "does not bar another action
involving the same parties, on the same subject matter and theory."46 The NLRC Rules of Procedure, specifically Section 16
of Rule V thereof, provides the remedy of filing for a revival or re-opening of a case which was dismissed without prejudice
within 10 days from receipt of notice of the order of dismissal and of re-filing the case after the lapse of the 10-day period.
Petitioners are thus not barred from re-filing their Complaints.
In choosing to rescind the Joint Compromise Agreement and re-file their complaints, petitioners can rightfully include their
claim of illegal dismissal. The CA took off from the wrong premise that petitioners, in re-filing their case, cannot be said to
have opted to rescind the compromise agreement since they were not insisting on their original claim. It must be noted that
when petitioners initially filed their first set of complaints for wage differentials, 13th month pay, overtime pay, holiday pay,
premium pay for holiday and rest day, service incentive leave pay, and unpaid ECOLA (that does not include the claim of
illegal dismissal), subsequent events transpired which brought about their unceremonious suspension and dismissal from
work. This then led to the parties entering into the Joint Compromise Agreement whereby respondents undertook to reinstate
petitioners and pay them the sum of P7,000.00 in partial satisfaction of their claims. The compromise agreement evinces and
shows that petitioners' reinstatement was part of their original demands. Besides, respondents acknowledged that the first
and second sets of Complaints filed by petitioners are similar in nature. Respondents even admitted that the issues raised in
the first set of Complaints were similar to the issues raised by petitioners when they filed anew their Complaints.
Nevertheless, the filing of a separate action for illegal dismissal shall only go against the rule on multiplicity of suits. It is
settled that a plaintiff may join several distinct demands, controversies or rights of action in one declaration, complaint or
petition.47 This is to avert duplicity and multiplicity of suits that would farther delay the disposition of the case.
In view of the foregoing, we find that both the NLRC and CA gravely erred in dismissing petitioners' Complaints on the
ground of res judicata. LA Espiritu correctly assumed jurisdiction and properly took cognizance of petitioners' consolidated
complaints for illegal dismissal and other monetary claims.
Petitioners are entitled to separation pay

and full backwages as well as to the other
monetary awards granted by the
Labor Arbiter
We, likewise, subscribe to LA Espiritu's ruling that petitioners, as regular employees, are deemed to have been constructively
and illegally dismissed by respondents. Being on floating status and off-detailed for more than six months, not having been
reinstated and reassigned by respondents, petitioners are considered to have been constructively dismissed.48 Settled is the
rule that an employee who is unjustly dismissed from work shall be entitled to reinstatement, or separation pay if
reinstatement is no longer viable, and to his full backwages.49
LA Espiritu awarded petitioners separation pay in lieu of reinstatement. The Court agrees that the award of separation pay is
warranted due to the already strained relations between the parties.50 However, aside from separation pay, petitioners, for
having been illegally dismissed, should also be awarded full backwages, inclusive of allowances and their other benefits or
their monetary equivalent computed from November 9, 2002 (the date of their last work assignment or from the time
compensation was withheld from them) up to the date of finality of this Decision.
While petitioners failed to raise the matter of entitlement to backwages before the CA, this does not prevent the Court from
considering their entitlement to the same. The Court has discretionary authority to take up new issues on appeal if it finds
that their consideration is necessary in arriving at a just decision.
Anent the other monetary claims in petitioners' complaints, the awards granted to them by LA Espiritu stand undisturbed for
petitioners' failure to question the same on appeal before the CA and even before this Court. Hence, we sustain the award of
wage differentials, 13th month pay differentials, service incentive leave pay, unpaid ECOLA, and holiday pay less the
P7;000.00 already received by them.
WHEREFORE, the Petition is GRANTED. The August 27, 2010 Decision and February 10, 2011 Resolution of the Court of
Appeals in CA-G.R. SP No. 106724 are REVERSED and SET ASIDE. The July 29, 2004 Decision of the Labor Arbiter Pablo C.
Espiritu, Jr. in NLRC NCR Case Nos. 00-05-05557-2003, 00-05-06187-2003, 00-05-06605-2003 and 00-07-07792-2003
is REINSTATED. In addition, respondents Napar Contracting & Allied Services and Norman Lacsamana are held jointly and
severally liable to pay petitioners Reynaldo Inutan, Helen Carte, Noel Ayson, Ivy Cabarle, Noel Jamili, Maritess Hular, Rolito
Azucena, Raymundo Tunog, Roger Bernal, Agustin Estre, Marilou Sagun, and Enrique Ledesma, Jr. full backwages, inclusive
of allowances and their other benefits or their monetary equivalent computed from November 9, 2002 up to the date of
finality of this Decision.
SECOND DIVISION
G.R. No. 202611, November 23, 2015
ABNER MANGUBAT, Petitioner, v. BELEN MORGA-SEVA, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the Resolutions of the Court of Appeals (CA) dated (i) July 13, 20111 which
dismissed for lack of merit petitioner Abner Mangubat's (Abner) Petition for Annulment of Judgment and, (ii) June 13,
20122 which denied his motion for reconsideration.
Factual Antecedents
On March 5, 1974, Gaudencio Mangubat (Gaudencio) and his wife Aurelia Rellora-Mangubat (Aurelia) filed with the Regional
Trial Court (RTC) of Pili, Camarines Sur a Complaint for Specific Performance with Damages against respondent Belen Morga-
Seva (Belen) and two other defendants. The case was docketed as Civil Case No. P-279 and raffled to the RTC Branch 31. On
August 27, 1985, the RT.C issued a Decision,3 the dispositive portion of which reads in part, viz.: chanRoble svirtual Lawlib ra ry
Based on the facts x x x established x x x and the cited applicable law and jurisprudence, this Court hereby renders
judgment and orders: chanRob lesvi rtua lLawl ibra ry
xxxx
3. The defendants to reimburse the plaintiffs the total amount the latter have paid the (Development Bank of the Philippines
[DBP]) after 1971, the year the defendants defaulted in their amortization payments to DBP, and in the event of the failure
of the defendants to make such reimbursement, for plaintiffs to assume the rights of the old creditor (DBP) and take such
remedial action as the situation may warrant, x x x
xxxx
5. The defendants [are] entitled to claim and recover title or ownership over the following properties held as collaterals by
DBP, subject, however, to the encumbrance in favor of the plaintiffs, who have substituted for DBP as creditors: chanRoble svirtual Lawli bra ry
1. The parcel of land covered by TCT No. 6337 with all the improvements thereon; x x x
xxxx
SO ORDERED.4
cralawlawl ibra ry
ChanRoblesVi rtualaw lib rary
Since Belen and her co-defendants' appeal to the CA and later to this Court were both unsuccessful, the RTC Decision
became final and executory.
On September 3, 1998, Gaudencio and his children as heirs (the heirs) of the deceased Aurelia filed with the same court a
Complaint for Revival of the Decision in Civil Case No. P-279.5 They averred that the writ of execution could not be
implemented because Belen and her co-defendants evaded service thereof. And since five years had already lapsed from the
date of its entry, Gaudencio and the heirs prayed for the revival of the RTC Decision.
Gaudencio, assisted by Atty. Reynaldo L. Herrera (Atty. Herrera) and Belen by Atty. Junnel M. Relativo, entered into a
Compromise Agreement6 which states as follows: chanRoblesvi rtua lLawl ibra ry
xxxx
The defendants admit that they shall pay the amount of P33.OOO.OO that was previously paid by the plaintiffs to [the DBP1
prior to the issuance of the decision in Civil Case No. 279, plus its legal interest of 12% per annum since August [1990 until]
the year 2000 or a total sum of P72,600.00 plus P5,000.00 for attorney's fee, payable on or before June 30, 2001;
That upon payment of said amount, the plaintiffs will transfer the title, TCT No. 6337 to defendant Belen Morga Seva;
All other claims and counterclaims that the parties may have [against each other] are hereby waived.
x x x x7
cralawlawlib ra ry
The RTC approved8 the agreement and on February 23, 2001 rendered a Decision9 in accordance therewith. Upon its finality,
the Writ of Execution was ordered issued by the said court.10
On June 24, 2002, Abner, on his own behalf, moved to substitute his father Gaudencio who died on January 31, 2002.11 A
few months thereafter and now allegedly in behalf of his co-heirs, Abner, through Atty. Haide B. Vista-Gumba (Atty. Vista-
Gumba) filed another motion to substitute Gaudencio exclusively for the purpose of executing the final judgment in the case
on the claim that it was necessary for the settlement of the intestate estate of his father.12 In an Order13 dated September
13, 2002, the RTC granted Abner's motion for substitution but for purposes of execution only.
On December 18, 2003, Belen handed to Atty. Herrera her payment of P91,280.0014 in accordance with the Compromise
Agreement.15 Alleging, however, that the heirs refused to convey to Belen the lot covered by TCT No. 6337, the RTC, upon
motion of Atty. Herrera,16 directed (1) Abner, who was allegedly in possession of the owner's copy of the title, to surrender
the same to the Clerk of Court; and (2) the Clerk of Court to execute in behalf of the heirs a deed of sale or conveyance of
the lot in favor of Belen pursuant to Sec. 10, Rule 39 of the Rules of the Court.17 Abner, however, manifested that as far as
he is concerned, Belen has not yet made any payment to the heirs as he was not notified by Atty. Herrera of the
same.18 Thus, Atty. Herrera reported to the court that out of the P91,280.00 handed to him by Belen, he had turned-over the
amount of P84,480.00 to the Clerk of Court and retained £6,800.00 as his attorney's fee.19 This was duly noted by the RTC.20
On January 20, 2005, Abner terminated the services of Atty. Herrera.21 Subsequently and purportedly in behalf of all the
heirs, Abner, through Atty. Vista-Gumba, filed a Motion to Declare the Amicable Settlement Null and Void.22 It was alleged
therein that Gaudencio acted only on his own behalf when he entered into the compromise agreement with Belen, hence, the
same is null and void for want of consent and participation of the heirs who were indispensable parties.
Interestingly, however, two of the heirs namely, Ruth Mangubat Parcia and Job Mangubat filed a Manifestation with Motion to
Withdraw the Heirs['] Respective Shares.23 According to them, they were seven siblings all in all and each is entitled to
P12,068.00 from Belen's payment. They do not agree with the course of action taken by Abner relative to the case and
prayed that the case be considered closed and terminated and their respective shares from Belen's payment released to
them. Belen, on the other hand, questioned Abner's capacity to assail the compromise agreement. She averred that in the
decision of the probate court regarding the intestate estate of Gaudencio, Abner was disinherited by his father.24
In an Order25 dated September 8, 2005, the RTC ruled on the Motion to Declare the Amicable Settlement Null and Void as
follows: cha nRoblesv irt ual Lawlib rary
The present action for Declaration of Nullity of the Compromise Agreement was filed by Abner Mangubat, son and one. of the
heirs of Gaudencio and Aurelia Mangubat, who has been disinherited by final judgment in Spec. Procs. No. P-984 before
RTC[,] Branch 33 of this Court x x x thus, Abner Mangubat is not a real party in interest to bring this present action ([to]
declare [the] amicable settlement null and void] under Rule 3, Section 2 of the Rules of Court. His allegations that the
present motion was brought in behalf of the other heirs of Gaudencio and Aurelia Mangubat is gratuitous and without basis,
there is no evidence to show that he is authorized to represent them. As a matter of fact, two of the heirs, Ruth Mangubat
Parcia and Job Mangubat manifested that they do not want to be involved and dragged in this proceeding nor in any other
action that Abner may institute; that accordingly, they are satisfied with the decision of the Court, and they want to get their
share of the deposit x x x.
Be it noted that the decision has been partially satisfied when defendant Belen Morga Seva, thru Atty. Reynaldo Herrera,
deposited the amount of P84,480.00 to the Clerk of Court as per [R]eceipt No. 1201439 dated April 6, 2005. Moreover, by
his own act, Abner Mangubat is bound by the compromise agreement when he substituted for his father. Record shows that
Abner Mangubat continued to retain the legal services of Atty. Reynaldo Herrera as counsel for the plaintiffs contrary to his
allegations. The services of Atty. Herrera was terminated only sometime in January 2005. x x x
It is well settled that a judgment on a compromise is not appealable and is immediately executory, unless a motion is filed to
set aside the compromise on the ground of fraud, mistake or duress in which case an appeal may be taken from the order
denying the motion.
The inaction of Abner Mangubat or [the] other heirs of Gaudencio Mangubat and Aurelia Mangubat for a period of almost four
(4) years after becoming aware of the compromise agreement and of the judgment thereon, amounts to a ratification on
their part of said agreement. For laches operates to validate an agreement otherwise invalid, granting that the herein
compromise agreement was invalid, when the party on becoming aware of the compromise fails to repudiate it promptly.
Such ratification is presumed from his or their inaction.
The validity of a judgment or order of a Court cannot be assailed collaterally unless the ground of attack is lack of
jurisdiction. If the purported nullity of the judgment lies on the party's lack of consent to the compromise agreement, as
claimed by Abner Mangubat being the heir of Aurelia Rellora-Mangubat who died before the filing of this case for revival of
judgment, the remedy of the aggrieved party is to have it reconsidered, and if denied to appeal from such judgment or if
final to apply for relief under Rule 38 of the Rules of Court or to file an annulment of judgment under Sec. 9 of B.P. 129
before the Honorable Court of Appeals.
It is unfortunate that Abner Mangubat failed to avail of the remedies provided for under the Rules of Court and opted to file
this instant motion to declare the compromise agreement null and void which has no leg to stand on.
WHEREFORE, in view of all the foregoing, for lack of sufficient merit, the motion to declare [the] amicable settlement null and
void is hereby DENIED.
Again purportedly on behalf of all the heirs, Abner moved for the reconsideration of the above-quoted Order27 but was denied
by the RTC in its Order28 of February 27, 2006. When the same became final, Belen filed a Motion for Execution of Specific
Acts29 wherein she once more prayed that Abner be ordered to surrender to the RTC the owner's copy of TCT No. 6337 and
the Clerk of Court to execute in her favor and on behalf of the heirs a deed of sale involving the lot covered by the said title.
This was granted by the RTC in an Order30 dated July 14, 2006. Still, Abner refused to comply. Hence, the said court upon
motion of Belen31 issued its Order32 of September 25, 2006, the dispositive portion of which reads: chanRoblesv irt ual Lawlib rary
WHEREFORE, in view of the foregoing, plaintiffs through Abner Mangubat [are] hereby divested of the ownership of the
property covered by Transfer Certificate of Title No. 6337 pursuant to the decision of this Court dated February 23, 2001 and
the same is vested to herein defendant Belen Morga-Seva. This order shall now have the force and effect of a conveyance
executed in due form oflaw pursuant to the last sentence of Sec. 10(a) of Rule 39 of the [R]ules of Court.
SO ORDERED.33
cralawlawl ibra ry
Trie afore-mentioned order became final on November 19, 2006.34 Pursuant thereto, the RTC directed the Registrar of Deeds
of Camarines Sur to transfer title to the property under TCT No. 6337 to Belen.35
On September 21, 2010, Abner filed a Petition for Annulment of Final Order36 with the CA. He contended that under the
Compromise Agreement, Belen was supposed to make her payment on or before June 30, 2001. However, the same was
made only on December 18, 2003 or way beyond the period agreed upon. Thus to Abner, it was unjust for the RTC to have
issued its September 25, 2006 Order divesting the heirs of ownership of the subject property. Moreover, Abner argued that
since the February 23, 2001 RTC Decision approving the Compromise Agreement had long become final and executory, the
RTC had already lost its jurisdiction over the case when it issued the September 25, 2006 Order.
In a Resolution37 dated July 13, 2011, the CA dismissed the Petition for lack of merit. The Motion for
Reconsideration38 thereto was also denied in Resolution39 dated June 13, 2012.
Hence, this Petition for Review on Certiorari.
The Parties' Arguments
Abner basically reiterates the arguments he advanced before the CA.
For her part, Belen argues that the RTC has jurisdiction over the Complaint for revival of judgment. In fact, the RTC's
issuance of the September 25, 2006 Order is nothing but an exercise of jurisdiction pursuant to its authority to handle the
case until the full satisfaction of its Decision. At any rate, Abner is guilty of laches as it was only after almost four years from
the finality of the said Order that he questioned the same.
Our Ruling
The Petition fails.
It must be stressed that the remedy of annulment of judgment is only available under certain exceptional circumstances as
this is adverse to the concept of immutability of final judgments.40 Hence, it is allowed only on two grounds, i.e., extrinsic
fraud and lack of jurisdiction.41
Abner anchors his Petition for Annulment of Final Order on lack of jurisdiction. He posits that the RTC had lost jurisdiction
over the case when its February 23, 2001 Decision became final, hence, any issuance subsequent thereto is made without
any jurisdiction.
The argument is, however, specious. "Lack of jurisdiction on the part of the trial court in rendering the judgment or final
order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the
petitioner."42 Here, it is undisputed that the RTC acquired jurisdiction over the person of Abner, he having asked for
affirmative relief therefrom several times.43 As mentioned, what Abner questions is the RTC's jurisdiction over the case.
"In a petition for annulment of judgment based on lack of jurisdiction, petitioner must show not merely an abuse of
jurisdictional discretion but an absolute lack of jurisdiction. Lack of jurisdiction means absence of or no jurisdiction, that is,
the court should not have taken cognizance of the petition because the law does not vest it with jurisdiction over the subject
matter. Jurisdiction over the nature of the action or subject matter is conferred by law."44 The RTC's jurisdiction over
petitions for revival of judgment had already been upheld by the Court.45 It was held that "[a]n action for revival of judgment
may be filed either 'in the same court where said judgment was rendered or in the place where the plaintiff or defendant
resides, or in any other place designated by the statutes which treat of the venue of actions in general.'"46 Here, the
Complaint for revival of judgment was filed in the same court (RTC-Pili Camarines Sur, Branch 31) which rendered the
August 27, 1985 Decision in Civil Case No. P-279. Undoubtedly, the RTC has jurisdiction over the action. There is therefore
no valid ground for the Petition for Annulment of Final Order that Abner filed with the CA.
To the mind of the Court, Abner's flawed arguments emanate from his misconception of lack of jurisdiction over the subject
matter or nature of the action as a ground for annulment. As aptly observed by the CA, he has confused lack of jurisdiction
with error in the exercise of jurisdiction, viz.: chanRo blesvi rtua lLawl ib rary
It is settled that once jurisdiction has been acquired, it is not lost until the court shall have disposed of the case in its
entirety. [Abner's] predecessor having elected to enforce the compromise agreement, the RTC is still vested with jurisdiction
until compliance therewith has been fully enforced.
[Abner] clearly confused lack of jurisdiction with error in the exercise of jurisdiction. Jurisdiction is not the same as the
exercise of jurisdiction. As distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide a case, and
not the decision rendered therein. Where there is jurisdiction over the person and the subject matter, the decision on all
other questions arising in the case is but an exercise of such jurisdiction. And the errors which the court may commit in the
exercise of jurisdiction are merely errors of judgment which are the proper subject of an appeal. The error raised by [Abner]
pertains to the trial court's exercise of its jurisdiction, not its lack of authority to decide the case. In a petition for annulment
of judgment based on lack of jurisdiction, [a] petitioner must show not merely an abuse of jurisdictional discretion but an
absolute lack of authority to hear and decide the case. On this basis, there would be no valid ground to grant the petition for
annulment of judgment.47
cralawlawl ibra ry
ChanRoblesVi rt ualawlib rary
Even assuming that the claim of lack of jurisdiction is well-grounded, Abner's Petition for Annulment of Final Order is barred
by laches. An action for annulment of judgment or final order if based on lack of jurisdiction, must brought before it is barred
by laches.48 "The principle of laches or 'stale demands' ordains that the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or should have been done earlier ~ negligence
or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it has
abandoned it or declined to assert it."49 In this case, it was only after almost four years from the finality of the September
25, 2006 Order that Abner brought an action to annul the same. He did not even care to provide in his petition any
justification for his inaction for such a long period of time. Such unreasonable delay warrants the presumption that Abner has
declined to assert his right to the property covered by TCT No. 6337. Verily, to permit him now to assert the same would be
unfair and inequitable.
In any event, Abner's Petition for Annulment of Final Order was not the proper remedy to nullify the September 25, 2006
Order which is an interlocutory order. "An interlocutory order refers to a ruling respecting some point or matter between the
commencement and end of the suit, but is not a final adjudication of the claims and liabilities of the parties that are in
dispute in that suit.50 The September 25, 2006 Order merely dealt with the incidental matter of causing the transfer of the
title to the property covered by TCT No. 6337 under the name of Belen in accordance with the final and executory February
23, 2001 RTC Decision after Abner refused to comply with the directive to deliver the owner's copy thereof. No further
settlement of any claim or imposition of any further liability was made in the said order.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed Resolutions of the Court of Appeals dated July
13, 2011 and June 13, 2012 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 179257, November 23, 2015
UNITED ALLOY PHILIPPINES CORPORATION, Petitioner, v. UNITED COCONUT PLANTERS BANK [UCPB] AND/OR
PHILIPPINE DEPOSIT INSURANCE CORPORATION [PDIC], JAKOB VAN DER SLUIS AND ROBERT
T.CHUA, Respondent.
DECISION
DEL CASTILLO, J.:
"[T]he dismissal of the principal action x x x [carries] with it the denial, disallowance or revocation of all reliefs ancillary to
the main remedy sought in that action."1
Challenged in this Petition for Review on Certiorari2 is the August 17, 2007 Decision3 of the Court of Appeals, Cagayan de Oro
City Station (CA CDO) in CA-G.R. SP No. 67079 dismissing petitioner United Alloy Philippines Corporation's (UniAlloy) Petition
for Certiorari and Mandamus filed therewith. In said Petition, UniAlloy sought to nullify the Orders dated September 134 and
14,5 2001 of the Regional Trial Court (RTC), Branch 40, Cagayan de Oro City in Civil Case No. 2001-219 that dismissed its
Complaint for Annulment and/or Reformation of Contract and Damages with Prayer for A Writ of Preliminary Injunction or
Temporary Restraining Order (TRO)6 and ordered it to surrender the possession of the disputed premises to respondent
United Coconut Planters Bank (UCPB).
Factual Antecedents
UniAlloy is a domestic corporation engaged in the business of manufacturing and trading on wholesale basis of alloy
products, such as ferrochrome, ferrosilicon and ferromanganese. It has its principal office and business address at Phividec
Industrial Area, Tagaloan, Misamis Oriental. Respondent UCPB, on the other hand, is a banking corporation while respondent
Robert T. Chua (Chua) is one of its Vice-Presidents. Respondent Jakob Van Der Sluis is a Dutch citizen and was the Chairman
of UniAlloy. Respondent Philippine Deposit Insurance Corporation is the assignee-in-interest of UCPB as regards the loan
account of UniAlloy.
On September 10, 1999, UniAlloy and UCPB entered into a Lease Purchase Agreement7 (LPA) wherein UniAlloy leased from
UCPB several parcels of land with a total area of 156,372 square meters located in Barangay Gracia, Tagoloan, Misamis
Oriental,8 The three-year lease commenced on August 1, 1999 to run until July 31, 2002 for a monthly rent: of P756/700.00.
The parties stipulated that upon the expiration of the lease, UniAlloy shall purchase the leased properties for P300 million to
be paid on staggered basis. UniAlloy also obtained loans from UCPB.
On August 27, 2001, however, UniAlloy filed the aforesaid Complaint9 against respondents. It claimed that, thru
misrepresentation and manipulation, respondent Jakob Van Der Sluis took foil control of the management and operation of
UniAlloy; that respondents connived with one another to obtain fictitious loans purportedly for UniAlloy as evidenced by
Promissory Note Nos. 8111-00-00110-6, 8111-00-20031-1, and 8111-01-20005-6 for P6 million, US$10,000.00, and
US$320,000.00, respectively; that UCPB demanded payment of said loans; and, that UCPB unilaterally rescinded the LPA.
UniAlloy prayed that judgment be issued: (i) ordering the annulment and/or reformation of the three Promissory Notes; (ii)
nullifying UCPB's unilateral rescission of the LPA; (iii) enjoining UCPB from taking possession of the leased premises; and (iv)
ordering respondents to jointly and severally pay nominal and exemplary damages, as well as attorney's fees of P500,000.00
each. As ancillary relief, UniAlloy prayed for the issuance of a temporary restraining order and/or writ of preliminary
injunction.
On the same day, the Executive Judge of the RTC, Cagayan de Oro City issued a 72-hour TRO directing UCPB to cease and
desist from taking possession of the disputed premises.10 The following day, respondent Jakob Van Der Sluis filed a Motion to
Dismiss and Opposition to the Application for Injunction or TRO11 on the grounds of improper venue, forum-shopping,12 litis
pendentia, and for being a harassment suit under the Interim Rules of Procedure for Intra-Corporate Cases. He argued that
the LPA specifically provides that any legal action aiising therefrom should be brought exclusively in the proper courts of
Makati City. The Complaint did not disclose the pendency of Civil Case No. 2001-156 entitled "Ernesto Paraiso and United
Alloy Philippines Corporation v. Jakob Van Der Sluis" before Branch 40, as well as CA-G.R. SP No, 66240 entitled "Jakob Van
Der Sluis v. Honorable Epifanio T. Nacaya, et al." He further averred that what UniAlloy sought to enjoin is already fait
accompli.
Respondents UCPB and Chua, on the other hand, filed a Motion to Dismiss & Motion to Recall Temporary Restraining
Order.13 In addition to the ground of improper venue, they raised the issue of lack of authority of the person who verified the
Complaint as no secretary's certificate or a board resolution was attached thereto.
During the hearing on the writ of preliminary injunction on August 30, 2001, the RTC directed the parties to maintain
the status quo by not disturbing the possession of the present occupants of the properties in question pending resolution of
respondents' motions,
On September 13, 2001, the RTC, acting as Special Commercial Court, issued an Order14 granting the motions to dismiss and
ordering the dismissal of the case on the grounds of improper venue, forum-shopping and for being a harassment suit. The
RTC held that venue was improperly laid considering that the Promissory Notes sought to be annulled were issued pursuant
to a Credit Agreement which, in turn, stipulates that any legal action relating thereto shall be initiated exclusively in the
proper courts of Makati City. It also opined that UniAlloy committed forum-shopping for failing to disclose in its certificate of
non-forum-shopping the pendency of Civil Case No, 2001-156 which involves the same parties, the same transactions and
the same essential facts and circumstances. The cases, as ruled by the RTC, have also identical causes of action, subject
matter and issues. The dispositive portion of the September 13, 2001 Order reads: ch anRoblesvi rtua lLawl ibra ry
ACCORDINGLY, finding meritorious that the venue is improperly laid and the complain[an]t engaged in forum-shopping and
harassment of defendant Jakob Van der Sluis, this case is hereby DISMISSED rendering the prayer issuance of a writ of
preliminary injunction moot and academic, and ordering plaintiff to turn over possession of the subject premises of the
properties in question at Barangay Gracia, Tagoloan, Misamis Oriental to defendant United Coconut Planters Bank.
SO ORDERED.15
cralawlawl ibra ry
Upon UCPB's motion, the RTC issued another Order16 dated September 14, 2001 directing the issuance of a writ of execution
to enforce its September 13, 2001 Order. Accordingly, a Writ of Execution17 was issued directing the Sheriff to put UCPB in
possession of the disputed premises. It was satisfied on September 17, 2001.18 The employees of UniAlloy were evicted from
the leased premises and UCPB's representatives were placed in possession thereof.
On September 25, 2001, UniAlloy received copies of the RTC Orders.19 And on October 9, 2001, it filed with the Court of
Appeals, Manila Station (CA Manila) its petition in CA-G.R. SP No. 67079 attributing grave abuse of discretion on the part of
the court a quo in (i) dismissing its petition on the grounds of improper venue, forum-shopping and harassment, (ii) ordering
the turnover of the property in question to UCPB after the dismissal of the Complaint, and (iii) applying the Interim Rules of
Procedure for Intra-corporate Controversies.
On October 18,2001, the CA Manila issued a TRO. After hearing, the CA Manila issued a Resolution20dated February 18, 2002
granting UniAlloy's ancillary prayer for the issuance of a writ of preliminary injunction upon posting of a bond in the amount
of P300,000.00.
UniAlloy posted the requisite bond.
However, no writ of preliminary injunction was actually issued by the CA Manila because of this Court's March 18, 2002
Resolution21 in G.R. No. 152238 restraining it from enforcing its February 18, 2002 Resolution. G.RNo. 152238 is a Petition
for Certiorari initiated by UCPB assailing said Resolution of CA Manila. And, in deference to this Court, the CA Manila refrained
from taking further action in CA-G.R. SP No. 67079 until G.R. No. 152238 was resolved.22
On January 28, 2005, this Court rendered its Decision23 in G.R. No. 152238 finding no grave abuse of discretion on the part
of the CA in issuing its February 18, 2002 Resolution and, consequently, denying UCPB's petition.
Thereafter, and since this Court's Decision in G.R. No. 152238 attained finality, UniAUoy filed with the CA Manila a Motion to
Issue and Implement Writ of Preliminary Mandatory Injunction.24 In the meantime, the records of CA-G.R. SP No. 67079
were forwarded to CA CDO pursuant to Republic Act No. 8246.25 cralaw red
On May 31, 2006, the CA CDO issued a Resolution26 denying UniAlloy's motion. It found that UniAUoy had lost its right to
remain in possession of the disputed premises because it defaulted in the payment of lease rentals and it was duly served
with a notice of extrajudicial termination of the LPA. Said court also found that UniAUoy vacated the leased premises and
UCPB was already in actual physical possession thereof as of August 24, 2001, or three days before UniAUoy filed its
complaint with the RTC. Hence, it could no longer avail of the remedy of preliminary injunction to regain possession of the
disputed premises.
UniAUoy filed a Motion for Reconsideration,27 which was denied in the CA CDO's November 29,2006 Resolution.28
On August 17, 2007, the CA CDO issued the assailed Decision denying UniAlloy's petition and affirming the RTC's questioned
Orders. It opined inter alia that UniAUoy erred in resorting to a Rule 65 petition because its proper recourse should have
been to appeal the questioned Orders of the RTC, viz.: chanRoblesvi rt ualLawl ibra ry
It is plain from the record, though, that Unialloy had lost its right to appeal. The time to make use of that remedy is gone. It
is glaringly obvious that Unialloy resorted to this extraordinary remedy of certiorari and mandamus as a substitute vehicle for
securing a review and reversal of the questioned order of dismissal which it had, by its own fault, allowed to lapse into
finality. Unfortunately, none of the arguments and issues raised by Unialloy in its petition can adequately brand the 13
September 2001 Order as void on its face for being jurisdietionaily flawed, nor mask the fact that it became final and
executory by Unialloy's failure to file an appeal on time. And so, even if the assailed order of dismissal might arguably not
have been entirely free from some errors in substance, or lapses in procedure or in findings of fact or of law, and which that
account could have been reversed or modified on appeal, the indelible fact, however is that it was never appealed. It had
become final and executory. It is now beyond the power of this Court to modify it.29
cralawlawl ibra ry
ChanRoblesVirtualawl ibra ry
Hence, this Petition raising the following issues for Our resolution:
1. Whether the Court of Appeals (Cagayan de Oro City) erred, or acted without, or in excess of jurisdiction, or
committed grave abuse of discretion arnounting to lack, or excess of jurisdiction in DENYING United Alloy's Motion to
Issue and Implement Writ of Preliminary Mandatory Injunction in this case, DESPITE the earlier resolution dated
February 18, 2002 issued by the same Court of Appeals (Manila) of coordinate and co-equal jurisdiction which
granted United Alloy's Motion for Issuance of Preliminary Injunction upon bond of P300,000.00, and DESPITE this
Honorable Court's decision dated January 28, 2005 in the certiorari case G.R. No. 152238 filed by UCPB to assail the
Court of Appeals's Resolution of February 18, 2002, which decision sustained the said resolution of February 18,
2002, and DENIED UCPB's petition in said G.R. No. 152238.
As sub-issue - Whether the Court of Appeals (Cagayan de Oro City) disregarded the rule that every court must take
cognizance of decisions the Supreme Court has rendered, because they are proper subjects of mandatory judicial
notice. The said decisions more importantly, form part of the legal system, and failure of any court to apply them
shall constitute an abdication of its duty to resolve a dispute in accordance with law and shall be a ground for
administrative action against an inferior court magistrate x x x
2. Whether x x x the Court of Appeals (Cagayan de Qro City) decided this case in accord with law and the evidence,
and so far departed from the accepted and usual course of judicial proceedings as to call for an exercise of the
supervisory power of this Honorable Court, and to entitle this petition to allowance and the review sought in this
case.30
cralawlawl ibra ry
Issue
The basic issue to be resolved in this case is whether the CA CDO erred in dismissing UniAlloy's Petition for Certiorari and
Mandamus. For if the said court did not commit an error then it would be pointless to determine whether UniAlloy is entitled
to a writ of preliminary injunction pursuant to CA Manila's February 18, 2002 Resolution which was issued as a mere
ancillary' remedy in said petition.
Our Ruling
The Petition is devoid of merit.
Before delving on the focal issue, the Court shall first pass upon some procedural matters.
UniAlloy availed of the proper remedy

in assailing the RTC's September 13, 2001
Order dismissing its Complaint
In its Comment,31 UCPB defends the CA CDO in denying due course to UniAlloy's Petition for Certiorariand Mandamus. It
posits that UniAlloy should have filed with the RTC a Notice of Appeal from the Order dated September 13, 2001 instead of a
Rule 65 petition before the CA, Respondents Jakob Van der Sluis and Chua echo UCPB's contention that UniAlloy resorted to
a wrong mode of remedy and that the dismissal of its complaint had become final and executory which, in turn, rendered
UniAlloy's Rule 65 petition before the CA moot and academic.32
In its Consolidated Reply,33 UniAlloy counter-argues that it filed a Rule 65 petition with the CA because the remedy of appeal
is inadequate as the RTC had already directed the issuance of a writ of execution and that the RTC Orders are patently
illegal.
UniAlloy availed of the correct remedy. Under Section 1 Rule 16 of the Rules of Court, the following may be raised as grounds
in a motion to dismiss: chanRoble svi rtual Lawli bra ry
SECTION 1. Grounds. — Within the time for but before filing the answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following grounds: chanRoble svi rtual Lawli bra ry
(a) That the court has no jurisdiction over the person of the defending party;
(b) That the court has no jurisdiction over the subject matter of the claim;
(c) That venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the statute of limitations;
(g) That the pleading asserting the claim states no cause of action;
(h) That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or otherwise
extinguished;
(i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds; and
(j) That a condition precedent for filing the claim has not been complied with. cralawlawl ib rary
Except for cases falling under paragraphs (f), (h), or (i), the dismissal of an action based on the above-enumerated grounds
is without prejudice and does not preclude the refiling of the same action. And, under Section l(g) of Rule 41,34 an order
dismissing an action without prejudice is not appealable. The proper remedy therefrom is a special civil action
for certiorari under Rule 65,35 But, if the reason for the dismissal is based on paragraphs (f), (h), or (i) (i.e., res
judicata, prescription, extinguishment of the claim or demand, and unenforceability under the Statute of Frauds) the
dismissal, under Section 5,36 of Rule 16, is with prejudice and the remedy of the aggrieved party is to appeal the order
granting the motion to dismiss.
Here, the dismissal of UniAlloy's Complaint was without prejudice. The September 13, 2001 Order of the RTC dismissing
UniAlloy's Complaint was based on the grounds of improper venue, forum-shopping and for being a harassment suit, which
do not fall under paragraphs (f), (h), or (i) of Section 1, Rule 16. Stated differently, none of the grounds for the dismissal of
UniAlloy's Complaint is included in Section 5 of Rule 16 of the Rules of Court. Hence, since the dismissal of its Complaint was
without prejudice, the remedy then available to UniAlloy was a Rule 65 petition.
CA CDO did not err in affirming the

dismissal of UniAlloy's Complaint on the
grounds of improper venue, forum-shopping
and for being a harassment suit
The RTC was correct in dismissing UniAlloy's Complaint on the ground of improper venue. In general, personal actions must
be commenced and tried (i) where the plaintiff or any of the principal plaintiffs resides, (ii) where the defendant or any of the
principal defendants resides, or (III) in the case of a resident defendant where he may be found, at the election of the
plaintiff.37 Nevertheless, the parties may agree in writing to limit the venue of future actions between them to a specified
place.38
In the case at bench, paragraph 18 of the LPA expressly provides that "[a]ny legal action arising out of or in connection with
this Agreement shall be brought exclusively in the proper courts of Makati City, Metro Manila."39 Hence, UniAlloy should have
filed its complaint before the RTC of Makati City, and not with the RTC of Cagayan de Oro City.
But to justify its choice of venue, UniAlloy insists that the subject matter of its Complaint in Civil Case No. 2001-219 is not
the LPA, but the fictitious loans that purportedly matured on April 17, 2001.40
UniAlloy's insistence lacks merit. Its Complaint unequivocally sought to declare "as null and void the unilateral rescission
made by defendant UCPB of its subsisting Lease Purchase Agreement with [UniAlloy]."41 What UCPB unilaterally rescinded is
the LPA and without it there can be no unilateral rescission to speak of. Hence, the LPA is the subject matter or at least one
of the subject matters of the Complaint. Moreover, and to paraphrase the aforecited paragraph 18 of the LPA, as long as the
controversy arises out of or is connected therewith, any legal action should be filed exclusively before the proper courts of
Makati City. Thus, even assuming that the LPA is not the main subject matter, considering that what is being sought to be
annulled is an act connected and inseparably related thereto, the Complaint should have been filed before the proper courts
in Makati City.
With regard forum-shopping, our review of the records of this case revealed that UniAlloy did not disclose in the
Verification/Certification of the Complaint the pendency of Civil Case No. 2001-156 entitled "Ernesto Paraiso and United Alloy
Philippines Corporation v. Jakob Van Der Sluis." The trial court took judicial notice of its pendency as said case is also
assigned and pending before it. Thus, we adopt the following unrebutted finding of the RTC: chanRoblesvi rtua lLawl ibra ry
These two civil cases have identical causes of action or issues against defendant Jakob Van Der Sluis for having
misrepresented to plaintiff and its stockholders that he can extend financial assistance in running the operation of the
corporation, such that on April 6, 2001 plaintiff adopted a Stockholders Resolution making defendant Jakob chairman of the
corporation for having the financial capability to provide the financial needs of plaintiff and willing to finance the operational
needs thereof; that a Memorandum of Agreement was subsequently entered between the parties whereby defendant Jakob
obligated to provide sufficient financial loan to plaintiff to make it profitable; that Jakob maliciously and willfiilly reneged [on]
his financial commitments to plaintiff prompting the stockholders to call his attention and warned him of avoiding the said
agreement; that defendant who had then complete control of plaintiffs bank account with defendant UCPB, through
fraudulent machinations and manipulations, was able to maliciously convince David C. Chua to pre-sign several checks; that
defendant Jakob facilitated several huge loans purportedly obtained by plaintiff which defendant himself could not even
account and did not even pay the debts of the corporation but instead abused and maliciously manipulated plaintiffs account.
Forum-shopping indeed exists in this case, for both actions involve the same transactions and same essential facts and
circumstances as well as identical causes of action, subject matter and issues, x x x42 cralaw lawlib rary
The dismissal of UniAlloy's main

action carries with it the dissolution of
any ancillary relief previously granted
therein.
UniAlloy argues that the CA CDO erred in denying its petition considering that this Court has already sustained with finality
the CA Manila's February 18, 2002 Resolution granting its prayer for the issuance of a writ of preliminary mandatory
injunction.
The contention is non sequitur.
"Provisional remedies [also known as ancillary or auxiliary remedies], are writs and processes available during the pendency
of the action which may be resorted to by a litigant to preserve and protect certain rights and interests pending rendition,
and for purposes of the ultimate effects, of a final judgment in the case. They are provisional because they constitute
temporary measures availed of during the pendency of the action, and they are ancillary because they are mere incidents in
and are dependent upon the result of the main action."43 One of the provisional remedies provided in the Rules of Court is
preliminary injunction, which may be resorted to by a litigant at any stage of an action or proceeding prior to the judgment
or final order to compel a party or a court, agency or a person to refrain from doing a particular act or acts.44 In Bacolod City
Water District v. Hon. Labayen,45 this Court elucidated that the auxiliary remedy of preliminary injunction persists only until it
is dissolved or until the tepnination of the main action without the court issuing a final injunction, viz.: chanRob lesvi rtua lLawl ibra ry
x x x Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a certain act,
It may be the main action or merely a provisional remedy for and as an incident in the main action.
The main action for injunction is distinct from the provisional or ancillary remedy of preliminary injunction which cannot exist
except only as part or an incident of an independent action or proceeding. As a matter of course, in an action for injunction,
the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue. Under the law, the main action
for injunction seeks a judgment embodying a final injunction which is distinct from, and should not be confused with, the
provisional remedy of preliminary injunction, the sole object of which is to preserve the status quo until the merits can be
heard. A preliminary injunction is granted at any stage of an action or proceeding prior to the judgment or final order. It
persists until it is dissolved or until the termination of the action without the court issuing a final injunction.46 cralawlawl ibra ry
Based on the foregoing, it is indubitably clear that the August 17, 2007 Decision of CA CDO dismissing UniAlloy's Petition
for Certiorari and Mandamus effectively superseded the February 18, 2002 Resolution of the CA Manila granting UniAUoy's
ancillary prayer for the issuance of a writ of preliminary injunction. It wrote finis not only to the main case but also to the
ancillary relief of preliminary injunction issued in the main case.
For the same reason, there is no merit in UniAUoy's contention that the RTC grievously erred in ordering it to turn over the
possession of the subject premises to UCPB considering that the latter never prayed for it. As borne out by the records of the
case, UCPB was already in actual possession of the litigated premises prior to the filing of the Complaint on August 27, 2001.
This conforms with the finding of the CA CDO which pronounced that "an actual turnover of the premises x x x was really
effected on August 24, 2001, prior to the institution of the complaint a quo."47 UniAlloy was able to regain possession of the
disputed premises only by virtue of the RTC's 72-hour TRO. With the issuance of the RTC's September 13, 2001 Order
dismissing the Complaint of UniAlloy, however, the RTC's 72-hour TRO and August 30, 2001 order to maintain status quo,
which are mere incidents of the main action, lost their efficacy. As discussed above, one of the inevitable consequences of
the dismissal of the main action is the dissolution of the ancillary relief granted therein. Besides, the RTC issued the status
quo order with the express caveat that the same shall remain in force until it has resolved respondents' motions to dismiss,
which it subsequently granted. Consequently, UniAlloy has no more bases to remain in possession of the disputed premises.
It must, therefore, restitute whatever it may have possessed by virtue of the dissolved provisional remedy, even if the
opposing party did not pray for it.
The August 17, 2007 Decision neither

violated this Court's January 28, 2005
Decision in G.R. No. 152238 nor contradicted
the CA Manila's February 18, 2002 Resolution.
UniAlloy further argues that in denying its petition, CA CDO contradicted the earlier Resolution of a coordinate court, the CA
Manila, and the January 28, 2005 Decision of this Court in G.R. No. 152238. It insists that no court can interfere with the
judgment, orders or decrees of another court of concurrent or coordinate jurisdiction.
We are not persuaded.
True, under the doctrine of judicial stability or non-interference, "no court can interfere by injunction with the judgments or
orders of another court of concurrent jurisdiction having the power to grant the relief sought by injunction. The rationale for
the rule is founded on the concept of jurisdiction: a court that acquires jurisdiction over the case and renders judgment
therein has jurisdiction over its judgment, to the exclusion of all other coordinate courts, for its execution and over all its
incidents, and to control, in furtherance of justice,, the conduct of ministerial officers acting in connection with this
judgment."48 But said doctrine is not applicable to this case. Here, the proceeding in CA CDO is a continuation of the
proceeding conducted in CA Manila. There is only one case as what was resolved by CA CDO is the same case, CA-G.R. SP
No. 67079 earlier filed with and handled by CA Manila. It was referred to CA CDO pursuant to Republic Act No. 8246 creating
three divisions of the CA each in Cebu and Cagayan de Qro. Section 5 thereof provides: chanRob lesvi rtual Lawli bra ry
SECTION 5. Upon the effectivity of this Act, all pending cases, except those which have been submitted for resolution, shall
be referred to the proper division of the Court of Appeals.cralawlawli bra ry
In fine, CA CDO did not intrude into an order issued by another co-equal court in a different case. Rather, it continued to
hear the petition until its termination after the CA Manila referred the same to it by virtue of a law.
The fact that said February 18, 2002 Resolution of CA Manila was affirmed by this Court in its January 28, 2005 Decision in
G.R. No. 152238 is likewise of no moment. Said Resolution of CA Manila only granted UniAlloy's ancillary prayer for injunctive
relief. It did not touch on the issues of improper venue, forum-shopping, and harassment. Thus, neither did this Court tackle
said issues in its January 28, 2005 Decision. In fact, this Court cautiously limited its discussions on the propriety of the CA's
directive temporarily restraining the RTC from placing UCPB in possession of the disputed premises and deliberately reserved
to the CA the determination of whether the RTC erred in dismissing the main case. Thus: chanRoblesvi rt ual Lawlib rary
The dismissal of Civil Case No. 2001-219 on the grounds of forum-shopping, improper venue and harassment - although
raised, too, by Unialloy in its Petition before the Court of Appeals - was not passed upon in the assailed interlocutory CA
Resolution. As a consequence, it would be premature and improper for us to pass upon the RTC's dismissal of the case.
Hence, we shall limit our discussion to the assailed Resolutions temporarily stopping the trial court's turnover of the litigated
property to petitioner.49
cralawlawl ibra ry
ChanRob les Virtualawl ibra ry
WHEREFORE, the instant petition is hereby DENIED.
SECOND DIVISION
G.R. No. 202859, November 11, 2015
NEW FILIPINO MARITIME AGENCIES, INC., TAIYO NIPPON KISEN CO., LTD., AND ANGELINA T,
RIVERA, Petitioners, v. VINCENT H. D ATAYAN -HEIR OF SIMON VINCENT H. DATAYAN III,1Respondent.
DECISION
DEL CASTILLO, J.:
As a rule, the death of a seafarer during the term of his employment makes his employer liable for death benefits. The
employer, may, however, be exempt from liability if it can successfully establish that the seafarer's death was due to a cause
attributable to his own willful act.2
This Petition for Review on Certiorari assails title February 22, 2012 Decision3 of the Court of Appeals (CA) in CA-G.R. SP No.
119775. The CA granted the Petition for Certiorari filed therewith and reversed and set aside the October 28, 2010
Decision4 and March 15, 2011 Resolution5 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 07-000536-
10, which, in turn, affirmed the May 31, 2010 Decision6 of Labor Arbiter Arden S. Anni (LA) dismissing the complaint in
NLRC-NCR OFW Case No. (M)05-07052-09.
Likewise challenged is the July 24, 2012 CA Resolution7 denying the motion for reconsideration for lack of merit.
Factual Antecedents
On August 8, 2007, New Filipino Maritime Agencies, Inc. (NFMA), for and on behalf of St. Paul Maritime Corp. (SPMC),
employed Simon Vincent Datayan II (Simon) as deck cadet on board the vessel Corona Infinity. His employment was for nine
months with basic monthly salary of US$23 5.00.8 Prior to his deployment, Simon underwent pre-employment medical
examination (PEME) and was declared fit for sea duties. On August 17, 2007, he boarded the vessel and assumed his duties
as deck cadet.9
On December 30,2007, at 12:40 a.m., the Master authorized the conduct of an emergency fire drill in which the crew
participated. At about 1:25 a.m., he declared that Simon jumped overboard. A futile search-and-rescue operation ensued.
After a few weeks, Simon was declared missing and was presumed dead.10
Simon's father, Vincent H. Datayan (respondent), alleged that he went to NFMA to claim death benefits but his claim was
unheeded.11 On May 11, 2009, he filed a complaint12 for death benefits and attorney's fees against NFMA, Taiyo Nippon Kisen
Co., Ltd.,13 and Angelina T. Rivera (petitioners).
Respondent averred that because Simon died during the term of his employment, the provisions of the collective bargaining
agreement (CBA) among All Japan Seamen's Union, Associated Marine Officers' and Seamen's Union of the Philippines
(AMOSUP), and the International Mariners Management Association of Japan, must be applied in the grant of death benefits
and burial assistance in his favor, being the heir of Simon.14
Respondent also stated that the fire drill was conducted at 12:40 a.m. where there was heavy concentration of fishing boats
in the area; and during which the water temperature was expected to cause hypothermia. He asserted that petitioners were
presumed to be at fault or had acted negligently, unless they could prove that Simon's death was due to causes not legally
compensable.15 He declared that there was no evidence that Simon committed suicide and maintained that his death was a
result of negligence and reckless instruction of the Master.16
On the other hand, petitioners alleged that on December 29/2007, the crew, except those on duty, were in the mess hall for
a birthday celebration. They stated that Simon was invited by the Master to join the party but he refused.17 At about 12:40
a.m. of December 30, 2007, the Master ordered the conduct of a fire and emergency drill. After the drill, a crew meeting was
held where the Master reprimanded Simon for his poor performance. They stated that Simon left even before the meeting
was concluded. Thus, the Master ordered the crew to search for him. At about 1:25 a.m. to 1:30 a.m. of December 30, 2007,
Raymond Ocleasa (Ocleasa) saw Simon jump overboard.18
Additionally, petitioners declared that they exerted efforts to search, locate and rescue Simon.19 They alleged that the vessel
retraced its course to where he fell. The Master also informed the Japan Coast Guard about the incident. In response, the
Yokohama Coastguard Patrol conducted a search-and-rescue operation to no avail.20
Petitioners also averred that during a search made on the vessel, a note from Simon was found.21
Petitioners argued that respondent had no cause of action against them because Simon's death was a result of his (Simon's)
deliberate act. They insisted that based on the Philippine Overseas Employment Administration (POEA) Standard Employment
Contract (SEC) and CBA, a complainant is not entitled to death benefits when the cause of the seaman's death was the
latter's willful act.22 Petitioners added that the Master's Report, Statement of Facts, Marine Note of Protest and Investigation
Report conclusively proved that Simon committed suicide. They stated that this conclusion was bolstered by the suicide note
found on the vessel, signed by Simon himself.23
Ruling of the Labor Arbiter
On May 31, 2010, the LA dismissed the complaint.24 The LA held that Simon's suicide was established by the evidence on
record. Specifically, the Master's Report, as corroborated by Simon's suicide note, showed that he voluntarily jumped
overboard. The LA stated that ''the signature of the deceased seafarer in said note and in his POEA Contract would show
similarity, if not identity. To say that it was fabricated or concocted will not lessen the credibility of the suicide note, absent
any concrete evidence to the contrary."25 cralawred
Ruling of the National Labor Relations Commission
On appeal, the NLRC affirmed the LA Decision.26 Like the LA, the NLRC gave probative weight to the suicide note, the
Master's Report, along with other pieces of documentary evidence adduced, to establish that Simon committed suicide. It
held that considering that the death of the seafarer was due to his willful act, then his heir is not entitled to his death
benefits.
On March 15, 2011, the NLRC denied respondent's motion for reconsideration.27
Respondent then filed a Petition for Certiorari with the CA maintaining that there was no evidence that Simon committed
suicide hence his death is compensable.
On February 22, 2012, the CA rendered the assailed Decision,28 finding for respondent, the decretal portion of which
reads: chanRoble svirtual Lawli bra ry
WHEREFORE, the petition for certiorari is GRANTED. The assailed October 28, 2010 Decision and March 15,2011 Resolution
of public respondent are REVERSED and SET ASIDE. A new judgment is rendered ordering private respondents New Filipino
Maritime Agencies, Inc. and/or Taiyo Nippon Kisen Co., Ltd. and Angelina T. Rivera to pay petitioner Vincent H. Datayan as
heir of Simon Vincent H. Datayan II, the following:
1. US$50,000.00 or its Philippine currency equivalent as death benefits in accordance with the 2000 POEA
Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean[-
]Going Vessels;
2. US$1,000.00 or is [sic] Philippine currency equivalent as burial assistance;
3. P50,000.00 as moral damages and P25,000.00 as exemplary damages;
4. Attorney's fees equivalent to 10% of the total monetary awards; and
5. Legal interest on the foregoing amounts from the date of filing of the complaint until fully paid.
SO ORDERED.29
cralawlawl ibra ry
The CA explained that it was beyond question that Simon died aboard the vessel and during the effectivity of his contract,
thus, respondent is entitled to receive death benefits arising therefrom. It found that petitioners' evidence failed to prove
that Simon committed suicide; and ruled that the Master who executed and signed the Master's Report, Marine Note of
Protest and Statement of Facts failed to give positive testimony ascertaining Simon's actual suicide. It further pointed out
that the crew members who signed the Investigation. Report had no personal knowledge of Simon's suicide. It added that
Ocleasa, the alleged witness of the incident, did not sign the report or issue a sworn statement on the matter.
In addition, the CA stated that Simon underwent PEME and was not declared emotionally unfit. As such, it gave no probative
weight to the alleged suicide note of Simon.
Finally, the CA reasoned that in computing the death benefits in favor of respondent, the applicable provisions are those
under the POEA SEC not the CBA which covers disability benefits only; moreover, there was no evidence that Simon was an
AMOSUP member.
On July 24,2012, the CA denied petitioners' motion for reconsideration.30 Hence, petitioners filed the instant Petition arguing
that: chanRoblesvi rtua lLawl ibra ry
I. x x x the Court of Appeals committed serious, reversible error of law in awarding death benefits in favor of
respondent Mr. Vincent H. Datayan II despite the ruling of this Honorable Court in the case of Reyes vs. Maxim's Tea
House, that findings of fact of quasi-judicial bodies like the NLRC, particularly when they coincide with those of the
Labor Arbiter and if supported by substantial evidence, are accorded respect and even finality by appellate courts.
II. x x x the Court of Appeals committed serious, reversible error of law in holding that the death of the deceased
seafarer was compensable as the defense of suicide was not established with substantial evidence despite the suicide
note made by the deceased seafarer whose authenticity was affirmed by the Labor Arbiter and the First Division of
the NLRC.32
III. x x x the Court of Appeals committed serious, reversible error of law in awarding damages, attorney's fees and legal
interest in favor of respondent. The award of damages and attorney's fees has no basis as the denial of respondent's
claim for death benefits was done in good faith. Further, the award of legal interests has no basis in fact and in
law.33
cralawlawl ibra ry
Petitioners submit that the documentary evidence established that Simon killed himself, which makes respondent not entitled
to death benefits. They contend the LA and the NLRC found said documents to be authentic and are sufficient proof that the
cause of Simon's death was his willful act of committing suicide.
Petitioners posit that the CA erred in holding that the best evidence to prove Simon's alleged suicide was his body, which was
never found. They added that it would be unjust to hold that the fact of death was established but its cause was not shown
from the evidence on record. They further aver that to follow this line of reasoning the fact of death must be established by
clear and convincing evidence. As such, according to petitioners, respondent's cause of action would have accrued only after
four years from the time Simon was presumed dead on December 30, 2007.
Likewise, petitioners state that the Marine Note of Protest, Master's Report, Statement of Facts and Investigation Report
were not hearsay evidence because they were official documents issued by the Master. Also, they point out that these
documents were notarized and were authenticated by an affidavit signed by the Master.
Petitioners also explain that the absence of signature of Ocleasa was addressed in the Investigation Report. The report
indicated that Ocleasa had already disembarked when the investigation was conducted; he, nonetheless, reported to the local
agents and narrated what he witnessed on the vessel.
Petitioners emphasize the finding of the LA that the signatures in the alleged suicide note and in the POEA contract were the
same, if not identical.
Lastly, petitioners allege that damages were improperly awarded in favor of respondent considering that necessary
procedures were undertaken to locate Simon. They also state that investigation was conducted to gather information from
the crew regarding the circumstances surrounding his death.
For his part, respondent reiterates that there was no evidence that Simon committed suicide and that his death was a result
of the Master's negligence. He insists that the alleged suicide note could not have been written by Simon considering the
proximity of events, that is, at 12:40 a.m., the fire drill was conducted and at 1:25 a.m., Simon was said to have jumped
overboard. He asserts that he is entitled to compensation for the death of his son because he had established that he died
during the term of his employment contract with petitioners.
Issue
Is the CA correct in finding that the NLRC committed grave abuse of discretion in denying respondent's claim for death
benefits?
Our Ruling
In labor cases, the review of the Court under Rule 45 of the Rules of Court involves the determination of the legal
correctness of the CA Decision. This means that the Court must ascertain whether the CA properly determined the presence
or absence of grave abuse of discretion in the NLRC Decision. Simply put, "in testing for legal correctness, the Court views
the CA Decision in the same context that the petition for certiorari it ruled upon was presented to it."34 It entails a limited
review of the acts of the NLRC, of whether it committed errors of jurisdiction. It does not cover the issue of whether the
NLRC committed any error of judgment, unless there is a showing that its findings and conclusion were arbitrarily arrived at
or were not based on substantial evidence.35
In this case, both the LA and the NLRC ruled that respondent's claim for death benefits was without basis. They agreed that
Simon committed suicide, as principally established by the Master's Report and Simon's suicide note. The CA ruled otherwise.
It gave no weight to the suicide note because Simon underwent the PEME and was declared fit to work. The CA also refused
to accord probative value to the Master's Report, among others, because the Master gave no positive testimony on Simon's
actual suicide.
To determine whether the CA correctly found that the NLRC gravely abused its discretion in finding that there is substantial
evidence - or such relevant evidence a reasonable mind might accept as adequate to support a conclusion36 - that Simon
committed suicide, it becomes imperative to resolve whether the parties discharged their respective burdens of proof and the
corresponding shift in the burden of evidence in this case.37
As claimant for death benefits, respondent has the burden to prove by substantial evidence that his son's death is work-
related and that it transpired during the term of his employment contract. In this respect, respondent has discharged his
burden. It is beyond question that Simon died during the term of his contract. The next question is whether Simon's death
was due to his deliberate act. If such is the case, then respondent is not entitled to death benefits. That Simon's death was a
result of his willful act is a matter of defense.38 Thus, petitioners have the burden to prove this circumstance by substantial
evidence.
The Court finds that petitioners discharged their burden to prove that Simon committed suicide. The Master's Report39 clearly
described the situation on the vessel prior to, during and after the time that Simon went overboard, to wit:chanRoble svi rtual Lawli bra ry
x x x WE CONDUCTED EMERGENCY FIRE DRILL AT NIGHT TIME 0040LT 30th DECEMBER 2007/ 1540TC 29th DECEMBER 2007.
AFTER THE DRILL AT ABOUT 0055LT WE CONDUCTED MEETING AT CREW MESSHALL FOR MASTER'S EVALUATION AND AT
THE SAME TIME SAFETY MEETING DURING EVALUATION, I STRONGLY MENTIONED ABOUT HIS (SIMON'S) BEHAVIOUR ON
BOARD THE SHIP TO MOTIVATE HIM AND TO IMPROVE HIS PERFORMANCE SINCE HE IS A DECK CADET AND ABOUT TO BE
PROMOTED AS ORDINARY SEAMAN x x x
x x x AFTER THE MEETING [I] OBSERVED THAT HE WAS NOT AROUND IN THE MESSHALL. KNOWING THAT HE WAS
SLIGHTED I ORDER TO LOOK FOR HIM IN WHICH THE CREW COMPLIED. ONE OF THE CREW WIPER RAYMOND C. OCLEASA
xxx SAW DECK CADET SIMON VINCENT H. DATAYAN II WAS STANDING [SIC] ON THE FAIRLEAD PORT QUARTER AND AT
THAT POINT HE (WIPER) SAW TORCH LIGHT PASS HIS (DECK CADET) FACE AND CAUGHT HIS (DECK CADET) ATTENTION
THEN WHEN HE ATTEMPTED TO JUMP, HE (WIPER) CALLED HIS NAME BUT HE (DECK CADET) JUMPED OVERBOARD. THEN
WIPER WENT TO SHIP'S OFFICE AND DIAL 0 FOR PUBLIC ADDRESS AND SHOUT MANOVERBOARD PORTSIDE. BUT THAT
ANNOUNCEMENT WAS NOT CLEAR ENOUGH. SO WHEN I REACH THE BRIDGE I ASKED SECOND OFFICER WHICH SIDE HE
FELL OVERBOARD BUT SECOND OFFICER ALSO NOT SURE [SIC] WHICH SIDE HE FELL. IN ORDER TO RETURN I ORDERED
HARD STARBOARD TO MANEUVER WILLIAMSON TURN AND RETURN TO RECIPROCAL COURSE AND DROP LIFEBOUY WITH
BOUYANT SMOKE SIGNAL AND SELF IGNITING LIGHT. TURN ON ALL DECK LIGHTS AND POSTED LOOKOUTS x x x40
cralawlawl ibra ry
ChanRobles Vi rtualaw lib rary
At the same time, the Statement of Facts41 submitted by petitioners indicated that after the vessel retraced its course to
where Simon fell, the incident was reported to the Japan Coast Guard and to petitioners' local agents in the Philippines. The
Yokohama Coastguard Patrol also conducted search-and-rescue but to no avail.
Moreover, in their Investigation Report,42 the crew described Simon as a "very silent person, bright student, [f]ast learner
but very sensitive person and will not talk unless you x x x question him. No problems with anybody since he embarked the
vessel [sic]."
The Master Report and Statement of Facts were executed by the Ship Master Arthur Evangelista, who also subscribed and
swore to his statements before a Notary Public.43
In Unicol Management Services, Inc. v. Malipot,44 the Court considered the Master's Report and the Investigation Report,
among others, in ruling that the seaman's beneficiaries were not entitled to death benefits. It noted that these documents
completely detailed the events that transpired prior to and the circumstances leading to the discovery of his death by suicide.
Similarly, in the instant case, the Master's Report as well as the Statement of Facts described the events that occurred prior
to, during and after the incident when Simon went overboard. In particular, Simon declined the Master's invitation for him to
join the party; thereafter, the Master reprimanded him because he performed poorly in the drill; Simon left the meeting and
was later seen to jump overboard by Ocleasa. Added to this narration is the statement of the crew in the Investigation
Report that Simon was a "very sensitive" person.
Also, the Investigation Report addressed the question on why Ocleasa did not sign said report. As stated therein, he already
disembarked from the vessel when the report was executed and was investigated at the (local) office, where he stated that
he saw Simon jump overboard.45
More importantly, the fact that Simon committed suicide is bolstered by the suicide note that he executed. His
note46 reads: chanRob lesvi rtual Lawl ibra ry
0100LT Dec. 30, 2007
Dear loved ones & shipmates,
I cannot take it anymore. Sorry for letting you pay for my shortcomings. I ask you to let me end my life. I cannot bear the
shame of letting you all endure all what is due me. But I happily end my life because I know it is the only [way] I can repay
you [sic]. You suffered for not letting myself obey my Master for a drink [sic], of which, he commenced a drill w/out anyones
[sic] idea[.]
Sayonara & God bless.
w/ you always.
cralawlawl ibra ry
Simon
The suicide note is informative as to why Simon committed suicide. He declined to join the party held prior to the drill and
was reprimanded for his poor performance in said drill. It can, thus, be inferred from the note that he blamed himself for the
difficulties he assumed to have caused his colleagues.
As such, to refute petitioners' position that Simon committed suicide, the burden of evidence shifts to respondent.
Nonetheless, respondent failed to discharge his burden. Respondent relies on the alleged negligence of the Master in ordering
the conduct of the drill and argues that Simon could not have written a suicide note because of the proximity of the time
when the drill was conducted and the time when Simon jumped overboard. Respondent presented no proof that said suicide
note was fabricated, as no specimen of Simon's handwriting was submitted to prove that it was not written by him.
On the contrary, the Court shares the observation of the LA that the signature47 in the suicide note and the signature48 of
Simon in his employment contract appear to be the same.
Hence, by substantial evidence, there are adequate reasons and proof that Simon committed suicide.
Under Section 20(D) of the POEA SEC,49 no compensation or benefits shall arise in case of death of a seafarer resulting from
his willful act, provided that the employer could prove that such death is attributable to the seafarer.
Although Simon died during the term of his contract with petitioners, still, respondent is not entitled to receive benefits
arising from his death. As clearly established, Simon died by his willful act of committing suicide and death under that
circumstance is not compensable under the POEA SEC.
In consideration of the foregoing, the Court finds that the CA erred in setting aside the NLRC Decision which affirmed the LA
Decision dismissing the complaint for lack of merit.
WHEREFORE, the Petition is GRANTED. The February 22, 2012 Decision and July 24, 2012 Resolution of the Court of
Appeals in CA-G.R. SP No. 119775 are REVERSED and SET ASIDE. The October 28, 2010 Decision of the National Labor
Relations Commission in NLRC LAC No. 07-000536-10 is REINSTATED and AFFIRMED. Accordingly, the complaint in NLRC-
NCR OFW Case No. (M)05-07052-09 is DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 197458, November 11, 2015
NICANOR PINLAC Y RESOLME, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition filed under Rule 45 of the Rules of Court assails the March 29, 2011 Decision1 of the Court of Appeals (CA)
which affirmed with modification the ruling2 of the Regional Trial Court (RTC) of Olongapo City, Branch 72, finding petitioner
Nicanor Pinlac (petitioner) guilty of violation of Section 5(b), Article III of Republic Act (RA) No. 7610 (otherwise known as
the Special Protection of Children Against Child Abuse, Exploitation, and Discrimination Act), which provides: chanRoblesv irt ual Lawlib rary
SEC. 5. Child Prostitution and Other Sexual Abuse. - Children, whether male or female, who for money, profit or any other
consideration or due to the coercion or influence of any adult syndicate or group, indulge in sexual intercourse or lascivious
conduct are deemed to be children exploited in prostitution and other sexual abuse.
The penalty of reclusion temporal in its medium period to reclusion perpetua shall be imposed upon the following:
xxxx
(b) Those who commit the act of sexual intercourse or lascivious conduct with a child exploited in prostitution or subjected to
other sexual abuse: x x x ChanRoblesVi rtualaw lib rary
The prosecution established that on the evening of March 9, 1997, "AAA,"3 a 14-year old boy, went with petitioner to the
Kale Beach Resort in Subic, Olongapo City for initiation rites in a fraternity founded by the latter. After succumbing to
petitioner's "persuasion" to drink alcohol and smoke marijuana, "AAA" lost control of himself ("nawala ako sa sarili"). While in
a daze, stupor, or near total unconsciousness, petitioner isolated "AAA" from his companions and other fraternity recruits,
forcibly disrobed "AAA", and performed oral sex on him by sucking his penis until he ejaculated. The following day or on
March 10, 1997, petitioner again performed oral sex on "AAA" after convincing him anew to ingest alcohol and to smoke
marijuana.
Petitioner denied the charges against him. He disclaimed that he was at the Kale Beach Resort in Subic, Olongapo City on
March 9, 1997; that "AAA" underwent initiation to join a fraternity; that he isolated "AAA" from his companions and other
fraternity recruits; that he forcibly disrobed "AAA" and performed oral sex on him; that he sucked "AAA's" penis until "AAA"
ejaculated; and that on March 10, 1997, he again performed oral sex on "AAA" after convincing the latter anew to ingest
alcohol and to smoke marijuana. He claimed that he was a candidate for barangay kagawad at the time and that he was too
pre-occupied then campaigning for that post, so that he could find no time at all for some other activities, including the
commission of the alleged acts of lasciviousness imputed to him. He insisted that this case was instigated by "BBB," "AAA's"
mother, who was also running for the position of barangay kagawad.
The RTC did not lend credence to the version of petitioner. In a Decision dated January 6, 2010, it found petitioner guilty
beyond reasonable doubt of having violated Section 5(b), Article III of RA 7610, thus: chanRoble svirtual Lawli bra ry
On the basis of the foregoing evidence presented, the Court finds and so holds that the prosecution has presented the
required evidence to prove the guilt of the accused beyond reasonable doubt [of] [violation of Section 05 (b) of Article III of
Republic Act 7610.
Prosecution evidence would show that on March 9, 1997 accused brought the victim [AAA,] a minor, together with other
persons to Kale Beach Resort located in Subic at around 7:00 o'clock in the evening as part of their initiation as x x x recruits
of the fraternity founded by the accused. At the said place, the accused let [AAA] take alcohol, marijuana, and drugs as part
of their initiation. After taking drugs and marijuana the victim lost control of himself (nawala sa sarili) because he was
"high["] at that time. Seeing the situation of the victim, the accused asked their companions to leave the place leaving him
(accused) and the victim in the said place. While the victim was [in that] condition, and taking advantage of such condition of
the victim, the accused sucked his penis. The following day, particularly on March 10, 1997, the accused did the same thing
to the victim, that is, sucking again the minor victim's penis while lying on the sand. Before the accused sucked his penis, the
accused [first] took off x x x his shirt and pants. The victim was [then still] drunk and "high" on drugs.
It was very clear that the prosecution was able to present a complete picture detailing how the accused sexually abused the
minor victim by sucking his penis [on] the night of March 9, 1997 and also on the following day while the victim was under
the influence of liquor and dangerous drugs.
On the other hand, accused['s] defense is merely denial. He denied having in [his] company x x x the victim on said dates.
His denial was also corroborated by a witness who happened to be his friend. The court is not persuaded by the version of
the accused insinuating that the filing of the instant case was concocted and instigated by the mother of the minor victim and
that the victim had asked forgiveness for the same. For one, it is very apparent that the accused was just concocting [a]
story to exculpate himself. Accused stated that there was no occasion on said dates and prior thereto that he was with the
victim because he was always with Leslie Enciro who always accompanied him in his campaign sorties as a candidate for
barangay kagawad. This is, however, hard to believe. The testimony of Leslie Enciro that there was no time that she was not
[in] the company of the accused on said dates due to their campaign activities even made the defense more unreliable.
Denial and alibi are the weakest defense in criminal cases. (People vs. Bulan 459 SCRA 550). Settled is the rule that denial is
essentially the weakest defense and it can never overcome an affirmative testimony particularly when it comes from the
mouth of a credible witness (People vs. Mendoza 450 SCRA 328).
xxxx
Section 5(b) of Republic Act 7610 provides:
Section 5. Child Prostitution and Other Sexual Abuse. - Children, whether male or female, who, for money, profit, or any
other consideration or due to the coercion or influence of any adult, syndicate or group, indulge in sexual intercourse or
lascivious conduct, are deemed to be children exploited in prostitution and other sexual abuse.
The penalty of in its medium period, to reclusion perpetua shall be imposed upon the following: chanRoble svi rtual Lawli bra ry
xxxx
(b) Those who commit the act of sexual intercourse or lascivious conduct with a child exploited in prostitution or subjected to
other sexual abuse: x x x ChanRoblesVi rtualaw lib rary
Undoubtedly, the accused's act of sucking the penis of the minor victim amounts to lascivious conduct. Hence, there is no
doubt that the accused is guilty of the crime charged against him.4 ChanRoblesVirt ualawli bra ry
Thereafter, the RTC disposed decretally as follows -

WHEREFORE, in view of the foregoing considerations, the Court finds the accused NICANOR PINLAC Y RESOLME GUILTY
beyond reasonable doubt for Violation of Section 5 (b) of Republic Act 7610 (Special Protection of Children Against Child
Abuse, Exploitation and Discrimination Act) and hereby sentences him to suffer the indeterminate imprisonment of TWELVE
YEARS (12) YEARS and ONE (1) DAY of Reclusion Temporal as the minimum to FIFTEEN (15) YEARS SIX MONTHS and
TWENTY DAYS of Reclusion Temporal as the maximum, and for the accused to pay the sum of THIRTY THOUSAND PESOS
(P30,000.00) as moral damages.
On appeal, petitioner challenged "AAA's" credibility by citing alleged inconsistencies in his testimony vis-a-vis the testimony
of his mother, "BBB." He likewise questioned why it took "AAA" 10 months to report the crime to the authorities. He also
asserted that the judge who penned the Decision was not the judge6who tried and heard the case, hence, did not allegedly
have the opportunity to personally observe the deportment and demeanor of the prosecution witnesses who gave the
testimonies that led to his conviction.
Dismissing petitioner's arguments, the CA held that the government's case was erected upon actual, incontrovertible facts
which proved beyond reasonable doubt that petitioner did in fact commit the crime set forth under Section 5(b), Article III of
RA 7610 i.e., performing lascivious acts upon a child exploited in prostitution or subjected to sexual abuse, and that the
child-victim, in this case "AAA" as clearly and specifically spelled out in the trial court's discussion, was below 18 years of
age.
The CA stressed that -

In the instant case, the act of accused-appellant in disrobing the minor AAA, who was then under the influence of illegal
drugs and liquor after he was made to take them by accused-appellant, and thereafter, sucking AAA's penis, is clearly a
lascivious conduct performed by accused-appellant on AAA.
A child is deemed exploited in prostitution or subjected to other sexual abuse, when the child indulges in sexual intercourse
or lascivious conduct (a) for money, profit, or any other consideration; or (b) under the coercion or influence of any adult,
syndicate or group. The law covers not only a situation in which a child, through coercion or intimidation, engages in any
lascivious conduct. The very title of Section 5, Article III (Child prostitution and Other Sexual Abuse) of RA 7610 shows that
it applies not only to a child subjected to prostitution but also to a child subjected to other sexual abuse. A child is deemed
subjected to "other sexual abuse" when he or she indulges in lascivious conduct under the coercion or influence of any adult.
In the instant case, accused-appellant influenced minor AAA to go to Sta. Cruz, Zambales; made him to take' drugs and
drink liquor; and when he was already high and out of control, accused-appellant performed lascivious conduct on AAA.
When the said lascivious conduct was performed on 09 and 10 March 1997 by accused-appellant on AAA, the latter was
fourteen years old. As indicated in his Certificate of Live Birth (Exhibit "A"), AAA was born on 21 August 1982. During the
pre-trial, the defense stipulated on AAA's birth certificate (Exhibit "A"). BBB, the mother of AAA, also testified that AAA was
born on 21 August 1982. AAA further testified that he was born on 21 August 1982.7 ChanRobles Vi rtua lawlib rary
The CA gave short shrift to petitioner's pale and stale alibi and denial of the sexual abuse charges, appropriately
characterizing these as "weak and self-serving." The CA held such a characterization both telling and compelling in light of
"AAA's" positive and categorical assertions graphically detailing the lewd and lascivious acts perpetrated by the petitioner.
Regarding "AAA's" alleged delay of 10 months in reporting the incident to the authorities, the CA held that there is no
behavioral norm that victims of sexual abuse follow in respect to the time-frame for making such report, each case being
determined by its peculiar milieu and setting; and that assuming for argument's sake that there was indeed some delay in
this case, such delay should not be construed as implying that the accusation might not have been true at all especially in
light of the fact that the victim was a minor.8
Anent petitioner's contention that the judge who wrote the Decision was not the judge who presided over the trial and did
not have the opportunity to personally observe the deportment and demeanor of the witnesses and hence was not in a
position to calibrate the credibility of these witnesses, the CA ruled that -
x x x The fact that the judge who heard the evidence was not himself the one who prepared, signed and promulgated the
decision constitutes no compelling reason to jettison his findings and conclusions, and does not per se render his decision
void. The validity of a decision is not necessarily impaired by the fact that its ponente only took over from a colleague who
had earlier presided at the trial. x x x9 ChanRobles Vi rtualaw lib rary
On March 29, 2011, the CA rendered judgment as follows: chanRoble svirtual Lawlib ra ry
WHEREFORE, premises considered, the appeal is DENIED. The Decision dated 06 January 2010 of the Regional Trial Court of
Olongapo City, Branch 72, in Criminal Case No. 79-1999 finding accused-appellant Nicanor Pinlac y Resolme guilty beyond
reasonable [doubt] for violation of Section 5 (b), Article III of Republic Act No. 7610, is AFFIRMED with MODIFICATION in
that, accused-appellant is hereby sentenced to suffer the indeterminate penalty of imprisonment of 8 years and 1 day
of prision mayor, as minimum, to 17 years, 4 months and 1 day of reclusion temporal, as maximum, and to pay a fine of
P15,000.00; and for him to pay the victim AAA the amounts of P20,000.00 as civil indemnity, and P15,000.00 as moral
damages. Costs against accused-appellant.
cralawlawl ibra ry
Hence, this Petition raising the sole issue of: cha nRoblesvi rtua lLaw lib rary
Whether x x x the Court of Appeals erred in giving credence to the testimony of "AAA."11
ChanRoblesVi rt ualawlib ra ry
Our Ruling
Petitioner claims that the CA erred in its "findings of facts."12 He avers that the factual finding of the CA that the crime was
committed at Kale Beach Resort, Sta. Cruz, Zambales was erroneous; he posits that Kale Beach Resort is in Olongapo City
and not Sta. Cruz which is another local government unit.13Petitioner next insists that the appellate court erred in its
assessment of "AAA's" credibility.14
The Petition lacks merit.
It must be stressed that only questions of law may be raised in a petition for review filed under Rule 45 of the Rules of Court.
The issue raised by petitioner as well as his arguments pertains to factual findings which are not within the ambit of a
petition for review. Our ruling in Ortega v. People15 is pertinent: "The petition being a petition for review, the jurisdiction of
this Court is confined to reviewing questions of law."16
In any event, we find no cogent reason to set aside the findings of the trial court which were affirmed by the CA. After a
thorough review of the records of this case, we find that the CA Decision squares with the evidence and with the law as well
as with the jurisprudential doctrines laid down by this Court. Both the RTC of Olongapo City, Branch 72 and the CA reached
the correct conclusion that petitioner was indeed guilty beyond reasonable doubt of having violated Section 5(b), Article in of
RA 7610. We find, as did the RTC and the CA, that the State had satisfactorily established the following elements constitutive
of the offense charged: "(1) the accused commits the act of sexual intercourse or lascivious conduct; (2) the said act is
performed with a child exploited in prostitution or subjected to sexual abuse; and (3) the child, whether male or female, is
below 18 years of age."17 In this case "AAA" was 14 years and eight months old when he was subjected to sexual abuse by
the herein petitioner on March 9 and 10, 1997. This Court thus finds no reversible error in the assailed Decision.
Penalties and Awards of Damages
Under Section 5, Article III of RA 7610, the penalty of reclusion temporal in its medium period to reclusion perpetua shall be
imposed on those who commit acts of lasciviousness with a child exploited in prostitution or subjected to other sexual abuse.
Notwithstanding the fact that RA 7610 is a special law, the petitioner in this case may enjoy the benefits of the
Indeterminate Sentence Law.18 In applying the Indeterminate Sentence Law, the penalty next lower in degree is prision
mayor in its medium period to reclusion temporal in its minimum period. Thus, the CA correctly imposed the indeterminate
sentence of eight (8) years and one (1) day of prision mayor as minimum, to seventeen (17) years, four (4) months and one
(1) day of reclusion temporal as maximum.
The CA likewise correctly ordered petitioner to pay "AAA" the following amounts: P20,000.00 in the concept of civil
indemnity, P15,000.00 as moral damages, and a fine of P15,000.00 pursuant to Section 31(f), Article XII of RA 7610.19 In
addition, this Court also orders petitioner to pay "AAA" P15,000.00 by way of exemplary damages.20
Finally, we note that the RTC, in an Order21 dated January 21, 2010, allowed petitioner to enjoy his provisional liberty by
posting an appeal bond thru Monarch Insurance Company, Inc. in the amount of P80,000.00 under Bond No. JCR(2)
1004159.22 In conformity with this Decision, the bondsman, Monarch Insurance Company, Inc. is directed to surrender
petitioner to the court of origin. In turn, the RTC of Olongapo City, Branch 72 is directed to order the transmittal of petitioner
to the Bureau of Corrections.
WHEREFORE, the Petition is DENIED. The Decision dated March 29, 2011 of the Court of Appeals in CA-GR. CR. No. 33169
finding petitioner Nicanor Pinlac y Resolme guilty beyond reasonable doubt of having violated Section 5(b), Article III of
Republic Act No. 7610, and sentencing him to suffer the indeterminate penalty of imprisonment ranging from eight (8) years
and one (1) day oiprision mayor, as minimum, to seventeen (17) years, four (4) months and one (1) day of reclusion
temporal, as maximum, and to pay the victim "AAA" the amounts of P20,000.00 as civil indemnity, P15,000.00 as moral
damages, and P15,000.00 by way of fine is AFFIRMED, subject to the MODIFICATIONS that petitioner is also ordered to
pay "AAA" P15,000.00 in the concept of exemplary damages. All damages awarded shall earn interest at the rate of 6% per
annum from finality of this Decision until fully paid.
The bondsman, Monarch Insurance Company, Inc. is DIRECTED to surrender the person of petitioner to the Regional Trial
Court of Olongapo City, Branch 72 within 10 days from notice and to make a REPORTof the fact of surrender to this Court,
also within 10 days. The Regional Trial Court of Olongapo City, Branch 72 is DIRECTED to order or cause the transfer of
petitioner to the Bureau of Corrections within 10 days from the time petitioner was turned over, and to make a report to this
Court of such transfer, also within 10 days. Finally, the Bureau of Corrections is DIRECTED to make a report within 10 days
of petitioner's confinement thereat.
cralawlawl ibra ry
SO ORDERED.
SECOND DIVISION
G.R. No. 192955, November 09, 2015
EDILBERTO P. ETOM, JR., Petitioner, v. AROMA LODGING HOUSE THROUGH EDUARDO G. LEM, PROPRIETOR AND
GENERAL MANAGER, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 is the January 21, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R.
SP No. 110901. The CA granted the Petition for Certiorari3 filed therewith and set aside the April 30, 2009 Decision4 and June
30, 2009 Resolution5 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 09-003303-08 which affirmed with
modification the August 20, 2008 Decision6 of Labor Arbiter (LA) Eduardo G. Magno in NLRC NCR No. 04-05453-08 and found
Edilberto Etom (petitioner) entitled to unpaid wages, 13th month pay and holiday pay. Also assailed is the July 2, 2010 CA
Resolution7 which denied petitioner's motion for reconsideration.
Factual Antecedents
This case stemmed from a complaint8 dated April 15, 2008 filed by petitioner against Aroma Lodging House (respondent) for
illegal dismissal and money claims. Petitioner alleged that respondent, a business engaged in providing affordable
lodging,9 employed him as roomboy in 1997 with a monthly salary of P2,500.00. He averred that his working hours were
from 5:00 a.m. to 11:00 p.m. from Monday to Saturday, including holidays. His tasks included cleaning the lodging house
and washing towels and bedsheets.10
Petitioner claimed that on February 4, 2008, respondent refused to allow him to report for work. Petitioner argued that
respondent did not inform him of any violation that would warrant his dismissal. He also claimed that he was not given an
opportunity to explain and answer any imputation against him by his employer.11
On the other hand, respondent asserted that it employed petitioner as roomboy in 2000.12 He was paid salary above the
required minimum wage, holiday pay, 13th month pay and overtime pay. Respondent also stated that it provided petitioner
with free meals, allowed him to receive "tips" from customers, and sell bottles left by customers in the lodge. It also gave
him commission on certain occasions.13
Respondent averred that despite its beneficence, petitioner still showed an adverse attitude in work. In particular, he created
trouble within the workplace, stole items from customers and was even charged with rape in 2003.14 Petitioner also figured in
a fistfight with another roomboy, Reynaldo Baccus, whom he tried to stab with a knife on September 2, 2006. He likewise
had an altercation with Arnold Sansona (Sansona), a checker in the lodge, who reprimanded him for watching television
during working hours. He also had a quarrel with another co-worker, Jess Abuca (Abuca). On separate occasions, while
purportedly armed with a knife, petitioner chased Sansona and Abuca.15
Respondent averred that it served upon petitioner a memorandum16 requiring him to explain why he chased a co-employee
with a knife. However, respondent refused to receive said memorandum. Taking into consideration the safety of its
employees and customers, it terminated petitioner for serious misconduct.17
On August 20, 2008, the LA rendered a Decision18 finding petitioner to have been legally dismissed. The LA, however,
ordered respondent to pay petitioner punitive damages amounting to P10,000.00 for non-compliance with the termination
notice requirement, salary differential computed at P199,482.80, holiday pay amounting to P3,107.50 and 13th month pay of
P7,150.00.
Respondent appealed to the NLRC arguing that petitioner was not underpaid.19 It stated that in a "Sama-Samang
Sinumpaang Salaysay"20 - which was submitted in another labor case, - petitioner and another employee averred that they
were regular employees of respondent since 2000 and that they were receiving wages beyond the minimum required by
law.21 Respondent also claimed that it furnished petitioner with a copy of notice to explain and notice of termination but the
latter refused to receive them.22
In its April 30, 2009 Decision,23 the NLRC affirmed the ruling of the LA but deleted the award of punitive damages.
The NLRC concurred with the LA ruling that petitioner was underpaid considering that he was receiving only P2,500.00 as
monthly salary. It decreed that petitioner was entitled to receive salary differential amounting to P166,080.38 for three years
computed from February 20, 2005 to February 20, 2008 less 10% thereof for the facilities provided by respondent.
On June 30, 2009, the NLRC denied respondent's motion for reconsideration.24
Undaunted, respondent filed with the CA a Petition for Certiorari insisting that petitioner was not entitled to salary
differential, 13th month pay and holiday pay because he admitted in an affidavit that he had been receiving wages and other
benefits in accordance with law.25 It also asseverated that it was exempt from Minimum Wage Law since it had no more than
10 employees.26
For his part, petitioner argued that the Petition for Certiorari should not be entertained for late filing of the motion for
reconsideration of the NLRC Decision. He contended that respondent received the NLRC Decision on May 13, 2009 but filed a
motion for reconsideration only on May 26, 2009. Thus, he maintained that such filing was three days late.27
On January 21, 2010, the CA rendered the assailed Decision28 granting the Petition for Certiorari, the decretal portion of
which reads: chanRoble svirtual Lawlib ra ry
FOR THE STATED REASONS, the petition is GRANTED and the assailed decisions, dated April 30, 2009 and June 30, 2009 of
the National Labor Relations Commission (Second Division), awarding private respondent Edilberto Etom of unpaid wages,
13th month pay and holiday pay are hereby REVERSED and SETASIDE.xxx
The CA held that respondent timely filed a motion for reconsideration of the NLRC Decision. It added that "if the motion for
reconsideration was filed out of time, the NLRC would have dismissed it outright, instead of resolving it on its merit."30
Moreover, the CA explained that for having executed an earlier notarized affidavit stating that he received wages above the
required minimum salary, petitioner could not subsequently claim that he was underpaid by respondent.31 It also declared
that there is no factual basis to support the grant of 13thmonth pay and holiday pay in favor of petitioner.32
On July 2, 2010, the CA denied petitioner's motion for reconsideration.33
Hence, petitioner filed the instant Petition raising the following assignment of errors: cha nRoblesvi rtua lLawl ibra ry
1. THE HONORABLE COURT OF APPEALS COMMITTED A VERY GRAVE ERROR WHEN IT BASED ITS CONCLUSION THAT
HEREIN RESPONDENT'S] MOTION FOR RECONSIDERATION OF THE DECISION OF THE NLRC WAS NOT FILED OUT
OF TIME, ON CONJECTURES [sic] DESPITE THE CATEGORICAL ADMISSION OF HEREIN RESPONDENTS [sic] AND THE
MACHINE RECEIVED COPY OF SAID MOTION.
2. THE HONORABLE COURT OF APPEALS COMMITTED A VERY GRAVE ERROR WHEN IT UPHELD THE JOINT-AFFIDAVIT
OF HEREIN PETITIONER AND HIS CO-EMPLOYEE AS ADMISSION AGAINST INTEREST DESPITE THE DOCUMENTARY
EVIDENCE THAT PETITIONER WAS NOT PAID HIS MINIMUM WAGE AND DESPITE DECISIONS OF THE HONORABLE
SUPREME COURT ON QUITCLAIMS AND WAIVERS.
3. THE COURT OF APPEALS COMMITTED A VERY GRAVE ERROR WHEN HEREIN PETITIONER WAS NOT GIVEN THE
OPPORTUNITY TO FILE A REPLY AND SUCH OTHER RESPONSIVE PLEADING TO THE PETITION FOR CERTIORARI,
PURSUANT TO SECTION 6 OF RULE 65, AND/OR MEMORANDUM PURSUANT TO SECTION 8 THEREOF.34
Petitioner reiterates that respondent's motion for reconsideration of the NLRC Decision was filed beyond the reglementary
period.35 He also maintains that he was underpaid, and was not given 13th month pay and holiday pay by respondent.36
In addition, petitioner alleges that his affidavit dated March 19, 2004 was executed during the pendency of a criminal case
against him. He contends that respondent pressured him to sign it.37 He likewise avers that he is illiterate and does not
understand the implication of said affidavit.38 He further explains that he was unable to disclaim the voluntary execution and
authenticity of the affidavit because he was not given the chance to file a memorandum where he could have discussed all
the issues in the Petition for Certiorari.39
For its part, respondent reiterates the timely filing of its motion for reconsideration before the NLRC. It also agrees with the
CA ruling giving evidentiary value to petitioner's affidavit.40
Our Ruling
As a rule, the perfection of appeal within the period required by law is mandatory and jurisdictional. Failure to appeal within
such period results in the assailed decision becoming final and executory. As regards a motion for reconsideration of a
decision of the NLRC, the same must be filed within 10 days from the receipt of the assailed decision. It must, nevertheless,
be emphasized that the NLRC is not bound by the technical rules of procedure. Thus, in deciding labor cases, the NLRC is
allowed to liberally apply its rules.41
In this case, petitioner alleges that the subject motion for reconsideration was filed beyond the 10-day reglementary period.
However, we note the explanation made by respondent for the seeming late filing of its motion to wit: chanRob lesvi rtua lLawl ibra ry
x x x [I]t is public knowledge that May 23, 2009 happens to be a Saturday, hence, under established rules and relevant
jurisprudence, the filing of petitioners' (herein respondent) Motion for Reconsideration should be on May 25, 2009, the next
working day after May 23, 2009. On May 25, 2009, Petitioners filed their Motion for Reconsideration before the public
respondent, however, through a glitch in the docket machine date and time puncher of the NLRC at that date and hour, the
petitioners' Motion for Reconsideration date of filing was erroneously marked and stamped as May 26, 2009 1:47 A.M.
Petitioners only managed to take notice of the mistake in the date and time of the docket of their Motion for Reconsideration
on the following day, May 26, 2009, the real May 26, 2009. Petitioners thence quickly went to the NLRC Docket Section to
report the mistake and x x x was [sic] told by the Docket Section Personnel that they have already corrected the erroneous
date and time of petitioners' docketed Motion for Reconsideration to the x x x correct May 25, 2009, 1:47 P.M. and have
forwarded the Motion for Reconsideration of the [petitioners to the NLRC x x x Indeed, it would be plainly absurd for a
government office docket section like that of the public respondent NLRC to be open for business at such unholy hour of 1:47
A.M. x x x42 ChanRoblesVi rt ualawlib ra ry
Based on the foregoing explanation, we are convinced that respondent timely filed its motion for reconsideration of the NLRC
Decision. In fact, the NLRC took cognizance of it and decided the motion on the merit.
In any event, we held in Opinaldo v. Ravina43 that the NLRC may liberally apply its rules and decide a motion for
reconsideration on the merits. We upheld the liberal application by the NLRC of its technical rules to resolve the issues on the
merits because "a full resolution of the case on the merits is the more palpable explanation for the liberal application of its
rules."44
Petitioner also argues that he failed to disclaim the voluntary execution of the affidavit - where he admitted to have been
paid wages beyond the minimum required by law - because he was not given the opportunity to file a memorandum.
His contention is unmeritorious.
Section 6,45 Rule 65 of the Rules of Court provides that before the court gives due course to a petition for certiorari, it may
require the respondent to file a comment to the petition. Afterwards, the court may require the filing of a reply and such
pleadings as it may deem necessary. In turn, Section 846 of Rule 65 states that after the comment or other pleadings are
filed or the period for their filing has expired, the court may require the parties to file memoranda.
It is thus clear that the filing of a reply and other subsequent pleading, as well as memoranda, is subject to the sound
judgment of the court. "The word 'may' when used in a statute is permissive only and operates to confer discretion x x
x."47 In this case, the CA, in the exercise of its judgment, may or may not require the filing of any pleading and submit the
case for resolution, after the petition and the comment thereto had been filed.
Anent the substantive issue raised by petitioner, the power of the Court to review a CA Decision in labor cases is limited.
Specifically, in a petition for review under Rule 45 of the Rules of Court, the Court has to resolve whether the CA properly
determined the presence of grave abuse of discretion on the part of the NLRC in rendering its Decision, and not whether the
NLRC Decision on the merits was correct. However, while the strict inquiry on the correctness of evaluation of evidence is not
required in a certiorariproceeding, it is still necessary to determine that the conclusions of labor tribunals were supported by
substantial evidence. This is because a decision unsupported by substantial evidence is a judgment rendered with grave
abuse of discretion.48
In addition, as a rule, once the employee has asserted with particularity in his position paper that his employer failed to pay
his benefits, it becomes incumbent upon the employer to prove payment of the employee's money claims. In fine, the burden
is on the employer to prove payment, rather than on the employee to establish non-payment.49
Both the LA and the NLRC held that respondent did not pay petitioner the required minimum wage, holiday pay and
13th month pay. The CA, however, overturned the factual findings of these labor tribunals. Thus, we deem it necessary to
review the facts on record.
While a notarized document is presumed to be regular such presumption is not absolute and may be overcome by clear and
convincing evidence to the contrary. The fact that a document is notarized is not a guarantee of the validity of its contents.50
Here, petitioner is an unlettered employee who may not have understood the full import of his statements in the affidavit.
Notably, petitioner, along with a co-worker did not state the specific amount of what they referred as salary above the
minimum required by law. Their statement only reads as follows: cha nRoblesvi rt ual Lawlib rary
Na kami ay namamasukan bilang mga 'roomboy' sa naturang Aroma Lodge magmula pa noong taong 2000 at bilang mga
regular na mga empleyado nito, kami ay nakakatangap ng pasueldo na lagpas sa 'minimum wage' na takda ng batas, bukod
pa sa libreng tirahan (stay-in), pagkain, [paggamit] ng ilaw at tubig, at mga 'tips' at komisyon sa mga parokyano ng Aroma
Lodge.51ChanRobles Virtualawl ibrary
As found by the LA, respondent did not present substantial evidence that it paid the required minimum wage, 13th month pay
and holiday pay in favor of petitioner.52 Respondent's mere reliance on the foregoing affidavit is misplaced because the
requirement of established jurisprudence is for the employer to prove payment, and not merely deny the employee's
accusation of non-payment on the basis of the latter's own declaration.
In conclusion, we find that the CA erred in ascribing grave abuse of discretion on the part of the NLRC in awarding salary
differential, 13th month pay and holiday pay in favor of petitioner.
WHEREFORE, the Petition is GRANTED. The January 21, 2010 Decision and July 2, 2010 Resolution of the Court of Appeals
in CA-G.R. SP No. 110901 are REVERSED and SET ASIDE. Accordingly, the April 30, 2009 Decision and June 30, 2009
Resolution of the National Labor Relations Commission in NLRC LAC No. 09-003303-08 are REINSTATED and AFFIRMED.
SO ORDERED. cha
SECOND DIVISION
G.R. No. 211638, October 07, 2015
MARK ANTHONY SASO, Petitioner, v. 88 ACES MARITIME SERVICE, INC. AND/OR CARMENCITA A. SARREAL AND
LIN WEN YU, Respondents.
RESOLUTION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the September 18, 2013 Decision2 and March 5, 2014 Resolution3 of the Court
of Appeals (CA) in CA-G.R.SP No. 124369.
Factual Antecedents
Petitioner Mark Anthony Saso (Saso) was engaged by respondent 88 Aces Maritime Services, Inc. (88 Aces) on behalf of its
principal, respondent Lin Wen Yu (Lin Wen Yu), as a fisherman on board the latter's fishing vessel in Taiwan.
The employment was for a period of 24 months and with an agreed monthly salary of NT$ 17,280.00. After completing the
requirements for his deployment including the mandatory Pre-Employment Medical Examination (PEME) where he was
declared "fit to work/fit for sea service", Saso left the Philippines on February 3,2010.
Not long thereafter or on March 12, 2010, Saso figured in an accident on board the vessel. While in the process of hauling
their catch, a hanging fishnet loaded with fish accidentally knocked him down. While still lying on the ground, the loaded
fishnet and the huge rope holding it crashed into his right thigh thereby fracturing it. As a result, Saso had to be operated on
twice in two different hospitals in Taiwan. He was thereafter repatriated and arrived in the country on April 20,2010 in
crutches.
On August 3, 2010, Saso filed before the Labor Arbiter (LA) a Complaint4 for Disability Benefits, Reimbursement of Medical
Expenses, Sickness Allowance, Damages and Attorney's Fees against 88 Aces, its Managing Director, respondent Carmencita
A. Sarreal, and Lin Wen Yu.
In his pleadings,5 Saso claimed that upon his arrival in the Philippines, respondents already left him on his own. In fact,
respondents did not even care to send somebody to fetch and assist him at the airport despite them being fully aware of his
condition. Worse, when by his own initiative he presented himself to the office of 88 Aces on April 23, 2010, he was merely
told that he should first shoulder the expenses for his continued medical treatment subject to reimbursement only upon
proper documentation. Thus, he was constrained to spend for all his medical needs.
It was only on June 21, 2010 that respondents summoned him to report to their office for medical examination.6 In
compliance, Saso presented himself to them on July 1, 2010 and was referred to by respondents to the company-designated
physician, Dr. Rafael S. Recto (Dr. Recto) of the Manila Doctor's Hospital who examined him on even date.
Subsequent, or on August 3, 2010, Saso filed the said Complaint against On September 3, 2010, Saso was again seen by Dr.
Recto who then issued a medical bulletin stating as follows: cralawlawl ibrary
Mr. Mark Anthony Saso was first seen last July 1, 2010 [f]or evaluation of an injury sustained while on board a ship. He had
a communuted fracture of his right femoral shaft when a heavy tackle fell on his right thigh. Treatments were done in Taiwan
[wherein] two surgeries were done two weeks apart.
A dynamic intramedullary nail was placed with multiple [circlage] wires.
When seen, he was walking with a pair of crutches. His x-ray then showed callous formation. He has a shortening of one inch
on the right leg. He was [advised] to undergo physical therapy to strengthen his thigh muscles.
He was seen again last September 3 x x x with new x-rays revealing further callous formation. He was also walking with full
weight on his right lower extremity. He also complained of right sided back pain.
Examination showed a shortening of one inch on the right [leg] with weak quadriceps muscle.
He was [advised] to continue strengthening his quadriceps muscles and to put a shoe lift on the right. He was also told to
strengthen back muscle with exercises.
He is presently walking without walking aides with a short leg limp on the right.7 chan rob leslaw
However, due to the fact that his right leg has not been restored to its normal condition and also that Dr. Recto failed to
issue an assessment of his disability, Saso consulted Dr. Manuel Fidel M. Magtira (Dr. Magtira) of Casa Medica Inc. who, after
examining him, issued a Medical Report8 dated September 8, 2010 which states in part, viz.: cralawlawl ibra ry
This is the case of Mr. Mark Anthony M. Saso, a 24[-]year old male, resident of Phase I, Blk. 13, Lot 2, Eastwood Subd., San
Isidro, Rodriquez, Rizal. He [complained of] pain on the right thigh. His present condition apparently started on March 12,
2010 when the [patient's right leg] was crushed by a load of fish in a net [causing] injury to his right lower extremity while
on board the ship. He was given emergency splinting and bandaging initially and was brought to a [h]ospital in Taiwan
wherein X-ray was done. He was subjected to surgery wherein ORIF with M nailing was done. He was confined for ten days
and was discharged [in an improved condition] but still in pain. On March 29, 2010, he was brought to another hospital in
Taiwan wherein he [was] again x x x subjected to surgery [where] ORIF with circlage wiring and screw fixation [were done].
On April 20,2010, he was repatriated. On April 29,2010, he [consulte the] Philippine [Orthopedic] Center and was subjected
to physiotherapy.
On physical examination the patient is fairly nourished, well[-]developed, on crutched ambulation. There is a presence of 12
inches incision scar on the lateral aspect of his right thigh. Atrophy of the thigh and calf muscle was noted. There [is a 1-cm]
leg length discrepancy noted. There is limitation of motion of the right hip and knee. Numbness of the right lower extremities
was noted.
Result of X-ray done in Marikina Valley Medical Center dated: 05/18/10
RIGHT FEMUR:
FINDINGS: chanRoblesvi rtua lLawl ibra ry
Orthopedic rod, screws and surgical wires are seen transfixing a comminuted fracture involving the proximal and middle
3rd of the right femur.
Moderate callus formation is documented.

Mr. Saso remains incapacitated. Despite his previous surgeries, he [continues to experience] pain on his right
lower extremities. He walks with limitation. He [cannot] walk [without] the aid of x x x crutches. He has lost his
pre[-]injury capacity and is UNFIT to work back at his previous occupation due to the said impairment. As he
has lost his pre[-]injury capacity [,] he is partially and permanently disable with Grade 10 impediment based on
[the] POEA contract.9
chanrobles law
For their part, respondents averred that after the accident they properly attended to all of Saso's medical needs while he was
still in Taiwan; Saso came home to the Philippines with a companion, a certain Sonia Lianko, who upon arrival at the airport
told him that they should proceed directly to 88 Aces for post-employment medical examination but the latter refused; Saso
was summoned several times by respondents to present himself for post-employment medical examination but he failed to
heed the same; and, despite such failure, respondents still accommodated Saso's request for reimbursement of medical
expenses. In view of these, respondents argued that Saso is not entitled to his claims. Besides, per respondents' narration in
their Position Paper,10 the company-designated physician already issued on September 23, 2010 an assessment of his
disability as Impediment Grade 13.
In a Decision11 dated April 15, 2011, the LA ruled as follows:cralawlawl ibra ry
When [Saso] was repatriated on April 20, 2010, it was expected as required by Section 20[B], paragraph 3 x x x that the
company-designated physician must [assess] [his] disability or fitness to work but in no case shall the period exceed 120
days. [Saso] was repatriated on April 20, 2010 but until September 3, 2010, the company[-]designated physician failed to
declare his assessment of [Saso's] disability or fitness to work, hi the premises, as ruled in
the case of Crystal Shipping, Inc. v. Deo Natividad, G.R. No. 154798, October 20, 2005, 473 SCRA 567, 568, [Saso] is
already entitled to permanent total disability benefits, or the equivalent of US$60,000.00. The Supreme Court, in particular
held that:
Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he
loses the use of any part of his body. As gleaned from the records, respondent was unable to work from August 18, 1998 to
February 22, 1999, at the least, or more than 120 days, due to his medical treatment. This clearly shows that his disability
was permanent.
Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar
nature that he was trained for, or [accustomed] to perform, or any kind of work which a person of his [mentality] and
attainment could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is
compensated, but rather, it is the incapacity to work resulting in the impairment of one's earning capacity.
In the instant case, [Saso] was unable to perform his job as Fisherman since his repatriation on April 20, 2010 until the
filing of the complaint on September 17, 2010, or for more than 120 days. In the case of Leopoldo Abante vs. KJGS
Fleet Management Manila, et al., G.R. No. 182430, December 4, 2009, it has been held that 'given a seafarer's entitlement to
permanent disability benefits when he is unable to work for more than 120 days, the failure of the company-designated
physician to pronounce petitioner fit to work within the 120-day period entitled him to permanent total disability in the
amount of US$60,000.00.'
Regarding [Saso's] claim for sickness allowance, it appears from [his] reply that he was already paid an amount equivalent
to his three (3) months['] salary, or for a period of only ninety (90) days. Thus, he is entitled to one (1) month salary, or the
amount of NT$ 17,280.00 to complete his sickness allowance equivalent to 120 days.
The claims for reimbursement of medical expenses and for moral and exemplary damages, for lack of evidence must be
denied.
Finally, [Saso] being represented by counsel in the instant suit, it is but just and [fair] that he is entitled to an award
equivalent to ten percent (10%) of the total judgment award as and for attorney's fees.
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondents] to pay
jointly and solidarily [Saso] the sum of US$60,000.00 as permanent total disability benefits, and NT$7,280.00 as balance of
his sickness allowance, plus ten percent (10%) of the foregoing judgment awards as and for attorney's fees.
All other claims of [Saso] are dismissed for lack of merit.
SO ORDERED.12
chanrobles law
Ruling of the National Labor Relations Commission (NLRC)
In their appeal, respondents pointed out, among others, that the Complaint was filed on August 3, 2010 and not on
September 17, 2010 as stated by the LA in his Decision. Hence, from Saso's repatriation on April 20, 2010 up to the filing of
the Complaint on August 3, 2010, the period of 120 days within which the company-designated physician must declare him
fit to work or assess his disability had not yet lapsed. Respondents thus argued that the Complaint against them was
prematurely filed. In any case, they asserted that Saso's failure to present himself for post-employment examination within
three days from his repatriation negated his entitlement to the claimed benefits.
On December 20, 2011, the NLRC issued a Decision13 finding the appeal meritorious. It found that Saso failed to submit
himself to post-employment examination within three days from his repatriation and this precluded him from claiming any
compensation benefit. The NLRC also subscribed to respondents' observation that the Complaint was prematurely filed
considering that the 120-day presumptive disability period, reckoned from Saso's arrival in the country on April 20, 2010,
was yet to lapse on August 19, 2010 or after the Complaint was filed on August 3, 2010.
The dispositive portion of the NLRC Decision reads: cralawlawlib ra ry
WHEREFORE, premises considered, the assailed Decision is hereby reversed and set aside and a new one entered dismissing
the complaint for lack of merit.
SO ORDERED.14 chanrobles law
Saso's Motion for Reconsideration15 thereto was denied by the NLRC in a Resolution16 dated February 17, 2012.
In his Petition for Certiorari,17 Saso insisted that he reported to 88 Aces on April 23, 2010, or within three days from his
repatriation, for post-employment medical examination. However, respondents merely advised him to shoulder his own
medical expenses subject to reimbursement. Hence, on the same day, Saso went to the Philippine Orthopedic Center and
had himself medically examined as evidenced by a Medical Certificate18 issued by the said hospital. Also, to prove the
arrangement that respondent would just reimburse him of his medical expenses, Saso referred to an acknowledgement
receipt dated June 3, 2010 showing his receipt of the amount of P3,849.5019 as reimbursement of his medical expenses. He
further averred that although respondents indeed advised him to report for a medical check-up, the same was belatedly
made on June 21, 2010. Saso thus argued that the absence of a timely post-employment medical examination should not
prejudice his rightful claims for compensation since respondents were the ones who refused to provide him with the same.
Anent the 120-day presumptive disability period, Saso averred that the said period is not for the purpose of computing the
timeliness of the filing of the Complaint. Rather, it serves as a time-frame for the company-designated physician to either
declare a seafarer fit to work or to issue an assessment of disability. Thus, to Saso, even if the Complaint was filed ahead of
any disability assessment, this procedural infirmity was cured by the subsequent issuance of the respective disability
assessments of his independent physician and of the company-designated physician. Besides, technicalities should not
override the merits of the case especially in labor cases.
In a Decision20 dated September 18, 2013, the CA declared Saso as not entitled to total and permanent disability benefits
since he failed to comply with the mandatory 3-day reporting requirement. It also ruled that since his Complaint was filed
before the lapse of the 120-day period, he had no cause of action against respondents at the time of its filing. Ultimately, the
CA held thus: cralawlawlibra ry
IN VIEW OF ALL THESE, the Petition is DENIED.
SO ORDERED.21
chanrobles law
Saso's Motion for Reconsideration22 thereto was denied by the CA in a Resolution23 dated March 05, 2014.
Hence, this Petition.
Our Ruling
There is partial merit in the Petition.
A review of the facts is warranted in this

case; the absence of post-employment
examination does not defeat Saso's right to
claim for compensation
and benefits.
"Generally, the Court does not review factual questions, primarily because the Court is not a trier of facts."24 "However, in
instances where the judgment was premised on a misapprehension of facts or when certain material facts and circumstances
were overlooked and which, if taken into account, would alter the result of the case, a review of the facts by this Court is
warranted."25 cralawred
Relevant portions of Section 20(B) of the 2000 Philippine Overseas Employment Administration-Standard Employment
Contract (POEA-SEC) read: cralawlawli brary
Section 20. COMPENSATION AND BENEFITS
xxxx
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as
follows: cha nRoblesv irt ual Lawlib rary
xxxx
2. x x x
[I]f after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided
at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-
designated physician.
physician x x x
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-
designated physician within three working days upon his return except when he is physically incapacitated to do
so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the
seafarer to comply within the mandatory reporting requirement shall result in Ms forfeiture of the right to claim
the above benefits. (Emphasis supplied) cha nro bleslaw
The NLRC and CA both held that Saso failed to submit himself for post-employment medical examination within three days
from his repatriation thereby forfeiting his right to file a claim. However, the Court notes that in so ruling, the NLRC and the
CA simply side-swept Saso's allegation that he reported to 88 Aces on April 23, 2010 but was merely told by the latter to
shoulder his medical expenses subject to reimbursement upon proper documentation. This is despite the fact that (1) Saso
has been raising this all along, i.e., in his Reply26 with the LA, in his Comment/Opposition27 and Motion for
Reconsideration28with the NLRC, in his certiorari petition with the CA,29 and in the present Petition, contrary to respondents'
averment that he only did so before the CA,30 and, (2) respondents never categorically denied such claim. Moreover, Saso's
willingness to undergo a post-medical examination despite being told by respondents to just shoulder his medical expenses is
shown by the fact that on the same day, he had himself medically examined in the Philippine Orthopedic center. Also, none
other than respondents' own evidence bolsters his allegation. In their Reply31 before the LA, respondents attached thereto as
Annex "12" an acknowledgment receipt, viz:. c ralawlawl ibra ry
Date: 6/3/10
Received the Payment for Medication Reimbursement dated April 23, 2010 with the total amount of P3,849.50.
Received and signed this 6/3/10 day of May 2010 at Quezon City. Signed by: chanRoblesv irt ual Lawlib rary
Sgd.
MARK ANTHONY M. SASO
Fisherman
Arrival Date: April 20, 2010 (Taipei-Manila)32cha nrob leslaw
Significantly, per the above acknowledgement receipt, respondents reimbursed Saso for the medical expenses he incurred on
April 23, 2010, the same date that he claims to have reported to the office of 88 Aces for post-medical examination.
On the other hand, respondents' averment that they summoned Saso several times for post-medical examination but was
ignored by the latter cannot just be accepted hook, line and sinker. In their Appeal Memorandum33 with the NLRC,
respondents averred that as early as April 27, [2010], Saso went to the office of 88 Aces to ask for reimbursement of his
medical expenses. During the same, an employee of 88 Aces, Cherry Nazareth (Nazareth) allegedly asked Saso to undergo
post-medical examination but the latter refused. This allegation, however, is unsupported by competent proof. While
respondents submitted Nazareth's affidavit to supposedly attest to the same, the said sworn statement, standing alone, is
self-serving and therefore cannot be accorded considerable weight.34 What the Court observes is that respondents could have
easily proved their claimed willingness to comply with their part of the bargain by showing that they issued Saso a referral
for post-employment examination. However, on the said date (April 27, 2010) and on another occasion that Saso went to 88
Aces to claim the reimbursement for his medical expenses as shown by the above-quoted acknowledgement receipt (June 3,
2010), no such referral was issued him.
Anent respondents' written advice of June 21, 2010 wherein they requested Saso to report to their office for medical check-
up, the same cannot also be given any credence for the obvious reason that it was made way beyond the 3-day mandatory
reporting period. As averred by Saso, such issuance by respondents of the written advice is a mere afterthought to make it
appear that they complied with the requirements of the POEA-SEC. Had respondents been truly keen in having him undergo
a post-employment examination, they should have furnished him such advice when he earlier went to their office but did not
do so. It bears to stress that in the same way that a seafarer has the duty to faithfully comply with and observe the terms
and conditions of the POEA-SEC, the employer also has the duty to provide proof that the procedures laid therein were
followed.35 And in case of doubt in the evidence presented by the employer, the scales of justice should be tilted in favor of
the seafarer pursuant to the principle that the employer's case succeeds or fails on the strength of its evidence and not the
weakness of that adduced by the employee.36
In view of the foregoing, the Court lends more credence to Saso's allegation that he reported to 88 Aces on April 23, 2010 or
within three days from his repatriation in compliance with the mandatory reporting requirement and, that it is actually
respondents who failed to fulfill their part of the obligation when they did not provide him with a timely post-employment
medical examination. As held, the absence of a post-employment medical examination cannot be used to defeat a seafarer's
claim when the failure to subject him to such requirement was not due to his fault but to the inadvertence or deliberate
refusal of the employer.37 Hence, contrary to the rulings of the NLRC and the CA, Saso cannot be considered to have forfeited
his right to claim compensation and benefits.
Nevertheless, Saso is not entitled to toted

and permanent disability benefits.
The Court held in Vergara v. Hammonia Maritime Services, Inc.38 that: cralawlawlib ra ry
As [the relevant provisions of the Labor Code and the POEA SEC] operate, the seafarer, upon sign-off from his vessel, must
report to the company-designated physician within three (3) days from arrival for diagnosis and treatment. For the duration
of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to
work. He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged
by the company to be permanent, either partially or totally, as his condition is defined under the POEA Standard Employment
Contract and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made because
the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum
of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability
already exists. The seaman may of course also be declared fit to work at any time such declaration is justified by his medical
condition.39
chan rob leslaw
Pursuant to the above pronouncement, the Court declared in C.F. Sharp Crew Management, Inc. v. Taok40 that the 120-day
or 240-day period and the obligation of the law imposed on the employer are determinative of when a seafarer's cause of
action for total and permanent disability may be considered to have arisen. The instances when a seafarer may pursue an
action for total and permanent disability benefits were then enumerated therein as follows: "(a) when the company-
designated physician failed to issue a declaration as to his fitness to engage in sea duty or disability x x x after the lapse of
the 120-day period and there is no indication that further medical treatment would address his temporary total disability
[even if the period is extended] to 240 days; (b) 240 days had lapsed without any certification being issued by the company-
designated physician; (c) the company-designated physician declared that he is fit for sea duty within the 120-day or 240-
day period, as the case may be, but his physician of choice and the doctor chosen under Section 20-B(3) of the POEA-SEC
are of a contrary opinion; (d) the company-designated physician acknowledged that he is partially permanently disabled but
other doctors x x x he consulted, on his own and jointly with his employer, believed that his disability is not only permanent
but total as well; (e) the company-designated physician recognized that he is totally and permanently disabled but there is a
dispute on the disability grading; (f) the company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third doctor selected under Section 20-
B(3) of the POEA-SEC found otherwise and declared him unfit to work; (g) the company-designated physician declared him
totally and permanently disabled but the employer refuses to pay him the corresponding benefits; and (h) the company-
designated physician declared him partially and permanently disabled within the 120-day or 240-day period he remains
incapacitated to perform his usual sea duties after the lapse of the said periods."41
Unfortunately for Saso, none of the above instances justifies his claim for total and permanent disability benefits. As may be
recalled, he filed his Complaint on August 3, 2010 or after a mere 105 days from his repatriation on April 20, 2010. Clearly,
the 120-day period had not yet lapsed at that time. Moreover, the company-designated physician had not yet issued any
declaration as to his fitness or disability. This is considering that at the time of such filing, Saso was still under the care of Dr.
Recto as shown by the fact that he was subsequently seen by the said doctor on September 3, 2010. While Saso was able to
secure a medical report from Dr. Magtira who assessed him to be suffering from permanent disability of grade 10 and
declared him unfit to resume work in his previous occupation, the same is useless and did not provide him the cause of
action for total and permanent disability benefits.42 "Indeed, a seafarer has the right to seek the opinion of other doctors
under Sec. 20-B(3) of the POEA-SEC but this is on the presumption that the company-designated physician had already
issued a certification as to his fitness or disability and he finds this disagreeable. Under the same provision, it is the
company-designated physician who is entrusted with the task of assessing a seafarer's disability and there is a procedure to
contest his findings."43 Without a doubt, Saso has not yet acquired a cause of action for total and permanent disability
benefits when he filed his Complaint. At that time, he was, in legal contemplation, considered to be temporarily disabled and
thus not entitled to total and permanent disability benefits.44
Saso's non-entitlement to total and

permanent disability benefit does not rule
out his right to the other benefits provided
for by the POEA-SEC.
In Javier v. Philippine Transmarine Carriers, Inc.45 the Court clarified that in cases where a seafarer suffers work-related
injury or illness during the term of his contract, the employer under the POEA-SEC has three separate and
distinct liabilities to the former, to wit: (1) provide, at its cost, for the medical treatment of the repatriated seafarer for the
illness or injury that he suffered on board the vessel until the seafarer is declared fit to work or the degree of his disability is
finally determined by the company-designated physician, conditioned upon the 3-day mandatory reporting requirement; (2)
provide the seafarer with sickness allowance that is equivalent to his basic wage until the seafarer is declared fit to work or
the degree of his permanent disability is determined by the designated physician within the period of 120 days or 240 days
as the case may be; and, (3) once a finding of permanent total or partial disability is made within the aforementioned period,
to pay the seafarer disability benefits for his permanent total or partial disability caused by the work-related illness or
injury.46
It is clear from the above that while Saso is not entitled to total and permanent disability benefits, this does not rule out his
right to the other benefits provided for under the POEA-SEC such as reimbursement for medical expenses, sickness
allowance and benefit for partial disability caused by a work-related injury. However, before the Court dwells on Saso's
entitlement to the said benefits, it must first be emphasized that the company-designated physician already issued an
assessment of Saso's injury as Impediment Grade 13 on September 23, 2010 or 156 days from Saso's arrival in the country
on April 20, 2010.47 The certification of the company-designated physician reads as follows: c ralawlawl ibra ry
September 23, 2010
88 Aces Maritime Services Incorporated

Ms. Lilian J. Villarica
President
Re: Mark Anthony Saso

Request for Impediment Grade
Dear Madam: chanRoblesvi rtua lLawl ibra ry
We want to inform your good office that based on the assessment of our affiliated orthopedic surgeon, Dr. Rafael Recto, Mr.
Mark Anthony Saso can be categorized with Impediment Grade 13 (Shortening of a lower extremity from one to three
centimeters with either joint lesion or disturbance of weight bearing joint).
This letter is made for your reference. Thank you very much. Sincerely,
(Sgd.)
Magdalena R. Cruz, M.D.
ATTENDING PHYSICIAN48 chanroble slaw
Notably, the said issuance which was made beyond the 120-day period but within the 240-day period is justified by the
September 3, 2010 medical bulletin released by Dr. Recto prior to the disability assessment which shows that at that time (or
16 days after the lapse of the 120-day period), Saso's condition still requires further therapy, i.e., he was advised to continue
strengthening his quadriceps muscles, put a shoe lift on the right leg, and strengthen back muscles with exercises.
Going now to Saso's entitlement to the above-mentioned benefits, the Court earlier declared that the absence of post-
employment medical examination does not bar Saso from claiming the benefits that are rightfully due him. Nevertheless, his
claim for reimbursement of medical expenses in the amount of P25,857.00 must be disallowed for being not supported by
receipts. At any rate, the records show that respondents already reimbursed him the amount of P3,849.50 for his medical
expenses. With respect to sickness allowance, Saso admitted in his Reply49 with the LA that he already received the amount
of NT$51,200.00 which is equivalent to his salary for three months. Reckoned from his arrival in the Philippines on April 23,
2010, the said amount covers his compensation for only until July 23, 2010. Therefore, Saso is'still entitled to receive from
respondents sickness allowance covering the period July 24, 2010 to September 23, 2010 when the company-designated
physician issued an assessment of his disability, or equivalent to his two months' salary50 amounting to NT$34,560.00.
Finally, while it is true that Saso's claim for total and permanent disability benefit is premature, the fact remains that he
sustained a work-connected injury that did not only impair his physical appearance but also his earning capacity which, thus,
needs to be compensated. Even respondents acknowledged this in their Position Paper with the LA when they asserted that
Saso is entitled to disability compensation commensurate to Impediment Grade 13 under Section 32 of the POEA-SEC. On
this score, the Court deems it proper to award Saso partial disability benefit in accordance with the findings of the company-
designated physician. Under Section 32 of the POEA-SEC, the disability allowance for Impediment Grade 13 is US$50,000.00
multiplied by the degree of impediment which is 6.72%. Saso is thus entitled to US$3,360.00, to be paid in Philippine
Currency equivalent to the exchange rate prevailing at the time of payment. Attorney's fees cannot, however, be granted
since in the light of the factual milieu of this case, respondents were well within their rights to deny Saso's claim for total and
permanent disability benefit.
WHEREFORE, the Petition is PARTLY GRANTED. Respondents are ordered to pay jointly and solidarity petitioner Mark
Anthony Saso sickness allowance in the amount of NT$34,560.00 and partial disability benefit in,the amount of US$3,360.00
or their peso equivalent at the time of payment.
SECOND DIVISION
G.R. No. 201535, October 05, 2015
NEC SYSTEM INTEGRATED CONSTRUCTION (NESIC) PHILS., INC., Petitioner, v. RALPH T. CRISOLOGO, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to nullify the November 18, 2011 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 108873 which annulled the November 11, 2008 Decision3 of the National Labor Relations Commission (NLRC) in
NLRC NCR CA No. 043319-05, as well as the CA's April 12, 2012 Resolution4 denying petitioner's Motion for
Reconsideration5 thereon.
Factual Antecedents
On May 3, 1993, respondent Ralph T. Crisologo was employed by petitioner NEC System Integrated Construction Phils., Inc.
(NESIC), a Philippine corporation wholly owned by NEC System Integration & Construction, Ltd., of Japan (NESIC Japan), a
business engaged in providing specialty and technical telecommunications services. He was assigned as Manager of
petitioner's Communication Facilities Engineering Department.
Due to his exemplary work performance, respondent was promoted several times: as Deputy Manager of the Corporate
Planning Office directly under the office of the President; as Department Manager for Transmission Systems; as Head of Data
Communications Department; as Assistant Vice-President, and eventually as Vice-President, of the Information Network
Group; and as Vice-President of the Production Engineering Group6 - which is composed of the Telecommunications Group
and the Information Network Group.7
Sometime in July 2001, respondent was appointed as Executive Senior Manager - Quality Control and Training,8 with a gross
monthly salary of P93,596.84 including allowances.9 Although respondent was reluctant to accept the new position as this
was a demotion from his position at that time as Vice-President, he nevertheless accepted the new position at the special
request of then NESIC President Noriyuki Yamashita (Yamashita) in order to specifically train a certain Nakahata of
Engineering and Operations Group for possible appointment as General Manager of NESIC Japan. In a July 3, 2001
Memorandum10 to Yamashita, respondent voiced his reservations about being effectively demoted yet expressed his
willingness to train Nakahata on condition that his salary "remain the same," and that he would still be Head of the line
functions for the ISED, or the Integrated Systems Engineering Department (Production Engineering Group). Respondent also
expressed the "hope" that the appointment is only temporary. Respondent's memorandum is phrased as follows:
Sir,
As per our initial verbal conversation concerning the above subject, I would like to state my concern[s] as follows:
a.) Although I feel bad about my position as long as my salary scale would remain the same this might be acceptable.
b.) I am willing to train and assist Mr. Nakahata as General Manager so he would improve his skills and perform better when
he would be ultimately be [sic] sent back to NESIC Japan.
c.) I would still be a line function as HEAD for ISED.11
d.) I just hope that this would be on a temporary basis.

Thanks for your continued support and trust in me.12 (Emphasis supplied)
In his July 18, 2001 reply to respondent's July 3, 2001 memorandum, Yamashita thanked respondent for accepting his new
position, acknowledged that respondent was "already a very good General [sic] Manager as Vice-President" and reiterated his
special request to "train and assist Nakahata san [to] become [a] very good x x x GM."13
Although respondent assumed his position as Executive Senior Manager -Quality Control and Training as early as July 2001 -
his formal appointment as such came out only on April 16, 2003, as shown in a Memorandum of even date issued by
Yamashita.14
On July 7, 2003, NESIC Japan appointed Hideaki Amakawa (Amakawa) as petitioner's new President, thus replacing
Yamashita, who retired.
On November 13, 2003, petitioner hired an outsider - Chester Genobaten (Genobaten) - as new Assistant General Manager
for its Engineering and Operations Group. In the meantime, respondent ostensibly remained Executive Senior Manager -
Quality Control and Training.
In an August 12, 2003 "Executive Order,"15 Amakawa announced the implementation of cost-cutting measures, specifically
terminating all project and contractual employees effective September 2003; reducing the number of vehicles rented by
50%; putting on hold purchases of office supplies, except those that were extremely necessary for the continued operations
of the business; and reducing communications expenses by 30%. According to Amakawa, these measures "are the
company's initial response to the need of a long-term cost reduction and increased profitability program to ensure future
progress."16
In line with the above directive, the NESIC General Manager drafted a cost reduction plan,17 which petitioner implemented.
Thus, the employees' health care plan was downgraded two steps; office space was reduced; all company-issued mobile
phones were retrieved; landline phones and telefaxes were reduced from seven to four; air and sea carrier preference was
downgraded to those that offered cheaper fares; parking slots were reduced from nine to only four; the company Christmas
party was cancelled; and the giving of year-end bonus was withheld. Other cost-cutting measures were deferred.18
Notwithstanding its cost-cutting measures, petitioner's financial statements19 revealed a P25,814,677.0020 net loss for the
year ending December 31, 2003.
In a March 4, 2004 Memorandum,21 the NESIC President announced its retrenchment program. On even date, petitioner
notified the Department of Labor and Employment (DOLE) in writing of its retrenchment program and submitted an
Establishment Termination Report, which included respondent as among the 17 employees it was terminating from
employment.22
On March 5, 2004 petitioner sent respondent a termination letter via registered mail,23 which could not be served personally
as respondent was then absent. But on March 8, 2004, respondent personally received a copy of the letter when he reported
for work. The letter reads in part:
x x x [W]e regret to inform you that the Company will undergo an organizational change that will involve the company-wide
restructuring of work assignments and the abolition of certain positions from various departments. In this regard, it is also
very unfortunate that you are among the employees that we have to let go and this shall take effect on April 5, 2004.
We would like you to understand that this move is brought about by the financial losses that we had in the previous year and
the continued decrease in major projects. Although we have implemented cost reduction measures, these have not been
substantial to keep the Company financially stable. Based on the latest sales forecasts and the trend in the currency
fluctuations, the current Company situation is likely to continue in 2004. Thus, it is imperative that the,Company implement
drastic cost reduction measures to make its business viable in the coming year. It is for this reason that the Company has to
reduce its existing headcount in order to significantly reduce operating costs.
The Company offers you the Separation Pay (non-taxable): 100% of the latest monthly basic salary for every year of service
wherein any fraction of over six (6) months shall be considered as one (1) year. This is to be released on or before March 12,
2004.
You will be receiving the following as part of your Last Pay (net of accountabilities to the Company), on or before April 30,
2004:
 Salary (including overtime if applicable) and allowances for March 1 - April 5, 2004
 Conversion of Earned Leave Balances for CY2004 (Vacation Leave and Sick Leave)
 13th month pay (computed at 3 months/12 months) and Tax Refund for CY200424
In petitioner's own words, respondent was retrenched because -

upon evaluation of the company's organizational structure, [petitioner] found that the position of Executive Senior Manager -
Quality Control and Training - was superfluous and in excess of the needs of the company. Since the position of Executive
Senior Manager - Quality Control and Training is not a line position -[petitioner] determined that the line managers of
[petitioner's] Engineering and Operations Group could review their own quality systems and processes, while [petitioner's]
Support Group could handle the training of employees. As [respondent's] position was superfluous based on the foregoing
findings, [petitioner found it necessary to abolish] the position of Executive Senior Manager - Quality Control and Training -
as part of the company reorganization. At the same time, such abolition was in line with the Retrenchment Program's goal to
prevent or reduce substantial business losses.25cra lawredChanRob les Vi rtualaw lib rary
On March 12, 2004, respondent received P1,002,065.24 representing his separation pay and other benefits up to March 5,
2004. He executed a Waiver and Quitclaim and a receipt for said amount.26However, on realizing that respondent received
the termination letter only on March 8, 2004 but that his termination became effective on April 5, 2004, or less than the
required one month from receipt of notice of termination, petitioner adjusted his effective date of termination to April 10,
2004.
Respondent sought reconsideration of petitioner's decision to retrench him, to no avail.27
On April 5, 2004, petitioner announced, among other things, that it hired Suzette Mendoza, Fredes Marie Lucas and Larry
Balonsay as additional personnel to fill positions within the company.
On June 9, 2004, Genobaten was appointed General Manager of the Engineering and Operations Group.
On April 12, 2004, respondent filed a Complaint28 against petitioner and Amakawa for illegal dismissal and recovery of
backwages, allowances, benefits, moral and exemplary damages, and attorney's fees. This was docketed as NLRC Case No.
00-04-04652-04.
In his Position Paper29 and Comment/Rejoinder,30 respondent claimed that there was no basis for the petitioner's
retrenchment program as the latter's claimed loss was not substantial and constituted merely 3.17% of its forecast revenue.
He also asserted that the retrenchment program was an unjustified drastic measure adopted by Amakawa who was then not
familiar with the peculiarities of the business, as he was only eight months into his tenure as President; besides, salary
increases were implemented in April 2003, and a mid-year bonus was given in July of the same year - proof that petitioner
was not in dire financial straits.31 He contended that based on the company's 2004 annual budget32 - prepared in February
2004 - petitioner was not suffering substantial losses. Respondent also alleged that despite his credentials, performance,
loyalty, and years of service with petitioner, he was terminated, even as additional personnel were hired; that despite his
qualifications and performance, petitioner bypassed him when it hired an outsider (Genobaten) to fill the position that he
previously held, and to add insult to injury Genobaten was almost at once also appointed as General Manager. Moreover,
respondent argued that petitioner's retrenchment program was not premised on fair and reasonable criteria, considering that
he (respondent) was an exemplary senior management employee who had served the petitioner for more than 10 years; and
that in dismissing him, petitioner and Amakawa acted in bad faith and in wanton disregard of the law.
In their joint Position Paper,33 Reply,34 and Rejoinder,35 petitioner and Amakawa countered that they acted in accordance
with law in effecting the retrenchment program. They maintained that petitioner's 2003 net loss of P25,814,677.00 was
substantial; that the projected loss for 2004 would be even greater, amounting to P28,455,106.00, necessitating farther
cost-cutting measures such as the retrenchment of personnel; that with retrenchment, projected 2004 losses would be
reduced by at least P5,443,101.00; and that when it became apparent in August 200336 that petitioner was in a precarious
financial situation, cost-cutting measures were immediately instituted, but proved to be insufficient a petitioner continued to
suffer business reverses. They also averred that respondent's position - Executive Senior Manager - Quality Control and
Training, which is responsible for the review of quality systems and processes within the Engineering and Operations Group -
is superfluous because the line managers of the Engineering and Operations Group could conduct their own review of their
quality systems and processes, while the Support Group could handle the training of employees. They maintained that no
criteria were required in determining whether to retain or dismiss respondent since his position was unique and unlike any
other within the company, given that there are no other employees occupying similar positions; that Genobaten's hiring was
a valid exercise of petitioner's management prerogative, and petitioner was under no legal compulsion to appoint respondent
to the position given to Genobaten; that additional personnel (in Suzette Mendoza and Fredes Marie Lucas) were hired
precisely to augment petitioner's Marketing Department and neutralize decreasing sales, and thus reduce losses. They also
pointed out that before termination, the required notices and documents were submitted to the DOLE, and respondent was
given a termination letter. They stressed that respondent voluntarily accepted his separation pay and other benefits and
executed a quitclaim and waiver for valuable consideration; that respondent was even given additional compensation for his
extended employment up to April 10, 2004; that since respondent's retrenchment was legal, respondent is no longer entitled
to his claims; and that Amakawa may not be held personally liable for respondent's claims, since Amakawa acted in good
faith and within his authority as Company President. Thus, petitioner and Amakawa prayed that respondent's Complaint be
dismissed.
On November 30, 2004, the Labor Arbiter rendered his Decision37 dismissing respondent's Complaint for lack of merit, thus:
The sole issue for resolution in the instant case is: WHETHER XXX THE RETRENCHMENT MEASURE ADOPTED BY THE
RESPONDENTS WHICH RESULTED TO [sic] THE TERMINATION OF THE COMPLAINANT WAS JUST AND VALID.
There are formidable obstacles to a finding against the validity of the retrenchment program implemented by the respondent
company. The evidence on record amply supports this conclusion.
The duly audited Financial Statements for December 31, 2003 and 2002 and the Report of Independent Auditors of the Sycip
Gorres Velayo and Co., clearly [indicate] that the respondent company suffered a net loss of Php25,814,677.00 in calendar
year 2003 despite implementing cost reduction program for the second half of said year. Pursuant to the Memorandum
issued by the President on August 12, 2003 x x x, the following measures composed the company's cost reduction plans, to
wit:
"1. All Project/Contractual Employees shall be terminated effective September 2003. x x x
"2. Existing number [of] rented vehicles must be reduced by 50%. x x x
"3. Office supplies purchases will be put on hold except those that are extremely necessary in the operations of the company
x x x.
"4. Communication expenses such as mobile phones must be reduced by 30%. x x x
Thus, in line with the cost reduction plan of the respondent company, various measures calculated to reduce operating
expenses were undertaken x x x.
Despite the implementation of all the cost reduction measures, the respondent company still incurred business losses by the
end of 2003. Respondents might not be faulted for taking the ultimate measure of retrenchment of workers.
The respondents justified the retrenchment of the complainant, as follows: chanRoblesv irtual Lawlib rary
"15. Upon evaluation of the company's organization[al] structure, NPI's management found that the position of Executive
Senior Manager - Quality Control and Training was superfluous and in excess of the needs of the company, xxx NPI
determined that the line managers of NPI's Engineering and Operations Group could review their own quality systems and
processes, while NPI's Support Group could handle the training of employees. As complainant's position was superfluous
based on the foregoing findings, NPI's management [abolished it. S]uch abolition was in line with the Retrenchment
Program's goal to prevent or reduce substantial business losses."
This Arbitration Branch finds merit in the respondents' arguments. The characterization of an employee's services as no
longer necessary or sustainable, and therefore properly terminable, is an exercise of business judgment x x x. The wisdom or
soundness of such characterization or decision is not subject to discretionary review on the part of Labor Arbiters [of] the
NLRC provided of course, that violation of law on arbitrary or malicious action is not shown (Golden Thread Knitting vs.
NLRC, G.R. No. 119157, March 11, 1999, citing Wiltshire File Co., Inc. vs. NLRC, G.R. No. 83349, 7 February 1991,193 SCRA
655).
What militates strongly against the complainant's argument of illegal dismissal is that he executed a "Waiver and Quitclaim,"
which states:chanRoblesvi rtua lLawl ibra ry
"2. That in connection with my former employment with NPI, for valuable consideration in the amount of [PESOS:] ONE
MILLION TWO THOUSAND SIXTY FIVE & 24/100 ONLY (Php1,002,065.24), by these presents, I hereby release, waive and
forever discharge NPI, its officers, directors, representatives or employees from any action for sums of money or other
obligations arising from my previous employment with NPI. I acknowledge that I have received all amounts that are now or
in the future may be due from NPI. I therefore undertake not to do any act prejudicial to the interest of NPI, its branches, or
its projects here in the Philippines, or abroad arising from my previous employment."
Complainant as a senior managerial employee very well knew the implications and significance of said waiver and quitclaim.
As a matter of fact, he did not dispute the validity and due execution of the said waiver and quitclaim. Moreover, this
Arbitration Branch finds that complainant in the execution of the said waiver and quitclaim received a valuable consideration
which is not considered unconscionable under the circumstances.
Finally, complainant's claim for service incentive leave pay may not be granted considering that complainant was a
managerial employee and pursuant to Art. 82 of the Labor Code, he is excepted from the enjoyment of said benefit.
Likewise, his claim for 13th month [pay] for 2004 has already been included in his final terminal pay.
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered dismissing the complaint for lack of
merit.
Respondent appealed to the NLRC,39 thereat docketed as NLRC NCR CA No. 043319-05. On November 11, 2008, the NLRC
handed down a Decision40 containing the following pronouncement:
The main thrust of complainant's appeal is whether x x x he was validly dismissed on the ground of retrenchment to prevent
losses.
It must be stressed that retrenchment is a management prerogative, a means to protect and preserve the employer's
viability and ensure [its] survival. This Court [sic] has always respected this prerogative during trying times but there must
be faithful compliance by management with the substantive and procedural requirements laid down by law and jurisprudence
(Central Azucarera delaCarlotavs. NLRC, G.R. No. 100092, December 19, 1995).
The Labor Code, as amended, recognizes retrenchment as a mode of terminating an employment relationship. The Code
provides as follows: c hanRoble svirtual Lawlib ra ry
Art. 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any
employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. In case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall
be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
Under this provision, there are three basic requisites for a valid retrenchment. These are: (a) the retrenchment is necessary
to prevent losses and such losses are proven; (b) written notice to the employees and to the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; and (c) payment of separation pay equivalent to
one month pay or at least one-half (1/2) month's pay for every year of service, whichever is higher.
It is undisputed in the instant case that the second requirement of written notice to the DOLE and the employees concerned
at least a month before the retrenchment has been satisfactorily fulfilled by respondents x x x. What needs close
examination is the first requirement, i.e. that the retrenchment is necessary to prevent losses and that such losses are
proven.
There are four standards of retrenchment that must be observed to comply with the law. First, the losses expected should be
substantial and not merely de minimis. Second, the substantial loss apprehended must be reasonably imminent, as perceived
objectively and in good faith by the employer. Third, because of the consequential nature of retrenchment, it must be
reasonably necessary and likely to prevent the expected losses. Fourth, the alleged losses, if already incurred, must be
proved by sufficient and convincing evidence x x x.
In his appeal, complainant avers that NPI's actual losses amounting to P25,814,677 cannot be considered substantial
because NPI is such a big Japanese Multinational Company with an average yearly sales of over P300,000,000 and the
incurred loss for CY 2003 of P25,814,677 is x x x a mere 9% of its revenue; that NPI's projected losses for 2004 were not
reasonably imminent because NPI's Income Statement as of February of 2004 showed an expected loss for CY 2004 of
P8,081,190; and that retrenchment was not valid because NPI even hired and regularized three personnels [sic] namely, Ms.
Suzette Mendoza, Ms. Fredes Marie Lucas and Mr. Chester Genobaten.
We agree with the Labor Arbiter in his findings that respondents should not be faulted for taking the ultimate measure of
retrenchment of workers. Records show that in line with the cost production [sic] plan of the respondents [sic] company,
various measures calculated to reduce operating expenses were already undertaken xxx.
Moreover, it cannot be disputed that prior to complainant's dismissal, NPI actually suffered substantial losses in calendar year
2003 amounting to P25,814,677 as shown in the Financial Statements (December 31, 2003 and 2002) and Report of
Independent Auditors prepared by Sycip Gorres Velayo and Co. x x x. We agree with the respondents that the said actual
loss is substantial by any account and cannot be considered de minimis. It should also be noted that NPFs actual loss in 2003
constituted more than half of its P50,000,000.00 authorized capital stock x x x.
Further, the assertion by the complainant that NPFs projected losses for the year 2004 were not reasonably imminent
deserves scant consideration. In fact, x x x the Financial Statements x x x and Report of Independent Auditors x x x reveals
[sic] that NPI actually suffered P30,745,801 x x x.
If the Labor Code allows retrenchment in cases where the employer foresees imminent losses, then retrenchment is all the
more justified when the employer has actually incurred substantial losses. In the case at bar, NPI did not only suffer losses of
P25,814,677 in 2003. NPI also projected and, in fact, actually suffered losses of P30,745,801 in 2004.
Anent the allegation of complainant regarding the hiring of new employees by the respondents, the same is substantially
justified by the respondents. Ms. Suzette Mendoza and Ms. Fredes Marie Lucas were respectively hired in September and
October of 2003 in order to augment NPFs Marketing and Sales Department. On the other hand, Mr. Chester Genobaten who
was allegedly hired as complainant's replacement was hired in November of 2003 as the successor of an Assistant General
Manager who was scheduled to retire in December of 2003. When NPI re-hired Mr. Genobaten in November of 2003,
complainant's Quality Control and Training position was not yet being considered for abolition x x x. NPI validly exercised
management prerogative.
Be that as it may, We cannot ignore the fact that complainant signed a Waiver and Quitclaim. The Labor Arbiter is correct in
stating that the complainant is bound by the Quitclaim he executed. Considering that he received a valuable consideration in
the amount of P1,002,065.24; that he executed the said Quitclaim three days after he received a copy of his termination
[notice], or after he had sufficient time to reflect on the validity of his dismissal; that complainant is not an ordinary rank and
file employee but occupying a managerial position, We cannot believe complainant's claim that he was made to sign the
Waiver and Quitclaim under pressure. Undisputably [sic], it was voluntarily executed by the complainant. In Periquet vs.
NLRC, 186 SCRA 724, the Supreme Court held that not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents reasonable settlement, it is binding on the parties and may not later
be discarded simply because of a change of mind.
WHEREFORE, premises considered, the appeal of complainant is DISMISSED. Accordingly, the Decision of Labor Arbiter Jose
G. De Vera dated November 30,2004 is hereby AFFIRMED.
Respondent moved for reconsideration, but the NLRC stood its ground.422
Via a Petition for Certiorari43 before the CA, thereat docketed as CA-G.R. SP No. 108873, respondent assailed the above
dispositions of the NLRC and prayed that the CA declare his dismissal by petitioner illegal and that petitioner be moreover
ordered to pay him full backwages, and other benefits from the time of his dismissal up to his actual reinstatement, plus
reasonable moral and exemplary damages as well as attorney's fees. Respondent insisted that petitioner did not suffer
substantial losses that justified the implementation of a retrenchment program; that it was illegal and improper for petitioner
to hire Genobaten and thereafter fire him (respondent), when he could have been the one appointed to the position filled by
Genobaten since he was a senior employee who possessed the qualifications and experience required for the position; that
worse, Genobaten was promoted just after he (respondent) was dismissed; that his dismissal had no basis other than
petitioner's excuse of management prerogative; and that his quitclaim and waiver are ineffective and did not constitute
estoppel.
In their Comment,44 petitioner and Amakawa asked that the Petition be dismissed. They argued that the identical findings of
the Labor Arbiter and the NLRC are binding and conclusive upon the appellate court; that the NLRC's Decision was not
tainted with grave abuse of discretion; that the retrenchment program was valid; that when Genobaten was hired,
respondent's position was not yet considered for abolition; that since respondent's position was "unique" and not a line
position, no criteria for dismissing his services were required; that the quitclaim and waiver executed by respondent are valid
and binding on him; and that respondent is not entitled to his money claims. They likewise asserted that respondent's
Petition was defective as it did not contain adequate evidence of respondent's identity other than his community tax
certificate.
In his Reply,45 respondent attached photocopies of his driver's license46 and his Social Security System (SSS) identification
card.
On November 18, 2011, the CA rendered the assailed Decision granting the Petition, decreeing thus:
WHEREFORE, in view of the foregoing, the petition is GRANTED. The assailed Decision of the public respondent NLRC is
hereby ANNULLED and SET ASIDE. In lieu thereof, a new one is rendered ordering private respondents as follows -
1. To pay petitioner full backwages x x x; cralawlawlib rary
2. To pay petitioner separation pay in lieu of reinstatement, x x x with the corresponding deduction of whatever amount he
had already received from private respondents as separation pay; cralawlawlib rary
3. To pay petitioner his Salary (including overtime if applicable) and allowances for 01 March - 10 April 2004, the Conversion
of Earned Leave Balances for CY2004 (Vacation Leave and Sick Leave), and 13th month pay (for the covered period of
CY2004) and Tax Refund for CY2004; and
4. To pay petitioner attorney's fees equivalent to ten percent (10%) of the total monetary award.
The other reliefs prayed for are denied for lack of merit.
xxxx
In reversing the Labor Arbiter and the NLRC, the CA essentially declared that while petitioner complied with four of the five
requirements for a valid retrenchment — substantial losses, actual and imminent, were being suffered; written notices were
duly sent to the employees and to the DOLE and for the required period; good faith attended the retrenchment; and
respondent had been paid the corresponding separation pay and other benefits for retrenched employees - the last
requirement, viz., that fair and reasonable criteria were used in ascertaining who would be dismissed and who would be
retained, had not been observed. Thus, it held:
As for the fifth requirement listed above, private respondents48 were not able to show x x x reasonable criteria as to why
petitioner49 was one of the seventeen (17) employees laid off. They merely stated that there was no need for them to adopt
a set of criteria, as these [are applicable] only if the employer has to choose whom to terminate among several employees
occupying similar positions.
We hold that private respondents failed to use fair and reasonable criteria in determining which employees shall be
retrenched or retained. Private respondents have not explained why petitioner had to be laid off without considering his
many years of service with private respondents - eleven (11) years. The fact that petitioner had been in private respondents'
employ for so long a time indicates that he had been retained because of his loyal and efficient service. Moreover, there is no
showing also that petitioner's job performance is below par. The absence of criteria in the selection of an employee to be
dismissed renders the dismissal arbitrary.
Private respondents' allegation that petitioner's position was superfluous and in excess of the needs of the company should
not be given any credit. There was no substantial evidence presented by private respondents to justify petitioner's dismissal
due to redundancy. In private respondents' letter addressed to the DOLE, they mentioned "the company-wide restructuring
which has, x x x, resulted in a reorganization of work assignments and the abolition of certain positions that are no longer
needed in the new organizational set up" "in the face of losses in millions and continued decrease in major projects." In the
letter addressed to petitioner, private respondents also alleged that "the Company will undergo an organizational change that
will involve the company-wide restructuring of work assignments and the abolition of certain positions from various
departments." These letters do not satisfy the requirement of substantial evidence, that is, the amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion.
Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual
requirement of the enterprise. It is the burden of private respondents, as employer, to prove the factual and legal basis for
the dismissal of their employee, i.e., petitioner, on the ground of redundancy.
It is however not enough for a company to merely declare that positions have become redundant. It must produce adequate
proof of such redundancy to justify the dismissal of the affected employees. In Panlilio v. NLRC, the Supreme Court said that
the following evidence may be proffered to substantiate redundancy: "the new staffing pattern, feasibility studies/proposal,
on the viability of the newly created positions, job description and the approval by the management of the restructuring." In
another case, it was held that the company sufficiently established the fact of redundancy through "affidavits executed by the
officers of the respondent [company], explaining the reasons and necessities for the implementation of the redundancy
program."
The employer must comply with the following requisites to ensure the validity of the implementation of a redundancy
program: (1) a written notice served on both the employees and the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at
least one month (sic) pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions;
and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. In
several instances, the Court has held that it is important for a company to have fair and reasonable criteria in implementing
its redundancy program, such as but not limited to, (a) preferred status, (b) efficiency and (c) seniority. This[,] private
respondents failed to do.
We find that private respondents failed to establish either redundancy or retrenchment. Hence, petitioner's termination from
employment was illegal.
Finally, the Supreme Court, in the case of Ariola vs. Philex Mining Corporation, invalidated a retrenchment program for its
improper implementation despite proof of financial losses, x x x
xxxx
Thus, from the foregoing, the NLRC committed grave abuse of discretion amounting to lack of or in excess of jurisdiction in
finding that the retrenchment of petitioner was valid.
Article 279 of the Labor Code pertinently provides:
Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.50
The CA held, nonetheless, that reinstatement could not be done, as respondent's position no longer existed after the
restructuring; hence, the CA ordered that respondent be paid backwages and separation pay. The CA also ruled that
respondent was also entitled to attorney's fees pursuant to Article 111 of the Labor Code51 and Article 2208 of the Civil
Code.52
Petitioner filed a motion for reconsideration, but the CA denied the same in its April 12, 2012 Resolution. Hence, the instant
Petition.
In an April 3, 2013 Resolution,53 this Court resolved to give due course to the Petition. ^^
Issues
Before this Court, petitioner now raises the following issues for resolution:
I.
THE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO, [AND] MORE SO IN GRANTING, THE PETITION FOR
CERTIORARI NOTWITHSTANDING RESPONDENT'S DEFECTIVE VERIFICATION/ CERTIFICATION.
II.
THE COURT OF APPEALS ERRED IN GRANTING THE PETITION FOR CERTIORARI [AND IN REJECTING] THE FINDINGS OF
FACT OF THE LABOR ARBITER AND THE NLRC.
III.
THE COURT OF APPEALS ERRED IN GRANTING THE PETITION FOR CERTIORARI DESPITE THE ABSENCE OF GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION ON THE PART OF THE NLRC.
IV.
THE COURT OF APPEALS ERRED IN GRANTING THE PETITION FOR CERTIORARI [AND IN HOLDING] THAT PETITIONER
FAILED TO COMPLY WITH THE REQUISITES OF A VALID TERMINATION ON THE GROUNDS OF RETRENCHMENT AND/OR
REDUNDANCY.
a. All the requisites of a valid termination on the grounds of retrenchment and/or redundancy are present.
b. Petitioner complied with the 30-day notice rule.
c. Respondent was terminated based on fair and reasonable criteria.
d. Petitioner presented substantial evidence to prove redundancy.
V.
THE COURT OF APPEALS ERRED IN GRANTING THE PETITION FOR CERTIORARI NOTWITHSTANDING RESPONDENT'S
EXECUTION OF A VALID QUITCLAIM AND WAIVER.
VI.
THE COURT OF APPEALS ERRED IN AWARDING RESPONDENT FULL BACKWAGES AND SEPARATION PAY.
VII.
THE COURT OF APPEALS ERRED IN AWARDING RESPONDENT ATTORNEY'S FEE'S.54
Petitioner's Arguments
In its Petition and Consolidated Reply and Comment,55 petitioner argues that it was error for the CA to have entertained
respondent's defective Petition for Certiorari as it did not show adequate evidence of his identity apart from his community
tax certificate, in violation of the 2004 Rules on Notarial Practice;56that respondent's belated submission to the CA of copies
of his driver's license and SSS card did not cure the defective Petition; that the CA may not ignore the identical findings of
the Labor Arbiter and the NLRC, which are final and binding upon it; that there was no grave abuse of discretion on the part
of the NLRC; that its (petitioner's) retrenchment program was valid; that Genobaten was lawfully hired when respondent's
position was still subsisting, and that Genobaten did not supplant respondent at all; that fair and reasonable criteria were
observed in deciding to retrench respondent after it became apparent that his "unique" position and functions had become
superfluous, unnecessary, and redundant, and could be absorbed by other departments within the company; that
respondent's quitclaim/waiver was valid and binding, and bars respondent from recovering additional monetary benefits; and
that since petitioner's retrenchment program was valid, and since respondent had freely and voluntarily executed a
quitclaim/waiver and had already received the proper separation pay, respondent is therefore no longer entitled to
backwages, damages and attorney's fees.
Respondent's Arguments
In a Motion to Dismiss Petition57 which this Court treated as his comment to the Petition,58 respondent counters that
petitioner raised factual issues which are not proper in a petition for review under Rule 45 of the 1997 Rules of Civil
Procedure; and that the CA did not err in arriving at its conclusions. Aside from praying for the dismissal of the Petition,
respondent asks that petitioner be required to post a bond to guarantee payment of his monetary claims. chanroble slaw
Our Ruling
The Petition is meritorious.
We take the view that basic to and at the core of a just resolution of the instant controversy is the respondent's subscribing
to the document/deed captioned "WAIVER AND QUITCLAIM SEPARATION PAY"59 and his acceptance of the benefits
thereunder. Dated March 12, 2004, this deed/document is now marked as Annex "J" and it reads:
That I, RALPH T. CRISOLOGO, of legal age, Filipino and with address at 100 AMR. U.P.C. VILL. T. SORA QC, on my own free
will, and for valuable consideration, hereby declare and manifest:
1. That I have ceased to be employed at NESIC Philippines, Inc. (NPI) due to retrenchment resulting from reorganization at
the close of business hours of April 5, 2004.
2. That in connection with my former employment with NPI, for valuable consideration in the amount of [PESOS:] ONE
MILLION TWO THOUSAND SIXTY FIVE & 24/100 ONLY (Php 1,002,065.24), by these presents, I hereby release, waive and
forever discharge NPI, its officers, directors, representatives or employees from any action for sums of money or other
obligations arising from my previous employment with NPI. I acknowledge that I have received all amounts that are now or
in the future may be due me from NPI. I therefore undertake not to do any act prejudicial to the interest of NPI, its branches,
or its projects here in the Philippines or abroad arising from my previous employment.
3. That I acknowledge that I have no cause of action whatsoever, criminal, civil or otherwise against NPI, its officers, agents
or representatives or project employees with respect to any matter arising from or cessation of my employment with NPI. I
further warrant that I will institute no action and will
not continue to prosecute, pending actions, if any against NPI, its officers, agents or representatives or project employees.
IN WINTESS WHEREOF, I have hereunto set my hand this 12 day of March, 2004 at Makati City.
(Signed)
RALPH T. CRISOLOGO
Employee's Signature over Printed Name60
(Emphases supplied) ChanRoble sVirtualawli bra ry
Read as worded, respondent thereunder declared and manifested of his own free will and for valuable consideration"61 -
(1) That he ceased to be employed by the petitioner because of retrenchment resulting from reorganization, effective at the
close of office hours of April 5,2004; cralawlaw lib rary
(2) That in connection with his former employment with petitioner, for valuable consideration to the tune of PESOS: ONE
MILLION TWO THOUSAND SIXTY FIVE & 24/100 (P1,002,065.24) and because of his execution of this document he
has released, waived and forever discharged petitioner, its officers, directors, representatives or employees from any action
for sums of money or other obligations arising from his previous employment with petitioner; and that he indeed has
acknowledged that he had received all amounts that are now or in the future may be due him from petitioner; hence, he
promised "not to do any act prejudicial to the interest of [petitioner], its branches or its projects here in the Philippines or
abroad arising from [his] my previous employment."62
(3) What is more, respondent acknowledged that he has "no cause of action whatsoever, criminal, civil or otherwise against
[petitioner], its officers, agents or representatives or project employees with respect to any matter arising from or cessation
of [his] employment with [petitioner]."63 Finally, he vowed that he "will institute no action and will not continue to prosecute
pending actions, if any, against [petitioner], its officers, agents or representatives or project employees."64
And, the consideration for all the foregoing: as shown in Annex "K,"65 respondent acknowledged "receipt of RCBC MC No.
0000070301" representing payment of PI,002,065.24, on March 10, 2004.
After this, it appeared that additional blessings still came respondents' way. For on March 31, 2004 respondent received this
letter66 from Amakawa:
March 31, 2004
Mr. RALPH T. CRISOLOGO

100 Ambuklao Rd., NPC Village
Tandang Sora, Quezon City
Dear Mr. Crisologo,
We would like to inform you that we are adjusting the effectivity of your retrenchment to April 10, 2004 instead of April 5,
2004 in consideration of the actual receipt of the Original Copy of the Retrenchment Letter dated March 5, 2004 sent to your
[residence] through registered mail on the same date and basing on the certification issued by the QC Central Post Office. In
addition to the Separation Pay you have received on March 12, 2004, you shall be receiving the following as part of your Last
Pay (net of accountabilities to the Company), on or before April 30, 2004:
 Salary (including overtime if applicable) and allowances for March 1 - April 10, 2004
 Conversion of Earned Leave Balances for CY2004 (Vacation Leave and Sick Leave)
 13th month pay (for the covered period of CY2004) and Tax Refund for CY 2004
Your Certificate of Employment shall be reflecting your service to the Company from your hiring date up to April 10, 2004.
Again, THANK YOU and we wish you luck in all your future endeavors.
Very sincerely,
(Signed)
HIDEAKI AMAKAWA
President67
Thus, it can hardly be doubted that from its end petitioner had dealt at arms length with respondent in the matter of duly
compensating the latter for the services he had rendered the petitioner during the 11 years or so that he had been under its
employ.
Turning now to the deed of waiver/quitclaim cum separation pay; prefatorily, what must not escape our notice and attention
is the fact that what Annex "J" mentions is both a Waiver and a Quitclaim rolled into one. In other words, it is not only the
one but also the other. More than that this waiver and quitclaim is supported by a valuable consideration; this valuable
consideration being the separation pay itself in the amount of P1,002,065.24; and of course, it is no inconsequential matter
that to this amount of P1,002,065.24 should be added the still-to-be computed "Last Pay" (net of accountabilities to the
Company) spoken of in Annex "L," the March 31, 2004 letter of Amakawa to respondent.
The records of the case yield no evidence that respondent had ever been tricked or hoodwinked into affixing his signature
upon the said deed of waiver-quitclaim cum separation pay; indeed, respondent has not put forward any such claim. And if
he did, it should suffice to point to Annex "6"68 authored and accomplished by the respondent himself, wherein he attested to
these facts -
(1) He graduated from the University of the Philippines, Diliman, Quezon City with the college degree B.S. Electrical
Engineering.
(2) He pursued post-graduate studies at the same university and earned 30 units in his M.S. Industrial Engineering course,
without, however submitting his thesis.
(3) He did further post-graduate work at the Asian Institute of Management, graduating at the top of his class in the
70th Basic Management Program in February 1995.
(4) He placed seventh highest (with a rating of 91.4%) in the Government Assistant Electrical Engineering Licensure
Examination in May 1982.
These impressive credentials are of course ample proof of authentic high level academic achievement, indicative of a by-no-
means middling or common place intellectual power. For this reason, this Court cannot accept respondent's claim that he did
not thoroughly apprehend the full scope, thrust and import of the waiver-quitclaim cum separation pay that he freely,
voluntarily and intelligently forged and fashioned with petitioner. The combination of all these circumstances thus repels the
suggestion that respondent might not have fully or thoroughly grasped or understood the plain meaning, intendment and
significance of the deed/document to which he affixed his signature, and from the obvious and inevitable effects of which he
now seeks to rid or extricate himself. That by his free and voluntary act and deed he chose or opted to deed away his
patrimonial rights he has only himself to blame.
In Periquet v. National Labor Relations Commission,69 this Court set the guidelines and doctrinal policy relative to waiver and
quitclaim, thus -
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of
mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms
of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is
shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking. As in this case.
And in Samaniego v. National Labor Relations Commission,70 this Court noted that therein petitioners were "not ordinary
laborers or rank-and-file personnel who may not be able to completely comprehend and realize the consequences of their
acts, x x x [that in fact, therein] petitioners are managerial employees holding responsible positions[; and that moreover]
they are educated individuals:"71 basic considerations which impelled this Court into concluding that: "it can hardly be said
that they were coerced into resigning from the company."72
Herein respondent's situation is not much different from therein petitioners' situation in the Periquet73and Samaniego74 cases.
To the same effect: Mendoza, Jr. v. San Miguel Foods, Inc.75Sicangco v. National Labor Relations Commission76Casimiro v.
Stern Real Estate, Inc.77 and Sarocam Interorient Maritime Ent., Inc.78
Under the same parity of reasoning, the case law rulings announced in the above-mentioned cases apply to the present case.
WHEREFORE, the Petition is hereby GRANTED. The November 18, 2011 Decision of the Court of Appeals in CA-G.R. SP No.
108873 and its April 12, 2012 Resolution are hereby ANNULLED and SET ASIDE. The November 11, 2008 Decision of the
National Labor Relations Commission in NLRC NCR CA No. 043319-05 is hereby REINSTATED.
SECOND DIVISION
G.R. No. 201359, September 23, 2015
MAGSAYSAY MARITIME CORPORATION, PRINCESS CRUISE LINES, LTD. AND/OR MR. EDUARDO U.
MANESE, Petitioners, v. VIRGILIO L. MAZAREDO, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are: 1) the October 28, 2011 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 117748, which affirmed with modification the September 14, 2010 Decision3 and October 29, 2010
Resolution4 of the National Labor Relations Commission (NLRC) in NLRC LAC No. (OFW-M) 06-000439-10; and 2) the CA's
March 28, 2012 Resolution5 denying reconsideration of its assailed Decision.
Factual Antecedents
Respondent Virgilio L. Mazaredo has been working for petitioner manning agency Magsaysay Maritime Corporation
(Magsaysay) since 1996. For his last employment contract, he was hired for Magsaysay's foreign principal and co-petitioner
herein, Princess Cruise Lines, Limited (Princess Cruise). He was assigned as Upholsterer onboard the vessel MY "Tahitian
Princess." His 10-month POEA6 Standard Employment Contract7 dated June 25,2008 stated among others that he was to
receive a monthly salary of US$455.00.
Respondent was deployed on July 5, 2008.8
On February 4, 2009, while aboard M/V "Tahitian Princess," respondent experienced back pain. Upon examination by the
ship's doctor Lana Strydom on March 12, 2009, the following diagnosis was issued: "a) uncontrolled hypertension on
medication; b) probable previous silent inferior myocardial infarct; c) left ventricular hypertrophy; d) tachycardia (95-107);
xxx f) needs CXR, Echo, Stress Test and Angiogram; g) needs cardiologist specialist consultation; h) needs another
seafarer's fitness to work at sea medical before next contract x x x."9
On March 22,2009, respondent was medically repatriated and immediately referred to the company-designated physician.
Respondent underwent a series of examinations10 such as electrocardiogram (ECG), 2D Echo, and coronary
arteriography.11 On May 30, 2009, he was found to be suffering from "coronary artery disease, three-vessel involvement;"
the recommendation was for him to undergo coronary artery bypass graft surgery (CABG12).13
On July 6, 2009, respondent underwent percutaneous coronary intervention14 or angioplasty instead of the recommended
bypass surgery. The angioplasty was a mere outpatient procedure.15 Respondent underwent angioplasty instead of bypass
surgery because he could not afford the latter procedure, as it was he who was paying for his treatment.16 Petitioners did not
provide medical and financial assistance after respondent's initial diagnosis.17 It was respondent alone who chose the hospital
and procedure for the treatment of his condition, with full consideration of the cost and expenses of treatment.18
In a July 6, 2009 Cardiac Catheterization Laboratory Report19 issued after respondent's angioplasty, the attending physician
recommended the administration of dual antiplatelets20 and that medical care or management of respondent's condition
should be "maximized."
On September 25, 2009, respondent sought the opinion of an independent physician, Dr. Efren R. Vicaldo (Dr. Vicaldo), who
issued a Medical Certificate21 declaring that respondent is unfit to resume work as seaman in any capacity; that he requires
maintenance medication to control his hypertension to prevent cardiovascular complications such as worsening coronary
artery disease, stroke and renal insufficiency; and that respondent is not expected to land gainful employment given his
medical background.
Prior to Dr. Vicaldo's assessment, or on July 27, 2009, respondent filed a Complaint22 against Magsaysay, Princess Cruise,
and their co-petitioner Eduardo U. Manese (Manese) - Magsaysay Owner/President/General Manager - for recovery of
permanent total disability and sickness benefits, reimbursement of medical and other expenses, moral and exemplary
damages, and attorney's fees, which was docketed in the NLRC, National Capital Region, Quezon City as NLRC NCR Case No.
OFW (M)-07-10662-09.
In his Position Paper,23 Reply,24 and Rejoinder,25 respondent claimed that petitioners acted in bad faith in refusing to provide
medical and financial assistance to address his heart condition, which he claimed was contracted during his employment with
the latter; that he has been rendered and declared permanently and totally disabled, which thus entitled him to the
maximum corresponding benefits; that petitioners unjustly refused to indemnity him, which further entitled him to actual,
moral and exemplary damages, and attorney's fees for being compelled to litigate; and that in addition, he was entitled to
indemnity under an International Transport Federation Collective Bargaining Agreement (ITF-CBA). Thus, respondent prayed
that he be paid US$80,000.00 as permanent disability compensation; US$2,275.00 sickness compensation; P463,240.31 as
reimbursement for medical expenses incurred; P16,700.00 as reimbursement for transportation expenses; P600,000.00
combined moral and exemplary damages; and 10% attorney's fees.
In their joint Position Paper,26 Reply,27 and Rejoinder,28 petitioners argued that respondent boarded M/V "Tahitian Princess"
on June 17, 2007 and disembarked upon completion of his contract on March 9, 2008, which meant that he completed his
contract prior to contracting of his illness; that respondent's illness is not work-related as declared by the company-
designated physician in a Medical Report29 dated March 27, 2009, which thus justified their denial of respondent's disability
claim; that despite such finding, they continued with respondent's treatment and shouldered all the medical expenses he
incurred; that the company-designated physician's March 27, 2009 assessment should prevail in deciding respondent's case;
that the supposed ITF-CBA is inapplicable in this case, since respondent's illness was not title result of an accident - a pre-
condition under said ITF-CBA; and that respondent is not entitled to his other claims since they have fulfilled their contractual
obligations in good faith, which thus leaves respondent without a valid cause of action. They prayed for the dismissal of
respondent's Complaint and recovery, by way of counterclaim, of P500,000.00 as and for attorney's fees and litigation
expenses.
On April 20, 2010, the Labor Arbiter rendered a Decision30 dismissing the respondent's Complaint for lack of merit, stating
thus:cralawlawli bra ry
ISSUES:
1. Is complainant entitled to permanent disability compensation in the amount of US$80,000.00?
2. Is complainant entitled to reimbursement of full medical cost for treatment of illness, sick wages for "130
days"?
3. Is he entitled to moral and exemplary damages plus attorney's fees?
Before these issues are resolved, this Arbitration branch takes note that in Respondents'31Position Paper, Annex "3", which is
alleged as the Medical Report dated 27 March 2009 of the company-designated physician, is not attached thereto.
Be that as it may, it appears on the records that on March 12, 2009, Dr. Lana Strydom, in the Medical Referral Letter,
diagnosed complainant and requested/recommended that complainant needs to be treated with the following: cralaw lawlib rary
"1. CXR, Echo, Stress Test and Angiogram

2. Cardiologist Specialist consultation
3. Repeat Monitoring of U & E
4. Needs another seafarer's fitness to work at sea medical before next contract." chanrobleslaw
Unfortunately, as earlier mentioned, the alleged Medical Report dated March 27, 2009 of the company-designated physician
is not on record. Although this is not attached, the complainant nonetheless admits that upon his arrival in the Philippines on
March 22, 2009, he underwent a series of medical examinations by the company-designated physician. But he himself did
not submit any document on the results of those tests.
The complainant however submitted a document dated May 30, 2009 executed by his own independent doctor, Eduardo T.
Buan, Angiographer of the Invasive Cardiology Division, Philippine Heart Center. He also submitted a Cardiac Catheterization
Laboratory Report dated July 6, 2009 issued by Drs. Dee/Delos Reyes/Albacite/Regamit with these recommendations: "Dual
Antiplatelets, Maxize [sic] Medical management".
A careful scrutiny of complainant's Annexes "E-l" and "E-2" (CPP) bear no date when they were issued by the Philippine
General Hospital. They however state complainant's "Condition on Discharge - Improved, Ambulatory".
It is noted that this complaint was filed on July 27,2009. On September 25, 2009, or about two (2) months thereafter, Dr.
Efren R. Vicaldo, in his Medical Certificate, states that complainant was confined September 25, 2009 with the following
diagnosis:chanRob lesvi rtua lLawl ibra ry
"Hypertensive cardiovascular disease Coronary artery disease S/P percutaneous coronary intervention"
And in Dr. Vicaldo's Medical Evaluation of Patient/Seaman dated September 2009, he did not state any Grading for which
complainant should be compensated/ entitled. Besides, complainant consulted the said doctor just once.
The ruling in the case of Crystal Shipping, Inc. vs. Natividad (Supra) does not apply in this case. In that case, the company-
designated physician and the respondent physician, although they differ in their assessment of the degree of respondent's
disability, bothfound that respondent was unfit for sea-duty. In the present case, the facts differ. Neither is the ruling on the
case of HFS Philippines, Inc. et al. vs. Ronaldo R. Pilar applicable herein for the same reason - the facts differ in these cases.
It is also noted that complainant went to seek the medical opinion of Dr. Vicaldo after he had filed this case and after the
lapse of One Hundred Twenty (120) days.
Much as this Labor tribunal looks tenderly on the laborer, there are legal parameters that limit our resolution on cases of this
nature. There are rulings favoring the seafarer; there are also those not in their favor. The particular facts of the case and
the evidence adduced by the parties had always been the bases for the High Court's decisions. This Arbitration Branch can
only apply those which We deem fall squarely on the base at bar.
One last note: The respondents are hereby admonished to carefully go over the evidence they present or inadvertently fail to
attach.
WHEREFORE, in the light of the foregoing, judgment is hereby rendered DISMISSING this complaint for lack of merit.
All other claims herein sought and prayed for are hereby denied for lack of legal and factual bases.
Respondent interposed an appeal33 before the NLRC, which was docketed as NLRC LAC No. (OFW-M) 06-000439-10. On
September 14, 2010, the NLRC issued its Decision34 containing the following pronouncement: cralawlaw lib rary
Hence, this appeal anchored on serious errors and grave abuse of discretion committed by the Labor Arbiter in dismissing the
complaint, with the complainant35 asserting that the diagnosed illnesses that caused the death [sic] of the seafarer are listed
as occupational illnesses under the POEA Standard Employment Contract, and therefore compensable.
The appeal is impressed with merit.
It must be clarified at the outset that while respondents36 have argued that complainant was on finished contract, having
embarked in June 2007, this contention is belied by the POEA-approved contract clearly showing that complainant's last
contract on board the vessel "TAHITIAN PRINCESS" was for a period of ten months commencing on July 8, 2008 or the date
of his departure. That complainant was medically repatriated on March 22, 2009 or two months short of the 10-month
contract duration is not disputed, and as such the reasonable presumption is that complainant's contract had not expired or
[was not] completed, as claimed by respondents.
Proceeding to the primary issue in this appeal, we find that complainant's allegation notwithstanding, it is the provisions of
the POEA Standard Employment Contract that would have to be applied. The contention that the claim for disability
compensation should be based on the provisions of the CBA which provides higher benefits is untenable as it is unequivocally
stated in the CBA that disability compensation under said Agreement is conditioned upon a finding that the injury is due to
an accident. In this case, complainant was repatriated due to illness, thereby excluding the coverage of his claim under the
CBA.
Under Section 20.B of the POEA Standard Employment Contract, the employer is liable for payment of disability
compensation arising from work-related illness/injury sustained or contracted during the period of the seafarer's
employment. Section 32-A of the same Contract enumerates what are deemed occupational illnesses, whereas Section 20.D
specifically states that illnesses not listed are disputably presumed to be work-connected.
Complainant in this case was discharged from his assigned vessel when he was found to be suffering from uncontrollable
hypertension, with specific requirement for cardiac consultation and related laboratory examinations. Upon arrival it is not
disputed that complainant underwent angioplasty and was assessed by his physician to be suffering from hypertensive
cardiovascular disease and coronary artery disease and determined to be unfit to resume employment as seafarer in any
capacity whatsoever.
Respondents' defense is predicated on the claim that complainant's illness is not work-related.
This argument is bereft of merit.
Complainant's diagnosed illness is listed under Section 32-A of the POEA Standard Employment Contract and therefore
compensable. It is to be noted that as against the medical certificates submitted by the complainant, respondents' claim of
non-work connection is anchored on a purported certification issued by the company-designated physician which, as found by
the Labor Arbiter, was not attached to the respondents' Position Paper.
Be that as it may, the fact that the illness is listed as an occupational disease is sufficient to overcome the respondents'
unsubstantiated allegation of the illness' absence of work causality.
As to the argument that it is the assessment of the company[-designated] physician that should be upheld, the Supreme
Court in Maunlad Transport Inc., et al. vs. Manigo (G.R. No. 161416, June 13, 2008) x x x reconciled its rulings on the same
issue and declared that the seaman does not automatically bind himself to the medical report of the company-designated
physician and that neither are the labor tribunals and courts bound by the medical report, the inherent merit of which will be
weighed and duly considered. It was further decreed that the seaman may dispute the medical report issued by the
company-designated physician by seasonably consulting another physician, which will be evaluated by the labor tribunal and
the courts based on its inherent merits.
Thus, as between the respondents' unsubstantiated declaration that complainant's illness is not work-related, and the
complainant's medical certificates detailing the extent and nature of his condition, the latter must be upheld as reflective of
the complainant's medical status, and resulting incapacity. Likewise, it must [also be] emphasized that complainant had been
continuously a seafarer for more than twelve (12) years with the respondents and as such his work must have at least
contributed and aggravated his illness which resulted in his incapacity.
The fact that complainant's condition may have improved, or that he is ambulatory, as found by the Labor Arbiter will not
militate against complainant's entitlement to disability compensation. What is important is that the complainant's medical
condition [from] which he suffered during his employment and while in the performance of his duties has rendered him
incapacitated to perform his usual job.
In Seagull Maritime Corp. et al. vs. Jaycee Dee et al., (G.R. No. 165156, April 2, 2001) the Supreme Court decreed that
disability should not be understood solely on its medical significance, but also on the real and actual effects of the injury [on]
the claimant's right and opportunity to perform work and earn a living. The test to determine its gravity is the impairment or
loss of one's capacity to earn and not its mere significance. Permanent total disability means disablement of the employee to
earn wages in the same kind of work or work of similar nature [- that for which] he was trained for or accustomed to
perform, or any kind of work which a person of his mentality and attainment can do.
Complainant is therefore entitled to the maximum disability compensation of US$60,000.00.
In addition, complainant is entitled to sickness wages corresponding to the remaining period of his ten[-]month contract.
While the POEA Standard Employment Contract provides a maximum period of 120 days sickness wage [benefit] (130 days
under the CBA) complainant is not entitled to the entire covered period considering that there was less than three (3)
months left of his contract. Given the nature of sickness wages, which are intended to compensate the seafarer while he is
ailing during the period of his contract, it goes without saying that his entitlement should be limited to one month and
thirteen days or 43 days equivalent to US$652.16.00 [sic].
Likewise, complainant is entitled 'to reimbursement [for] medical expenses as duly proven, considering that it is the
obligation of the respondents to provide medical attendance to the complainant.
The claims for moral and exemplary damages are denied, but complainant is nonetheless entitled to ten percent of the
monetary award as and for attorney's fees, having secured legal representation to pursue his valid claims.
WHEREFORE, premises considered, the decision dated April 20, 2010 is VACATED and SET ASIDE. Respondents are ordered
to pay complainant jointly and severally the Philippine peso equivalent at the time of actual payment
of US$60,000.00 representing permanent disability benefits and US$652.16.00 [sic] representing sickness
wages, [P]463,240.31representing reimbursement of duly proven medical expenses, and ten percent (10%) thereof as and
for attorney's fees.
SO ORDERED.37
chanrobles law
Petitioners filed a Motion for Reconsideration,38 insisting that respondent's illness is not work-related; that the company-
designated physician's assessment prevails; that respondent's illness is not a Grade 1 disability; and that consequently, he is
not entitled to sickness allowance and attorney's fees. However, in a Resolution dated October 29,2010, the NLRC held its
ground.39 chan roblesv irtuallaw lib rary
In a Petition for Certiorari40 filed with the CA and docketed therein as CA-G.R. SP No. 117748, petitioners sought to set aside
the NLRC dispositions, reiterating their arguments that respondent's disability was not work-related; that he disembarked
from the vessel due to a finished and completed employment contract, and not his illness; and that the NLRC committed
grave abuse of discretion in granting the awards. Petitioners also sought injunctive relief.
On October 28, 2011, the CA issued the herein assailed Decision containing the following pronouncement: cralaw lawlib rary
Petitioners assert that private respondent is [a] contractual employee, thus, when the contract expired upon private
respondent's return, the term contract has terminated. As such, any claims he may have under such a contract has also
terminated.
We disagree.
Section 18 (B) (1) of the POEA SEC provides:

"xxx xxx xxx
B. The employment of the seafarer is also terminated when the seafarer arrives at the point of hire for any of the following
reasons: chanRoblesv irt ual Lawlib rary
(1) when the seafarer signs-off and is disembarked for medical reasons pursuant to Section 20 (b) (5) of this Contract.
xxx xxx xxx " chanroble slaw
Section 20 (B) (5) of the same contract also states that upon the seafarer's sign-off from the vessel for medical treatment,
the employer shall bear the full cost of repatriations in the even[t] the seafarer is declared fit for repatriation. True, private
respondent signed-off and disembarked for medical reasons but this [is] not tantamount to the denial of the private
respondent's right to claim any disability benefits under the POEA SEC.
It bears stressing that seafarers are contractual employees. Their employment is governed by the contracts they sign and
are fixed for a period of time. Their entitlement to disability benefits is a matter governed, not only by medical findings but
also by contract. By contract means the Employment Contract and POEA Standard Employment Contract (POEA SEC), x x x
xxxx
Petitioners posit that the opinion of the company-designated physician is the best and most reliable source of information as
to the private respondent's state of health. The declaration that private respondent's illness is not work-related should not
only be given great weight in determining disability benefits but also be considered as conclusive.
xxxx
Any dispute as to private respondent's claim and state of health could have been easily resolved had the parties observed the
provisions of the POEA SEC. However, the parties did not jointly choose a third doctor to assess private respondent's
condition. We are therefore constrained to make a ruling based on the evidence already submitted by the parties and made
part of the records of the case, including the medical certification of private respondent secured from this [sic] attending
physicians.
It is undisputed that private respondent submitted himself to the treatment and medical evaluation of company-designated
physician, Dr. Robert Lim. It has also been established that private respondent was found to be suffering from a heart
ailment. The problem arose when he was diagnosed with hypertensive cardiovascular disease and the company-designated
physician opined that his illness is not work-related and found to be generic in origin.
xxxx
On the other hand, private respondent's own physician declares that the illness suffered by him is work-related/work-
aggravated. True, it is the company-designated physician who is entrusted with the task of assessing the seaman's disability
under the POEA SEC. Nonetheless, private respondent also had the right to seek medical treatment other than [from] the
company-designated physician. A claimant may dispute the company-designated physician's report by seasonably consulting
another doctor. In such a case, the medical report issued by the latter shall be evaluated by the labor tribunal and the court,
based on its inherent merit.41 The records indicate that when private respondent was given medical attention at the
Philippine General Hospital, he consistently complained of back pains as shown in the Clinical Abstract and Discharge
Summary. Thereafter, he was finally diagnosed with "ISCHEMIC HEART DISEASE; CORONARY ARTERY DISEASE, 3 VESSEL
CAD." We also note that Dr. Efren Vicaldo is a Cardiologist at the Philippine Heart Center. Therefore, Dr. Vicaldo's diagnosis
and assessment should be given credence.
xxxx
Thus, We see no reason to disturb the NLRC's findings and conclusion on this point xxx
xxxx
The POEA SEC provides a Schedule of Disability or Impediment for Injuries Suffered and Diseases Including Occupational
Diseases or Illness Contracted. Here, private respondent has been diagnosed to be suffering from the "Hypertensive
Cardiovascular Disease, Coronary Artery Disease; S/P percutaneous coronary intervention." Cardiovascular diseases are
classes of diseases that involve the heart and blood vessels (arteries and veins). The term cardiovascular diseases must be
understood not only in its generic form but also in its plural sense, x x x
Corollarily, cardiovascular disease is listed as an occupational disease under the POEA SEC. xxx
xxxx
It is sufficient that the foregoing elements be established by substantial evidence or such relevant evidence as a reasonable
mind to accept [sic] as adequate to justify a conclusion. In this case, private respondent's medical history and condition was
well-documented. When private respondent consulted the ship doctor, [Dr.] Lana Strydom, he had been complaining of back
pain post lifting and bending and was diagnosed of Mechanical Lower Back Pain with Muscle Spasm. He then had a blood
pressure of 177/119. After being repatriated xxx, Dr. Eduardo Buan found that private respondent was suffering [from]
Coronary Artery Disease, Three-Vesel Involvement. Thereafter, private respondent underwent Percutaneous Transcoronary
Angioplasty at the Philippine General Hospital. Obviously, these signs and symptoms did not develop overnight.
The significance of the Medical Referral Letter, Clinical Abstract and Discharge Summary cannot be overemphasized. They
confirmed that private respondent began to experience the signs and symptoms of hypertensive cardiovascular disease such
as back pains and fatigue which persisted when subjected to stress at work until he underwent angioplasty. It is undisputed
that private respondent was deployed with petitioners for more than twelve (12) years. Given the arduous nature of his job,
it must have at least aggravated any pre-existing condition he might have had. Clearly, there is substantial evidence to
support the reasonable connection between private respondent's work and development and exacerbation of his heart
ailment.
xxxx
As to the award of sickness allowance, we find it to be warranted by the undisputed fact on record that private respondent's
basic salary is US$ 455.00 per month. However, we modify that amount. Private respondent has a right to receive the
sickness allowance for 120 days pursuant to Section 20 (B) (3) of the POEA SEC and not 43 days as found by the NLRC.
Multiplying the 120-day sickness allowance due to private respondent on the basis of the correct monthly rate of US$455.00,
he should be awarded US$1,820.00 as sickness allowance.
As to the reimbursement of medical expenses, we will likewise modify this award. The records reveal that only the amount of
P104,955.31 are duly supported by official receipts.
As to the award of attorney's fees, the same is justified, as private respondent actually hired the services of a lawyer to
vindicate his right to claim his disability benefits. Attorney's fees is [sic] recoverable when the defendant's act or omission
has compelled the plaintiff to incur expenses to protect his interest. The attorney's fees awarded by the NLRC shall be
maintained but must reflect the modified amount of the sickness allowance and reimbursement of medical expenses.
With respect to petitioners' application for provisional remedies, there is no need to pass upon it as it has been rendered
moot and fait accompli by this decision.
WHEREFORE, premises considered, this petition is DISMISSED. The assailed Decision dated September 14, 2010 and
Resolution dated October 29, 2010 of the NLRC is [sic] AFFIRMED with MODIFICATION. Petitioners are hereby ORDERED to
jointly and severally pay private respondent Virgilio Mazaredo the following: (1) permanent disability compensation in the
amount of US$60,000.00; (2) sickness allowance in the amount US$1,820.00; (3) reimbursement of medical expenses in the
amount of PI04,955.31; and (4) attorney's fees equivalent to ten percent (10%) of the total monetary award.
SO ORDERED.42
chanrobles law
Petitioners filed a Motion for Reconsideration,43 but the CA denied the same in its March 28, 2012 Resolution. Hence, the
present Petition.
Issues
Petitioners submit the following issues for resolution: cra lawlawlib rary
1. Whether x x x the Court of Appeals' decision in awarding private respondent US$60,000.00 as disability benefits is in
accord with law or the applicable decisions of this Honorable Court despite the fact that private respondent
disembarked from the vessel due to a finished contract and the alleged cause of the seafarer's disability is not work-
related.
2. Whether x x x the Court of Appeals' decision in awarding private respondent sickness allowance, medical
reimbursement and attorney's fees is in accord with law or the applicable decisions of this Honorable Court
considering that private respondent has provided no basis for such claims.
3. Whether x x x the Court of Appeals' decision is in accord with law or the applicable decisions of this Honorable Court
considering that the findings of fact and legal conclusions both [sic] the Labor Arbiter and the NLRC are completely
different from its questioned Decision and Resolution.44
chanrobles law
Petitioners' Arguments
Praying that the assailed CA pronouncements be set aside and that a new judgment be rendered dismissing NLRC NCR Case
No. OFW (M)-07-10662-09, petitioners insist in their Petition and Reply45 that respondent has no right to any disability
benefits since his employment contract expired before he contracted his illness; that his illness is not work-connected; that
hypertensive cardiovascular disease is not compensable as it is not a work-connected illness under the POEA SEC; that the
company-designated physician already made a prior categorical assessment, contained in a March 22, 2009 Medical Report,
that respondent's illness was not work-related and thus not compensable; that the company-designated physician's
assessment - not that of respondent's appointed doctor, Dr. Vicaldo's - should be given credence; and that resultantly, the
CA committed grave abuse of discretion in awarding disability benefits, damages, and attorney's fees to respondent.
In his Comment,46 respondent counters that the assailed Decision of the appellate court is duly supported by the evidence
adduced; that his condition -hypertensive cardiovascular disease or coronary artery disease - was contracted during his
employment with petitioners; that his work contributed to the development of his condition and deterioration of his health;
that cardiovascular disease is listed as a compensable illness under the POEA SEC; that he is entitled to permanent and total
disability benefits as he has been unable to work even up to the present as a result of his illness which prevents him from
obtaining gainful employment; and that the POEA SEC is a contract of adhesion that should be construed liberally in his
favor, and strictly against petitioners.
Our Ruling
Respondent's POEA SEC
Petitioners insist that respondent's employment contract expired before he contracted his illness; however, the evidence
clearly belies such claim. His 10-month POEA SEC was dated June 5, 2008; he was deployed on July 5, 2008, and repatriated
on March 22, 2009 - or sometime during the ninth or tenth month of his POEA SEC. Petitioners seem to base their argument
on respondent's previous contract, and not the current one in issue.
Compensability
On the issue of compensability, there is no question that respondent's condition — "coronary artery disease, three-vessel
involvement" — is a covered illness. It has consistently been held that cardiovascular disease, coronary artery disease, as
well as other heart ailments, are compensable.47 It likewise remains undisputed that given his 12 years of employment with
petitioners and the conditions he was subjected to as a seafarer, respondent's illness can be attributed to his work. As
correctly held by the CA, there is a reasonable connection between respondent's work and the development and exacerbation
of his heart ailment. During his employment as seafarer, respondent was consistently exposed to varying temperatures and
harsh weather conditions as the ship crossed ocean boundaries, and he may have been required to perform overtime work.
Indeed, "any kind of work or labor produces stress and strain normally resulting in wear and tear of the human
body."48 Moreover, as seafarer, respondent was constantly plagued by homesickness and emotional strain as he is separated
from his family, even as he had to contend with the perils of the sea while at work.49 chanroblesv irt uallawl ibra ry
Company-designated physician's Assessment
Under Article 192 (c)(l) of the Labor Code50 and Rule X, Section 2 of the Amended Rules on Employees Compensation,51 the
company-designated physician must arrive at a definite assessment of the seafarer's fitness to work or permanent disability
within the period of 120 or 240 days; if he fails to do so and the seaman's medical condition remains unresolved, the latter
shall be deemed totally and permanently disabled.
Respondent was repatriated on March 22, 2009 and was examined and treated by the company-designated physician. On
May 30, 2009, he was found to be suffering from "coronary artery disease, three-vessel involvement," and recommended to
undergo CABG, or bypass surgery. However, instead of the recommended bypass surgery, respondent underwent
percutaneous coronary intervention or angioplasty - an outpatient procedure - on July 6, 2009, because he did not have the
resources to pay for the more expensive bypass surgery. On July 6, 2009, the company-designated physician issued a
Cardiac Catheterization Laboratory Report recommending the administration of dual antiplatelets; he likewise stated that the
medical management of respondent's condition should be "maximized." Thereafter, it appears mat respondent's treatment
was discontinued, and no assessment of respondent's fitness to work or disability was made. Indeed, up to this stage of the
proceedings, there is no such declaration of fitness or disability issued by the company-designated physician.
Petitioners argue that there is a March 27, 2009 Medical Report issued by the company-designated physician which declared
that respondent's condition was not work-connected and not compensable. However, the record of the case is bereft of such
report. On the contrary, the last medical report issued by the company-designated physician on July 6, 2009 indicates that
respondent's condition has not been resolved; he has not been cured, and instead, the attending physician recommended
that medical management of respondent's condition should be maximized, meaning that his treatment must continue and the
medical care to be given to him must be augmented.
Respondent's condition remains unresolved even up to this day, and petitioners did not renew his contract; nor was
respondent able to work for other employers on account of his condition. Thus, applying the doctrine enunciated
in Magsaysay Mitsui OSK Marine, Inc. v. Bengson52 and Alpha Ship Management Corporation v. Cab53 - that an employee's
disability becomes permanent and total when so declared by the company-designated physician, or, in case of absence of
such a declaration either of fitness or permanent total disability, upon the lapse of the statutory 120- or 240-day treatment
period, while the employee's disability continues and he is unable to engage in gainful employment during such period, and
the company-designated physician fails to arrive at a definite assessment of the employee's fitness or disability - respondent
is thus deemed totally and permanently disabled and entitled to the corresponding benefit under the POEA SEC in the
amount US$60,000.00.
The assessment of Dr. Vicaldo, an independent physician consulted by respondent, is irrelevant in this case. At most, it
merely corroborates the findings of the company-designated physician; what prevails is the opinion of the latter, particularly
the July 6, 2009 medical report recommending continued treatment and management of respondent's condition.
Pecuniary Awards
On the matter of pecuniary awards, the Court finds no reason to disturb the pronouncement of the CA in this regard. In the
exercise of its power of review, the findings of fact of the CA are conclusive and binding on this Court; it is not the latter's
function to analyze or weigh evidence all over again.
Deceitful Conduct
Finally, this Court has not failed to notice how petitioners' counsels of record, Attorneys Herbert A. Tria and Jerome T.
Pampolina, repeatedly attempted - all throughout the proceedings of this case, or for a period of six years - to deceive and
mislead the Labor Arbiter, the NLRC, the CA, and this Court, into believing that a favorable March 27, 2009 "Medical Report"
of petitioners' company-designated physician exists which supposedly shows that respondent's condition was not work-
connected and not compensable, when in fact there is none. Indeed, the CA was duped, and it fell for Tria and Pampolina's
scheme. This Court has taken pains to review in earnest - again and again - the record, in order to locate and determine
what the March 27, 2009 medical report contained, but it could not be found. Yet in their pleadings filed before this Court,
Atrys. Tria and Pampolina continued to refer to the document.54Instead, it appears that in truth and in fact, there is no such
document: from the start, the Labor Arbiter already noted its absence; in fact, the Labor Arbiter even admonished
respondents to "carefully go over the evidence they present or inadvertently fail to attach."55 But just the same, the CA was
deceived to the point of declaring that respondent "was diagnosed with hypertensive cardiovascular disease and the
company-designated physician opined that his illness is not work-related and found to be generic in origin"56 when no such
medical opinion exists on record. It would appear, therefore, that such "medical report" was contrived in order to satisfy the
legal requirement that the company-designated physician must make a definitive assessment of the employee's fitness to
work in order to justify a denial of disability benefits.
The Code of Professional Responsibility provides that "[a] lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct" (Rule 1.01); he "shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man's
cause" (Rule 1.03); he "shall not do any falsehood, nor consent to the doing of any in Court, nor shall he mislead, or allow
the Court to be misled by any artifice" (Rule 10.01); and he "shall not knowingly x x x assert as a fact that which has not
been proved" (Rule 10.02).
Let this serve as a warning to Attys. Tria and Pampolina. Another transgression shall warrant the initiation of proceedings for
their disbarment. Suffice it to state that lawyers should not transcend the bounds of propriety and commit a travesty before
this Court by willfully, intentionally and deliberately resorting to falsehood and deception in handling their client's case in
order to misguide, obstruct and impede the proper administration of justice.
WHEREFORE, the Petition is DENIED. The assailed October 28, 2011 Decision and March 28, 2012 Resolution of the Court
of Appeals in CA-G.R. SP No. 117748 are AFFIRMED, with the MODIFICATIONthat in addition to the adjudged amounts of
P104,955.31 as reimbursement for medical expenses and attorney's fees equivalent to 10 per cent (10%) of the total
monetary award, the awarded sums of US$60,000.00 representing permanent total disability compensation and
US$1,820.00 representing sickness allowance shall be paid by the petitioners to the respondent in Philippine pesos,
computed at the exchange rate prevailing at the time of payment.
Attorneys Herbert A. Tria and Jerome T. Pampolina are STERNLY WARNED for their unethical conduct. A repetition of these
acts shall be dealt with more severely.
SO ORDERED. chanroblesvi rtua ll
EN BANC
G.R. No. 204835, September 22, 2015
MOVERTRADE CORPORATION, Petitioner, v. THE COMMISSION ON AUDIT AND THE DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, Respondents.
DECISION
DEL CASTILLO, J.:
Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good
faith.1
cralawred nad
This Petition for Certiorari2 under Rule 65, in relation to Rule 64, of the Rules of Court assails the December 29, 2011
Decision3 of respondent Commission on Audit (COA), which denied petitioner Movertrade Corporation's claim for payment for
dredging works with side dumping of spoils in Pampanga Bay and the primary Pasac-Guagua-San Fernando Waterways in
Pampanga amounting to P7,354,897.10. Likewise assailed is the November 5, 2012 Resolution4 of respondent COA denying
petitioner's Motion for Reconsideration.
Factual Antecedents
On February 7, 1996, petitioner and respondent Department of Public Works and Highways (DPWH) entered into a Contract
Agreement5 for dredging and other related works in Pampanga Bay and the primary Pasac-Guagua-San Fernando Waterways
in Pampanga, which were affected by the Mt. Pinatubo eruptions and mudflows, in the total amount of PI 88,698,000.00,
broken down as follows: ChanRoblesvi rt ualLawlib rary
Particulars Volume Amount

Dredging Works 3.35 million cu. m. P148,698,000.00
Distance Pumping provisional sum 20,000,000.00
Spoil Site Developmentprovisional sum 20.000,000.00
Total P188,698,000.006
The Mount Pinatubo Emergency-Project Management Office of respondent DPWH, headed by Director Florante Soriquez
(Director Soriquez), implemented and supervised the project.7 cral awredna d
On August 13, 1997, due to the alleged absence of spoil sites, petitioner requested permission from Director Soriquez to
allow it to undertake side dumping (dumping within the river) chargeable against the dredging works.8 c ralaw rednad
On August 18, 1997, Director Soriquez issued a letter9 denying the request. He reminded petitioner that side dumping was
not allowed and that as per the report of Engr. Marcelino P. Bustos (Engr. Bustos), the Area Engineer of respondent DPWH,
petitioner could still pump the dredge spoils to the following spoil sites: Pascual "A," Pascual "B," and the Regala fishpond.
On September 29, 1997, Engr. Bustos issued a letter10 requiring petitioner to provide additional pipelines for distance
pumping. Engr. Bustos also reiterated in his letter that "Pascual spoil site can still accommodate more materials" and that
'[respondent DPWH] is not allowing or giving any instruction to use side dumping process for whatsoever reason."11 cralawred nad
However, despite the denial and the prohibition issued by Director Soriquez and Engr. Bustos, petitioner continued to side
dump.12 Thus, on October 1, 1997, Director Soriquez issued another letter,13 which reads: ChanRoblesvi rtua lLawl ibra ry
We were informed by our field personnel that in spite of the field memo dated 29 September 1997 x x x issued to your
Engineer at the 28" [diameter] dredger and followed by a letter dated 30 September 1997 by Jose C. Gabriel, Engineer IV of
this office, your 28" [diameter] dredger presently operating near the town proper of Sasmuan, is still dredging through side
dumping.
Please be informed that side dumping activities in the area is not allowed which this office has previously informed your end
thru our letter of 18 August 1997. There is still an available spoil site where spoils could be dumped thru distance pumping
and the other one is the Regala spoil site, which has to be developed as previously instructed based on our previous letters.14
Still, petitioner ignored the prohibition and continued to side dump.15 cra lawred nad
When the project was in its final phase of completion, petitioner, through its President, Mr. Wenceslao Zingapan, wrote a
letter16 dated October 15, 1997 to then DPWH Secretary Gregorio Vigilar (Secretary Vigilar) asking for payment for the
dredging work it rendered. In the letter, petitioner explained that it was forced to side dump the dredge spoils along the
project waterway for the following reasons: ChanRoblesvi rtua lLawl ibra ry
1.0)The strong and heavy siltation if not avoided will ground our 28" Dredge and the
grounding will render the equipment inutile for a considerable time beyond the
contract despite the application of extraneous salvaging measures, and
2.0)Even if the extraordinary effort of the Project Implementing Office shall be factored
in the provision and making available to us the needed spoil site, the Regala
Property which was presented to us for development of a dike thereon, is a mere 2-
hectare size and in our long experience in shallow river dredging, is uneconomical,
unsafe and inoperable for utilization as an effective dumping site. If the
development of the Regala property is pursued, the disproportionate heavy pressure
pumping induced by our huge deep sea 28" Dredge will cause a dangerous spillage
back to the middle of the waterway. The resultant volume equivalent to the
containment capacity of the 2-hectare size Regala property will create a dike-like
[blockade] transversal to the length of the waterway. Navigation and commerce
along the waterway then will be put to standstill.17
On October 24, 1997, Director Soriquez issued a letter18 informing petitioner of the denial of its request for payment. He
said:ChanRoblesvi rt ualLaw lib rary
Please be informed that side dumping of your [dredge] spoils between Sta. 15+000 to Sta. 14+000 was not allowed by this
Office thru our letters of August 18, 1997 and October 1, 1997 to your end. The strong and heavy siltations you are
mentioning at the vicinity of Sta. 14+000 (mouth of San Pedro Creek) was not too alarming, since the flow of the
floodwaters and siltations coming from the confluence of Pasig-Potrero River is x x x going downstream through San
Francisco River at Minalin, as a result of the heavy rains caused by typhoon Ibiang and not at Guagua River and San Pedro
Creek. The siltations at the subject section were already there since the breaching of the transverse dike.
Furthermore, with respect to spoil site availability, you have two (2) alternatives: a] Utilize Pascual "A" spoil site, thru
distance pumping wherein the volume of 50,000 cu. m. of silt materials could still be accommodated, and b] Utilize Regala
fishpond, even with only two (2) hectares in area, can contain at least 60,000 cu. m. of dredge spoils, the same area as the
spoil site at Malusac portion (S3-1) that you have used previously using your 25" dia. Dredger.
In view of the above, we cannot recommend any compensation for the volume of silt materials side dumped based on your
letter of October 15,1997.19
When the project was completed, respondent DPWH paid petitioner the total amount of P180,029,910.15, covered by various
disbursement vouchers.20 The amount of P7,354,897.10, representing the 165,576.27 cubic meters dredging work rendered
by petitioner, however, was not paid.21 cralaw rednad
On June 18, 1998, the Director III of the Legal Service of DPWH, Mr. Cesar D. Mejia, issued a Memorandum22 to Director
Soriquez expressing his position that petitioner should be paid for work accomplished as shown in the As-Built Plans and the
Statement of Work Accomplished without the necessity of issuing a variation order.
On January 4, 2000, then DPWH Secretary Vigilar wrote a letter stating that the agency will no longer entertain any request
for reconsideration on the subject matter.23 Petitioner, however, continued to demand payment for the said dredging works.
On February 24, 2005, former DPWH Acting Secretary Hermogenes E. Ebdane, Jr. (Secretary Ebdane Jr.) issued Department
Order No. 51, creating an Ad Hoc Committee to further evaluate the payment claim of petitioner.24 c ralaw rednad
On October 5, 2005, the Committee rendered a Resolution25 recommending payment of the claim in the amount of
cralaw red
P7,354,897.91 provided petitioner restores to its original grade elevation the section where dredge spoils were dumped. One
of the members of the Committee, Regional Director Ramon P. Aquino (Regional Director Aquino), DPWH-Region III, San
Fernando City, Pampanga, however, did not agree with the recommendation and maintained that petitioner is not entitled to
payment for breach of contract.26 And since Secretary Ebdane Jr. likewise did not agree with the Resolution, he resolved to
return the same to the Committee for re-evaluation.27 c ralawre dnad
On December 8, 2006, the DPWH Ad Hoc Committee rendered an amended Resolution,28 to wit: ChanRoblesvi rtua lLawl ib rary
WHEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED THAT PAYMENT FOR THE CLAIM OF MOVERTRADE
CORPORATION FOR WORK PERFORMED UNDER THE DUTCH-FUNDED MT. PINATUBO AFFECTED WATERWAYS PROJECT
SHALL BE GRANTED PROVIDED THAT THE IMPLEMENTING OFFICE SHALL DETERMINE THE AMOUNT OF PAYMENT DUE TO
THE CONTRACTOR.29
Regional Director Aquino and Secretary Ebdane Jr., however, did not sign amended Resolution as they did not agree with the
recommendation.30 cralaw rednad
On July 14, 2009, petitioner offered a reduction of P300,000.00 on its claim if payment is made within a month.31 cralaw rednad
On January 22,2010, Assistant Secretary Dimas S. Soguilon, the Chairman of the Extraordinary Claims and Review
Committee, DPWH, issued a Memorandum finding petitioner's claim for payment to be a money claim, which is under the
jurisdiction of respondent COA.32 cralawrednad
Accordingly, on February 19,2010, petitioner filed with respondent COA a money claim against respondent DPWH for
payment of dredging works with side dumping of spoils in Pampanga Bay and the primary Pasac-Guagua-San Fernando
Waterways in Pampanga amounting to P7,354,897.10.33 cralawrednad
Ruling of the Commission on Audit
On December 29, 2011, respondent COA rendered Decision No. 2011-106 denying the money claim34 of petitioner for lack of
merit.35 Respondent COA ruled that petitioner is not entitled to payment for the dredging works for breach of
contract.36 Paragraph 11 of the Contract Agreement prohibits side dumping as it specifically requires that dredge spoils
should be dumped at pre-designated areas to prevent them from spilling back into the channel.37 It also noted that
petitioner's claim for payment was never approved by respondent DPWH as the Resolution and amended Resolution issued
by the DPWH Ad Hoc Committee were not signed by Secretary Ebdane Jr.38 cralaw rednad
Aggrieved, petitioner moved for reconsideration39 insisting that there was no breach of contract and that even if there was a
breach, it is still entitled to payment under the principle of quantum meruit.
On November 5, 2012, respondent COA issued a Resolution denying the motion for reconsideration for lack of merit.40 It
stood pat on its finding that there was a breach of contract as the side dumping employed by petitioner was never
authorized, verbally or in writing.41 As to the principle of quantum meruit, respondent COA explained that the principle
applies only when there is no written contract between the parties.42 In this case, since there is a written contract entered
into by the parties, the principle of quantum meruit cannot be applied.43 Thus, petitioner should bear the loss for breaching
the contract.44cralawrednad
Issue
Hence, petitioner filed the instant Petition raising the core issue of whether petitioner is entitled to the payment of
P7,354,897.10 for dredging works.
Petitioner ascribes grave abuse of discretion on the part of respondent COA in denying its money claim.45It insists that it did
not violate paragraph 11 of the Contract Agreement and alleges it was respondent DPWH who failed to provide adequate
spoil sites.46 To substantiate its allegation, petitioner cites Director Soriquez's letter47 dated June 6, 1997 addressed to the
Executive Director of the Mt. Pinatubo Commission, where Director Soriquez mentioned that "[petitioner's] equipment can no
longer continue the dredging works due to non-availability of spoil sites [as] the spoil sites being used in the area have
already been utilized to full capacity."48 This statement allegedly proves that respondent DPWH knew that there were no
available spoil sites left, which justifies petitioner's non-compliance with paragraph 11 of the Contract Agreement.49 cralawre dnad
Petitioner likewise denies side dumping the dredge spoil and claims that what it did was actually "free dumping," wherein the
spoils during dredging were exposed to strong current of the water and were carried away by it towards the mouth of Manila
Bay.50 Although it admits that it used the term "side dumping" in its letters, it claims that it was used to refer to a situation
where the spoils are not being dumped at the spoil sites.51 In any case, petitioner claims that despite the method of disposal
used, the waterways remained navigable except for minimal siltation when the DPWH engineers inspected the subject
waterways.52 And since the dredging works benefited the public and the government, petitioner asserts that it is entitled to
its money claim in the highest interest of justice and equity.53 cralaw rednad
Respondents, through the Office of the Solicitor General (OSG), contend that respondent COA committed no grave abuse of
discretion in denying the money claim because petitioner in disposing the dredge spoils through side dumping violated
paragraph 11 of the Contract Agreement.54 They maintain that respondent DPWH provided adequate spoil sites and that
assuming that these were insufficient, petitioner should have ceased dredging operation in the meantime instead of
breaching the terms and conditions of the Contract Agreement.55 Also, petitioner is not entitled to its money claim as "a
breach of contract cannot be the source of rights or the basis of a cause of action."56 Moreover, the dredging work did not
benefit the government as side dumping, which entails dumping of dredge spoils back into the river, goes against the very
purpose for which the dredging works were done.57 c ralaw rednad
Our Ruling
The Petition must fail.
Paragraph 11 of the Contract Agreement reads: ChanRoblesvi rtua lLawl ibra ry
11. The disposal of dredge spoils shall be made at pre-designated areas to be provided by the OWNER, including land
access as appropriate, to the CONTRACTOR as follows: ChanRobles virtua lLawl ibra ry
In case of cutter suction dredge or other similar type with pipeline discharge, the disposal area shall be within a
maximum distance of 500 meters beyond which the CONTRACTOR shall be entitled to additional payment at [the]
rate of P3.00 per cu. m. per 500 meters increment, but the total discharge distance shall not exceed 2,000 meters.
The CONTRACTOR shall develop and maintain the disposal areas during use and, together with the OWNER'S
representative shall monitor and evaluate their effectiveness, to ensure that discharges thereof, into the primary
waterway, are minimized.58
Under the said provision, petitioner should dispose of the dredge spoils by dumping them at the pre-designated areas
provided by respondent DPWH. Petitioner should also develop and maintain the designated disposal areas during use.
Petitioner, however, failed to comply with the said provision as it opted to side dump 165,576.27 cubic meters of dredge
spoils back to the river. To justify its action, petitioner claims that respondent DPWH failed to provide adequate spoil sites.
We do not agree.
It is evident from the records that respondent DPWH provided spoil sites to petitioner. Director Soriquez, in his letters dated
August 18, 1997 and October 1, 1997, specifically mentioned Pascual "A," Pascual "B," and the Regala fishpond as
designated spoil sites. Engr. Bustos, in his letter dated September 29, 1997, also reminded petitioner of the available spoil
sites. These letters clearly show that contrary to the claim of petitioner, respondent DPWH complied with its obligation to
provide spoil sites.
Petitioner, however, contends that these letters contradict Director Soriquez's earlier letter dated June 6, 1997 addressed to
the Executive Director of the; Mt. Pinatubo Commission. In the said letter, Director Soriquez was requesting the Mt. Pinatubo
Commission to issue a certification to the OSG to confirm the availability of funds for the expropriation of certain properties
as "the spoil sites being used have already been utilized to full capacity."59 cralawrednad
At first glance, the letter dated June 6, 1997 issued by Director Soriquez seems to contradict his subsequent letters. But a
careful review of the records leads us to believe otherwise. First of all, when Director Soriquez informed petitioner that there
were still available spoil sites, he cited the report of Engr. Bustos as basis. Thus, it is possible that at the time Director
Soriquez issued the lelter dated June 6, 1997, he was not aware that there were still available spoil sites in some other areas
and that it was only after he received the report of Engr. Bustos that he became aware of the availability of said spoil sites.
And considering that petitioner's request for side dumping was made on August 13, 1997 or more than two months after
Director Soriquez wrote to Executive Director Fernando, it is also possible that during that span of time, respondent DPWH
was able to look for other possible spoil sites. In fact, in the Memorandum dated December 17, 1999 addressed to then
DPWH Secretary Vigilar, Director Soriquez explained that: ChanRoblesvi rtua lLawl ib rary
A. The spoil sites referred to in the subject communications of the contractor with a total of 30.2 hectares, such as the 10
hectares of Mrs. Olivia Pascual, 7.7. hectares of P. Santos, et al., and the 12.5 hectares of F. Gutierrez, did not materialize
due to funding constraint. However, a written instruction was issued to the contractor to utilize further the existing 5.0
hectares of Mrs. Olivia Pascual adjacent to the 10.0 hectares owned also by Mrs. Pascual, the 2 hectares owned by Mr.
Regala and the Mangalindan/Manansala property with an area of 3 hectares. The combined total area of 10 hectares for the 3
spoil sites could accommodate 168,517 cu. m. The total side dumping volume is 165,000 cu. m. The contractor was given
ample time to develop these spoil sites to contain the [dredge] volume but unfortunately they insisted on side dumping
because they lack sufficient pipelines for distance pumping with an allocation of P20 Million in the Contract Agreement. Such
provision was purposely provided in the contract in the event distance pumping would be required but the contractor never
availed of this provision and undertook side dumping activities without first obtaining the approval of the DPWH.60
In view of the foregoing, we find petitioner's contention untenable as the letter dated June 6, 1997 does not necessarily
contradict the subsequent letters issued by Director Soriquez.
Neither can petitioner justify the breach by merely alleging that the spoil sites provided by respondent DPWH were
inadequate, uneconomical, unsafe, and inoperable.61 To begin with, no evidence was presented to support these allegations.
And even if true, petitioner failed to inform respondent DPWH of these problems. In fact, after receiving Director Soriquez's
letter dated August 18, 1997 denying its request to side dump the dredge spoils, petitioner did not ask for a reconsideration
nor did it issue any letter questioning the capacity of the designated spoil sites. Instead, it was only after the dredge spoils
were side dumped or when petitioner was already following-up its claim for payment that it explained in writing its reasons
for side dumping.62c ralaw rednad
Respondent DPWH, on the other hand, consistently prohibited side dumping as reiterated in the letters dated September 29,
1997 and October 1, 1997 issued by Engr. Bustos and Director Soriquez, respectively. However, notwithstanding the
prohibition, petitioner continued with its side dumping activities without any explanation. Petitioner's blatant defiance of the
prohibition on side dumping is a violation of the contract that should not be ignored just because petitioner was able to
complete the project.
It is a basic principle in law that contracts have the force of law between the parties and should be complied with in good
faith.63 In this case, the contract specifically provides the manner of disposing dredge spoils. Thus, petitioner cannot
unilaterally change the manner of disposal without first amending the contract or obtaining the express consent or approval
of respondent DPWH. Otherwise, petitioner would be guilty of breaching the contract. "[A] breach occurs where
the contractor inexcusably fails to perform substantially in accordance with the terms of the contract."64 Without a doubt,
petitioner's failure to dump the dredge spoils at the designated spoil sites constitutes a breach.
As a last-ditch effort, petitioner for the first time claims that the dredge spoils were not side dumped but were "freely"
dumped. Petitioner's attempt to split hairs between "side dumping" and "free dumping" is unavailing as both are not allowed
under paragraph 11 of the Contract Agreement. It makes no difference whether petitioner performed side dumping or free
dumping activities considering that in both instances, dredge spoils are not dumped at spoil sites. What is crucial is the
admission of petitioner that it did not dump the dredge spoils at the designated spoil sites but dumped them back into the
river.65The act of dumping dredge spoils back into the river clearly violates paragraph 11 of the Contract Agreement. And as
aptly explained by respondent COA: ChanRoblesvirtual Lawlib rary
Furthermore, in the engineering point of view, for purposes of improving the discharge capacity of the channel, dredging
through side dumping is not a sound engineering practice. The purpose of pre-designated spoil sites is to provide
containment of the [dredge] spoils to ensure that the same will not flow back into the channel, otherwise
government funds would be wasted because of faulty dredging procedure. (Memorandum dated October 23, 2001 of
OIC-Project Director Amando R. Ramirez, MPE-PMO, DPWH)(Emphasis supplied)66
Considering that the dredge spoils were dumped back into the river, we cannot be certain, as pointed out by the OSG, that
the government benefited from petitioner's 165,576.27 cubic meters dredging work. And it would be unfair to allow
petitioner to benefit from its breach. Besides, petitioner cannot claim that it was not duly compensated for the services it
rendered as the amount of P7,354,897.10 is only a part of the P188,698,000.00 contract. In fact, petitioner admits that it
was already paid the amount of P180,029,910.15.67 Thus, we agree with respondent COA that petitioner is not entitled to its
money claim for the 165,576.27 cubic meters dredging work as it was done in contravention of paragraph 11 of the Contract
Agreement.
All told, we find no grave abuse of discretion on the part of respondent COA in denying petitioner's money claim as the
evidence on record undoubtedly supports the factual findings of respondent COA. We need not belabor that in the absence of
grave abuse of discretion, the decisions and resolutions of respondent COA are accorded not only with respect but also with
finality, not only on the basis of the doctrine of separation of powers, but also of its presumed expertise in the laws it is
entrusted to enforce.68
WHEREFORE, the Petition is hereby DISMISSED for lack of merit. The assailed December 29, 2011 Decision and the
November 5, 2012 Resolution of respondent Commission on Audit are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 201945, September 21, 2015
MAERSK-FILIPINAS MAERSK-FILIPINAS CREWEVG, INC., INC./A.P. MOLLER A/S, Petitioners, v.ROMMEL RENE O.
JALECO, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are: 1) the March 13, 2012 Decision2 of the Court of Appeals (CA) granting
the Amended and/or Supplemental Petition for Certiorari in CA-G.R. SP No. 118688; and 2) the CA's May 21, 2012
Resolution3 denying reconsideration of its assailed Decision.
Factual Antecedents
On December 4, 2006, respondent Rommel Rene O. Jaleco was hired by petitioner Maersk-Filipinas Crewing, Inc. (Maersk),
on behalf of its foreign principal and co-petitioner herein, A.P. Moller A/S (Moller), as Able Bodied Seaman on board the
vessel "M/T Else Maersk."4 Respondent boarded "M/T Else Maersk" on January 16, 2007 and commenced his work.
Sometime in February 2007, respondent complained of intermittent pain on the left buttock radiating to the. lower back and
left groin.5 When examined in Singapore on April 13, 2007, his lumbosacral spine x-ray generated normal results but he was
diagnosed as having "suspected prolapsed intervertebral disc." Nonetheless, he was declared fit to sail.6
On April 29, 2007, respondent was once more examined in Dubai, United Arab Emirates, where the doctor diagnosed him
with "acute lumbago with left-sided sciatica r/o disc prolapsed."7 He was advised to obtain an MRI8 scan of the lumbar spine,
undergo neurosurgical review, and to avoid lifting heavy objects for one week. Moreover, he was declared unfit for duty.9
Respondent was repatriated on May 1, 2007 and was immediately referred to the company-designated physician, Dr. Natalio
Alegre II (Dr. Alegre), who examined him on May 2 and 3, 2007. He found respondent to be suffering from "paralumbar
spasm and limitation of movement due to pain. Straight leg raise is normal and sensation intact."10 He prescribed medication
and physical therapy at three sessions per week.11
On May 17, 2007, respondent was again examined, and found to still have "left buttock pain radiating to his lower back and
lateral side of his left thigh which is most severe at 8/10 on a pain scale x x x (which) is slightly relieved with intake of his
pain medications." MRI scan was recommended12 as well as epidural steroid injection and further physical therapy.
When respondent was examined on June 4, 2007, Dr. Alegre found that he "still has low back pain radiating to his left lower
extremity even with physical therapy. This is associated with numbness on the lateral aspect of his left leg and paralumbar
spasm is still present."13 Thus, further medication, physical therapy and epidural steroid injection were recommended.
Respondent was confined at the St. Luke's Medical Center from June 13 to 19, 2007 and from July 24 to 27, 2007.14 On
June 16, 2007,14 he underwent epidural steroid injection,15 as well as electromyogram and nerve conduction velocity (EMG-
NCV) testing.16
Respondent returned on June 20, 2007, complaining of headache and low back pain. He was diagnosed with stage 1
hypertension and given medication.17
On June 29, 2007, respondent was evaluated by a spine surgeon who recommended provocative discography to find out
whether he will need a disc replacement.18
In his July 9, 2007 Progress Report,19 Dr. Alegre noted the evaluation of respondent by a spine surgeon who declared that
the EMG-NCV tests returned normal20 and "beginning L5S1 disc herniation." Dr. Alegre further stated: cralawlaw lib rary
The low back pain intensity is not commensurate with the alleged symptoms of back pain so that a Provocative Discography
is recommended and the schedule will follow as the operating room right now is fully book [sic].
Likewise an incidental note of a probable small cyst in the left kidney was noted. Since this is only an incidental finding, we
would need your approval to evaluate Ms.21 chanrobles law
On July 26, 2007, respondent underwent Provocative Discography22 at the St. Luke's Medical Center which generated the
following result:
c ralawlawli bra ry
Finding: There is midposterior Grade 1 annular tear with contrast medium leakage more to the left.
CONCLUSION: ELICITED AREAS ARE NOT CONCORDANT WITH USUAL PAIN BASED ON PATIENT'S EXPERIENCE. 23 chan robles law
On July 27, 2007, Dr. Alegre issued another Progress Report24 stating essentially as follows: c ralawlawl ibra ry
Objective Findings:
Tenderness over the loose paralumbar muscles.
Truncal mobility restricted.
Small Cyst in the left kidney.
chanrobles law
Assessment:
Beginning Disk Dessication, L5S1
Small Cyst, Left
Urology evaluated the small kidney cyst and opined that it will be observed as it is small and no impairment of kidney
function is noted.
Provocative Discography was done on 26 July 2007 and showed leakage of contrast material at the midposterior aspect of
the disk more towards the left thru a mild posterior annular tear. It was opined by Interventional Radiology that the pain
complained of is not commensurate with the Discography.
Plans: chanRoblesvi rtua lLaw lib rary
As the pain is not commensurate with the discography, personality reasons should be evaluated to rule out malingering is for
your approval the form of [sic] Minnesota Multiphasic Personality Test. Approximate cost is Phpl0,000.00.25 chanrob leslaw
On August 15, 2007, respondent took the Minnesota Multiphasic Personality Inventory - 2 Test26 (MMPI-2) at the St. Luke's
Medical Center. The results of the test are contained in Dr. Alegre's August 30,2007 Progress Report,27 thus: cra lawlawlib rary
The MMPI-2 Test provides a number of validity indices that are designed to provide an assessment of factors that could
distort the results of testing. Such factors could include failure to complete test items properly, carelessness, reading
difficulties, confusion, exaggeration, malingering or defensiveness.
During the interview phase, he was highly defensive finishing the test in more than 5 hours which is normally completed
within P/2 hours. He expressed doubts as to whether his injury or back pain will be cured doubting about his capacity and
fitness to return to work. He already approached an attorney for disability claims and he is expecting a large sum of money
from his claim. According to him, he was informed and-encouraged by the ship's "Master" on board regarding disability
benefits.
The test showed that he tried to create a favorable impression of himself by not being honest in responding to the items. He
reported a number of vague physical complaints and the development of physical problems occur when he is under stress.
The medical history is characterized by excessive and vague physical complaints, weakness and pain. He tends to rely on
hysterical defenses or exaggeration in the face of conflict. The test also showed Mr. Jaleco converting psychological conflict
into physical complaints.
Based on the test protocol and interview, there are indicators that Mr. Jaleco is malingering and exaggerating hi [sic]
symptoms. The essential feature is the intentional production of exaggerated physical symptoms motivated by external
incentives - obtaining financial compensation and avoiding work.28 chanrobles law
On September 4, 2007, respondent underwent another check-up. The results thereof are contained in Dr. Alegre's Progress
Report29 of even date, thus: crala wlawlibra ry
Subjective Complaints:
Complained of persistence of back pains
Objective Findings:
1. Slightly spastic paraspinal muscles

2. Truncal mobility functional
3. Straight leg raising test normal
4. Personality test (MMPI) indicates malingering and exaggeration of symptoms
Assessment:
Mild Disc Dessication, L5S1
Plans: chanRoblesvi rtua lLaw lib rary
Physical therapy
If a disability is to be assessed now, a disability grade of 11 [would be obtained] based on the POEA Contract, Chest-Trunk-
Spine #6 - Slight Rigidity or 1/3 loss of motion or lifting power of the trunk.30 chanroble slaw
On February 8, 2008, respondent underwent physical examination by an independent physician, Dr. Ramon Santos-Ocampo
(Dr. Santos-Ocampo), at the Department of Radiology of the Makati Medical Center. Dr. Santos-Ocampo's Clinical
Abstract31 of the examination reads as follows: cralawlawl ibra ry
Physical Examination: chanRoblesv irtual Lawlib rary
There is no tenderness elicited when pressing on the left buttock. Slight tenderness and radiating pain was noted when the
L5-S1 facet joints were pressed.
Assessment;
Sacro-iliitis, left and Bilateral facet joint arthropathy, L5-S1
Plan: chanRoblesvi rt ualLawlib rary
Local anesthesia injection into the left sacro-iliac joint to determine significance of the sacro-ilitis. If there is a slight
improvement or complete improvement, then the sacro-iliac joint will be injected with steroids and long-acting local
anesthesia. Then bilateral facet joint injections at L4-5 and L5-S1 will be performed on the same day.32 chanrob leslaw
On April 28, 2008, respondent consulted another independent physician, Dr. Alan Leonardo R. Raymundo (Dr. Raymundo) -
an orthopedic surgeon of the Philippine Orthopedic Institute - who issued a Medical Report33 which states: cra lawlawlib rary
This 37-year-old seaman was repatriated here last May 2007, because of low back pain after carrying a heavy load while on
board a ship. He was first seen at St. Luke's Medical Center when he was repatriated x x x and has undergone an epidural
shot for his low back pain. His MRI plates show no significant disc protrusion that might be impinging on the nerve and his
EMG NCV results were also normal. However he continuous [sic] to have low back pain whenever he would walk for long
distances and whenever he would sit for long periods. He claims that his pain is actually in the area of the sacroiliac joint
radiating down the buttock area and posterior to the thigh when this would occur.
He was referred to Dr. Ramon Santos Ocampo to look for the pain generator and injection of the Facet Joint and the
Sacroiliac Joint of the Lumbar Spine were done. After the procedure the pain was relieved, however after three weeks the
pain recurred.
Because of the recurrence of the pain and considering the nature of his job as a seaman, I told him that it would be
impossible for him to return to his previous work duties. I would therefore declare him not fit for duty.34 chanroble slaw
On October 8, 2009, respondent underwent a second MRI of the lumbar spine at the Makati Medical Center. The results are
as follows: cralawlaw lib rary
Examination of the sagittal imaging demonstrates normal alignment of the vertebral bodies. The lumbar curvature is
maintained. The conus medullaris is seen to be normal and ends at T12-L1 level. No abnormal signal is seen within the
conus.
Focal T1W/T2W hyperintensity is noted in the anterosuperior corner of the L3 vertebral body. There is also a Tl W/T2W
hyperintense focus in the L5 vertebral body. Examination of the intervertebral disc reveals no signal abnormality. No
paraspinal or intraspinal mass noted.
T12-L1: No evidence of disc bulge or herniation.

LI-2: No evidence of disc bulge or herniation.
L2-3: No evidence of disc bulge or herniation.
L5-S1: Focal left of central disc protrusion mildly abutting the ipsilateral traversing nerve root.
A 1.0 cm. cyst is noted in the superior pole of the left kidney.
IMPRESSION: chanRoblesvirt ual Lawlib rary
1. Degenerative osteitis, L3 vertebral body

2. L5 vertebral body hemangioma
3. Focal left of central disc protrusion mildly abutting the ipsilateral traversing nerve root, L5-S1.
4. Above findings are generally unchanged from previous study.
5. Left renal cyst35 chanrobles law
On October 12, 2009, respondent was again examined by Dr. Raymundo, who thereafter issued another Medical
Report36stating as follows: c ralawlawli bra ry
The patient is here today with his new MRI results showing a disk protrusion at the level of L5-S1 with [sic] mildly abutting
the ipsilateral traversing nerve root. I have already given this patient a rating of grade 8 with a moderate rigidity or % loss
of motion or lifting power of the trunk.
If I were to re-evaluate this, the functional capacity of the patient is actually more severe than this grading. However, the
next grading which is grade 6 indicates or points to a fracture of the dorsal or lumbar spine which the patient does not have.
However, the severity of his symptom is almost equal to a grade 6 with severe or total rigidity or total loss of lifting power of
heavy objects.
In my opinion, despite the absence of a fracture of the dorsal lumbar spine, I will still give this patient a rating of grade 6 in
terms of pain and affectation of the spinal cord.37
chanrobles law
No further attempt to secure the opinion of a third physician was made by the parties. Instead, respondent filed a complaint
for illegal dismissal, nonpayment of salaries/wages and other benefits, disability claims, medical expenses, damages, and
attorney's fees against petitioners and Maersk General Manager Jerome P. delos Angeles (delos Angeles) before the National
Labor Relations Commission (NLRC) docketed as NLRC-NCR Case No. (M) 12-17087-08.
In his Position Paper,38 respondent claimed that in February 2007, while performing the difficult task of ship-to-ship mooring
on deck - which involved lifting and pulling heavy wires and ropes thus placing pressure and stress on the back and spine -
something in his spine snapped and he felt terrible lower back pain such mat he could not stand erect or carry anything for
more than a month. He averred that despite his protestations and appeals for medical intervention, petitioners - in bad faith
and acting with inexcusable negligence - failed and refused to give him immediate medical attention. He was forced to
continue working in spite of his injury and the excruciating pain it caused him. For this reason, his injury and pain were
aggravated. It was only after two months from his injury - or in April 2007 - that he was medically attended to. Despite post-
repatriation treatment and medication by the company-designated physician, his injury persisted and incapacitated him from
returning to work. After consulting an independent physician, he was declared unfit for sea duty and was given a Grade 6
disability raiting. For petitioners' acts and refusal to compensate him, he suffered injury for which he should be indemnified.
Thus, he prayed that petitioners be declared liable for malice or inexcusable negligence which caused the aggravation of his
injury, and that they be ordered to pay him a) disability benefits corresponding to a Grade 6 rating, b) reimbursement for his
medical and other expenses, c) compensation for permanent injury based on the Consolidated Workers' Compensation Act of
Denmark, d) P1 million actual damages, e) P1 million moral damages, f) P1 million exemplary damages, g) 20% attorney's
fees, and h) costs of suit.
In their joint Position Paper,39 petitioners and delos Angeles sought dismissal of the complaint, arguing that respondent is not
entitled to a Grade 6 disability rating, but only Grade 11 as determined by the company-designated physician. They argued
that it has been shown that respondent is merely malingering, feigning, and exaggerating his pain; that
assuming arguendo that a different opinion was issued by an independent physician, the opinion of a third doctor should
have been obtained by the parties pursuant to the provisions of the POEA40 Standard Employment Contract.41 Since no third
opinion was obtained, then the company-designated physician's opinion prevails over the respondent's doctor's findings.
They also contended that respondent is not entitled to reimbursement of his medical and other expenses, which were
incurred after the company-designated physician declared his findings on September 4, 2007. Moreover, respondent is not
entitled to his claim for damages, attorney's fees and costs, for being unfounded and in the absence of malice, bad faith, or
negligence on their part.
In his Reply/Comment,42 respondent insisted that he is entitled to disability benefits based on his physician's
recommendation; that the company-designated physician's treatment was inadequate, and his findings inaccurate and based
on fraud and malice, which thus prompted him to secure the opinion of an independent doctor; and that for these reasons,
he should be paid all his claims as prayed for in his Position Paper.
In their Reply43 to respondent's Position Paper, petitioners argued that there is no basis for the accusation of refusal or failure
to give respondent immediate and proper medical attention after his injury, as he failed to show convincingly that indeed he
suffered his injuries sometime in February 2007. His only basis for such claim - a supposed "Notification of Accident at Work"
marked Annex "D" of his Position Paper44 — is self-serving and hearsay, since it was not signed by him. Moreover, there is no
truth to his allegation that he protested and appealed for medical intervention or that he was forced to work and endure
excruciating pain for two months before proper medical intervention was done. On the contrary, he was able to work until his
repatriation in May 2007. In addition, they gave him timely and extensive medical attention and treatment, with the
company-designated physician closely monitoring his condition all throughout. Also, based on the medical findings of the
company-designated physician, respondent was feigning his illness. Moreover, respondent's doctor's opinion cannot prevail
over the company-designated physician's findings, as it was merely based on a single MRI report, and not on an extensive
treatment and monitoring of respondent's condition over an extended period of time; and that for lack of legal basis,
respondent cannot claim indemnity based on a supposed collective bargaining agreement or foreign law.
On March 23, 2010, a Decision45 was rendered by Labor Arbiter Catalino R. Laderas granting disability benefits and attorney's
fees in favor of respondent. The Decision decrees as follows: cralawlawl ibra ry
Upon his repatriation on 01 May 2007, complainant was assessed and medically treated by respondents' company-designated
physician and the latter's team of specialists and was never declared fit to work.
Finding that complainant's illness is compensable, we now determine whether the same is permanent or total in order that he
may claim full disability benefits.
xxxx
In the case at bar, x x x while respondents' company-designated doctor/s provided a disability rating for complainant's
sustained injury, the former, nonetheless failed to make any declaration and/or assessment as to the latter's fitness for work
and/or capability to render sea duty.
Indubitably, the failure of respondents' company-designated doctor/s to declare complainant's fitness for work reasonably
infers a scheme to evade full payment of disability benefits to the complainant, by merely declaring complainant partially
disabled with a Grade 6 Impediment assessment.
Verily, it was undisputed that despite continuous medical treatment, complainant continue[s] to suffer his ailment and the
same remained uncured, until [the] present, which rendered him unable to work and earn income for his family.
As a result therefore of the injury he sustained while on board the vessel "ELSE MAERSK DENMARK", complainant was unable
to work for more than 120 days that resulted in the impairment of his earning capacity.
xxxx
Hence, this Office rules that notwithstanding the medical assessment of respondents' company-designated doctors,
jurisprudence dictates that complainant be entitled to permanent total disability benefits by reason of his continued medical
condition that rendered him incapacitated for work for more than 120 days from the date he was medically repatriated x x x
to the Philippines.
On the other hand, for lack of particulars, complainant's claim for medical expenses and for non-payment of wages, overtime
pay, vacation leave and sick leave pay, the same could not be reasonably granted under the circumstances for lack of factual
basis with which to make an appropriate award.
xxxx
Similarly, for lack of particulars as to complainant's claim for damages, the same could not be reasonably granted under the
circumstances for lack of factual basis with which to make an appropriate award.
xxxx
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondents, jointly and severally, to pay the
complainant total disability benefits corresponding the [sic] schedule of rates provided for under the CBA between the
AMOSUP and respondent manning agency.
Respondents are likewise ordered to pay respondents [sic] attorney's fees equivalent to ten (10%) percent of the total
judgment award.
The computation unit of this Office is hereby directed to compute the monetary award of the complainant which forms part of
this decision.46
Other claims are DISMISSED.
SO ORDERED.47
chanrobles law
Petitioners appealed before the NLRC which docketed the case as NLRC LAC No. OFW(M) 07-000539-10.
On November 30> 2010, the NLRC issued a Decision,48 declaring as follows: c ralawlawl ibra ry
The instant appeal is impressed with merit.
At the outset, it should be pointed out that had the parties in the instant case complied strictly with the provisions of the
POEA Standard Employment Contract, particularly on the appointment of a third physician in case of disagreement, a lot of
controversy would have been averted, x x x
xxxx
We are thus compelled to evaluate the divergent opinions of the company-designated physicians and complainant's private
physician.
xxxx
As can therefore be seen from the last MRI of complainant, the findings of the latter are basically unchanged. However,
complainant's physician issued a disability grading of Grade 6 "in terms of pain and affectation of the spinal cord," observing
that the severity of complainant's symptom is equivalent to said grading.
A close perusal of the above finding of Dr. Raymundo shows that there is "severe or total rigidity or total loss of lifting power
of heavy objects" based on complainant's symptom, that is, his pain. This however has been put in issue by the company-
designated physician, who earlier observed that: cralawlawl ibra ry
"Provocative Discography was done on 26 July 2007 and showed leakage of contrast material in the midposterior aspect of
the disk more towards the left thru a mild posterior annular tear. It was opined by Interventional Radiology that the pain
complained of is not commensurate with the Discography." chanroble slaw
This resulted in the following recommendation: cralaw lawlib rary
As the pain is not commensurate with the discography, personality reasons should be evaluated to rule out malingering is for
your approval the form of Minnesota Multiphasic Personality Test [sic]. Approximate cost is Php 10,000.00." chanrobleslaw
And the findings of said Minnesota Multiphasic Personality Test shows that: cralawlawlib rary
Based on the test protocol and interview, there are indicators that Mr. Jaleco is malingering and exaggerating hi [sic]
symptoms. The essential feature is the intentional production of exaggerated physical symptoms motivated by external
tendencies - obtaining financial compensation and avoiding work."
chanrobles law
As the company-designated physician has opined that complainant is malingering and exaggerating his pain, the same pain
made the basis for the disability grading of Dr. Raymundo, it was incumbent upon complainant to refute the same. He has
failed to do so.
xxxx
We therefore uphold the disability grading of Grade 11 as opined by the company-designated physician, which amounts to
US$7,465.00 corresponding to 14.93% disability as provided for in the POEA Standard Employment Contract.
Likewise, the mere fact that complainant was no longer able to return to work as a seaman, by itself, is no ground to
automatically entitle him to Grade 1 permanent total disability benefits, x x x.
xxxx
As the instant complaint is clearly unfounded, complainant is not entitled to any attorney's fees.
WHEREFORE, premises considered, the appealed Decision is hereby MODIFIED, in that complainant Rommel Rene O. Jaleco
is entitled only to disability benefits of US$7,465.00, corresponding to 14.93% disability (Grade 11) as provided for in the
POEA Standard Employment Contract. The award of 10% attorney's fees is DELETED for lack of legal basis.
Respondent moved for reconsideration, but in a February 28, 2011 Resolution,50 the NLRC held its ground.
In an Amended and/or Supplemental Petition for Certiorari 51 filed with the CA and docketed therein as CA-G.R. SP No.
118688, respondent sought to set aside the dispositions of the NLRC, arguing that since he was incapacitated to work since
his repatriation up to the filing of his Petition, or for a period of more than three years, he should be entitled to permanent
total disability benefits as adjudged by the Labor Arbiter. He also argued that he is entitled to reimbursement of medical and
other expenses incurred for his continued treatment, rehabilitation and aid even after treatment by the company-designated
physician because a) the company-designated physician's services proved to be inadequate and incomplete, and b) the
collective bargaining agreement (CBA) between AMOSUP52 and the Danish Shipowners Association, as well as the
Consolidated Workers' Compensation Act of Denmark, mandates reimbursement of these expenses. Moreover, as a
consequence of petitioners' bad faith and inexcusable negligence, he should also be entitled to moral and exemplary
damages; and that as there is ground to award his pecuniary claims, he should likewise be awarded attorney's fees, since he
was compelled to litigate and incur expenses as a result of petitioners' refusal to indemnify him.
On March 13, 2012, the CA issued the assailed Decision which contains the following pronouncement: cralawlawl ibra ry
The petition is meritorious.
In this case, Dr. Alegre based his assessment of petitioner Jaleco's disability at Grade 11 on the spine surgeon's evaluation
conducted on July 9, 2007 finding that the low back pain intensity was not commensurate to the alleged symptoms of back
pain, the opinion of the Interventional Radiology that the pain complained of was not commensurate with the Provocative
Discography performed on July 26, 2007 which showed "leakage of contrast material in the midposterior aspect of the disk
more towards the left thru a mild posterior annular tear", and the Minnesota Multiphasic Personality Inventory - 2 Test
(MMPI-2) which found petitioner Jaleco to be malingering and intentionally exaggerating his physical symptoms to obtain
financial compensation and avoid work.
On the other hand, Dr. Raymundo not only assessed petitioner Jaleco's disability at Grade 6 or Moderate Rigidity or two
thirds (%) loss of motion or lifting power of the trunk, but also declared him to be unfit for duty because of the recurrence of
pain and the nature of his job as a seaman.
The law does not require that the illness should be incurable. What is important is that he was unable to perform his
customary work for more than 120 days which constitutes permanent total disability.53
Dr. Alegre may have referred petitioner Jaleco's case to the proper medical specialist, monitored the latter's case during its
progress and issued a certification based on the medical records available and the results obtained. However, there is no
showing that he made a categorical declaration as regards petitioner Jaleco's fitness to resume sea-duty.
The POEA Standard Employment Contract for Seamen is designed primarily for the protection and benefit of Filipino seaman
[sic] in the pursuit of their employment on board ocean-going vessels. Its provisions must, therefore, be construed and
applied fairly, reasonably and liberally in their favor. Only then can its beneficent provisions be fully carried into effect.
Hence, petitioner Jaleco is entitled to the US$60,000.00 for Impediment Grade 1 award.
As regards the award of attorney's fees, this Court finds that petitioner Jaleco is entitled to attorney's fees equivalent to ten
percent (10%) of the monetary award.
xxxx
Petitioner Jaleco averred that as a registered member of AMOSUP, he is necessarily covered by the CBA (Ratings) between
the AMOSUP-FIGWO-ITF and the Danish Shipowners Association. But there is no showing that he was able to prove by
substantial evidence his positive assertions that he is a registered member of the said union and the said CBA is applicable to
him in this case.
xxxx
Petitioner Jaleco invokes protection under the Consolidated Workers' Compensation Act of Denmark by merely quoting its
pertinent provisions in his position paper, x x x
Foreign laws do not prove themselves in our courts. Foreign laws are not a matter of judicial notice. Like any other fact, they
must be alleged and proven.
Besides, the snap on petitioner Jaleco's back was an injury sustained from carrying and pulling the heavy wires that allegedly
got stuck and messed up everything during a mooring operation, which injury resulted in his disability. The injury cannot be
said to be the result of an accident, that is, an unlooked for mishap, occurrence, or fortuitous event, because the injury
resulted from the performance of a duty. Although petitioner Jaleco may not have expected the injury, yet, it is common
knowledge that carrying heavy objects can cause back injury, as what happened in this case.
xxx
Hence, the injury cannot be viewed as unusual under the circumstances, and is not synonymous with the term "accident" as
defined above.
With respect to the award for moral and exemplary damages, there is no showing of bad faith or malice on the part of
private respondents when they relied on Dr. Alegre's assessment of petitioner Jaleco's disability in denying the latter's claim.
Petitioner Jaleco's claim for actual damages was premised on his bare allegation that he was deprived of his sole source of
livelihood as a consequence of his dismissal without due process, by private respondents in violation of the Labor Code and
their failure and refusal to grant him the correct disability benefits. A party is entitled to adequate compensation only for
such pecuniary loss actually suffered and duly proved. It is a basic rule that to recover actual damages, the amount of loss
must not only be capable of proof but must actually be proven with a reasonable degree of certainty, premised upon
competent proof or best evidence obtainable of the actual amount thereof.
WHEREFORE, premises considered, the petition is GRANTED. The Decision dated November 30, 2010 and Resolution dated
February 28, 2011 of public respondent NLRC, First Division in NLRC NCR Case No. OFW(M) 12-17087-08 NLRC LAC No.
OFW(M) 07-000539-10 are hereby REVERSED and SET ASIDE. Judgment is hereby rendered ordering private respondents,
jointly and severally, to pay petitioner Jaleco US$60,000.00 as total permanent disability benefit and to pay him attorney's
fees equivalent to ten percent (10%) of the total judgment award.
SO ORDERED.54
chanrobles law
Petitioners filed a Motion for Reconsideration,55 but the CA denied the same in its May 21,2012 Resolution. Hence, the
present Petition.
Issues
Petitioners submit that -cralawlawl ibra ry
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS, REVERSIBLE AND GROSS ERROR IN LAW BASED ON THE
FOLLOWING GROUNDS: chanRoblesvirt ual Lawlib rary
In granting disability benefits based on the erroneous application of the case of Crystal Shipping v. Natividad (G.R. No.
154798, October 20, 2005) and equally erroneous interpretation of the case of Jesus Vergara v. Hammonia Maritime
Services, Inc. (G.R. No. 172933, October 6, 2008)
In awarding attorney 's fees without legal and factual basis.56 chan roble slaw
Praying that the assailed CA pronouncements be set aside and that the NLRC's November 30, 2010 Decision be reinstated,
petitioners maintain in their Petition and Reply57 that the company-designated physician's findings and recommendation
relative to disability grading and compensation should be upheld, the same being accurate, reliable, and reflective of
respondent's true state of health. They also insist that there should be no reason to doubt the results of the tests indicating
that respondent deliberately exaggerated the physical symptoms of his illness to obtain financial compensation and avoid
work as these tests are scientific and accurate. They posit that the CA erroneously applied the doctrine in the Crystal
Shipping case and that since the opinion of a third physician was not obtained, the company-designated physician's
assessment should prevail. Moreover, what happened to respondent was not an accident. Since there is no ground to grant
respondent's claims, and absent bad faith on their part, no attorney's fees may be awarded to him.
In his Comment,58 respondent counters that his permanent total disability benefits should be increased to US$105,761.00 in
accordance with the Consolidated Workers' Compensation Act of Denmark; that the opinion of Dr. Raymundo should prevail,
as it correctly reflects his true state of health, while the findings of the company-designated physician are inadequate and
inaccurate; that he is likewise entitled to additional reimbursement of medical expenses; and that he should be paid moral
and exemplary damages. Thus, he prays that petitioners be ordered to pay disability benefits in the amount of
US$105,761.00; reimbursement of his medical expenses; combined actual, moral and exemplary damages in the amount of
P3 million; and 10% of said amounts as attorney's fees.
Our Ruling
The Court grants the Petition.
The evidence indicates that contrary to the findings of the CA, the company-designated physician made a categorical
declaration relative to respondent's fitness to resume duty - approximately one hundred and twenty-seven (127) days from
his repatriation. Thus, in his September 4, 2007 Progress Report, Dr. Alegre declared: cral awlawlib rary
If a disability is to be assessed now, a disability grade x x x 11 [would be obtained] based on the POEA Contract, Chest-
Trunk-Spine #6 - Slight Rigidity or 1/3 loss of motion or lifting power of the trunk.59
chan robleslaw
In addition, Dr. Alegre concluded - after conducting extensive tests - that respondent was malingering or feigning his illness.
For these reasons, respondent sought the opinion of an independent physician, who came up with a Grade 6 disability rating.
"An employee's disability becomes permanent and total [only 1)] when so declared by the company-designated physician, or,
[2)] in case of absence of such a declaration either of fitness or permanent total disability, upon the lapse of the 120- or 240-
day treatment periods, while the employee's disability continues and he is unable to engage in gainful employment during
such period, and the company-designated physician fails to arrive at a definite assessment of the employee's fitness or
disability."60 The "mere lapse of the 120-day period itself does not automatically warrant the payment of permanent total
disability benefits."61 "If the 120 days initial period is exceeded and no such declaration is made because the seafarer
requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days,
subject to the right of the employer to declare within this period that a permanent partial or total disability already exists.
The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition."62
Since the company-designated physician, Dr. Alegre, arrived at an assessment that respondent's disability rating was only a
Grade 11 prior to the expiration of the maximum 240-day period prescribed, then there is no permanent total disability to
speak of. The appellate court erred in not considering that the mere lapse of the 120-day period itself does not automatically
warrant the payment of permanent total disability benefits, as said period may be extended up to 240 days.
Moreover, pursuant to Section 20(B)(3) of the POEA Standard Employment Contract, the parties should have secured the
opinion of a third doctor jointly appointed by them, whose decision shall be final and binding. However, this procedure was
not observed, and instead, respondent went on to file his labor complaint. Such misstep should prove costly for him.
In Philippine Hammonia Ship Agency, Inc. v. Dumadag,63 it was held that - cralawlawlib ra ry
We are confronted, once again, with the question of whose disability assessment should prevail in a maritime disability claim
- the fit-to-work assessment of the company-designated physician or the contrary opinion of the seafarer's chosen physicians
that he is no longer fit to work. A related question immediately follows - how are the conflicting assessments to be resolved?
xxxx
The POEA-SEC and the CBA govern the employment relationship between Dumadag and the petitioners. The two instruments
are the law between them. They are bound by their terms and conditions, particularly in relation to this case, the mechanism
prescribed to determine liability for a disability benefits claim. In Magsaysay Maritime Corp. v. Velasquez, the Court said:
"The POEA Contract, of which the parties are both signatories, is the law between them and as such, its provisions bind both
of them." Dumadag, however, pursued his claim without observing the laid-out procedure. He consulted physicians of his
choice regarding his disability after Dr. Dacanay, the company-designated physician, issued her fit-to-work certification for
him. There is nothing inherently wrong with the consultations as the POEA-SEC and the CBA allow him to seek a
second opinion. The problem only arose when he pre-empted the mandated procedure by filing a complaint for
permanent disability compensation on the strength of his chosen physicians' opinions, without referring the
conflicting opinions to a third doctor for final determination.
xxxx
The filing of the complaint constituted a breach of Dumadag's contractual obligation to have the conflicting
assessments of his disability referred to a third doctor for a binding opinion. The petitioners could not have possibly
caused the non-referral to a third doctor because they were not aware that Dumadag secured separate independent opinions
regarding his disability. Thus, the complaint should have been dismissed, for without a binding third opinion, the fit-to-work
certification of the company-designated physician stands, pursuant to the POEA-SEC and the CBA. x x x
xxxx
Whatever his reasons might have been, Dumadag's disregard of the conflict-resolution procedure under the POEA-SEC and
the CBA cannot and should not be tolerated and allowed to stand, lest it encourage a similar defiance. We stress in this
respect that we have yet to come across a case where the parties referred conflicting assessments of a seafarer's disability to
a third doctor since the procedure was introduced by the POEA-SEC in 2000 - whether the Court's ruling in a particular case
upheld the assessment of the company-designated physician, as in Magsaysay Maritime Corporation v. National Labor
Relations Commission (Second Division) and similar other cases, or sustained the opinion of the seafarer's chosen physician
as in HFS Philippines, Inc. v. Filar, cited by the CA, and other cases similarly resolved. The third-doctor-referral provision
of the POEA-SEC, it appears to us, has been honored more in the breach than in the compliance. This is
unfortunate considering that the provision is intended to settle disability claims voluntarily at the parties' level
where the claims can be resolved more speedily than if they were brought to court.
Given the circumstances under which Dumadag pursued his claim, especially the fact that he caused the non-referral to a
third doctor, Dr. Dacanay's fit-to-work certification must be upheld. In Santiago v. Pacbasin Ship Management, Inc., the
Court declared: "[t]here was no agreement on a third doctor who shall examine him anew and whose finding shall be final
and binding, x x x [T]his Court is left without choice but to uphold the certification made by Dr. Lim with respect to
Santiago's disability." (Emphasis and underscoring supplied) chan roble slaw
The above pronouncement was reiterated in subsequent cases, particularly Veritas Maritime Corporation v. Gepanaga,
Jr.;64 Daraug v. KGJS Fleet Management Manila, Inc.;65Bahia Shipping Services, Inc. v. Hipe;66Magsaysay Maritime
Corporation v. Simbajon;67 and Ayungo v. Beamko Shipmanagement Corporation.68
Thus, following the ruling in Dumadag, this Court rules that for respondent's disregard of the conflict-resolution procedure
under the parties' POEA Standard Employment Contract, his claims against petitioners should have been denied, since the
company-designated physician Dr. Alegre's assessment necessarily stands. Indeed, since respondent was the one pursuing a
claim, as he did by filing a labor complaint before the NLRC, then it was he - and not petitioners - who should have taken the
initiative to secure the opinion of a third physician prior to seeking intervention by the labor tribunals.
Besides, there is no reason to doubt Dr. Alegre's medical opinion regarding respondent's condition. Prior to his final
declaration, he took pains to address respondent's condition and did his best to reconcile the conflicting medical evidence
with respondent's declared symptoms. His objective resolve led him so far as to require respondent to undergo a
comprehensive battery of tests - EMG-NCV test, provocative discography, and even MMPI-2 - just to make sure that
respondent's complaints are addressed, while at the same time insure that an objective diagnosis of his illness is obtained.
There is thus merit in Dr. Alegre's finding that respondent is malingering; medical evidence obtained after the battery of
tests is to the effect that respondent's supposed excruciating back pain is not supported by or commensurate to the results
of the provocative discography and MMPI-2 tests. Being scientific medical procedures, the accuracy and reliability of these
tests cannot be doubted; besides, they have not been questioned in these proceedings.
As for respondent's claim that petitioners should answer for greater amounts than that adjudged by the appellate court - that
is, disability benefits in the amount of US$105,761.00; reimbursement of his medical expenses; and combined actual, moral
and exemplary damages in the amount of P3 million -this Court may not allow it. In order for such claims to be considered,
respondent should have filed the corresponding petition for review questioning the judgment of the CA. Settled is the rule
that a party is barred from assailing the correctness of a judgment not appealed from by him. In an appeal, an appellee may
argue only to sustain the appealed judgment, but not introduce arguments that would modify the same; in order to do that,
he likewise should have seasonably filed an appeal. The rule is rooted in the presumption that a party who did not interpose
an appeal is satisfied with the judgment rendered by the lower court.
WHEREFORE, the Petition is GRANTED. The assailed March 13,2012 Decision and May 21, 2012 Resolution of the Court of
Appeals in CA-G.R. SP No. 118688 are REVERSED and SET ASIDE. The November 30, 2010 Decision of the National Labor
Relations Commission in NLRC LAC No. 0FW(M) 07-000539-10 is REINSTATED.
SECOND DIVISION
G.R. No. 201793, September 16, 2015
PHILIPPINE TRANSMARINE CARRIERS, INC/NORWEGIAN CREW MANAGEMENT, Petitioners, v.JULIA T. ALIGWAY

(AS SUBSTITUTE FOR HER DECEASED HUSBAND, DEMETRIO ALIGWAY, JR., Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the February 20, 2012 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
120589. The CA granted the Petition for Certiorari filed therewith and accordingly, nullified the February 24, 2011
Decision3 and May 11, 2011 Resolution4 of the National Labor Relations Commission (NLRC) in NLRC LAC No. OFW(M) 12-
001028-10 which, in turn, affirmed the August 31, 2010 Decision5 of Labor Arbiter Geobel A. Bartolabac (LA) in NLRC NCR
Case No. OFW(M) 01-01214-10 dismissing the Complaint for lack of merit. Also assailed is the May 11,2012 CA
Resolution6which denied the Motion for Reconsideration filed by Demetrio Aligway, Jr. (Demetrio).
Factual Antecedents
On November 25, 2008, the Philippine Transmarine Carriers, Inc. (PTC), for and in behalf of its foreign principal, the
Norwegian Crew Management (NCM), employed Demetrio as chief cook on board the vessel Amasis. Demetrio's employment
contract was for nine months with a monthly salary of US$758.00.7
Demetrio alleged that prior to his deployment, he underwent pre-employment medical examination (PEME) and was declared
fit to work.8 Thereafter, while aboard the vessel, he suffered from "vomiting, anorexia, weight loss, and palpitations followed
by dizziness and a feeling of lightheadedness."9 As a result, on April 22, 2009,10 he was medically repatriated.
Demetrio claimed that despite medical examinations by the company-designated physician, his illness persisted beyond 120
days.11 This condition allegedly rendered him incapacitated to work again as a seafarer but the PTC and the NCM refused to
pay him disability benefits.12
Consequently, Demetrio filed a Complaint13 dated January 22, 2010 for disability benefits, moral and exemplary damages,
and attorney's fees against the PTC, the NCM, and their officers. He alleged that his work as chief cook, which involved food
intake, contributed to or aggravated his gastric cancer. He claimed that although the cause of gastric cancer was unknown,
there was speculation that smoked food may be promoting factors.14
Demetrio invoked the presumption laid down in the provision of the POEA15 Standard Employment Contract (SEC) mat his
illness was work-related.16 He also averred that he passed the PEME;17 and that as such, the PTC, the NCM, and their officers
were estopped from claiming that he was unfit to work prior to his deployment or that he did not contract his illness aboard
the vessel.18 He likewise argued that because the vessel Amasis was covered by a collective bargaining agreement (CBA), it
stands to reason that he was entitled to the benefits stipulated in that agreement.19
The PTC, the NCM and their officers did confirm that on December 25, 2008, Demetrio boarded the vessel; that on April 20,
2009, he was brought to the Entabeni Hospital in Durban due to gastritis; and that eventually, he was repatriated for further
treatment.20
The PTC, the NCM, and their officers however contended that Demetrio was a heavy smoker, and that he was smoking 12 to
15 cigarette sticks a day;21 that the company-designated physician Dr. Susannah Ong-Salvador (Dr. Salvador), declared that
Demetrio's condition was not work-related; and that the risk factors in Demetrio's condition included age, diet rich in
saturated fat, fatty acid, linoleic acid, and genetic predisposition.22
The PTC, the NCM, and their officers also argued that stomach cancer is asymptomatic - or an illness that has nonspecific
symptoms in its early stage and only becomes apparent when in the advanced stage already; that since Demetrio was only
about four months aboard the vessel when the symptoms of his cancer manifested, then it could not be inferred that he
acquired it during his employment with them;23and, that while Demetrio's contract was covered by an AMOSUP24 CBA, this
CBA did not include non-occupational illnessess, such as gastric cancer.25 cralawred
In sum, the PTC, the NCM, and their officers maintained that Demetrio's work involved food preparation and not food
intake;26 that the company-designated doctor found that the cause of his illness was not work-related;27 that there was no
evidence to indicate that his working conditions increased the risk of contracting it; that there was no evidence that his
illness was caused by the food being served on the vessel;28 and, that no causal connection was established between
Demetrio's work as chief cook and his gastric or stomach cancer.29
On August 31, 2010, the LA rendered a Decision30 dismissing the Complaint for lack of merit. The LA held that the company-
designated physician declared that Demetrio's illness was not work-related; and that because of this, the burden fell on the
latter to disprove the finding of the company-designated doctor. The LA ruled that Demetrio failed to discharge this burden
because he adduced no evidence proving that his work increased the risk of contracting stomach cancer.
On appeal, the NLRC affirmed the Decision of the LA.31 It gave credence to the medical opinion of the company-designated
physician. It opined that aside from bare allegations, Demetrio adduced no competent evidence to prove that his stomach
cancer was caused or aggravated by the working conditions on the vessel.
On May 11, 2011, the NLRC denied32 Demetrio's Motion for Reconsideration.
Demetrio thereafter filed a Petition for Certiorari with the CA imputing grave abuse of discretion against the NLRC in not
granting him full disability benefits despite his alleged work-related illness that manifested during his last contract with the
PTC and the NCM.
On February 20,2012, the CA rendered the assailed Decision,33 the decretal portion of which reads:
ACCORDINGLY, the petition is GRANTED. The Decision dated February 24, 2011 and Resolution dated May 11, 2011 are
nullified and [a] new one rendered, directing private respondents to pay petitioner full disability benefits and attorney's fees
equivalent to 10% thereof.
The Motion for Substitution of Parties dated January 25, 2012, praying that Mrs. Julia T. Aligway be substituted as petitioner,
in lieu of her husband Demetrio Aligway Jr., who died on December 26, 2011, is granted. The caption of the case is amended
to reflect the name of Mrs. Julia T. Aligway, as substitute petitioner.
SO ORDERED.34
The CA decreed that the LA and the NLRC improperly relied on the findings of the company-designated physician. It held that
said doctor merely referred to medical literature to explain Demetrio's condition without personally examining him; that Dr.
Salvador did not discuss how Demetrio's work and working environment could have caused or aggravated his illness; that the
opinion of Dr. Salvador lacked accuracy and was hypothetical, if not purely academic; and that Dr. Salvador was not
Demetrio's original attending physician.
In conclusion, the CA held that the presumption of compensability prevails and that Demetrio is entitled to full disability
benefits pursuant to the CBA.
On May 11, 2012, the CA denied35 the Motion for Reconsideration. Hence, the PTC and the NCM filed this Petition contending
that:
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS, REVERSIBLE AND GROSS ERROR IN LAW BASED ON THE
FOLLOWING GROUNDS:
A. In ignoring the legal precept that findings of facts of the NLRC are accorded respect and finality when supported by
substantial evidence[.]
B. In ignoring the declaration of the company[-]designated physician finding the illness to be not work[-]related
thereby violating the terms of the POEA contract giving authority to the company[-designated] doctor to assess the
illness involved.
C. In profoundly relying on inapplicable jurisprudence which finds no parallelism to the instant case.
D. In upholding the applicability of the alleged CBA in awarding USD$ 110,000.00 even if its provisions limit the liability
of the Employer to work[-]related accidents only.
E. In awarding attorney's fees without legal and factual basis.36
The PTC and the NCM insist that the medical opinion of the company-designated physician stood unchallenged since
Demetrio did not consult his own physician for a contrary opinion; that the opinion of the company-designated doctor cannot
be superseded or rescinded by mere speculation that the seafarer's illness was work-connected; and, that prior to the
aforesaid declaration of the company-designated doctor, Demetrio underwent a series of examinations and treatments, which
tended to show that the declaration of the company-designated physician was not arrived at capriciously.
The PTC and the NCM moreover fault the CA for holding that Dr. Salvador was not the original doctor who examined
Demetrio; that the medical opinion of the company-designated doctor should not be taken singly but as the collective opinion
of a team of doctors who worked together in arriving at a declaration regarding the seafarer's condition; and, that Dr.
Salvador merely reported the conclusion reached collectively by the medical experts in the team.
The PTC and the NCM insist that stomach cancer is often asymptomatic; that since Demetrio was only about four months
aboard the vessel when the symptoms of his stomach cancer manifested, then it is an open question whether he acquired his
illness on board the vessel; that the burden of proof to establish work-relation is upon the seafarer; and, that in this case,
there is no showing that the nature of Demetrio's work as well as the working conditions in the vessel increased the risk of
his acquiring stomach cancer.
Finally, the PTC and the NCM take the position that the CBA does not apply here because its provisions limit the employer's
liability to occupational injury as a result of an accident or to occupational disease suffered by the employee; and, that given
that stomach cancer is not listed as an occupational disease, it would be erroneous to award disability benefits pursuant to
the CBA; hence, the CA improperly awarded attorney's fees considering that the CA gave no explanation for that award.
For her part, Julia Aligway (Julia), as substitute for her deceased husband Demetrio, contends that Dr. Salvador did not
explain why Demetrio's illness was not work-related; that there is in fact substantial evidence that Demetrio's illness was
work-related; that environmental factors, which include conditions in oceangoing vessels, contributed to Demetrio's illness;
that Demetrio had passed his PEME and was aboard the vessel when he suffered from his illness; and, that his work as chief
cook was all about food intake and this circumstance did contribute to and aggravate his stomach cancer.
Issue
In fine, the core issue before us is whether the CA erred in holding that the NLRC committed grave abuse of discretion in
denying Demetrio's appeal and in affirming the dismissal of the complaint for lack of merit.
Our Ruling
As a rule, in a petition for review under Rule 45 of the Rules of Court, only questions of law can be raised and be reviewed by
this Court. However, this rule admits of exceptions and one such exception is where the Court may make its own evaluation
of the evidence adduced by the parties because the factual findings of the tribunals or courts a quo are in conflict with each
other.37 In this case, the LA, as affirmed by the NLRC, found that Demetrio was not entitled to disability benefits, among
other claims, and dismissed his complaint for lack of merit. The CA ruled otherwise. Thus, because of the conflicting findings
of fact of the LA and NLRC, on one hand, and of the CA, on the other, this Court has to exercise its mandated authority to
examine the evidence on record.
We stress that entitlement of seafarers to disability benefits is governed by medical findings, law and contract. Articles 191
to 193 under Chapter VI (Disability Benefits) of Book IV of the Labor Code set forth the applicable provisions concerning
disability benefits. Also, the POEA-SEC and the CBA bind the seafarer and his employer to each other.38
In this case, considering that Demetrio did not surfer from an occupational disease - or such diseases listed under Section
32-A of the 2000 POEA-SEC - it stands to reason that to be entitled to disability benefits, he must establish that he suffered
from a work-related injury or illness.
Under Section 20(B) of the 2000 POEA SEC, for disability to be compensable, (1) the seafarer's injury or illness must be
work-related; and (2) the work-related injury or illness must have existed during the term of his employment contract.
Hence, the seafarer must not only show that he suffers from an illness or injury that rendered him permanently or partially
disabled, but he must also prove that there is a causal relation between his illness or injury and the work for which he had
been engaged.39
This Court has held that a person who claims entitlement to the benefits provided by law must establish his right thereto by
substantial evidence or "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion."40 This Court cannot grant a claim for disability benefits without such substantial evidence because to do so would
be offensive to due process. Hence, the burden is on the seafarer to prove that he suffered from a work-related injury or
illness during the term of his contract.41
In this case, Demetrio failed to discharge this burden. He failed to prove the required causal connection between his stomach
cancer and his work as chief cook aboard the vessel.
In his Position Paper,42 Demetrio admitted that the cause of stomach cancer was unknown, but stressed that there is
speculation that smoked food may be promoting its development; that his illness is presumed to be work-related; and that
since he had passed the PEME, this estopped the PTC and the NCM from claiming that he was unfit to work prior to his
deployment or that he did not contract his illness on board the vessel.
Additionally, in the Comment43 to the Petition filed before this Court, Demetrio's widow, Julia, averred that the company-
designated doctor, Dr. Salvador, failed to explain how or why Demetrio's illness was not work-related; and that the latter's
work as chief cook was all about food intake and that this contributed to his becoming afflicted with stomach cancer.
Against this backdrop, the basic issue that clamors for resolution is how Demetrio's work, as chief cook, contributed to or
aggravated his illness; and definitely this was an issue that was not addressed or explained by both Demetrio and Julia. All
we have on record is the fact that Demetrio died of stomach cancer plus the claim that his work involved food intake which
according to him caused or aggravated his stomach cancer.
Demetrio and later, Julia, issued general statements that we deem self-serving because they are unproved or uncorroborated
allegations that simply raised the possibility that Demetrio's stomach cancer could have been or might have been work-
related. At any rate, even if the seafarer erects his claim on the probability of work-connectedness, such claim would still fail.
"Probability of work-connection must at least be anchored on credible information and not on self-serving allegations."44
Thus, this Court agrees with the finding of the NLRC that there is no substantial evidence to support the allegation that
Demetrio's stomach cancer was caused by work-connected factors.
In addition, Julia cannot point to Demetrio's having successfully passed the PEME as basis for the conclusion that he acquired
his illness on board the vessel. This is a non-sequitur. The PEME conducted upon a seafarer would not or could not
necessarily reveal or disclose his illness because such examination is not at all fool-proof or thoroughly exploratory.45
Here, stock can be taken of the fact that the company-designated doctor treated Demetrio from his repatriation until the
time that he was undergoing chemotherapy. Even then, the company-designated physician categorically stated that
Demetrio's medical condition was not work-related or work-aggravated.
Indeed, in her October 9, 2009 Medical Report,46 Dr. Salvador enumerated the causes of stomach cancer to wit:
1. Diet (nitrates, nitrites, cured or picked foods)
2. Environmental factors (smoke, dust, cigarettes and alcohol)
3. Chronic gastritis (atrophic, hypertrophic gastritis, gastric ulcers, achlorhydia, pernicious anemia, and prior gastric
resection)
4. Genetic factors (blood group A)
5. H. pylori infection
6. Previous gastric surgery
7. Obesity
8. Radiation exposure47
The company-employed physician opined that stomach cancer "[may be] more often multifactoral in origin involving both
inherited predisposition and environmental factors."48 She concluded that in the case at bench, Demetrio's stomach cancer
was not work-related.
In the absence of a second opinion from Demetrio's own physician of choice, this Court may not arbitrarily disregard the
finding of the company-designated doctor, Dr. Salvador. If anything, we hew close to the jurisprudential teaching that the
seafarer is not entitled to disability benefits if he does not adduce substantial evidence of a medically-established connection
between his work and his illness.49This is as it should be. For, unopposed and uncontradicted by equally credible and
trustworthy countervailing substantial evidence from herein respondents-spouses who, as the original suitors-at-law in this
indemnity-recovery suit, had the onus to establish their suit by the presentation of such specie of substantial evidence called
for by this case: this Court is not at liberty to reject, with no show of reason, the unopposed and uncontradicted testimony of
the company-designated physician.
All told, this Court finds that the CA erred in setting aside the NLRC Decision which affirmed the Decision of the LA dismissing
the Complaint for lack of merit.
WHEREFORE, the Petition is GRANTED. The Decision dated February 20, 2012 and Resolution dated May 11,2012 of the
Court of Appeals in CA-G.R. SP No. 120589 are REVERSED and SET ASIDE. Accordingly, the Complaint in NLRC NCR Case
No. OFW(M) 01-01214-10 is DISMISSED. Without costs.
SO ORDERED. cha
SECOND DIVISION
G.R. No. 197484, September 16, 2015
GERARDO A. CARIQUE, Petitioner, v. PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY,
INC., AND/OR RICARDO BONA AND SEVERO** SANTIAGO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the November 30, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. SP
No. 99967, which denied the Petition for Certiorari filed therewith and affirmed the October 30, 2006 Decision3 of the
National Labor Relations Commission (NLRC) dismissing petitioner Gerardo A. Carique's (petitioner) Complaint for illegal
dismissal against respondents Philippine Scout Veterans Security and Investigation Agency, Inc. (respondent agency) and/or
Ricardo Bona (Bona) and Severo Santiago (Santiago). Also assailed is the June 22, 2011 Resolution4 of the CA denying
petitioner's Motion for Reconsideration.5
chan roble svirtual lawlib rary
Antecedent Facts
On November 8,1990, petitioner was hired as security guard by respondent agency owned by respondent Santiago and
managed by respondent Bona. He was thereafter assigned/posted to respondent agency's several clients, the last of which
was at National Bookstore - Rosario, Pasig Branch.6 On October 28, 2002, petitioner was relieved from his post at the
National Bookstore - Rosario, Pasig Branch and was replaced by Security Guard Roel Juan pursuant to a rotation policy being
implemented by respondent agency.
On May 6, 2003, petitioner filed an illegal dismissal case against respondents before the Labor Arbiter, docketed as NLRC
NCR Case No. 00-05-05393-2003. The complaint was subsequently amended to include his claims for illegal deduction,
damages and refund of cash bond.7
Petitioner alleged that on October 30, 2002, shortly after his relief, he reported to respondent agency's office and inquired
about his next assignment. He was, however, informed of the lack of available assignment. He then reported continuously
but was repeatedly advised to wait for a new posting. He was thus surprised when on March 9, 2003, he received a
memorandum8 from respondent agency requiring him to explain his Absence Without Leave (AWOL) since November 30,
2002. He submitted an explanation9 on the charge, but no assignment at all was given to him. On May 5, 2003, he again
returned, but was compelled to acknowledge receipt of a memorandum10 dated April 30, 2003 requiring him to explain his
unjustified refusal to accept the posts offered to him and his AWOL. Attached to the memorandum were three Special
Security Detail (SSD)11 which required him to report for assignment at the National Bookstore, SM Bicutan, Taguig on March
11, 2003 and at East Asia Diesel Power Corporation and Country Space Condominium on March 17, 2003. Contending that
the SSDs attached to the memorandum were fabricated by respondent agency in order to evade liability, petitioner refused
to acknowledge receipt of the said memorandum. These events led him to file an illegal dismissal case against respondents.
Respondents denied having dismissed petitioner, let alone illegally, and alleged that petitioner was relieved from his post
because of a rotation policy being implemented as required by respondent agency's clients; that this lawful practice of
relieving security personnel from their posts did not amount to terminating the security personnel from employment but was
simply meant to place them on floating status while awaiting a new assignment; that petitioner was offered an assignment
for posting at the National Bookstore - SM Bicutan Branch as evidenced by SSD12 dated March 11, 2003 some five months
after his relief; that this offer was, however, refused by petitioner for no known reason; and, that after five days, petitioner
was again offered another assignment at the Country Space Condominium at Buendia, Makati as shown in the SSD13 dated
March 17, 2003 but petitioner rejected this second offer anew for no reason at all. Hence, respondents issued a
memorandum dated April 30, 2003 requiring petitioner to explain his actions. Two officers of respondent agency, Ermelo
Basal (Duty Officer Basal) and Fernando Amor (Investigator General Amor), submitted sworn statements14 attesting to the
fact that the offers for posting were refused by petitioner.
In his reply, petitioner averred that he did not consider the SSDs as valid offers for his posting; that there were apparent
discrepancies between the three SSDs submitted by him and the two SSDs presented by respondents; and, that the
conflicting entries between the SSDs submitted by him vis-a-visthose submitted by respondents were suggestive of
irregularities in their issuances.
In a Decision15 dated April 30, 2004, the Labor Arbiter declared petitioner to have been illegally dismissed on the ground that
respondents repeatedly denied petitioner's demands/requests for assignment/posting. The Labor Arbiter thus ordered
respondents to pay petitioner separation pay of P45,000.00, partial backwages of P90,000.00, and to refund petitioner's cash
bond in the amount of P17,840.00.
In their appeal before the NLRC, respondents averred that the Labor Arbiter gravely erred in relying on petitioner's baseless
allegations and disregarding their convincing countervailing evidence consisting of the SSDs and the sworn statements of
respondent agency's officers attesting to the fact that petitioner refused to accept his new assignment. Respondents thus
sought the invalidation of the Labor Arbiter's award for separation pay, backwages, and the refund of cash bond.
In a Decision16 dated October 30, 2006, the NLRC granted respondents' appeal and annulled the Labor Arbiter's judgment.
The NLRC was convinced that petitioner had refused new assignments. The NLRC found that petitioner never denied having
received copies of the SSDs as well as the memorandum asking him to explain his refusal to accept the offered assignments.
The NLRC noted that petitioner, far from complying with the memorandum directing him to explain his alleged refusal, chose
to ignore the memorandum and instead filed a case against respondents. The NLRC stressed that all that petitioner did was
to point out alleged discrepancies and conflicting entries in the SSDs but did not categorically deny that he received these
detail orders. The NLRC also noted that petitioner even adopted these documents as part of the evidence he submitted
before the Labor Arbiter. The NLRC, thus, concluded that petitioner was not at all dismissed; instead, he rejected the
assignments given to him.
In any event, the NLRC ordered the refund of petitioner's cash bond in view of respondents' admission that the cash bond
should be remitted upon severance of employment and upon petitioner's manifestation that he was no longer interested to
work for respondent agency. The dispositive portion of the NLRC Decision reads:
WHEREFORE, respondents' appeal is hereby GRANTED, the appealed Decision is hereby SET ASIDE and a new one entered
dismissing the complaint for lack of merit. Respondents are, however, ordered to refund to complainant his cash bond in the
amount of P17,840.00.
SO ORDERED.17
Petitioner moved for reconsideration which was denied by the NLRC in its Resolution18 of June 12, 2007.
Via a Petition for Certiorari,19 petitioner appealed the NLRC Decision to the CA. Petitioner reiterated that he was illegally
dismissed and that he continuously pleaded for new assignments but was not given any by respondent agency; that the
SSDs issued to him by respondent agency were fabricated and were merely prepared by respondent agency in order to
evade liability. Petitioner prayed for the reinstatement of the Labor Arbiter's Decision.
In a Decision20 dated November 30, 2010, the CA denied the Petition for Certiorari and affirmed the NLRC Decision. The CA
ruled that when petitioner was relieved from his post at the National Bookstore Rosario, Pasig Branch on October 28, 2002,
he was merely placed on floating status or temporary off-detail and was not dismissed. His floating status did not exceed six
months as he was in fact given new assignments within five months from his alleged relief but he refused these new
assignments.
Petitioner moved for reconsideration which was denied by the CA in its Resolution21 of June 22, 2011.
Issue
Hence, this Petition raising the issue of whether petitioner was illegally dismissed.
Petitioner maintains that the evidence he adduced before the Labor Arbiter compels the conclusion that he was illegally
dismissed, respondents' evidence notwithstanding. Petitioner avers that his 12 years of service with respondent agency as
well as the filing the instant complaint, belied any intention on his part to forego or abandon his employment. Petitioner
insists that, in any event, he was constructively dismissed because respondent agency's alleged offerings of new assignments
did not effectively toll the six-months floating period, because first, his relief did not arise from a bonafide suspension of the
company's operation as contemplated in Article 286 of the Labor Code22 effectively placing him on temporary off-detail for a
period not exceeding six months. The reason for his relief, i.e. rotation policy, was for regulatory purpose only and
presupposed available assignments under other existing service contracts. Secondly, the new assignments offered to him
were temporary reliever positions, and did not reinstate him to his former position with a regular status.
Our Ruling
The Petition is without merit.
We find no cogent reason to depart from the factual finding of both the NLRC and the CA that petitioner was not illegally
dismissed. The evidence on record clearly shows that respondents did offer petitioner new assignments. The SSDs and the
affidavits executed by Duty Officer Basal and by Investigator General Amor attest to this incontrovertible fact.
This Court is not unmindful of the rule that the employer has the burden of proving that the employee's termination was for a
valid or authorized cause. However, before the employer is tasked to discharge this burden, it is incumbent upon the
employee to prove by substantial evidence the fact that he was indeed illegally dismissed from employment.23 Illegal
dismissal must be established by positive and overt acts clearly indicative of a manifest intention to dismiss. This critical
affirmative fact must be proved by the party alleging the same with substantial evidence as required by the nature of this
case.24 Mere allegation is neither proof nor evidence.25cra lawred
Here, we find that petitioner anchored his claims on unfounded and unproven allegations. No positive or direct evidence was
adduced to show that he was indeed illegally dismissed from employment, either factually or constructively. If anything, the
evidence on record showed that petitioner was relieved from his last assignment because of the implementation of a rotation
policy by respondent agency which was requested by its clients; and that as correctly found by the CA, petitioner, from that
point on, was considered on floating status or on temporary off-detail which is not an unusual occurrence for security guards
given that their assignments primarily depend on the contracts entered into by the agency with third parties.26 Placing
petitioner on floating or off-detail status for not more than six months is not prohibited by law and did not amount to
dismissal.27
Petitioner's insistence that he was not given any new assignment after his relief was not corroborated by any evidence.
Significantly, both the NLRC and the CA noted that petitioner never denied or disputed having received copies of the SSDs
directing him to report to his new assignments. Indeed, the duty officer who issued the SSDs attested that petitioner was
offered postings on March 11, 2003 and on March 17, 2003, but were refused by petitioner without any justifiable reason.
The respondent agency's investigator general corroborated this fact in an Affidavit where he affirmed that he was present
when the assignments were offered to petitioner, but that petitioner turned these down. Petitioner never denied or contested
these assertions. If at all, he simply shrugged off the SSDs, claiming that these SSDs were fabricated and contained
inaccurate and falsified entries. Confronted with these conflicting claims, this Court finds no difficulty in upholding the claims
of the duty officer and the investigator general because these claims square with the facts on record.
Petitioner also avers that his alleged refusal to accept his new assignment is utterly immaterial to the resolution of the issue
on the validity of the rotation policy implemented by respondents. In fine, petitioner assails the propriety of the rotation
policy being implemented by respondent agency, claiming that this did not toll the allowable six-months floating period, on
account of which he must be deemed to have retained the regular status he enjoyed in his former assignments.
Notably, these issues are raised for the first time on appeal. In fact, it was only in his motion for reconsideration28 before the
CA where he belatedly insisted that assuming that he received the SSDs, his receipt thereof would not mean that he was not
illegally dismissed as the new assignments embodied in the detail orders were only "reliever" or temporary positions meant
to defeat his right to security of tenure. Needless to say, issues and arguments not raised before the original tribunal cannot
be raised for the first time on appeal.29 To entertain this new theory for the first time on appeal is unfair to the other
party30 and is offensive to the rudimentary rules of fair play, justice and due process.31
At any rate, even if timely raised, such arguments will not hold. The implementation of the rotation policy by respondent
agency is within the ambit of management prerogative. The employer has the inherent right to regulate all aspects of
employment, according to his own discretion and judgment, including the right to transfer an employee as long as the
transfer is not unreasonable, inconvenient, prejudicial and does not involve a demotion in rank or a diminution of the
employee's salaries, benefits, and other privileges.32 In the absence of evident bad faith or a manifest intent to circumvent
the factors and conditions just mentioned, this Court is not prepared to invalidate respondents' stance that this policy reflects
the essence of security planning and the importance of discouraging familiarity between security personnel and the premises
they are guarding. Thus, we here reiterate that contracts for security services may stipulate that the clients may request the
agency for the replacement of the guard/s assigned to it even for want of cause;33 and that such replaced security guard/s
could be placed on temporary "off-detail" or "floating status" which is the period of time when such security guard/s are in
between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a
new one.34
As a matter of record, respondent agency had been consistently rotating its security guards. Petitioner had been assigned
and periodically transferred to different clients since 1992; and there is no indication in the records that petitioner resisted or
opposed these postings. Petitioner therefore had effectively consented to this rotation policy, hence, he cannot now claim
that such rotation policy was an assault on his right to security of tenure. Petitioner is therefore estopped from denouncing
such rotation policy as an infraction of his right to security of tenure.
Neither may petitioner claim that the new assignments offered to him were "reliever" positions that were irregular in nature
as those new assignments allegedly interrupted or temporarily halted his regular employment, because even if his
employment was regular or had been temporarily halted, the employment is nonetheless deemed regular if the employee has
rendered at least one year of service.35More importantly, the primary standard for determining regular employment is the
reasonable connection between the activity performed by the employee vis-a-vis the business or trade of the
employer.36 Here, the new assignment/s offered as "reliever assignments" were not merely temporary assignment/s but
regular ones as the assignment/s were necessary to and essential in the usual business of respondent agency. In that
context, petitioner's repeated refusal of the new assignments offered to him was not justified.
All told, the Labor Arbiter erred in finding that petitioner was illegally dismissed, no substantial evidence having been
adduced to sustain this finding. On the other hand, both the NLRC and the CA correctly found that petitioner was not
dismissed but that petitioner instead unjustifiably refused to accept the new assignments offered to him. His conduct or
action negated his claim that he was illegally dismissed.
WHEREFORE, this Petition is DENIED. The November 30, 2010 Decision and the June 22,2011 Resolution of the Court of
Appeals in CA-G.R. SP No. 99967 are AFFIRMED. No pronouncement as to costs.
G.R. No. 202090
ICT MARKETING SERVICES, INC. (now known as SYKES MARKETING SERVICES, INC.), Petitioner,
vs.
MARIPHIL L. SALES, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails: 1) the Januruy 10, 2012 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 109860 nullifying and setting aside the February 16, 20093 and May 20, 20094 Resolutions of the
National Labor Relations Commission (NLRC) in NLRC LAC CN. 07-002404- 08(7)/(8) and reinstating with
modification the April 30, 2008 Decision5 of the Labor Arbiter in NLRC-NCR Case No. 10-11004-07; and 2) the CA's
May 28, 2012 Resolution6 denying petitioner's Motion for Reconsideration7 of the herein Assailed Decision.
Factual Antecedents
Petitioner ICT Marketing Services, Inc. (ICT) – now known as Sykes Marketing Services, Inc. – is a duly registered
domestic corporation engaged in the business of providing outsourced customer relations management and
business process outsourcing solutions to various clients in government and in the financial services, insurance,
telecommunications, health care, information technology, media, energy, and hospitality industries.
On February 22, 2006, petitioner hired respondent Mariphil L. Sales as its Customer Service Representative (CSR)
or Telephone Service Representative (TSR), and assigned her to its Capital One account. On August 21, 2006,
respondent became a regular employee, and her monthly base salary was increased to P16,350.00 and she was
given monthly transportation and meal allowances.
On February 21, 2007, respondent was assigned to the Washington Mutual account, where she was awarded with a
certificate for being the "Top Converter/Seller (Second Place)" for the month of April 2007.8
On July 3, 2007, respondent wrote to Glen Odom (Odom) – petitioner’s Vice President – complaining about
supposed irregularities in the handling of funds entrusted to petitioner by Washington Mutual which were intended
for distribution to outstanding Washington Mutual CSRs and TSRs as prizes and incentives. However, no action
appears to have been taken on her complaint.
Respondent was then transferred to the Bank of America account on July 30, 2007. Without prior notice to
respondent, petitioner scheduled her for training from July 30 to August 6, 2007 on the very same day of her
transfer. On the third day of training (August 1), respondent was unable to attend. When she reported for training the
next day, respondent was informed that she could not be certified to handle calls for Bank of America due to her
failure to complete the training. From then on, respondent was placed on "floating status" and was not given any
work assignment.
In a September 28, 2007 letter9 to petitioner’s Human Resource (HR) Manager, respondent tendered her resignation
from work, effective upon receipt of the letter. Respondent wrote:
I was forced to resign due to the reason that my employment was made on "floating status" effective August 4, 2007
and up to present (almost two months)
I haven’t receive [sic] any notice from you or the HR department to report for work despite my repeated follow-up
[with] your office thru telephone and mobile phone text messages. Hence, I consider your inaction to my follow-up
as an indirect termination of my work with ICT.
The reason I was placed [on] floating status is that, I was absent during the third day of my training with Bank of
America, the account to which I was transferred from Washington Mutual (WaMu). However, my absence during
such period was justified by the fact that I was sick and I need [sic] to undergo a medical check-up on that date.
Furthermore, I see my transfer from WaMu Account to Bank of America and the continued floating status of my work
was prompted by the fact that I lodged a complaint against managers/supervisors assigned in WaMu account
regarding irregularities in the handling of funds given by ICT clients which were supposed to be distributed as prizes
to TSR’s assigned with WaMu. After the filing of the said complaint, through your office, I was transferred to another
account (Bank of America) for no apparent reason. I was not even included in the original list of those who were
supposed to be transferred because my performance record with WaMu is satisfactory as proven by the fact that I
was even awarded with a certificate as "top converter (seller)" for the month of April and was supposed to be
included again in the top three highest converter[s] for the month of May, but unfortunately irregularities were
committed, that is why I filed the aforementioned complaint [with] your office.
On August 1, 2007, a few days after my transfer [to] Bank of America, my coach, angelo [sic], informed me that I will
be having a training on that same day with Bank of America which is really unexpected. I was not given a notice in
advance about the training. My coach informed me only three hours before the said training. Later on during my
training with Bank of America I was [placed on floating status] indefinitely due to a single absence even though I am
a regular employee having worked in ICT for almost two years. Another instance [of] discrimination [sic] and bad
faith on the part of ICT management is that, all my fellow agents who were [placed on floating status] for the same
reason were all ordered to return to work except me [sic]. Moreover, ICT is continuously hiring TSR’s which only
shows that there are still accounts open or work available in ICT. However despite the availability of work, I was still
on floating status.
Based on the aforementioned facts and circumstance[s], it is very clear that the harassment, pressure, and indefinite
floating of my employment with ICT are retaliatory acts perpetrated by the company because of my complaint/
request for investigation on the irregularities being committed by certain company officials.
Thus, I can no longer bear the above-mentioned abuses and discrimination committed against me by ICT
management. Therefore, I have no option but to sever my relationship with the company, as my continued floating
status had already prejudiced me emotionally and financially.10
On October 2, 2007, respondent filed a complaint for constructive dismissal against petitioner and Odom before the
NLRC NCR, Quezon City, docketed as NLRC-NCR Case No. 10-11004-07.
In her Position Paper,11 Reply,12 Rejoinder,13 and Surrejoinder,14 respondent claimed that for complaining about the
supposed irregularities in the Washington Mutual account, petitioner discriminated against her and unduly punished
her. Although she was not included in the original list of CSRs/TSRs for program transfer, she was transferred to
another account, and then placed on "floating status," which is tantamount to suspending her indefinitely without due
process, despite her satisfactory performance. Respondent averred that petitioner’s claim of multiple absences is
not true, because not once was she penalized therefor, assuming such charge is true. Respondent also alleged that
her one-day absence during the training for the Bank of America program cannot justify her being placed on a
"floating status" because the "no-absence during training" requirement cited by petitioner – using her employment
contract15 and the "New Hire Training Bay"16 as bases – applies only to new hires on probationary status, and not to
regularized employees. In any case, the "New Hire Training Bay" used by petitioner was for the Capital One
program. She also pointed out that during her indefinite suspension or "floating status," petitioner continued to hire
new CSRs, as shown by its newspaper advertisements during the period.17Finally, she asserted that her resignation
was not voluntary, but was forced upon her by petitioner as a result of its unlawful acts. Thus, respondent prayed for
the recovery of backwages, separation pay, P100,000.00 combined moral and exemplary damages, and attorney’s
fees equivalent to 10 per cent (10%) of the total award.
In its Position Paper,18 Reply,19 Rejoinder,20 and Surrejoinder,21 petitioner prayed for the dismissal of the complaint,
arguing that respondent was transferred from the Washington Mutual account as an exercise of management
initiative or prerogative, and due to infractions22 committed by her, as well as attendance and punctuality issues that
arose. It claimed that respondent could not be certified for the Bank of America account for failing to complete the
training. It maintained that respondent was placed on standby status only, and not suspended or constructively
dismissed. In fact, she was directed to report to its HR department, but she did not do so. It also insisted that
respondent resigned voluntarily. It denied committing any act of discrimination or any other act which rendered
respondent’s employment impossible, unreasonable or unlikely. Finally, it claimed that prior notice of her transfer to
the Bank of America account was made through an electronic mail message sent to her; and that respondent has no
cause of action since she resigned voluntarily, and thus could not have been illegally dismissed.
On April 30, 2008, the Labor Arbiter rendered a Decision23 finding complainant to have been constructively
dismissed and awarding separation pay, moral and exemplary damages, and attorney’s fees to respondent. The
Labor Arbiter held:
x x x Complainant was indeed constructively dismissed from her employment and she quitted [sic] because her
continued employment thereat is rendered impossible, unreasonable or unlikely.
Complainant’s resignation was sparked by her transfer of assignment and eventual placing her [sic] by the
respondent company of [sic] a "on floating" status.
x x x [T]here was no x x x evidence x x x that complainant’s transfer was due to the request of a client. Further, if
complainant was indeed remised of [sic] her duties due to her punctuality and attendance problem of committing
twelve (12) absences alone incurred in July 2007 [sic], why was there no disciplinary action taken against her like
reprimand or warning[?]
xxxx
And its effect, complainant is entitled to her claim of separation pay, moral and exemplary damages of P50,000.00
pesos [sic] including an award of attorney’s fees.
WHEREFORE, premises considered, judgment is rendered ordering the respondents to pay complainant of [sic] one
month pay per year of service as separation pay in the total amount of P32,700.00, P50,000.00 moral and
exemplary damages plus 10% of the award as attorney’s fees, hereunder computed:
I Separation Pay
2/21/06 – 8/4/07 = 2 yrs.
P16,350.00 x 2 yrs. = P32,700.00
II Damages P50,000.00
P82,700.00
P8,270.00
10% Attorney’s Fees
P90,970.00
SO ORDERED.24

Petitioner appealed before the NLRC arguing that the Labor Arbiter erred in ruling that respondent was
constructively dismissed. It also argued that Odom was not personally liable as he was merely acting in good faith
and within his authority as corporate officer.
Respondent likewise interposed an appeal25 arguing that the award of backwages should be computed from the date
of her dismissal until finality of the Labor Arbiter’s Decision; and that the proportionate share of her 13th month pay
should be paid to her as well.
On February 16, 2009, the NLRC issued a Resolution,26 declaring as follows:
We reverse.
Upon an examination of the pleadings on file, We find that in the past the complainant had been transferred from
one program to another without any objection on her part. Insofar as the instant case is concerned, it appears that
the complainant, aside from having been given a warning for wrong disposition of a call, had been absent or usually
late in reporting for work, constraining the respondent ICT to transfer her to another program/account. Required of
the complainant was for her to undergo Product Training for the program from July 30 to August 6, 2007, and the
records indicate that she attended only two (2) days of training on July 30 and 31, 2007, did not report on August 1,
2007 and again reported for training on August 2, 2007. It was then that ICT’s Operations Subject Matter Expert,
Ms. Suzette Lualhati, informed the complainant that she cannot be certified for the program because she failed to
complete the number of training days, and there was a need for her to report to Human Resources for further
instructions. As the complainant did not report to Human Resources, and due to her derogatory record, the
respondent company could not find another program where the complainant could be transferred.
From what has been narrated above, We come to the conclusion that the respondent company cannot be faulted for
placing the complainant on "floating status." And there does not appear to be any ill will or bad faith that can be
attributed to the respondent.
Finally, it is well to emphasize that the complainant tendered her resignation on October 1, 2007. There is no
evidence that the complainant has presented that would indicate that duress or force has been exerted on her.
All told, We are of the opinion that the findings of the Labor Arbiter are in stark contrast to the evidence on record.
WHEREFORE, in view of the foregoing, the decision appealed from is hereby reversed and set aside. Addordingly
[sic], a new one is entered dismissing the complaint for lack of merit.
SO ORDERED.27
Respondent filed a Motion for Reconsideration,28 but in a May 20, 2009 Resolution,29 the motion was denied.
In a Petition for Certiorari30 filed with the CA and docketed as CA-G.R. SP No. 109860, respondent sought a reversal
of the February 16, 2009 and May 20, 2009 Resolutions of the NLRC.
Petitioner filed its Comment,31 to which respondent interposed a Reply.32
On January 10, 2012, the CA issued the assailed Decision containing the following pronouncement:
This Court finds the petition meritorious.
While it is true that management has the prerogative to transfer employees, the exercise of such right should not be
motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient
cause. When the transfer is unreasonable, unlikely, inconvenient, impossible, or prejudicial to the employee, it
already amounts to constructive dismissal. In constructive dismissal, the employer has the burden of proving that
the transfer and demotion of an employee are for just and valid grounds, such as genuine business necessity.
Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful
constructive dismissal.
In the case at bench, private respondent corporation failed to discharge this burden of proof considering the
circumstances surrounding the petitioner’s July 2007 transfer to another account. Prior to her reassignment,
petitioner’s annual performance merited increase in her salary effective February 2007 and was also awarded a
certificate of achievement for performing well in April 2007. Her transfer was also abrupt as there was no written
transfer agreement informing her of the same and its requirements unlike her previous transfer from Capital One to
Washington Mutual account. It is therefore difficult to see the reasonableness, urgency, or genuine business
necessity to transfer petitioner to a new account. While it may be true that petitioner has attendance and punctuality
issues, her over-all performance as a CSR/TSR cannot be said to be below par given the annual merit increase and
the certificate of achievement awarded to her. If indeed, private respondent corporation had trouble transferring the
petitioner to another post because of her derogatory record, the corporation could just have dismissed her for cause.
After petitioner’s unjustified transfer, she was informed by private respondent corporation that she could not be
"certified" or allowed to handle calls for the new account because of her absence during training. She was later
placed on a floating status and was not given another post.
The Court considers placing the petitioner on a floating status as another unjustified action of the private respondent
corporation prejudicial to petitioner as employee. In this case, except for private respondent corporation’s bare
assertion that petitioner no longer reported to the human resources department as instructed, no proof was offered
to prove that petitioner intended to sever the employer-employee relationship. Private respondent corporation also
offered no credible explanation why it failed to provide a new assignment to petitioner. Its assertion that it is
petitioner’s derogatory record which made it difficult for the corporation to transfer her to another account despite its
efforts is not sufficient to discharge the burden of proving that there are no posts or no accounts available or willing
to accept her.
In Nationwide Security and Allied Services, Inc. vs. Valderama,33 the Supreme Court declared that due to the grim
economic consequences to the employee of being placed on a floating status, the employer should bear the burden
of proving that there are no posts available to which the employee temporarily out of work can be assigned.
These acts by the private respondent corporation, of transferring petitioner to another account without sufficient
cause and proper notice and its subsequent failure to provide a new post for her for two months without credible
explanation, constitute unjustified actions prejudicial to the petitioner as an employee, making it unbearable for her
to continue employment.
Thus, petitioner opted to resign, albeit involuntarily. The involuntariness of her resignation is evident in her letter
which states categorically:
"I was forced to resign due to the reason that my employment was made on ‘floating status’ effective August 4, 2007
and up to the present (almost two months) I haven’t receive [sic] any notice from you or the HR department to report
for work despite my repeated follow-up to your office thru telephone and mobile phone text messages. Hence, I 1avvphi1
consider your inaction to my follow-up as an indirect termination of my work with ICT."
Further, petitioner immediately filed a complaint for illegal dismissal. Resignation, it has been held, is inconsistent
with the filing of a complaint. Thus, private respondent corporation’s mere assertion that petitioner voluntarily
resigned without offering convincing evidence to prove it, is not sufficient to discharge the burden of proving such
assertion. It is worthy to note that the fact of filing a resignation letter alone does not shift the burden of proof and it
is still incumbent upon the employer to prove that the employee voluntarily resigned.
Therefore, we believe and so hold that petitioner was constructively dismissed from employment. Constructive
dismissal exists when the resignation on the part of the employee was involuntary due to the harsh, hostile and
unfavorable conditions set by the employer. The test for constructive dismissal is whether a reasonable person in
the employee’s position would feel compelled to give up his employment under the prevailing circumstances. With
the decision of the private respondent corporation to transfer and to thereafter placed [sic] her on floating status,
petitioner felt that she was being discriminated and this perception compelled her to resign. It is clear from her
resignation letter that petitioner felt oppressed by the situation created by the private respondent corporation, and
this forced her to surrender her position.
Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
As petitioner did not pray for reinstatement but only sought payment of money claims, the labor arbiter is correct in
awarding separation pay equivalent to one month pay for every year of service. We also do not find any cogent
reason to disturb the award of damages and attorney’s fees since we have found bad faith on the part of the private
respondent corporation to abruptly [sic] transfer and place the petitioner on floating status. Individual respondent
Glen Odom is however, exonerated from any liability as there was no clear finding that he acted with malice or bad
faith. Backwages and other monetary benefits must also be included in compliance with the above-mentioned
provision of labor law which shall be reckoned from the time her constructive dismissal took effect until the finality of
this decision.
WHEREFORE, premises considered, the Resolutions dated February 16, 2009 and May 20, 2009 respectively,
issued by the public respondent National Labor Relations Commission (NLRC) in NLRC CA No. 07-002404-08 are
REVERSED and SET ASIDE. The decision of the Labor Arbiter dated April 30, 2008 is REINSTATED with
MODIFICATION that the petitioner Mariphil L. Sales, be awarded backwages and other monetary benefits from the
date of her constructive dismissal up to the finality of this Decision.
SO ORDERED.34
Petitioner filed a Motion for Reconsideration, but the same was denied in a May 28, 2012 Resolution. Hence, the
present Petition.
In a November 11, 2013 Resolution,35 this Court resolved to give due course to the Petition.
Issues
Petitioner submits that –
A.
THE COURT OF APPEALS ERRED WHEN IT HELD THAT RESPONDENT’S TRANSFER WAS UNJUSTIFIED
NOTWITHSTANDING EVIDENCE TO SHOW THAT RESPONDENT WAS NOT DEMOTED AND WAS EVEN
GIVEN THE SAME RANK AND PAY.
B.
THE COURT OF APPEALS ERRED WHEN IT HELD THAT RESPONDENT’S PLACEMENT UNDER FLOATING
STATUS WAS TANTAMOUNT TO CONSTRUCTIVE DISMISSAL AS THIS IS CONTRARY TO NUMEROUS
DECISIONS OF THE HONORABLE COURT.
C.
THE COURT OF APPEALS ERRED WHEN IT REINSTATED LABOR ARBITER MACAM’S DECISION DATED 30
APRIL 2008 WHICH DECLARED THAT RESPONDENT WAS CONSTRUCTIVELY DISMISSED,
NOTWITHSTANDING EVIDENCE THAT CLEARLY SHOWS THAT RESPONDENT VOLUNTARILY RESIGNED.
D.
THE COURT OF APPEALS ERRED IN AWARDING RESPONDENT SEPARATION PAY, BACKWAGES, MORAL
AND EXEMPLARY DAMAGES AND ATTORNEY’S FEES.36
Petitioner’s Arguments
Praying that the assailed CA dispositions be set aside and that the NLRC’s February 16, 2009 and May 20, 2009
Resolutions be reinstated instead, petitioner maintains in the Petition and Reply37 that respondent’s transfer to
another account was done as a valid exercise of management prerogative, which allows it to regulate all aspects of
employment. Her transfer was done in good faith, and without diminution in rank and salary. It contends that
respondent knew very well that any CSR/TSR may be transferred to another program/account anytime for business
reasons; in fact, respondent herself was transferred from Capital One to Washington Mutual, and she did not
complain. Moreover, she knew as well that "schedule adherence" or attendance/punctuality is one of the "metrics" or
standards by which the performance of a CSR is measured, and that she failed to comply in this regard. It claims
that the decision to place her on "floating status" instead of dismissing her was an accommodation and should not
be treated as an illegal or unjustified act; that being on "floating status" is not tantamount to constructive dismissal,
and the failure to place or transfer respondent to another account was due to her derogatory record, and not
petitioner’s bad faith or inaction. It insists that the placing of an employee on "floating status" for up to six months is
allowed in the event of a bona fide suspension of the operations or undertaking of a business.38 In any event,
respondent’s voluntary resignation prior to the expiration of the allowable six-month "floating status" period cannot
constitute constructive dismissal, and her immediate filing of the labor case thereafter is thus premature. Finally,
petitioner posits that since there is no illegal dismissal but rather a voluntary relinquishment of respondent’s post,
then there is no basis for the pecuniary awards in her favor.
Respondent’s Arguments
In her Comment39 praying for dismissal of the Petition and the corresponding affirmance of the assailed dispositions,
respondent insists that she was illegally dismissed. She reiterates that her transfer to the Bank of America account
was an undue penalty for her complaining about supposed anomalies in the Washington Mutual account. She avers
that the documentary evidence of her supposed unauthorized absences were manufactured to support petitioner’s
false allegations and mislead this Court into believing that she was delinquent at work.
She argues that assuming that these absences were true, then they should have merited her dismissal for cause –
yet the fact is she was not dismissed nor punished for these supposed absences. She asserts that petitioner’s claim
that she was transferred on the recommendation of a client is untrue and self-serving, and is unjustified since the
client has no authority to order or recommend her transfer. She maintains that her being placed on "floating status"
was illegal, since a) there is no evidence to prove her alleged "attendance and punctuality issues," and b) there was
no bona fide suspension of petitioner’s business or undertaking for a period not exceeding six months, as prescribed
under Article 286 of the Labor Code,40 which would justify the suspension of her employment for up to six months.
As enunciated in the Philippine Industrial Security Agency Corp. v. Dapiton41 case which petitioner itself cited, Article
286 applies only when there is a bona fide suspension of the employer’s operation or undertaking for a period not
exceeding six months, due to dire exigencies of the business that compel the employer to suspend the employment
of its workers. Respondent points out that petitioner continued with its business, and worse, it in fact continued to
hire new CSRs/TSRs during the period of respondent’s suspension from work. In fine, respondent alleges that she
was constructively dismissed and forced to resign, rather than continue to subject herself to petitioner’s
discrimination, insensibility, harassment, and disdain; and that for such illegal acts, she is entitled to indemnity from
petitioner.
Our Ruling
Respondent’s Transfer
Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his
own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the
time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline,
dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by
labor laws and the principles of equity and substantial justice.
While the law imposes many obligations upon the employer, nonetheless, it also protects the employer’s right to
expect from its employees not only good performance, adequate work, and diligence, but also good conduct and
loyalty. In fact, the Labor Code does not excuse employees from complying with valid company policies and
reasonable regulations for their governance and guidance.
Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a
movement from one position to another of equivalent rank, level or salary without break in the service or a lateral
movement from one position to another of equivalent rank or salary; (b) the employer has the inherent right to
transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is
motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient
cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to
the employee.42
While the prerogative to transfer respondent to another account belonged to petitioner, it wielded the same unfairly.
The evidence suggests that at the time respondent was transferred from the Washington Mutual account to the
Bank of America program, petitioner was hiring additional CSRs/TSRs.43 This simply means that if it was then hiring
new CSRs/TSRs, then there should be no need to transfer respondent to the Bank of America program; it could
simply train new hires for that program. Transferring respondent – an experienced employee who was already
familiar with the Washington Mutual account, and who even proved to be outstanding in handling the same – to
another account means additional expenses for petitioner: it would have to train respondent for the Bank of America
account, and train a new hire to take her place in the Washington Mutual account. This does not make sense; quite
the contrary, it is impractical and entails more expense on petitioner’s part. If respondent already knew her work at
the Washington Mutual account very well, then it is contrary to experience and logic to transfer her to another
account which she is not familiar with, there to start from scratch; this could have been properly relegated to a new
hire.
There can be no truth to petitioner’s claim either that respondent’s transfer was made upon request of the client. If
she was performing outstanding work and bringing in good business for the client, there is no reason – indeed it is
beyond experience and logic – to conclude that the client would seek her transfer. Such a claim could only be
fabricated. Truly, Experience which is the life of the law — as well as logic and common sense — militates against
the petitioners’ cause.44
Moreover, as the appellate court correctly observed, even if respondent had attendance and punctuality issues, her
overall performance as a CSR/TSR was certainly far from mediocre; on the contrary, she proved to be a top
performer. And if it were true that respondent suddenly became lax by way of attendance in July 2007, it is not
entirely her fault. This may be attributed to petitioner’s failure to properly address her grievances relative to the
supposed irregularities in the handling of funds entrusted to petitioner by Washington Mutual which were intended
for distribution to outstanding Washington Mutual CSRs and TSRs as prizes and incentives. She wrote petitioner
about her complaint on July 3, 2007; however, no explanation was forthcoming from petitioner, and it was only
during these proceedings – or after a case had already been filed – that petitioner belatedly and for no other useful
purpose attempted to address her concerns. This may have caused a bit of disillusionment on the part of
respondent, which led her to miss work for a few days in July 2007. Her grievance should have been addressed by
petitioner; after all, they were serious accusations, and have a bearing on the CSRs/TSRs’ overall performance in
the Washington Mutual account.
Respondent’s work as a CSR – which is essentially that of a call center agent – is not easy. For one, she was made
to work the graveyard shift – that is, from late at night or midnight until dawn or early morning. This certainly takes a
toll on anyone’s physical health. Indeed, call center agents are subjected to conditions that adversely affect their
physical, mental and emotional health; exposed to extreme stress and pressure at work by having to address the
customers’ needs and insure their satisfaction, while simultaneously being conscious of the need to insure efficiency
at work by improving productivity and a high level of service; subjected to excessive control and strict surveillance
by management; exposed to verbal abuse from customers; suffer social alienation precisely because they work the
graveyard shift – while family and friends are at rest, they are working, and when they are at rest, family and friends
are up and about; and they work at a quick-paced environment and under difficult circumstances owing to
progressive demands and ambitious quotas/targets set by management. To top it all, they are not exactly well-paid
for the work they have to do and the conditions they have to endure. Respondent’s written query about the prizes
and incentives is not exactly baseless and frivolous; the least petitioner could have done was to timely address it, if
it cared about its employee’s welfare. By failing to address respondent’s concerns, petitioner exhibited an
indifference and lack of concern for its employees – qualities that are diametrically antithetical to the spirit of the
labor laws, which aim to protect the welfare of the workingman and foster harmonious relations between capital and
labor. By its actions, petitioner betrayed the manner it treats its employees.
Thus, the only conceivable reason why petitioner transferred respondent to another account is the fact that she
openly and bravely complained about the supposed anomalies in the Washington Mutual account; it is not her
"derogatory record" or her "attendance and punctuality issues", which are insignificant and thus irrelevant to her
overall performance in the Washington Mutual account. And, as earlier stated, respondent’s "attendance and
punctuality issues" were attributable to petitioner’s indifference, inaction, and lack of sensitivity in failing to timely
address respondent’s complaint. It should share the blame for respondent’s resultant delinquencies.
Thus, in causing respondent’s transfer, petitioner clearly acted in bad faith and with discrimination, insensibility and
disdain; the transfer was effected as a form of punishment for her raising a valid grievance related to her work.
Furthermore, said transfer was obviously unreasonable, not to mention contrary to experience, logic, and good
business sense. This being the case, the transfer amounted to constructive dismissal.
The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in
mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which
that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or
prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be
tantamount to constructive dismissal, which has been defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay.
Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer
has become so unbearable to the employee leaving him with no option but to forego with his continued
employment.45(Emphasis and underscoring supplied)
The instant case can be compared to the situation in Veterans Security Agency, Inc. v. Gonzalvo, Jr.,46 where the
employee concerned – a security guard who was brave enough to complain about his employer’s failure to remit its
employees’ Social Security System premiums – was "tossed around" and finally placed on floating status for no
valid reason. Taking the poor employee’s side, this Court declared:
True, it is the inherent prerogative of an employer to transfer and reassign its employees to meet the requirements
of its business. Be that as it may, the prerogative of the management to transfer its employees must be exercised
without grave abuse of discretion. The exercise of the prerogative should not defeat an employee’s right to security
of tenure. The employer’s privilege to transfer its employees to different workstations cannot be used as a
subterfuge to rid itself of an undesirable worker.
Here, riled by respondent’s consecutive filing of complaint against it for nonpayment of SSS contributions, VSAI had
been tossing respondent to different stations thereafter. From his assignment at University of Santo Tomas for
almost a year, he was assigned at the OWWA main [o]ffice in Pasig where he served for more than three years.
After three years at the OWWA main office, he was transferred to the OWWA Pasay City parking lot knowing that
the security services will end forthwith. VSAI even concocted the reason that he had to be assigned somewhere
because his spouse was already a lady guard assigned at the OWWA main office. Inasmuch as respondent was
single at that time, this was obviously a mere facade to [get] rid of respondent who was no longer in VSAIs good
graces.
The only logical conclusion from the foregoing discussion is that the VSAI constructively dismissed the respondent.
This ruling is in rhyme with the findings of the Court of Appeals and the NLRC. Dismissal is the ultimate penalty that
can be meted to an employee. Inasmuch as petitioners failed to adduce clear and convincing evidence to support
the legality of respondent’s dismissal, the latter is entitled to reinstatement and back wages as a necessary
consequence. However, reinstatement is no longer feasible in this case because of the palpable strained relations,
thus, separation pay is awarded in lieu of reinstatement.
xxxx
Indeed, the Court ought to deny this petition lest the wheels of justice for aggrieved workingmen grind to a halt. We
ought to abate the culture of employers bestowing security of tenure to employees, not on the basis of the latter’s
performance on the job, but on their ability to toe the line set by their employer and endure in silence the flagrant
incursion of their rights, zealously protected by our labor laws and by the Constitution, no less.47 (Emphasis and
underscoring supplied)
Respondent’s Floating Status
In placing respondent on "floating status," petitioner further acted arbitrarily and unfairly, making life unbearable for
her. In so doing, it treated respondent as if she were a new hire; it improperly disregarded her experience, status,
performance, and achievements in the company; and most importantly, respondent was illegally deprived of her
salary and other emoluments. For her single absence during training for the Bank of America account, she was
refused certification, and as a result, she was placed on floating status and her salary was withheld. Clearly, this
was an act of discrimination and unfairness considering that she was not an inexperienced new hire, but a promising
and award-winning employee who was more than eager to succeed within the company. This conclusion is not
totally baseless, and is rooted in her outstanding performance at the Washington Mutual account and her complaint
regarding the incentives, which only proves her zeal, positive work attitude, and drive to achieve financial success
through hard work. But instead of rewarding her, petitioner unduly punished her; instead of inspiring her, petitioner
dashed her hopes and dreams; in return for her industry, idealism, positive outlook and fervor, petitioner left her with
a legacy of, and awful examples in, office politicking, intrigue, and internecine schemes.
In effect, respondent’s transfer to the Bank of America account was not only unreasonable, unfair, inconvenient, and
prejudicial to her; it was effectively a demotion in rank and diminution of her salaries, privileges and other benefits.
She was unfairly treated as a new hire, and eventually her salaries, privileges and other benefits were withheld
when petitioner refused to certify her and instead placed her on floating status. Far from being an "accommodation"
as petitioner repeatedly insists, respondent became the victim of a series of illegal punitive measures inflicted upon
her by the former.
Besides, as correctly argued by respondent, there is no basis to place her on "floating status" in the first place since
petitioner continued to hire new CSRs/TSRs during the period, as shown by its paid advertisements and placements
in leading newspapers seeking to hire new CSRs/TSRs and other employees.48 True enough, the placing of an
employee on "floating status" presupposes, among others, that there is less work than there are employees;49 but if
petitioner continued to hire new CSRs/TSRs, then surely there is a surplus of work available for its existing
employees: there is no need at all to place respondent on floating status. If any, respondent – with her experience,
knowledge, familiarity with the workings of the company, and achievements – should be the first to be given work or
posted with new clients/accounts, and not new hires who have no experience working for petitioner or who have no
related experience at all. Once more, experience, common sense, and logic go against the position of petitioner.
The CA could not be more correct in its pronouncement that placing an employee on floating status presents dire
consequences for him or her, occasioned by the withholding of wages and benefits while he or she is not reinstated.
To restate what the appellate court cited, "[d]ue to the grim economic consequences to the employee, the employer
should bear the burden of proving that there are no posts available to which the employee temporarily out of work
can be assigned."50 However, petitioner has failed miserably in this regard.
Resignation
While this Court agrees with the appellate court’s observation that respondent’s resignation was involuntary as it
became unbearable for her to continue with her employment, expounding on the issue at length is unnecessary.
Because she is deemed constructively dismissed from the time of her illegal transfer, her subsequent resignation
became unnecessary and irrelevant. There was no longer any position to relinquish at the time of her resignation.
Pecuniary Awards
With the foregoing pronouncements, an award of indemnity in favor of respondent should be forthcoming. In case of
constructive dismissal, the employee is entitled to full backwages, inclusive of allowances, and other benefits or their
monetary equivalent, as well as separation pay in lieu of reinstatement. The readily determinable amounts, as
computed by the Labor Arbiter and correspondingly reviewed and corrected by the appellate court, should be
accorded finality and deemed binding on this Court.
Settled is the rule that an employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual
reinstatement. If reinstatement is not possible, however, the award of separation pay is proper.
Backwages and reinstatement are separate and distinct reliefs given to an illegally dismissed employee in order to
alleviate the economic damage brought about by the employee’s dismissal. "Reinstatement is a restoration to a
state from which one has been removed or separated" while "the payment of backwages is a form of relief that
restores the income that was lost by reason of the unlawful dismissal." Therefore, the award of one does not bar the
other.
In the case of Aliling v. Feliciano, citing Golden Ace Builders v. Talde, the Court explained:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed
employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and
backwages.
The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights,
and payment of backwages computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month
salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.51
WHEREFORE, the Petition is DENIED. The assailed January 10, 2012 Decision and May 28, 2012 Resolution of
the Court of Appeals in CA-G.R. SP No. 109860 are AFFIRMED, with MODIFICATIONS, in that petitioner ICT
Marketing Services, Inc., now known as Sykes Marketing Services, Inc., is ordered to PAY respondent Mariphil L.
Sales the following:
1) Backwages and all other benefits from July 30, 2007 until finality of this Decision;
2) Separation pay equivalent to one (1) month salary for every year of service;
3) Moral and exemplary damages in the amount of P50,000.00;
4) Attorney's fees equivalent to ten percent (10%) of the total monetary award; and
5) Interest of twelve per cent (12%) per annum of the total monetary awards, computed from July 30, 2007
up to June 30, 2013, and thereafter, six percent (6%) per annum from July 1, 2013 until their full satisfaction.
The appropriate Computation Division of the National Labor Relations Commission is hereby ordered to COMPUTE
and UPDATE the award as herein determined WITII DISPATCH.
SO ORDERED.
SECOND DIVISION
G.R. No. 201536, September 09, 2015
GRACE MARINE SHIPPING CORPORATION AND/OR CAPT. JIMMY BOADO, Petitioners, v. ARON S.
ALARCON, Respondent.
DECISION
DEL CASTILLO, J.:

Assailed in this Petition for Review on Certiorari1 are: 1) the December 8, 2011 Decision2 of the Court of Appeals (CA)
dismissing the petition for review in CA-G.R. SP No. 109238; and 2) the CA's April 12, 2012 Resolution3 denying
reconsideration of its assailed Decision.
Factual Antecedents
In 2006, respondent Aron S. Alarcon was hired by petitioner Grace Marine Shipping Corporation (Grace Marine Shipping) for
its foreign principal, Universal Marine Corporation. He was assigned as Messman onboard the vessel "M/V Sunny Napier II."
His nine-month Employment Contract4 dated November 28, 2006 stated among others that he was to receive a monthly
salary of US$403.
After undergoing the mandatory pre-employment medical examination, respondent was declared fit to work and, on January
11, 2007, he boarded "M/V Sunny Napier II."
As Messman, respondent maintained messroom sanitation, washed clothes and dishes, cleaned the area on board and was in
charge of general cabin sanitation. He used cleaning agents such as surfactants, alkalines, phosphates, acids, complexing
and bleaching agents, enzymes and other strong chemical substances.5
On August 6, 2007, while aboard "M/V Sunny Napier II," respondent developed a skin condition. He was examined by a
physician in New Zealand, and was diagnosed as having "infected fungal dermatitis."6 On August 27, 2007, respondent was
diagnosed by another doctor as having "eczema squamosum" and declared unfit for duty.7
Respondent was repatriated on August 29, 2007 and was immediately referred to the company-designated physician, Dr.
Nicomedes G. Cruz (Dr. Cruz). On August 30, 2007, respondent was diagnosed with "nummular eczema" on his arms, body,
legs and scalp by the company-designated dermatopathologist, Dr. Eileen Abesamis-Cubillan (Dr. Abesamis-Cubillan).
Respondent underwent treatment, but his condition was characterized by recurring lesions all over his body.
On January 21, 2008, Dr. Cruz declared respondent's condition as a Grade 12 disability - "slight residuals or disorder of the
skin."8
On January 31, 2008, respondent was declared fit to work, although it was noted that he still had "minimal and resolving"
skin lesions. In his letter-report9 to petitioner Capt. Jimmy Boado (Capt. Boado), Grace Marine Shipping's General Manager
for Crewing, Dr. Cruz wrote: cralawlawli bra ry
Patient was repatriated due to skin lesions incurred last July 2007 x x x.
He had his follow-up today. The skin lesions are minimal and resolving. Our dermatologist have [sic] cleared him to go back
to work.
DIAGNOSIS:
Nummular Eczema,
Psoriasis
RECOMMENDATION:
He is fit to work effective January 31, 2008 chanrobles law
Likewise, in a January 31,2008 letter10 to Dr. Cruz, Dr. Abesamis-Cubillan wrote: cralawlaw lib rary
Lesions are resolving but due to inability to procure meds, residual lesions are present. Patient may resume work at this time
but is advised to continue medications so as to completely resolve lesions and to continue treatment while on board. chanrob leslaw
In February 2008, respondent again consulted with Dr. Abesamis-Cubillan, who certified that respondent was suffering from
nummular dermatitis which can be recurrent depending on exposure to various factors such as cold temperature, use of
harsh soaps like detergents and dishwashing soaps, use of chemicals, and stress.11
In April 2008, respondent consulted an independent physician, Dr. Glenda A. Fugoso (Dr. Fugoso), who declared that he was
unfit to work and was suffering from subacute to chronic spongiotic dermatitis which may require lifetime treatment.12
In another letter13 to Capt. Boado dated June 4, 2008, Dr. Cruz wrote: cralawlawli bra ry
This is in response to your query about the above patient.14
Our dermatologist said that the patient's condition was due to the sensitivity of his skin. The dermatologist also noted that
there was recurrence and flare-up of lesions even when the patient is not on board ship.
During the patient's last follow-up, when he was cleared for work, the lesions were minimal and are resolving hence he was
advised to continue his medication while on board for the lesion to completely resolve. chanro bles law
Petitioners offered to compensate respondent in the amount of US$5,225.00 based on a Grade 12 disability rating, but
respondent claimed entitlement to Grade 5 disability benefits with a higher indemnity. Petitioners insisted on their offer.
Ruling of the National Conciliation and Mediation Board
Respondent filed a complaint against petitioners for the recovery of US$60,000.00 permanent total disability benefits;
P100,000.00 moral and exemplary damages; and 10% attorney's fees before the National Conciliation and Mediation Board
(NCMB). The case was docketed as MVA Case No. AC-890-36-05-07-08.
In his Position Paper15 and Reply,16 respondent stated that his illness entitles him to permanent and total disability benefits
and other claims. He argued that such illness is work-related, dermatitis being an occupational disease under Section 32-A of
the Philippine Overseas Employment Administration- Standard Employment Contract (POEA-SEC); that his illness was caused
by his handling of and exposure to chemical agents at work; and that said chemicals are skin irritants and sensitizers which
triggered his condition. He averred that prior to his employment, he was not suffering from skin disease as shown by the
results of his pre-employment medical examination which declared him as fit to work for petitioners. He asserted that the
company-designated doctor's January 31, 2008 declaration of his fitness to work is not valid, since it is stated therein that he
still had to continue medication and treatment to completely resolve his lesions which were not yet healed. Considering that
he was medically advised to avoid working in an environment that would aggravate his condition, this meant that he may no
longer return to duty under the same conditions he was exposed to.
Petitioners, on the other hand, claimed in their Position Paper17 and Reply18 that respondent is not entitled to his claims since
his ailment - nummular eczema -was caused by his "innate skin sensitivity" and not his work on board "M/V Sunny Napier
II." They pointed out that respondent had been declared fit for work by Drs. Cruz and Abesamis-Cubillan; also it cannot be
said that respondent's ailment was work-related since it recurred even after he was no longer exposed to the working
conditions on board the vessel. They claimed that assuming respondent is entitled to disability benefits, such is limited to
only US$5,225.00 in accordance with the Grade 12 disability assessment issued by Dr. Cruz; and that respondent is not
entitled to damages and attorney's fees since he has no valid claim against them. Petitioners thus prayed for dismissal of the
complaint, and in the alternative, that they be held liable only to the extent of US$5,225.00.
On May 22, 2009, the NCMB issued its Decision,19 decreeing as follows: c ralawlawli bra ry
The main issue to be resolved is whether or not complainant is entitled to disability benefit and attorney's fees.
The Panel of Voluntary Arbitrators herein supports complainant's view.
Indeed Complainant's illness manifested during the term of his employment with respondents as messman as he was
exposed to surfactant, alkaline, phosphates, acids, complexing agents, bleaching agents, enzymes and other strong chemical
substances. Complainant was also constantly exposed to stress and strain because of long hours of work and low staffing
level thus contributing to the decline of his health and resistance to the illness.
Our own research confirms that complainant's illness can be reasonably related to his work as messman and not everyone
who has the gene mutations gets nummular eczema or dermatitis as there are several forms of eczema or dermatitis that
people can develop. Certain "environmental triggers" play a role in causing skin disorder in people who have the gene
mutations. Also, psychological stress has long been understood as a trigger for skin flares, but scientists are still unclear
about exactly how this occurs. Studies do show that not only can a sudden, stressful event trigger a rash or worsen; daily
hassles of life can also trigger a flare. In addition, one study showed that people who are categorize [sic] as "huge worriers"
were almost two times less likely to respond to treatment compared to "low worriers." Sometime [sic] even mild injuries to
the skin such as abrasions can trigger skin flares. This is called the koebner20 phenomenon.
The Panel of Voluntary Arbitrators finds no convincing evidence to show that complainant's illness was caused by genetic
predisposition or drug addiction. Having ruled out these reasons, what remain [sic] is the environmental factor such as
complainant's constant exposure to chemicals while on board the vessel such as surfactant, alkaline, phosphates, acids,
complexing agents, bleaching agents, enzymes and other strong chemical substances that caused the skin injury in addition
to the stress and strain which are present in his work area.
While treatment can help control symptoms of Nummular Eczema/Psoriasis, there is yet no cure for the illness.
Complainant's continued employment on board is deleterious to his health because he will again be exposed to factors that
increases [sic] the risk of further recurrence and aggravation of the skin problem such as strong chemical substances, stress
and including changes in season and climate.
This office finds merit in the contention of complainant that as a result of his work-connected illness, he suffered permanent
disability as he could not return to his work as messman and earn wages in the same kind of work of similar nature [sic] that
he was trained for. In awarding disability compensation, it is not the injury which is compensated, but rather the incapacity
to work resulting in the impairment of one's earning capacity.
The High Tribunal consistently ruled that neither is it necessary, in order for an employee to recover compensation, that he
must have been in perfect condition or health at the time he recurred the injury [sic], or that he be free from disease. Every
workingman brings with him to his employment certain infirmities, and while the employer is not the insurer of the health of
his employees, he takes them as he finds them, and assumes the risk of having a weakened condition aggravated by some
injury which might not hurt or bother a perfectly normal, healthy person (More Maritime Agencies, Inc. vs. NLRC, 307 SCRA
189).
As ruled in Marcopper Manning Corporation vs. NLRC, 200 SCRA 167, the Arbitration Branch is mindful that all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer, contractual rights
and duties, such as these arising from the provisions of the POEA Standard Employment Contract and/or the Collective
Bargaining Agreement, should be voluntarily stipulated in good faith and must constitute the law between the parties.
Despite the inability to resume sea duty, this Panel award [sic] Grade 5 disability only to complainant. He is still physically
capable of performing other tasks or jobs besides being a messman even with the skin disorder although not of the same
position as messman. To this panel, despite declaration of fitness to resume work by the company-designated physician in
his 11th report, there is no concrete evidence indicated that respondent allowed him to resume sea duty on January 31,
2008. Likewise, both the company-designated physician and the independent dermatologist consulted by complainant agree
that the illness is recurrent and would be considered as unemployable as this illness would entail lifetime treatment. With
that, we considered his inability to resume x x x sea duty as justification to award x x x disability compensation based on
Grade 5 as evaluated by his attending physician.
For having been compelled to litigate and incur expenses, complainant's claim for attorney's fees is also granted. Other
claims however are dismissed for lack of factual and legal basis.
WHEREFORE, premises considered, respondents are hereby ordered to pay complainant jointly and severally the amount of
US$29,480.00 representing his disability benefit based on the POEA Standard Employment Contract plus (10%) ten percent
attorney's fees, Philippine Currency or the amount of US$2,948.00 at the rate of exchange prevailing at the time of actual
payment. All other claims are dismissed.
SO ORDERED.21 (Underscoring in the original.) cha nro bleslaw
In a Petition for Review22 filed with the CA and docketed therein as CA-G.R. SP No. 109238, petitioners sought to set aside
the above NCMB Decision, reiterating mainly their arguments in their pleadings filed with the NCMB. In addition, petitioner
claimed that the NCMB did not provide the medical basis for its findings; that there is no basis to conclude that respondent is
entitled to benefits corresponding to a Grade 5 disability; that on the contrary, it is the opinion of the company-designated
physician, Dr. Cruz, that is the best and most reliable determinant of respondent's fitness to work or degree of disability.
Petitioners argued that the NCMB committed grave abuse of discretion in disregarding the opinion of Dr. Cruz; and that the
opinion of the independent physician consulted by respondent cannot determine his fitness or disability. Petitioners likewise
sought injunctive relief.
On December 8, 2011, the CA issued the herein assailed Decision containing the following pronouncement: c ralawlawli bra ry
Entitlement of seamen on overseas work to disability benefits is a matter governed, not only by medical findings, but by law
and contract. Articles 191 to 193 of the Labor Code of the Philippines provide the basis for the worker's entitlement to
disability benefits. The said provisions equally [apply] to employees actually working in the Philippines and to seafarers. The
respondent claims permanent disability, hence, we should refer to Article 192(c)(l) of the Labor Code which provides: cha nRoblesv irt ual Lawlib rary
ART. 192. Permanent Total Disability, x x x
(c) The following disabilities shall be deemed total and permanent: chanRoblesv irt ual Lawlib rary
(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for
in the Rules;
By contract, the Philippine Overseas Employment Administration -Standard Employment Contract (POEA-SEC), as provided
under Department Order No. 4, Series of 2000 of the Department of Labor and Employment, and the parties' Collective
Bargaining Agreement (CBA) bind the seaman and his employer to each other. Section 20 (B) of the 2000 POEA-SEC governs
the compensation and benefits to which a seafarer is entitled in case of injury or illness, viz[.]: cralaw lawlib rary
"Section 20-B. Compensation and Benefits for Injury or Illness.
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as
follows:cha nRoblesv irt ual Lawlib rary
xxxx
physician but in no case shall this period exceed one hundred twenty (120) days.
xxxx
6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be
compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract. Computation of his
benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time
the illness or disease was contracted." chanrobles law
To be entitled to compensation and benefits under the foregoing provision, it is not sufficient to establish that the seafarer's
illness or injury has rendered him permanently or partially disabled, it must also be shown that there is a causal connection
between the seafarer's illness or injury and the work for which he had been contracted. Work-related injury is defined under
the 2000 POEA-SEC as an injury resulting in disability or death arising out of or in the course of employment. Work-related
illness, on the other hand, is any sickness resulting in disability or death as a result of an occupational disease listed under
Section 32-A of this contract with the conditions set therein satisfied.
Whether the illness of the respondent is work-related x x x does not seem to be an issue in the instant case. As x x x can be
gathered from the pleadings of the petitioners and the position papers submitted by them before the labor tribunal, what
they are only after is the proper determination of the degree of disability of the respondent. Moreover, the company-
designated physician himself did not categorically state that the illness of the respondent is not work-related.
Be that as it may, the records will show that the respondent was treated of nummular dermatitis by the company-designated
physician Nicomedes Cruz.
Dermatitis is listed as an occupational disease under Section 32-A. It is appreciated as an occupational disease if the nature
of employment involves the use or handling of chemical agents which are skin irritants and sensitizers.
The respondent alleged that M/V Sunny Napier II is a chemical tanker[, fjhat he worked therein as a Messman. That being
such, he was in charged [sic] of washing clothes and dishes, cleaning the area on board, the general sanitation using
cleaning agents such as surfactant, alkaline, phosphates, acids, complexing agents, bleaching agents, enzymes, and other
strong chemical substances. The petitioners did not seem to have ever disputed the said claims of the respondent. Based on
the foregoing, it cannot be denied that there is causal connection between the nature of job of the respondent and the illness
he contracted while employed with the petitioners.
The respondent was first seen by the company-designated physician on August 30, 2007. In the course of his treatment, the
respondent was asked several times to return for follow-up check-ups so that his progress could be monitored. On January
31, 2008, he was finally declared fit to work. But despite the pronouncement of the company-designated physician, it
appears that the illness of the respondent was not completely healed since he had to consult two physicians afterwards. One
of the physicians that he consulted, Dr. Glenda A. Fugoso, contradicted the findings of the company-designated physician
and declared the respondent unfit to work. It was further added that his condition might require a lifetime treatment. In view
thereof, the respondent claims permanent total disability benefits from the petitioners.
Permanent total disability means disablement of an employee to earn wages in the same kind of work or work of a similar
nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment
can do. It does not mean state of absolute helplessness but inability to do substantially all material acts necessary to the
prosecution of a gainful occupation without serious discomfort or pain and without material injury or danger to life. In
disability compensation, it is not the injury per se which is compensated but the incapacity to work.
Permanent total disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether
he loses the use of any part of his body. Otherwise stated, what determines the worker's entitlement to permanent disability
benefits is his inability to work for more than 120 days.
In this jurisdiction, jurisprudence abounds holding that failure of the company-designated physician to pronounce a seafarer
fit to work within 120 days entitles the latter to permanent total disability. This was the very ruling in Abante v. KJGS Fleet
Management Manila:23 cralawlawlib ra ry
"It is gathered from the documents emanating from the Office of Dr. Lim that petitioner was seen by him from July 24, 2000
up to February 20, 2001 or a total of 13 times; and except for the medical reports dated February 5, 2001 and February 20,
2001 (when the doctor finally pronounced petitioner fit to work), Dr. Lim consistently recommended that petitioner continue
his physical rehabilitation/therapy and revisit clinic on specific dates for re-evaluation, thereby implying that petitioner was
not yet fit to work.
Given a seafarer's entitlement to permanent disability benefits when he is unable to work for more than 120 days, the failure
of the company-designated physician to pronounce petitioner fit to work within the 120-day period entitles him to permanent
total disability benefit in the amount of US$60,000.00."
chanrobles law
The same ruling is echoed in the case of Oriental Shipmanagement Co., Inc. v. Bastol:24 c ralawlawl ibra ry
"In all, after his repatriation on March 7, 1997, Bastol went to see Dr. Peralta on March 8, 1997, and until the last
examination by Dr. Lim on October 28, 1997, he had been treated by these company-designated doctors for a period
spanning around seven months and 20 days or for approximately 230 days. Clearly then, the maximum period of 120 days
stipulated in the SEC for medical treatment and the declaration or assessment by the company-designated physician of either
being fit to work or the degree of permanent disability had already lapsed. Thus, by law, if Bastol's condition was with the
lapse of the 120 days of post-employment medical examination and treatment, which actually lasted as the records show for
at least over eight months and for over a year by the time the complaint was filed, without his being employed at his usual
job, then it was certainly total permanent disability."
chan robles law
In the case at bar, the respondent was under the treatment of the company-designated physician for five (5) months, or 154
days to be exact, from the time he was taken to the latter for an examination on August 30,2007 until he was declared fit to
work on January 31, 2008. Applying the foregoing jurisprudence in the case at bar, there is no doubt that the respondent is
entitled to permanent total disability benefits. The petitioners cannot take advantage of the pronouncement of the company-
designated physician that the respondent was already fit to work to evade their liability. Indeed, the respondent has been
eventually declared fit to work but the same came only after more than 120 days. The law and jurisprudence is very clear on
the matter, if the company-designated physician failed to declare the seafarer fit to [work] within 120 days, the latter is
entitled to a permanent total disability benefits [sic].
For obvious reason, the company-designated physician did not determine the degree of disability of the respondent. But
being the expert on the matter, we defer to the finding of the public respondent that the respondent is entitled to permanent
disability benefits equivalent to Grade 5 disability under the POEA contract.
The Court also sustains the award of attorney's fees in favor of the respondent. The claim for attorney's fees is granted
following Article 2208 of the New Civil Code which allows its recovery in actions for recovery of wages of laborers and actions
for indemnity under the employer's liability laws. The same fees are also recoverable when the defendant's act or omission
has compelled the plaintiff to incur expenses to protect his interest as in the present case following the refusal by the
petitioners to settle the respondent's claims. Pursuant to prevailing jurisprudence, the respondent is entitled to attorney's
fees of ten percent (10%) of the monetary award.
WHREFORE [sic], premises considered, the instant petition for review is DISMISSED for lack of merit.
Petitioners filed a Motion for Reconsideration,26 but the CA denied the same in its April 12, 2012 Resolution. Hence, the
present Petition.
Issues
Petitioners submit the following issues for resolution: cra lawlawlib rary
1. Whether x x x the Court of Appeals had legal basis in awarding US$29,480.00.
2. Whether x x x petitioners are liable to private respondent for disability benefits amounting to US$29,480.00 despite the
fact that he was declared fit to work by the company-designated physician.
3. Whether x x x the medical findings of the company-designated physician should be given more weight than that of the
physician appointed by the seafarer.
4. Whether x x x the private respondent is entitled to attorney's fees.27 chan roble slaw
Praying that the assailed CA pronouncements be set aside and that a new judgment be rendered absolving them from the
payment of disability benefits and attorney's fees and dismissing MVA Case No. AC-890-36-05-07-08, petitioners maintain in
their Petition and Reply28 that there is no substantial medical evidence to support the award of indemnity to respondent.
Since he was declared fit to work by the company-designated physician, he should not be entitled to disability benefits.
Moreover, respondent's illness is not work-connected, and he failed to prove that it is so. Petitioners insist that the findings
of the company-designated physician, and his recommendation relative to disability grading and compensation, should be
upheld; that such findings should be the sole basis for determining whether respondent is fit to work; and that since there is
no basis for an award of disability benefits, respondent's claim for attorney's fees should fail as well, and instead his labor
case should be dismissed.
In his Comment,29 respondent counters that there is substantial evidence to prove that he is entitled to a Grade 1 disability
rating, and not merely Grade 5, which thus entitles him to an award of US$60,000.00 in accordance with the POEA contract
provisions. He maintains that his ailment rendered him unemployable since it is recurrent and requires lifetime treatment;
that such finding was arrived at by the company-designated physician, Dr. Abesamis-Cubillan; and that his illness was
caused by his handling of irritating chemicals during his stint on board the vessel of petitioners' principal.
Our Ruling

Respondent was diagnosed by the company-designated physicians, Drs. Cruz and Abesamis-Cubillan to be suffering from
nummular eczema and psoriasis. Although he was initially cleared of psoriasis, the final diagnosis of the said doctors as
contained in Dr. Cruz's January 31, 2008 letter-report to Capt. Boado indicates that respondent suffered from said skin
disease, apart from nummular eczema. Moreover, said letter-report indicated that respondent's illness has not completely
healed, and that there were still "minimal and resolving" lesions. Another letter of Dr. Abesamis-Cubillan to Dr. Cruz dated
January 31, 2008 declared that as of said date, "residual lesions are present" and respondent was "advised to continue
medications so as to completely resolve lesions and to continue treatment while on board." This only means that
respondent's condition has not been completely addressed and his illnesses persisted even after a period of treatment
spanning five (5) months or approximately 150 days, or from August 30, 2007 up to January 31, 2008.
In another handwritten certification dated February 12, 2008, the same company-designated physician Dr. Abesamis-
Cubillan confirmed that respondent's condition can be recurrent depending on exposure to various factors such as cold
temperature, use of harsh soaps like detergents and dishwashing soaps, use of chemicals, and stress. And then again, in an
April 1, 2008 certification, Dr. Fugoso - an independent physician consulted by respondent -declared that respondent was
unfit to work and was suffering from subacute to chronic spongiotic dermatitis which may require lifetime treatment.
Respondent's condition was diagnosed to be psoriasis and nummular eczema by the company-designated doctors, while it
was found to be chronic spongiotic dermatitis by an independent doctor. The conflict in diagnoses can be resolved, as
petitioners correctly argue, by adherence to the company-designated physicians' findings. Thus, for purposes of the present
case, respondent suffered from psoriasis and nummular eczema. Nonetheless, while respondent was declared fit to return to
work, the obvious fact remains that at the time of such declaration, his illness has not been cured, as he continued to suffer
from recurrent lesions - as Drs. Cruz and Abesamis-Cubillan themselves acknowledged in their written communications and
certifications. Thus, Dr. Cruz's declaration of fitness is a nullity.
The evidence further suggests that before respondent was employed by petitioners, he did not suffer from psoriasis and
nummular eczema; if he had been afflicted with these ailments prior to employment, surely he would not have been taken in.
He was given a clean bill of health through the standard pre-employment physical examination. Besides, in any of their
pleadings, petitioners did not contest this fact; nor did they claim that respondent had these conditions prior to his
employment.
The evidence shows that during his eight-month stint aboard "M/V Sunny Napier II," respondent was constantly exposed to
chemicals. His sole responsibility as messman was to maintain overall sanitation - cleaning the messroom, the area on board,
the cabins, washing dishes, clothes, etc.; this cannot be done without the aid of cleaning agents, substances, and chemicals.
Thus, he inhaled and came into direct skin or body contact with such irritating and injurious chemicals and fumes. Certainly,
as with any other seafarer, he was subjected to stress at work, climate changes, and other environmental factors or
elements. As a result, he contracted nummular eczema and psoriasis which spread all over his body.
There is no validity to petitioners' argument that respondent's "innate skin sensitivity" caused his illness. If this were true,
then it did not have to take eight months before he became ill, considering the level of exposure he was subjected to, daily
for at least eight hours. Respondent's immune system was able to ward the disease for quite some time but respondent is
not superhuman; his body can only take so much. At some point, continuous direct exposure to irritating - if not deadly,
harmful or toxic - chemicals can only lead to the inevitable and unfortunate condition he now finds himself in.
Nummular eczema, "also known as discoid eczema and nummular dermatitis, is a common type of eczema that can occur at
any age. It is notable because it looks very different [from] the usual atopic dermatitis and can be much more difficult to
treat. The word "nummular" comes from the Latin word for "coin" as the spots can look coin-shaped x x x. They tend to be
well-defined, [and] may be very itchy or not x x x at all. They can be very dry and scaly or x x x wet and open. The cause of
nummular eczema is unknown, but it tends to be more isolated than atopic dermatitis and does not seem to run in families.
Sometimes there is a triggering event such as: a. an insect bite; b. a reaction to inflammation (including atopic dermatitis)
elsewhere on the body; c. dry skin in the winter."30 Direct exposure to cleaning agents and other chemicals and the fumes
thereof - which naturally cause irritation and thus inflammation as a physiological reaction, as well as climate or temperature
changes, can be said to have triggered respondent's nummular eczema.
In Maersk Filipinos Crewing, Inc./Maersk Services Ltd. v. Mesina,31 this Court held that there is a reasonable connection
between the nature of one's work and his contracting psoriasis when, in the performance of his duties, strong detergents,
fabric conditioners, special soaps, and other chemicals are used. The Court therein declared that — cralawlawlib ra ry
The 2000 POEA-SEC defines "work-related illness" as "any sickness resulting to disability or death as a result of
an occupational disease listed under Section 32-A of this contract with the conditions set therein satisfied."
In interpreting the said definition, the Court has held that for disability to be compensable under Section 20(B)
of the 2000 POEA-SEC, it is not sufficient to establish that the seafarer's illness or injury has rendered him
permanently or partially disabled; it must also be shown that there is a causal connection between the
seafarer's illness or injury and the work for which he had been contracted.
The Court has likewise ruled that the list of illnesses/diseases in Section 32-A does not preclude other
illnesses/diseases not so listed from being compensable. The POEA-SEC cannot be presumed to contain all the
possible injuries that render a seafarer unfit for further sea duties. This is in view of Section 20(B)(4) of the
POEA-SEC which states that "those illnesses not listed in Section 32 of this Contract are disputably presumed as
work-related."
Concomitant with such presumption is the burden placed upon the claimant to present substantial evidence that his working
conditions caused or at least increased the risk of contracting the disease. Substantial evidence consists of such relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion that there is a causal connection between
the nature of his employment and his illness, or that the risk of contracting the illness was increased by his working
conditions. Only a reasonable proof of work-connection, not direct causal relation is required to establish compensability of a
non-occupational disease.
xxxx
Psoriasis comes from the Greek word "psora" which means itch. It is a common disfiguring and stigmatising
skin disease associated with profound impaired quality of life. People with psoriasis typically have sharply
demarcated erythematous plaques covered by silvery white scales, which most commonly appear on the elbows,
knees, scalp, umbilicus, and lumbar area. Chronic plaque psoriasis (psoriasis vulgaris) is the most common type
of the disease which manifests thru plaques of varying degrees of scaling, thickening and inflammation [on] the
skin. The plaques are typically oval-shaped, of variable size and clearly distinct from adjacent normal skin.
As a result of the chronic, incurable nature of psoriasis, associated morbidity is significant. Patients in primary
care and hospital settings have similar reductions in quality of life specifically in the functional, psychological
and social dimensions. Symptoms specifically related to the skin (i.e., chronic itch, bleeding, scaling, nail
involvement), problems related to treatments (mess, odor, inconvenience, time), arthritis, and the effect of
living with a highly visible, disfiguring skin disease (difficulties with relationships, difficulties with securing
employment, and poor self- esteem) all contribute to morbidity. About one in four patients experience major
psychological distress, and the extent to which they feel socially stigmatized and excluded is significant.
Current available treatments for the disease are reasonably effective as short-term therapy. Extended disease
control is, however, difficult to achieve as the safety profile of most therapeutic agents limit their long-term
use.
Until now, the exact cause of psoriasis remains a mystery. But several family studies have provided compelling
evidence of a genetic predisposition to psoriasis, although the inheritance pattern is still unclear. Other
environmental factors such as climate changes, physical trauma, infections of the upper respiratory tract, drugs,
and stress may also trigger its onset or development.
After a circumspect evaluation of the conflicting medical certifications of Drs. Alegre and Fugoso, the Court finds that serious
doubts pervade in the former. While both doctors gave a brief description of psoriasis, it was only Dr. Fugoso who
categorically stated a factor that triggered the activity of the respondent's disease - stress, drug or alcohol intake, etc. Dr.
Alegre immediately concluded that it is not work-related on the basis merely of the absence of psoriasis in the
schedule of compensable diseases in Sections 32 and 32-A of the POEA-SEC. Dr. Alegre faUed to consider the
varied factors the respondent could have been exposed to while on board the vessel. At best, his certification was
merely concerned with the examination of the respondent for purposes of diagnosis and treatment and not with the
determination of his fitness to resume his work as a seafarer in stark contrast with the certification issued by Dr. Fugoso
which categorically declared the respondent as "disabled." The certification of Dr. Alegre is, thus, inconclusive for purposes of
determining the compensability of psoriasis under the POEA-SEC. Moreover, Dr. Alegre's specialization is General Surgery
while Dr. Fugoso is a dermatologist, or one with specialized knowledge and expertise in skin conditions and diseases like
psoriasis. Based on these observations, it is the Court's considered view that Dr. Fugoso's certification deserves greater
weight.
It remains undisputed that the respondent used strong detergent, fabric conditioner, special soap and chemicals
in performing his duties as a steward. Stress and climate changes likewise permeate his working environment
as with that of any other seafarer. These factors, taken together with Dr. Fugoso's certification, confirm the
existence of a reasonable connection between the nature of respondent's work and the onset of his psoriasis.
At any rate, even in the absence of an official finding by the company-designated physician or the respondent's own
physician, he is deemed to have suffered permanent total disability pursuant to the following guidelines in Fil-Star Maritime
Corporation v. Rosete, thus:
Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses
the use of any part of his body.
Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar
nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and
attainments could do.
A total disability does not require that the employee be completely disabled, or totally paralyzed. What is necessary is that
the injury must be such that the employee cannot pursue his or her usual work and earn from it. A total disability is
considered permanent if it lasts continuously for more than 120 days. x x x.
It is undisputed that from the time the respondent was medically repatriated on October 7,2005 he was unable to work for
more than 120 days. In fact, Dr. Alegre's certification was issued only after 259 days with the respondent needing further
medical treatments thus rendering him unable to pursue his customary work. Despite the declaration in the medical
reports that psoriasis is not contagious, no profit-minded employer will hire him considering the repulsive
physical manifestation of the disease, its chronic nature, lack of long-term cure and the vulnerability of the
patient to cardiovascular diseases and some cancers. Its inevitable impact [on] the respondent's chances of
being hired and capacity to continue working as a seaman cannot be ignored. His permanent disability thus
effectively became total in nature entitling him to permanent total disability benefits as correctly awarded by
the LA and the CA.32 (Emphasis supplied) c hanro blesl aw
Adopting the pronouncement in Maersk in its entirety and applying it to the present case, the Court finds that respondent's
psoriasis and nummular eczema, which have not been cured, are work-connected and thus compensable. He is unfit to
continue his duties as messman, as his illness prevents him from performing his functions as such. Up to this point, it does
not appear that petitioners took him back to work for their principal, or that a declaration of fitness to work or that his
condition has been resolved or cured has been issued. "[A]n employee's disability becomes permanent and total when so
declared by the company-designated physician, or, in case of absence of such a declaration either of fitness or permanent
total disability, upon the lapse of the 120 or 240-day treatment period under Article 192 (c) (1) of the Labor Code33 and Rule
X, Section 2 of the Amended Rules on Employees' Compensation Commission,34 while the employee's disability continues and
he is unable to engage in gainful employment during such period, and the company-designated physician fails to arrive at a
definite assessment of the employee's fitness or disability. This is true regardless of whether the employee loses the use of
any part of his body or if the injury or disability is classified as Grade 1 under the POEA-SEC."35
On the issue covering the pecuniary award, the Court finds the need to modify the award. Since respondent is entitled to a
declaration of permanent total disability, the corresponding benefit attached thereto in the amount of US$60,000.00 should
be given to him' This is in line with the Maersk pronouncement. Thus, on this score, both the NCMB and the CA patently
erred. Besides, petitioners came to this Court arguing mainly that respondent should not be awarded indemnity because his
illness is not work-connected and not compensable; alternatively, they contend that only the disability grading provided by
the company-designated physician - that is, Dr. Cruz's January 21, 2008 recommendation of a Grade 12 disability rating -
should be recognized.36Thus, apart from the issue of compensability, it became necessary for the Court to determine
the degree of compensability; the facts further indicate that respondent's condition has not been resolved. The fact that
respondent did not interpose a corresponding appeal is therefore of no moment. In any case, petitioner's "appeal, once
accepted by this Court, throws the entire case open to review, and that this Court has the authority to review matters not
specifically raised or assigned as error by the parties, if their consideration is necessary in arriving at a just resolution of the
case."37
As compensability has been established, entitlement to attorney's fees follows since it is evident that respondent had to
litigate to claim his rightful indemnity. On this score, the NCMB and the CA are correct in their pronouncements cited
elsewhere herein; there is no need to further elaborate.
WHEREFORE, the Petition is DENIED. The assailed December 8, 2011 Decision and April 12, 2012 Resolution of the Court
of Appeals in CA-G.R. SP No. 109238 are AFFIRMED, with the MODIFICATIONthat petitioners Grace Marine Shipping
Corporation and/or Capt. Jimmy Boado are ordered to jointly and severally pay respondent Aron S. Alarcon the amounts of
US$60,000.00 as disability compensation and US$6,000.00 as attorney's fees in Philippine pesos, computed at the exchange
rate prevailing at the time of payment.
SO ORDERED,
SECOND DIVISION
G.R. No. 199931, September 07, 2015
INC SHIPMANAGEMENT, INC., INTERORIENT NAVIGATION COMPANY LTD. AND REYNALDO

RAMIREZ, Petitioners, v. RANULFO CAMPOREDONDO, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the July 29, 2011 Decision2 of the Court of Appeals (CA) in CA-GR. SP No.
112079 which annulled and set aside the July 31, 2009 Decision3 and October 23, 2009 Resolution4 of the National Labor
Relations Commission (NLRC) and reinstated the April 27, 2009 Decision5 of Labor Arbiter (LA) Thelma M. Concepcion in OFW
(M) 08-12020-08 (LAC No. 06-000303-09). Likewise assailed is the January 2, 2012 Resolution6 of the CA which denied
petitioners' Motion for Reconsideration.7 chan roble svirtual lawlib rary
Factual Antecedents
On July 19, 2007, INC Shipmanagement, Inc. (INC), for and in behalf of Interorient Navigation Company Ltd. (Interorient),
hired respondent Ranulfo Camporedondo (respondent) as chief cook on board the vessel M/V Fortunia for a period of 10
months with a monthly salary of US$578.50 and allowance of US$80.00.8 On July 25, 2007, respondent boarded the vessel.9
As chief cook, respondent's tasks included food preparation and meals of the ship crew, custody, inventory, and budgeting of
food supplies of the vessel.10 Allegedly, keeping in mind his duties, respondent inquired from the captain the budget for the
vessel; he also reported to the latter the insufficiency and poor quality of some of the supplies. These inquiries enraged the
captain. As a result, he reprimanded respondent on a daily basis.11
Furthermore, respondent stated that on September 11, 2007, the captain gave him a return ticket to the Philippines to take
a vacation. He was purportedly promised to be transferred to another vessel.12 On September 12, 2007 or about a month
and a half into his contract, respondent was given a report13 of dismissal, which he refused to accept.14
On August 27, 2008, respondent filed a Complaint15 for illegal dismissal, non-payment of overtime pay and attorney's fees
against INC, Interorient and Reynaldo Elamirez, corporate officer of INC16(collectively referred hereunder as petitioners).
In his Position Paper,17 respondent alleged that he began working as seafarer in August 2001. From 2001 to 2005, he worked
for other employers and finished his contracts with them in good standing. In August 2005, he started working for INC and
prior to his July 19, 2007 contract, he completed two contracts with INC without issue. He stated that petitioners were
claiming that he was dismissed due to his stiff arm. However, he contended that he passed the medical and physical
examination and despite his condition, petitioners engaged his services. Furthermore, he asserted that he was made to sign
a report that terminated his contract without giving him the opportunity to explain or defend himself.
For their part, petitioners stated in their Position Paper18 that respondent joined the vessel on July 25, 2007 but was
repatriated on December 12, 2007.
They contended that the captain complained about his incompetence and/or poor performance. In particular, due to his stiff
right hand, respondent was allegedly unable to serve meals and maintain the cleanliness of the kitchen, store room and mess
room. They averred that eventually the captain served upon him the above-cited Report entitled as "Report of incompetent
action/insubordination/ indiscipline" which he refused to receive.
In addition, petitioners stated that the previous ship captain, under whom respondent was deployed, likewise complained
about his poor performance. They asserted that because they wanted to give respondent another chance, they deployed him
to M/V Fortunia. Allegedly, respondent was allowed to re-apply for assignment in another vessel and he readily agreed to be
repatriated.
Petitioners argued that respondent admitted his faults as he did not outrightly file a case; he even followed up his re-
deployment with their fleet personnel officer. They also emphasized that the complaint against them was barred by
respondent's voluntary execution of a quitclaim;19 and that respondent's complaint was "absolutely malicious and an
afterthought on his part because if he was truly aggrieved by his repatriation, he should not have executed such
quitclaim."20
chan roblesv irt uallawl ibra ry
Riding of the Labor Arbiter
On April 27, 2009, the LA rendered a Decision declaring that petitioners illegally dismissed respondent, the decretal portion
of which reads:
WHEREFORE, foregoing premises considered, we find the complaint against respondents impressed with merit. Accordingly
the latter is held liable to pay complainant the salaries equivalent to eight months unexpired portion of the ten[-]month
employment contract. Further awarded is ten percent of the total judgment award as attorney's fees, the computation of
which is shown in Annex 'A' and made an integral part hereof.
The rest of complainant's monetary claims are dismissed for lack of merit including respondents' counterclaim against the
complainant.
SO ORDERED.21
In its Decision dated July 31, 2009, the NLRC set aside the Decision of the LA and dismissed the case for lack of merit.
The NLRC was convinced that respondent's performance as chief cook was below the company's standard. It declared that
the delay in filing the case proved the weakness of respondent's claim. It likewise held against respondent his execution of a
quitclaim discharging petitioners from any liability in his favor.
The NLRC also denied respondent's Motion for Reconsideration22 in a Resolution dated October 23, 2009.
Respondent thus filed a Petition for Certiorari23 before the CA ascribing grave abuse of discretion on the part of the NLRC in
finding that he was legally dismissed and was afforded due process of law.
On July 29, 2011, the CA rendered the assailed Decision, the dispositive portion of which reads:
FOR THESE REASONS, the petition is GRANTED. The NLRC Decision and Resolution dated July 31, 2009 and October 23,
2009, respectively, are ANNULLED and SET ASIDE. The Decision of Labor Arbiter Thelma M. Concepcion dated April 27, 2009
is REINSTATED.
SO ORDERED.24
The CA noted that petitioners dismissed respondent because of his alleged incompetence and/or poor performance, as
indicated in the Report of incompetent action/insubordination/indiscipline. The CA, however, found that this Report was
neither authenticated nor supported by credible evidence. It also found that the Report did not explain or give details as
regards the circumstances surrounding the supposed incompetence and poor performance of respondent.
The CA further emphasized that electronic evidence, such as electronic mails (e-mails), must first be proved and
authenticated before they are received in evidence. It also held that even if such e-mails were admitted in evidence, they
could not support respondent's dismissal as they were based upon the self-serving statements of the officers of petitioners.
The CA likewise held that the subject quitclaim did not preclude the filing of an illegal dismissal case against petitioners. It
also held that while respondent executed a quitclaim, the same was invalid for want of fair and credible consideration.
In the assailed Resolution dated January 2, 2012, the CA denied petitioners' Motion for Reconsideration.25 c ralawre d
Hence, petitioners filed this Petition raising the following issues: chanRoble svi rtual Lawli bra ry
Issues
WHETHER xxx THE RESPONDENT IS ESTOPPED OR BARRED BY LACHES FROM CLAIMING THAT HE WAS ILLEGALLY
DISMISSED SINCE IT TOOK HIM ALMOST TWO (2) YEARS TO MAKE SUCH CLAIM AGAINST THE PETITIONERS.
WHETHER xxx RESPONDENT'S CLAIMED ILLEGAL DISMISSAL IS NEGATED BY HIS ACT OF APPLYING FOR RE-DEPLOYMENT
WITH THE PETITIONERS AND WHICH HE EVEN ARBITRARILY DECLINED WHEN HE WAS SO SCHEDULED TO JOIN THE
CROWLEY VESSEL.
WHETHER xxx RESPONDENT'S CLAIMED ILLEGAL DISMISSAL IS NEGATED BY HIS VOLUNTARILY EXECUTED QUITCLAIM
AFTER HIS REPATRIATION AND IN FAVOR OF THE PETITIONERS.
WHETHER xxx PETITIONERS' ADDUCED EVIDENCE WOULD NOT CONSTITUTE AS SUBSTANTIAL EVIDENCE TO PROVE THE
RESPONDENT'S INCOMPETENCE AND POOR PERFORMANCE AND xxx JUSTIFIED HIS DISMISSAL FROM EMPLOYMENT. 26
Petitioners maintain that respondent was aware of the reason for his repatriation and accepted the cause thereof as shown
by his failure to immediately file a claim against them. Besides, he repeatedly followed up his possible redeployment with
them. He was in fact scheduled for deployment in January 2008, but declined it.
Petitioners also contend that respondent voluntarily executed a quitclaim. This quitclaim was based on sufficient
consideration because they paid him his accrued benefits.
Petitioners likewise posit that respondent's incompetence and poor performance were supported by substantial evidence;
that even in his Position Paper respondent admitted that his work performance did not sit well with the captain; that if it
were not for his poor work performance then the captain would have no reason to reprimand him everyday; and that
respondent could not deny that he was hampered by his stiff right arm in performing his duties. Petitioners assert that they
informed respondent of his poor performance through the aforesaid Report which he declined to receive. They likewise argue
that the entries in the Report were based on entries in the vessel's logbook that deserve consideration.
Petitioners moreover argue that the captain of the previous vessel where respondent was deployed also complained about his
poor performance.
Respondent counters that petitioners illegally dismissed him on September 12, 2007 and he filed a Complaint against them
on August 27, 2008 and that in the intervening dates he claimed from petitioners what was rightfully his but to no avail; and
that the filing of this case against petitioners after more than one year from his repatriation did not prove that his action was
weak.
Respondent also argues that the allegation that he repeatedly followed up his possible re-deployment was petitioners' very
own uncorroborated assertion; and that what he actually followed up with petitioners was his monetary claim for benefits
unjustifiably withheld; that even assuming that he did follow up his possible re-deployment, that does not amount to a
waiver of his right to contest his illegal termination.
More than that, respondent avers that the sum he received pursuant to the quitclaim was much less than what was due him;
that he still had at least eight months of salary and allowance due him amounting to more than US$5,200.00; and that the
settlement of only P32,693.63 was way below the amount he deserved to receive from them.
Respondent takes issue with petitioners' claim that there was substantial evidence to support petitioners' allegation of his
incompetence and poor performance; that the above-cited Report was not credible evidence because the same was not
authenticated; and that for the same reason, the unsigned e-mails relied upon by petitioners were not credible as these were
also unauthenticated.
Our Ruling
It is axiomatic that this Court is not a trier of facts; it reviews only questions of law. As such, in petitions for review
on certiorari, only questions of law may be raised. This rule, nevertheless, admits of exceptions, as in this case where the
factual findings of the LA and the CA, on one hand, and the NLRC, on the other, are at odds. There being contradictory
findings of facts, the Court deigns it right to evaluate the pieces of evidence adduced by the parties and draw conclusions
from them.27
It is settled that the employer has the burden to prove that the dismissal of an employee is based on a valid cause. To
discharge this burden, the employer must present substantial evidence - or such amount of relevant evidence that a
reasonable mind might accept as adequate to support a conclusion - that the cause of the employee's dismissal was
valid.28 Specifically, the employer must comply with the following requisites: (1) the dismissal must be for a just or
authorized cause, and (2) the employee to be dismissed must have been afforded due process of law.29
In this case, petitioners failed to discharge this burden.
Petitioners failed to prove just or authorized cause.
First off, we hold that the due execution of the Report of incompetent action/insubordination/indiscipline was established
considering that both parties adduced it to support their respective positions. On one hand, petitioners relied on this Report
to prove that respondent was validly dismissed. On the other hand, respondent admitted that he was furnished a copy of this
Report but he declined to receive it. Thus, as regards the existence of the subject Report, We find that the same was duly
proved here.
However, the contents of this Report were insufficient bases to dismiss respondent. As stated therein, respondent was
dismissed for the following reasons:
DISMISSAL (Brief Details):
HE HAS AN OBVIOUS HANDICAP WHICH IS A STIFF RIGHT ARM. THIS HANDICAP ALLOWS HIM TO COOK, BUT
[REGRETABLY] IT MAKES MR. CAMPOREDONO [sic] UNABLE TO ALSO SERVE THE MEALS AND CLEAN THE KITCHEN,
MESSROOMS, STORES RESPECTABLE [sic]. WITH ASSISTENCE [sic] OF A MESSMAN HE CAN DO HIS JOB RESPECTIVE
[sic].30
As found by the CA, the Report provided no detailed explanation as regards respondent's supposed incompetence and poor
performance. The CA observed that the Report "did not particularly describe such inability that would lead to the conclusion
that he was incompetent."31 With this observation of the CA, we fully agree.
As a general concept, poor performance is tantamount to inefficiency and incompetence in the performance of official duties.
An unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Poor or
unsatisfactory performance of an employee does not necessarily mean that he is guilty of gross and habitual neglect of
duties.32
To ascribe gross neglect, there must be lack of or failure to exercise slight care or diligence, or the total absence of care in
the performance of duties. In other words, there is gross neglect when the employee exhibits thoughtless disregard of
consequences without exerting effort to avoid them.33 On the other hand, habitual neglect involves repeated failure to
perform duties for a certain period of time, depending upon the circumstances, and not mere failure to perform duties in a
single or isolated instance.34
As above-discussed, the Report of incompetent action/insubordination/indiscipline against respondent did not describe the
specific acts that would establish his alleged poor performance, or his want of even slight care in the performance of his
official tasks as chief cook for a certain period of time; hence, even assuming that respondent's performance was
unsatisfactory, petitioners failed to show that his poor performance amounted to gross and habitual neglect of duties.
Moreover, as correctly pointed out by the CA, no credence can be given to the e-mails presented by petitioners to support
respondent's purported incompetence because these e-mails were unauthenticated. In addition, they pertained to the
previous contract of respondent, which is unrelated to this present case.
Petitioners did not comply with the two-notice rule required in dismissing an employee.
To amount to a valid dismissal, an erring seafarer must be handed a written notice of the charge against him and must be
given the opportunity to explain himself unless of course there is a clear and existing danger against the safety of, the crew
or the vessel in which case notice may be dispensed with.35Needless to say, this is not the situation here.
Section 17 of the Philippine Overseas Employment Administration-Standard Terms and Conditions Governing the
Employment of Filipino Seafarers On Board Ocean-Going Vessels (Disciplinary Measures) specifically provides that before an
erring seafarer can be validly dismissed, he must be given by the master of the vessel a written notice stating the charge or
charges against him; and, the date, time and place for a formal investigation of such charge. Thereafter, an investigation or
hearing, duly documented and entered in the ship's logbook, must be conducted to give the seaman the opportunity to
explain or defend himself. If found guilty, the seaman shall be given a written notice of the penalty meted out against him.
with the specific reasons for the penalty so imposed. "Dismissal for just cause may be affected by the Master without
furnishing the seafarer with a notice of dismissal if there is a clear and existing danger to the safety of the crew or the
vessel."36
In this case, no hearing was conducted respecting respondent's alleged incompetence and poor performance, and granting
him opportunity to present countervailing evidence to disprove the charge against him. There was also no showing of
imminent danger to the crew or the vessel, so that the required notice may be dispensed with. True, as stated elsewhere,
the above-mentioned Report could somehow pass as a notice of respondent's dismissal. Nevertheless, as earlier discussed,
the allegations in this Report do not permit the conclusion that respondent was guilty of poor performance and incompetence
that would amount to gross and habitual neglect of duties.
Lastly, the quitclaim that respondent executed did not bar him from filing a complaint for illegal dismissal against petitioners.
Said quitclaim was invalid because it did not fully or completely give or grant respondent what was due him as a matter of
law and justice. It only covered respondent's accrued leave credits and his 3-day travel pay. Such payment involved only a
part or portion of the amount of money actually and justly due him under the law; it was not a full and complete satisfaction
of what is due him under the law.37
In view thereof, we find that the CA did not err in setting aside the Decision of the NLRC and in reinstating that of the LA,
which found respondent to have been illegally dismissed and entitled to his salaries for the unexpired portion of his
employment contract and to attorney's fees of 10% of the total award.38
WHEREFORE, the Petition is DENIED. Accordingly, the Decision dated July 29, 2011 and Resolution dated January 2, 2012
of the Court of Appeals in CA-G.R. SP No. 112079 are AFFIRMED.
SO ORDERED. ch
GR. No. 197472
REPUBLIC OF THE PHILIPPINES, represented by Commander Raymond Alpuerto of the Naval Base Camillo
Osias, Port San Vicente, Sta. Ana, Cagayan, Petitioner,
vs.
REV. CLAUDIO R. CORTEZ, SR., Respondent.
DECISION
DEL CASTILLO, J.:
An inalienable public land cannot be appropriated and thus may not be the proper object of possession. Hence,
injunction cannot be issued in order to protect ones alleged right of possession over the same.
This Petition for Review on Certiorari1 assails the June 29, 2011 Decision2 of the Court of Appeals (CA) in CA-GR.
CV No. 89968, which dismissed the appeal therewith and affirmed the July 3, 2007 Decision3 of the Regional Trial
Court (RTC) of Aparri, Cagayan, Branch 8 in Spl. Civil Action Case No. II-2403.
Factual Antecedents
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by vocation engaged in humanitarian and
charitable activities, established an orphanage and school in Punta Verde, Palaui Island, San Vicente, Sta. Ana,
Cagayan. He claimed that since 1962, he has been in peaceful possession of about 50 hectares of land located in
the western portion of Palaui Island in Sitio Siwangag, Sta. Ana, Cagayan which he, with the help of Aetas and other
people under his care, cleared and developed for agricultural purposes in order to support his charitable,
humanitarian and missionary works.4
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No. 201 reserving for military purposes a
parcel of the public domain situated in Palaui Island. Pursuant thereto, 2,000 hectares of the southern half portion of
the Palaui Island were withdrawn from sale or settlement and reserved for the use of the Philippine Navy, subject,
however, to private rights if there be any.
More than two decades later or on August 16, 1994, President Fidel V. Ramos issued Proclamation No. 447
declaring Palaui Island and the surrounding waters situated in the Municipality of Sta. Ana, Cagayan as marine
reserve. Again subject to any private rights, the entire Palaui Island consisting of an aggregate area of 7,415.48
hectares was accordingly reserved as a marine protected area.
On June 13, 2000, Rev. Cortez filed a Petition for Injunction with Prayer for the Issuance of a Writ of Preliminary
Mandatory Injunction5 against Rogelio C. Biñas (Biñas) in his capacity as Commanding Officer of the Philippine
Naval Command in Port San Vicente, Sta. Ana, Cagayan. According to him, some members of the Philippine Navy,
1âw phi1
upon orders of Biñas, disturbed his peaceful and lawful possession of the said 50-hectare portion of Palaui Island
when on March 15, 2000, they commanded him and his men, through the use of force and intimidation, to vacate
the area. When he sought assistance from the Office of the Philippine Naval Command, he was met with sarcastic
remarks and threatened with drastic military action if they do not vacate. Thus, Rev. Cortez and his men were
constrained to leave the area. In view of these, Rev. Cortez filed the said Petition with the RTC seeking preliminary
mandatory injunction ordering Biñas to restore to him possession and to not disturb the same, and further, for the
said preliminary writ, if issued, to be made permanent.
Proceedings before the Regional Trial Court
After the conduct of hearing on the application for preliminary mandatory injunction6 and the parties’ submission of
their respective memoranda,7 the RTC issued an Order8 dated February 21, 2002 granting the application for a writ
of preliminary mandatory injunction. However, the same pertained to five hectares (subject area) only, not to the
whole 50 hectares claimed to have been occupied by Rev. Cortez, viz.:
It should be noted that the claim of [Rev. Cortez] covers an area of 50 hectares more or less located at the western
portion of Palaui Island which is within the Naval reservation. [Rev. Cortez] presented what he called as a survey
map (Exh. "H") indicating the location of the area claimed by the Church of the Living God and/or Rev. Claudio
Cortez with an approximate area of 50 hectares identified as Exh. "H-4". However, the Survey Map allegedly
prepared by [a] DENR personnel is only a sketch map[,] not a survey map as claimed by [Rev. Cortez]. Likewise,
the exact boundaries of the area [are] not specifically indicated. The sketch only shows some lines without indicating
the exact boundaries of the 50 hectares claimed by [Rev. Cortez]. As such, the identification of the area and its
exact boundaries have not been clearly defined and delineated in the sketch map. Therefore, the area of 50
hectares that [Rev. Cortez] claimed to have peacefully and lawfully possessed for the last 38 years cannot
reasonably be determined or accurately identified.
For this reason, there is merit to the contention of [Biñas] that [Rev. Cortez]’ claim to the 50 hectares of land
identified as Exh. ["]H-4" is unclear and ambiguous. It is a settled jurisprudence that mandatory injunction is the
strong arm of equity that never ought to be extended unless to cases of great injury, where courts of law cannot
afford an adequate and commensurate remedy in damages. The right must be clear, the injury impending or
threatened, so as to be averted only by the protecting preventive process of injunction. The reason for this doctrine
is that before the issue of ownership is determined in the light of the evidence presented, justice and equity demand
that the [status quo be maintained] so that no advantage may be given to one to the prejudice of the other. And so it
was ruled that unless there is a clear pronouncement regarding ownership and possession of the land, or unless the
land is covered by the torrens title pointing to one of the parties as the undisputed owner, a writ of preliminary
injunction should not issue to take the property out of possession of one party to place it in the hands of another x x
x.
Admittedly, the documentary exhibits of [Rev. Cortez] tended only to show that [he] has a pending application of
patent with the DENR. Even so, [Rev. Cortez] failed to present in evidence the application for patent allegedly filed
by [him] showing that he applied for patent on the entire 50 hectares of land which he possessed or occupied for a
long period of time. Under the circumstances, therefore, the title of petitioner to the 50 hectares of land in Palaui
Island remains unclear and doubtful, and [is] seriously disputed by the government.
More significantly, at the time that Proc. No. 201 was issued on May 22, 1967, [Rev. Cortez] has not perfected his
right over the 50 hectares of land nor acquired any vested right thereto considering that he only occupied the land
as alleged by him in 1962 or barely five (5) years before the issuance of the Presidential Proclamation. Proclamation
No. 201 had the effect of removing Palaui Island from the alienable or disposable portion of the public domain and
therefore the island, as of the date of [the] issuance [of the proclamation], has ceased to be disposable public land.
However, the court is not unmindful that [Rev. Cortez] has lawfully possessed and occupied at least five (5) hectares
of land situated at the western portion of the Palaui Island identified as Exh "H-4". During the hearing, Cmdr.
Rogelio Biñas admitted that when he was assigned as Commanding Officer in December 1999, he went to Palaui
Island and [saw only] two (2) baluga families tilling the land consisting of five (5) hectares. Therefore, it cannot be
seriously disputed that [Rev. Cortez] and his baluga tribesmen cleared five (5) hectares of land for planting and
cultivation since 1962 on the western portion identified as Exhibit "H-4". The Philippine Navy also admitted that they
have no objection to settlers of the land prior to the Presidential Proclamation and [Rev. Cortez] had been identified
as one of the early settlers of the area before the Presidential Proclamation. The DENR also acknowledged that
[Rev. Cortez] has filed an application for patent on the western area and that he must be allowed to pursue his
claim.
Although the court is not persuaded by the argument of [Rev. Cortez] that he has already acquired vested rights
over the area claimed by him, the court must recognize that [Rev. Cortez] may have acquired some propriety rights
over the area considering the directive of the DENR to allow [Rev. Cortez] to pursue his application for patent.
However, the court wants to make clear that the application for patent by [Rev. Cortez] should be limited to an area
not to exceed five (5) hectares situated at the western portion of x x x Palaui Island identified in the sketch map as
Exh. "H-4." This area appears to be the portion where [Rev. Cortez] has clearly established his right or title by
reason of his long possession and occupation of the land.9
In his Answer,10 Biñas countered that: (1) Rev. Cortez has not proven that he has been in exclusive, open,
continuous and adverse possession of the disputed land in the concept of an owner; (2) Rev. Cortez has not shown
the exact boundaries and identification of the entire lot claimed by him; (3) Rev. Cortez has not substantiated his
claim of exemption from Proclamation No. 201; (4) under Proclamation No. 447, the entire Palaui Island, which
includes the land allegedly possessed and occupied by Rev. Cortez, was reserved as a marine protected area; and,
(4) injunction is not a mode to wrest possession of a property from one person by another.
Pre-trial and trial thereafter ensued.
On July 3, 2007, the RTC rendered its Decision11 making the injunction final and permanent. In so ruling, the said
court made reference to the Indigenous Peoples’ [Right] Act (IPRA) as follows:
The Indigenous [Peoples’ Right] Act should be given effect in this case. The affected community belongs to the
group of indigenous people which are protected by the State of their rights to continue in their possession of the
lands they have been tilling since time immemorial. No subsequent passage of law or presidential decrees can
alienate them from the land they are tilling.12
Ultimately, the RTC held, thus:
WHEREFORE, finding the petition to be meritorious, the same is hereby GRANTED.
xxxx
SO DECIDED.13
Representing Biñas, the Office of the Solicitor General (OSG) filed a Notice of Appeal14 which was given due course
by the RTC in an Order15 dated August 6, 2007.

In its brief,16 the OSG pointed out that Rev. Cortez admitted during trial that he filed the Petition for injunction on
behalf of the indigenous cultural communities in Palaui Island and not in his capacity as pastor or missionary of the
Church of the Living God. He also claimed that he has no interest over the land. Based on these admissions, the
OSG argued that the Petition should have been dismissed outright on the grounds that it did not include the name of
the indigenous cultural communities that Rev. Cortez is supposedly representing and that the latter is not the real
party-in-interest. In any case, the OSG averred that Rev. Cortez failed to show that he is entitled to the issuance of
the writ of injunction. Moreover, the OSG questioned the RTC’s reference to the IPRA and argued that it is not
applicable to the present case since Rev. Cortez neither alleged in his Petition that he is claiming rights under the
said act nor was there any showing that he is a member of the Indigenous Cultural Communities and/or the
Indigenous Peoples as defined under the IPRA.
In its Decision17 dated June 29, 2011, the CA upheld the RTC’s issuance of a final injunction based on the following
ratiocination:
The requisites necesary for the issuance of a writ of preliminary injunction are: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious
damage. Here, [Rev. Cortez] has shown the existence of a clear and unmistakable right that must be protected and
an urgent and paramount necessity for the writ to prevent serious damage. Records reveal that [Rev. Cortez] has
been in peaceful possession and occupation of the western portion of Palaui Island, Sitio Siwangag, San Vicente,
Sta. Ana[,] Cagayan since 1962 or prior to the issuance of Proclamation Nos. 201 and 447 in 1967 and 1994,
respectively. There he built an orphanage and a school for the benefit of the members of the Dumagat Tribe, in
furtherance of his missionary and charitable works. There exists a clear and unmistakable right in favor [of Rev.
Cortez] since he has been in open, continuous and notorious possession of a portion of Palaui island. To deny the
issuance of a writ of injunction would cause grave and irreparable injury to [Rev. Cortez] since he will be displaced
from the said area which he has occupied since 1962. It must be emphasized that Proclamation Nos. 201 and 447
stated that the same are subject to private rights, if there be [any]. Though Palaui Island has been declared to be
part of the naval reservation and the whole [i]sland as a marine protected area, both recognized the existence of
private rights prior to the issuance of the same.
From the foregoing, we rule that the trial court did not err when it made permanent the writ of preliminary mandatory
injunction. Section 9, Rule 58 of the Rules of Court provides that if after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined, the court shall grant a final
injunction perpetually restraining the party or person enjoined from the commission or continuance of the act or acts
or confirming the preliminary mandatory injunction.18
Anent the issue of Rev. Cortez not being a real party-in-interest, the CA noted that this was not raised before the
RTC and therefore cannot be considered by it. Finally, with respect to the RTC’s mention of the IPRA, the CA found
the same to be a mere obiter dictum.
The dispositive portion of the CA Decision reads:
WHEREFORE, premise[s] considered, the instant Appeal is hereby DENIED. The assailed 3 July 2007 Decision of
the Regional Trial Court of Aparri, Cagayan, Branch 8 in Civil Case No. II-2403 is AFFIRMED.
SO ORDERED.19
Hence, this Petition brought by the OSG on behalf of the Republic of the Philippines (the Republic).
The Issue
The ultimate issue to be resolved in this case is whether Rev. Cortez is entitled to a final writ of mandatory
injunction.
The Parties’ Arguments
The bone of contention as the OSG sees it is the injunctive writ since Rev. Cortez failed to prove his clear and
positive right over the 5-hectare portion of Palaui Island covered by the same. This is considering that by his own
admission, Rev. Cortez started to occupy the said area only in 1962. Hence, when the property was declared as a
military reserve in 1967, he had been in possession of the 5-hectare area only for five years or short of the 30-year
possession requirement for a bona fide claim of ownership under the law. The OSG thus argues that the phrase
"subject to private rights" as contained in Proclamation No. 201 and Proclamation No. 447 cannot apply to him since
it only pertains to those who have already complied with the requirements for perfection of title over the land prior to
the issuance of the said proclamations.
Rev. Cortez, for his part, asserts that the arguments of the OSG pertaining to ownership are all immaterial as his
Petition for injunction does not involve the right to possess based on ownership but on the right of possession which
is a right independent from ownership. Rev. Cortez avers that since he has been in peaceful and continuous
possession of the subject portion of Palaui Island, he has the right of possession over the same which is protected
by law. He asserts that based on this right, the writ of injunction was correctly issued by the RTC in his favor and
aptly affirmed by the CA. On the technical side, Rev. Cortez avers that the Republic has no legal personality to
assail the CA Decision through the present Petition since it was not a party in the appeal before the CA.
The Court’s Ruling
We grant the Petition.
For starters, the Court shall distinguish a preliminary injunction from a final injunction.
"Injunction is a judicial writ, process or proceeding whereby a party is directed either to do a particular act, in which
case it is called a mandatory injunction, [as in this case,] or to refrain from doing a particular act, in which case it is
called a prohibitory injunction."20 "It may be the main action or merely a provisional remedy for and as an incident in
the main action."21
"The main action for injunction is distinct from the provisional or ancillary remedy of preliminary injunction." 22 A
preliminary injunction does not determine the merits of a case or decide controverted facts.23 Since it is a mere
preventive remedy, it only seeks to prevent threatened wrong, further injury and irreparable harm or injustice until
the rights of the parties are settled.24 "It is usually granted when it is made to appear that there is a substantial
controversy between the parties and one of them is committing an act or threatening the immediate commission of
an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had
on the merits of the case."25 A preliminary injunction is granted at any stage of an action or proceeding prior to
judgment or final order.26 For its issuance, the applicant is required to show, at least tentatively, that he has a right
which is not vitiated by any substantial challenge or contradiction.27 Simply stated, the applicant needs only to show
that he has the ostensible right to the final relief prayed for in his complaint.28 On the other hand, the main action for
injunction seeks a judgment that embodies a final injunction.29 A final injunction is one which perpetually restrains the
party or person enjoined from the commission or continuance of an act, or in case of mandatory injunctive writ, one
which confirms the preliminary mandatory injuction.30 It is issued when the court, after trial on the merits, is
convinced that the applicant is entitled to have the act or acts complained of permanently enjoined.31 Otherwise
stated, it is only after the court has come up with a definite pronouncement respecting an applicant’s right and of the
act violative of such right, based on its appreciation of the evidence presented, that a final injunction is issued. To be
a basis for a final and permanant injunction, the right and the act violative thereof must be established by the
applicant with absolute certainty.32
What was before the trial court at the time of the issuance of its July 3, 2007 Decision is whether a final injunction
should issue. While the RTC seemed to realize this as it in fact made the injunction permanent, the Court, however,
finds the same to be wanting in basis.
Indeed, the RTC endeavored to provide a narrow distinction between a preliminary injunction and a final injunction.
Despite this, the RTC apparently confused itself. For one, what it cited in its Decision were jurisprudence relating to
preliminary injunction and/or mandatory injunction as an ancillary writ and not as a final injunction. At that point, the
duty of the RTC was to determine, based on the evidence presented during trial, if Rev. Cortez
has conclusively established his claimed right (as opposed to preliminary injunction where an applicant only needs
to at least tentatively show that he has a right) over the subject area. This is considering that the existence of such
right plays an important part in determining whether the preliminary writ of mandatory injunction should be
confirmed.
Surprisingly, however, the said Decision is bereft of the trial court’s factual findings on the matter as well as of its
analysis of the same vis-a-vis applicable jurisprudence. As it is, the said Decision merely contains a restatement of
the parties’ respective allegations in the Complaint and the Answer, followed by a narration of the ensuing
proceedings, an enumeration of the evidence submitted by Rev. Cortez, a recitation of jurisprudence relating to
preliminary injunction and/or specifically, to mandatory injunction as an ancillary writ, a short reference to the IPRA
which the Court finds to be irrelevant and finally, a conclusion that a final and permanent injunction should issue. No
discussion whatsoever was made with respect to whether Rev. Cortez was able to establish with absolute certainty
hisclaimed right over the subject area.
Section 14, Article VIII of the Constitution, as well as Section 1 of Rule 36 and Section 1, Rule 120 of the Rules on
Civil Procedure, similarly state that a decision, judgment or final order determining the merits of the case shall state,
clearly and distinctly, the facts and the law on which it is based. Pertinently, the Court issued on January 28, 1988
Administrative Circular No. 1, which requires judges to make complete findings of facts in their decision, and
scrutinize closely the legal aspects of the case in the light of the evidence presented, and avoid the tendency to
generalize and to form conclusion without detailing the facts from which such conclusions are deduced.33
Clearly, the Decision of the RTC in this case failed to comply with the aforestated guidelines.
In cases such as this, the Court would normally remand the case to the court a quo for compliance with the form and
substance of a Decision as required by the Constitution. In order, however, to avoid further delay, the Court deems it
proper to resolve the case based on the merits.34
"Two requisites must concur for injunction to issue: (1) there must be a right to be protected and (2) the acts against
which the injunction is to be directed are violative of said right."35 Thus, it is necessary that the Court initially
determine whether the right asserted by Rev. Cortez indeed exists. As earlier stressed, it is necessary that such
right must have been established by him with absolute certainty.
Rev. Cortez argues that he is entitled to the injunctive writ based on the right of possession (jus possesionis) by
reason of his peaceful and continuous possession of the subject area since 1962. He avers that as this right is
protected by law, he cannot be peremptorily dispossessed therefrom, or if already dispossessed, is entitled to be
restored in possession. Hence, the mandatory injunctive writ was correctly issued in his favor.
Jus possessionis or possession in the concept of an owner36 is one of the two concepts of possession provided
under Article 52537 of the Civil Code. Also referred to as adverse possession,38 this kind of possesion is one which
can ripen into ownership by prescription.39 As correctly asserted by Rev. Cortez, a possessor in the concept of an
owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or
prove it.40 In the same manner, the law endows every possessor with the right to be respected in his possession.41
It must be emphasized, however, that only things and rights which are susceptible of being appropriated may be the
object of possession.42 The following cannot be appropriated and hence, cannot be possessed: property of the public
dominion, common things (res communes) such as sunlight and air, and things specifically prohibited by law.43
Here, the Court notes that while Rev. Cortez relies heavily on his asserted right of possession, he, nevertheless,
failed to show that the subject area over which he has a claim is not part of the public domain and therefore can be
the proper object of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain belong to the State.44 Hence, "[a]ll lands not
appearing to be clearly under private ownership are presumed to belong to the State. Also, public lands remain part
of the inalienable land of the public domain unless the State is shown to have reclassified or alienated them to
private persons."45 To prove that a land is alienable, the existence of a positive act of the government, such as
presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands
investigators; and a legislative act or a statute declaring the land as alienable and disposable must be established.46
In this case, there is no such proof showing that the subject portion of Palaui Island has been declared alienable and
disposable when Rev. Cortez started to occupy the same. Hence, it must be considered as still inalienable public
domain. Being such, it cannot be appropriated and therefore not a proper subject of possession under Article 530 of
the Civil Code. Viewed in this light, Rev. Cortez’ claimed right of possession has no leg to stand on. His possession
of the subject area, even if the same be in the concept of an owner or no matter how long, cannot produce any legal
effect in his favor since the property cannot be lawfully possessed in the first place.
The same goes true even if Proclamation No. 201 and Proclamation No. 447 were made subject to private rights.
The Court stated in Republic v. Bacas,47 viz.:
Regarding the subject lots, there was a reservation respecting ‘private rights.’ In Republic v. Estonilo, where the
Court earlier declared that Lot No. 4319 was part of the Camp Evangelista Military Reservation and, therefore, not
registrable, it noted the proviso in Presidential Proclamation No. 265 requiring the reservation to be subject to
private rights as meaning that persons claiming rights over the reserved land were not precluded from proving their
claims. Stated differently, the said proviso did not preclude the LRC from determining whether x x x the respondents
indeed had registrable rights over the property.
As there has been no showing that the subject parcels of land had been segregated from the military
reservation, the respondents had to prove that the subject properties were alienable or disposable land of
the public domain prior to its withdrawal from sale and settlement and reservation for military purposes
under Presidential Proclamation No. 265. The question is primordial importance because it is determinative if the
land can in fact be subject to acquisitive prescription and, thus, registrable under the Torrens system. Without first
determining the nature and character of the land, all other requirements such as length and nature of
possession and occupation over such land do not come into play. The required length of possession does
not operate when the land is part of the public domain.
In this case, however, the respondents miserably failed to prove that, before the proclamation, the subject lands
were already private lands. They merely relied on such ‘recognition’ of possible private rights. In their application,
they alleged that at the time of their application, they had been in open, continuous, exclusive and notorious
possession of the subject parcels of land for at least thirty (30) years and became its owners by prescription. There
was, however, no allegation or showing that the government had earlier declared it open for sale or settlement, or
that it was already pronounced as inalienable and disposable.48
In view of the foregoing, the Court finds that Rev. Cortez failed to conclusively establish his claimed right over the
subject portion of Palaui Island as would entitle him to the issuance of a final injunction.
Anent the technical issue raised by Rev. Cortez, i. e, that the Republic has no personality to bring this Petition since
it was not a party before the CA, the Court deems it prudent to set aside this procedural barrier. After all, "a party's
standing before [the] Court is a [mere] procedural technicality which may, in the exercise of [its] discretion, be set
aside in view of the importance of the issue raised."49
We note that Rev. Cortez alleged that he sought the injunction so that he could continue his humanitarian works.
However, considering that inalienable public land was involved, this Court is constrained to rule in accordance with
the aforementioned.
WHEREFORE, the Petition is GRANTED. The June 29, 2011 Decision of the Court of Appeals in CA-GR. CV No.
89968 denying the appeal and affirming the July 3, 2007 Decision of the Regional Trial Court of Aparri, Cagayan-
Branch 08 in Spl. Civil Action Case No. II-2403, is REVERSED and SET ASIDE. Accordingly, the final injunction
issued in this case is ordered DISSOLVED and the Petition for Injunction in Spl. Civil Action Case No. II-
2403, DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 198426, September 02, 2015
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION

(POEA), Petitioner, v. PRINCIPALIA MANAGEMENT AND PERSONNEL CONSULTANTS, INC., Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 4, 2011 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
111874 which denied the Petition for Certiorari and Prohibition3 filed therein by petitioner Republic of the Philippines (the
Republic), through the Philippine Overseas Employment Administration (POEA), questioning the Orders4 dated July 28, 2009
and October 5, 2009 of the Regional Trial Court (RTC) of Mandaluyong City, Branch 212 in Civil Case No. MC09-4043. Also
assailed is the August 31, 2011 CA Resolution5 which denied the Republic's Motion for Reconsideration thereto.
Factual Antecedents
In the Order6 of June 8, 2009 in POEA Case No. RV 07-03-0442, respondent Principalia Management and Personnel
Consultants, Inc. (Principalia), a recruitment agency, was found by the POEA to have collected from complainant Alejandro
Ramos an excessive placement fee. It was thus declared to have violated Section 2(b), Rule I, Part VI 7 of the 2002 POEA
Rules and Regulations (POEA Rules), a serious offense which carries the penalty of cancellation of license for the first
offense.8 Accordingly, upon Principalia's receipt of the aforesaid Order on June 24, 2009, the POEA immediately cancelled its
license based on Section 5, Rule V, Part VI of the POEA Rules, viz.: ChanRoble svi rtual Lawli bra ry
Stay of Execution. The decision of the Administration shall be stayed during the pendency of the appeal; Provided that
where the penalty imposed carries the maximum penalty of twelve months suspension or cancellation of
license, the decision shall be immediately executory despite the pendency of the appeal.
Provided further that where the penalty imposed is suspension of license for one month or less, the decision shall be
immediately executory and may only be appealed on ground of grave abuse of discretion. (Emphasis supplied)
Two days later or on June 26, 2009, Principalia sought to stay the implementation of the June 8, 2009 POEA Order by filing
with the RTC of Mandaluyong City a Complaint for Injunction with Application for Issuance of a Temporary Restraining Order
(TRO) and/or Writ of Preliminary Prohibitory and Mandatory Injunction.9 It contended that the immediate cancellation of its
license not only deprived it of due process but also jeopardized the deployment of hundreds of overseas Filipino workers.
That same day, the Executive Judge of RTC Mandaluyong issued a 72-hour TRO10 to allow the deployment of six workers who
were already scheduled to leave for work abroad.
In the meantime, Principalia appealed the June 8, 2009 POEA Order with the Office of the Secretary of the Department of
Labor and Employment (DOLE Secretary) on July 8, 2009.11 cralaw rednad
On July 22, 2009, POEA filed with the RTC a Motion to Dismiss12 based on the grounds of lack of jurisdiction, failure to
exhaust administrative remedies and forum-shopping. According to it, (1) it is the DOLE Secretary and not the RTC which
has jurisdiction over cases assailing POEA Orders which direct the cancellation of license of a recruitment agency; (2)
assuming that the RTC has jurisdiction, Principalia nevertheless failed to exhaust administrative remedies since it failed to
first seek recourse from the DOLE; and, (3) Principalia committed forum-shopping when it also later appealed the June 8,
2009 POEA Order with the DOLE.
In its July 28, 2009 Order,13 the RTC rejected POEA's arguments in its Motion to Dismiss. It held that: 1) it was conferred
jurisdiction over injunction actions by Section 21 of Batas Pambansa Blg. 129 (BP 129), or the Judiciary Reorganization Act of
1980, as amended by Republic Act No. 7691 (RA 7691); 2) the case falls under the exception to the rule on exhaustion of
administrative remedies since it appears that Principalia may suffer irreparable damage as a result of the immediate
cancellation of its license; and, 3) there is no forum-shopping because there is neither identity of parties nor identity of relief
between the injunction case and the appeal before the DOLE. Hence, the RTC denied the said motion.
POEA moved for reconsideration14 but the RTC remained unconvinced of its contentions that it denied the same in its October
5, 2009 Order.15 cra lawredna d
Recapitulating the arguments in the said Motion to Dismiss, the Republic, through the POEA, questioned by way of Petition
for Certiorari and Prohibition16 the aforementioned July 28, 2009 and October 5, 2009 Orders of the RTC before the CA.
In its April 4, 2011 Decision,17 the CA debunked the argument of the Republic that the injunction case is in reality an action
for the reversal of the POEA's order of cancellation of license over which the DOLE Secretary has jurisdiction. It explained
that contrary to the Republic's contention, the injunction case is only meant to determine the legality or propriety of the
immediate cancellation of Principalia's license. This is pursuant to Principalia's claim that under the 2002 POEA Rules, it has
the right to be protected from an unwarranted immediate execution of a cancellation order. Thus, pursuant to BP 129 which
confers upon the RTC jurisdiction over actions for injunction, the trial court correctly assumed jurisdiction over the injunction
case. The CA further noted that the RTC had not even ruled yet on the merits of the injunction case and thus, the Republic
cannot claim that the latter already intruded into a matter that falls under the exclusive realm of authority of the DOLE
Secretary. Lastly, it opined that the provisions of the 2002 POEA Rules upon which the Republic heavily relies cannot deprive
the regular courts of jurisdiction to entertain an injunction complaint. Accordingly, the CA found no grave abuse of discretion
on the part of the RTC in issuing its assailed Orders.
In a Resolution18 dated August 31, 2011, the CA stood its ground by denying the Republic's Motion for Reconsideration.
Unrelenting in its opinion that the RTC should have dismissed outright the injunction suit, the Republic filed this Petition on
October 20, 2011.
However, on May 22, 2013, Principalia, filed a Motion to Dismiss (With Leave of Court)19 before the RTC. It averred that due
to the length of time that the case has been pending, it is no longer interested in pursuing the same. Aside from this,
Principalia believed that the issues involved in this case have already become moot and academic in view of the subsequent
renewal of its license. It thus prayed that its action for injunction be dismissed pursuant to Section 2,20 Rule 17 of the Rules
of Court. On June 5, 2013, the RTC granted the motion and dismissed the case.21 cralawred nad
The Parties' Arguments
Principalia, aside from refuting the substantial arguments of the Republic, asserts that the present Petition is already moot
and academic. This is in view of the fact that its 2007 license which was ordered cancelled by the POEA had already long
expired and in fact has been renewed by the POEA many times over. Principalia thus asserts that a ruling on this Petition will
no longer be of practical value considering that the subject matter that Principalia then sought to enjoin was the immediate
enforcement of the POEA Order cancelling its 2007 license. For this reason, the Petition should be dismissed.22 cra lawredna d
The Republic, on the other hand, argues that the renewal of Principal's license does not bar this Court from ruling on the
matters raised in the Petition. Even assuming that the Petition has indeed become moot and academic, the case at bench
falls under the exceptions that authorize courts to pass upon questions that are already moot. To farther convince the Court,
the Republic avers that in view of the plethora of pending similar cases that seek injunction from regular courts, the
resolution of the instant Petition is necessary in settling once and for all which between the DOLE Secretary and the RTC has
jurisdiction over actions assailing a POEA Order that involves immediate enforcement of penalties for serious offenses such
as cancellation of license. The Republic likewise buttresses its other arguments that Principalia failed to exhaust
administrative remedies when it directly filed the injunction case with the RTC and that it committed forum-shopping.23 c ralawred nad
Issue
The central issue in this case is whether the RTC has jurisdiction over the injunction case.
Our Ruling
At the outset, it must be noted that the Petition is dismissible for being moot and academic. It should be recalled that what
impelled Principalia to file the main action for injunction was the June 8, 2009 POEA Order directing the immediate
cancellation of its license. Since Principalia could not then engage in recruitment activities because of the said Order, it
resorted to the RTC to question and seek to enjoin such immediate cancellation for the obvious reason that it wanted to
continue the operation of its business. Significantly, however, Principalia, to date, is a POEA-accredited recruitment agency
licensed to do business until April 1, 2016.24 As things stand, therefore, Principalia has no more claim for relief against POEA
since this has been mooted by the latter's renewal of its license to do business. In fact and as mentioned, Principalia already
moved for the dismissal of the injunction case before the RTC which the said court correctly granted.
"A case becomes moot and academic when, by virtue of supervening events, there is no more actual controversy between
the parties and no useful purpose can be served in passing upon the merits."25 In Arevalo v. Planters Development
cralawred
Bank,26 the Court expounded: ChanRoblesv irt ual Lawlib rary
The Constitution provides that judicial power 'includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable.' The exercise of judicial power requires an actual case calling
for it. The courts have no authority to pass upon issues through advisory opinions, or to resolve hypothetical or feigned
problems or friendly suits collusively arranged between parties without real adverse interests. Furthermore, courts do not sit
to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging. As a condition
precedent to the exercise of judicial power, an actual controversy between litigants must first exist. An actual
case or controversy involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution,
as distinguished from a hypothetical or abstract difference or dispute. There must be a contrariety of legal rights that can be
interpreted and enforced on the basis of existing law and jurisprudence. (Emphases supplied)
However, the Court agrees with the Republic that while the case has indeed been rendered moot, it can still pass upon the
main issue for the guidance of both bar and bench. It is settled that courts will decide a question otherwise moot and
academic if the case is capable of repetition yet evading review.27 c ralawre dnad
In stressing that the RTC is bereft of jurisdiction to entertain the injunction case, the Republic avers that it is the POEA which
has original and exclusive jurisdiction to hear and decide all pre-employment cases which are administrative in character
involving or arising out of violations of recruitment regulations, or violations of conditions for the issuance of license to recruit
workers, under Section 3(d) of Executive Order No. 24728 (EO 247) and as reiterated in Section 1, Rule I, Part VI of the 2002
POEA Rules.29 On the other hand, the remedy of an appeal/petition for review of an Order issued by the POEA in the exercise
of such exclusive jurisdiction is lodged exclusively with the DOLE Secretary as provided under Section 1, Rule V, Part VI of
the 2002 POEA Rules.30 Notably, however, nothing in EO 247 and the 2002 POEA Rules relied upon by the Republic provides
for the grant to a recruitment agency of an injunctive relief from the immediate execution of penalties for serious offenses
(e.g., cancellation to operate, suspension of license for a maximum period of 12 months). Conversely, they do not deprive
the courts of the power to entertain injunction petitions to stay the execution of a POEA order imposing such penalties.
The Court thus agrees with the CA in holding that the RTC can take cognizance of the injunction complaint, which "is a suit
which has for its purpose the enjoinment of the defendant, perpetually or for a particular time, from the commission or
continuance of a specific act, or his compulsion to continue performance of a particular act."31 Actions for injunction and
damages lie within the exclusive and original jurisdiction of the RTC pursuant to Section 1932 of Batas Pambansa Blg. 129,
otherwise known as the Judiciary Reorganization Act of 1980, as amended by RA 7691.33 cralaw rednad
While "[w]ell-entrenched is the rule that courts will not interfere in matters which are addressed to the sound discretion of
the government agency entrusted with the regulation of activities coming under the special and technical training and
knowledge of such agency,"34 it is not entirely correct to say that an action by an administrative agency, such as in the case
at bar, cannot be questioned in an injunction suit. It has been held that "[c]ourts cannot enjoin an agency from performing
an act within its prerogative, except when in the exercise of its authority it gravely abused or exceeded its
jurisdiction."35Indeed, administrative decisions on matters within the executive jurisdiction can be set aside on proof of grave
abuse of discretion, fraud, or error of law, and in such cases, injunction may be granted.36 cralaw rednad
The Republic further argues that Principalia committed forum-shopping when it sought relief both from the RTC and the DOLE
Secretary. The Court, however, finds otherwise. What Principalia questioned before the DOLE Secretary was the merits of the
case which brought about the POEA's issuance of its order cancelling Principalia's license. Whereas before the RTC, the relief
sought by Principalia is limited to enjoining the POEA from immediately enforcing such cancellation. Clearly, the reliefs
sought by Principalia from the two fora were different and this negates forum-shopping.37 Neither would the RTC, in resolving
the injunction suit, encroach upon the DOLE Secretary's authority since Principalia was not asking the said court to prohibit
the DOLE Secretary from resolving the appeal before it or for Principalia to be allowed to continue operating its business
regardless of the judgment in the appeal.
Anent the failure of Principalia to observe the principle of exhaustion of administrative remedies, suffice it to say that this
principle admits of exceptions,38 and notably, Principalia raised one of these exceptions, i.e., deprivation of due process, as
an issue in its suit. And since this issue is a question of fact which the Court can only determine after the trial is had, the RTC
was correct in not dismissing the case and in allowing the same to proceed to trial. Significantly, this likewise goes true with
respect to the main relief for injunction. As the elements for its issuance, i.e., (1) there must be a right to be protected; and
(2) the acts against which the injunction is to be directed are violative of said right,39 are matters that must be proved during
trial, the RTC merely acted in its judicial sphere when it proceeded to try the case.
WHEREFORE, the instant Petition is DENIED. The April 4, 2011 Decision and August 31, 2011 Resolution of the Court of
Appeals in CA-G.R. SP No. 111874 are AFFIRMED.
SO ORDERED. chanrobles virtuallawlibrary
SECOND DIVISION
G.R. No. 203142, August 26, 2015
THE PHILIPPINE PORTS AUTHORITY (PPA), Petitioner, v. COALITION OF PPA OFFICERS AND EMPLOYEES,
REPRESENTED BY HECTOR E. MIOLE, ET AL., Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the July 27, 2011 Decision2 of the Court of Appeals (CA) dismissing
herein petitioner Philippine Ports Authority's (PPA) Petition for Certiorari in CA-G.R SP No. 03843, as well as theCA's August
10, 2012 Resolution3 denying reconsideration of its assailed Decision.
Factual Antecedents
Petitioner is a government-owned and -controlled corporation in charge of port administration and operation in the country.
Respondent Coalition of PPA Officers and Employees, represented by Hector E. Miole, is an aggrupation of PPA employees set
up as a result of the instant case.
In an Amended Petition for Mandamus with Damages4 filed on February 28, 2008 before the Cebu City Regional Trial Court
(RTC), docketed as Civil Case No. CEB-33982, and assigned to RTC Branch 21, respondent sought mainly to compel
petitioner to pay all its employees cost of living allowance (COLA) and amelioration allowance (AA), pursuant to the mandate
of Republic Act No. 67585 (RA 6758). Respondent claimed that the payment of these allowances were withheld by petitioner
on July 15, 1999.
Petitioner filed its Amended Answer with Compulsory Counterclaim.6 As special and affirmative defenses, it argued that
respondent had no legal standing to file the Petition since it did not secure the required powers of attorney from the PPA
employees and that it is not the recognized representative or bargaining/negotiating agent of the employees. Petitioner
alleged that there is another pending case between the parties involving the same subject matter and issues and that the
official documents which constitute the basis for filing the Petition are hearsay as they were obtained without petitioner's
authority/clearance. Moreover, there was no prior demand for the fulfillment of the alleged obligation sued upon. It also
asserted that res judicata exists and that there is no cause of action against it, as COLA and AA payments to the employees
were discontinued on March 16, 1999 pursuant to 1) Section 4 of DBM (Department of Budget and Management) Corporate
Compensation Circular No. 10 (DBM CCC 10), implementing Section 12 of RA 6758 which provides that all allowances, except
those specifically excluded and enumerated in said Section,7 shall be deemed included or integrated in the standardized
salary rates prescribed by said law, and 2) the ruling in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989
v. Commission on Audit8 which states that the integration of COLA and AA into the standardized salaries of the PPA
employees became effective on March 16, 1999. Thus, as of said date, PPA employees were no longer entitled to receive
these two allowances. Petitioner also claimed that mandamus will not lie against the clear mandate of RA 6758 and DBM CCC
10; that respondent failed to exhaust all administrative remedies relative to its claim; that respondent is guilty of laches for
filing the case only in 2008, when the COLA and AA were discontinued in March 1999; and that the case is really for a sum of
money, which thus requires the payment of the appropriate docket fees corresponding to the amount of COLA and AA being
claimed.
During the preliminary conference, petitioner moved to set the case for hearing on its affirmative defenses. The parties were
directed to submit their respective memoranda relative to the motion, and to attend the mediation which was scheduled on
May 27, 2008. The parties thus submitted memoranda9and attended the scheduled mediation.
On June 27, 2008, the RTC issued an Order,10 stating as follows: Lawl ib raryofCRAlaw
Upon examination and review of the records, this Court has found that the instant case refers to a petition for mandamus
with damages filed by the petitioner, thru counsel. It seeks to compel respondent PPA to integrate the amount of Cost of
Living Allowance (COLA) and Amelioration Allowance (AA) into the basic salaries of the petitioners as of July 15, 1999, the
corresponding differentials, and to continue paying them. Respondent PPA filed its Answer with Counterclaim with Special
and Affirmative Defenses (such answer was subsequently amended). Upon order of this Court, parties also submitted their
respective memoranda amplifying their stand on the Special and Affirmative Defenses, apart from some written
manifestations. After evaluation, this Court now believes that it can render judgment based on the pleadings submitted by
the parties without further hearings.
Accordingly, and in order to expedite the disposition of this case, this Court hereby orders the parties to submit their
respective memoranda within thirty (30) days from notice hereof, after which, this case will be deemed submitted for
decision.
Furnish copies of this Order to the counsels of the parties. SO ORDERED.11
Petitioner filed its Motion for Reconsideration12 praying that a hearing on its motion be conducted first before the submission
of memoranda. It argued that there is need to present evidence relative to the actual number or membership of the coalition,
which has bearing on other special and affirmative defenses raised in the Amended Answer, particularly lack of legal
standing/proper representation to sue, litis pendentia, and res judicata. It also averred that documentmy evidence submitted
by respondent during the pre-trial conference - but which petitioner denied specifically - must be presented in court and
identified before they could be admitted for trial. It claimed that there is confusion as to what law to apply if the Petition
for Mandamus were to be granted; that respondent's prayer is in conflict with the trial court's appreciation of the remedy to
be accorded in the case, and thus there is a danger that double compensation could occur; and that until all the foregoing
matters are clarified, it would be unable to prepare and submit an intelligent memorandum. These arguments were reiterated
in a Reply.13
reda rc law
In a September 5, 2008 Order,14 the trial court denied petitioner's Motion for Reconsideration, stating that: Lawlibra ryofCRAlaw
Preliminarily, it must be stressed that the Order dated July 27, 2008, now sought to be reconsidered, is based on the
provisions of Section [sic] 7 and 8, of Rule 65 of the 1997 Rules of Civil Procedure, which pertinently reads [sic]: Lawl ibraryofCRAlaw
Section 7 (supra) provides:Lawl ibra ry ofCRAlaw
"x x x The Court in which the petition is filed may issue orders expediting the proceedings, and it may also grant temporary
restraining order or a writ of preliminary injlll1ction from [sic] the preservation of the rights of the parties pending such
proceedings. x x x"
Section 8 (supra) also provides: Lawli bra ryofCRAlaw
"x x x After the comment or other pleadings required by the court are filed, or the time for the filing thereof has expired, the
court may hear the case or require the parties to submit memoranda. If after such hearing or submission of memorandum or
the expiration of the period for the filing thereof the court finds that the allegations of the petition are true, it shall render
judgment for the relief prayed for or to which the petitioner is entitled.
x x x x"
Counsels for the respondent argue that there is a need for hearing to determine the factual issues, x x x and whether x x x
petitioners made a demand upon the respondent (PPA), among others. On the other hand, petitioners' counsel argue[s] that
the issues to be resolved in this case are legal ones, which can be resolved based on the pleadings submitted by the parties.
The motion is unmeritorious.
After re-examining the records, this Court holds that the primary and principal issue to be resolved in this case, which is a
mandamus suit, is whether x x x respondent can be compelled to perform an act which the law (RA 6758) specifically enjoins
as [sic] a duty. All other issues raised, which respondent insists to be heard, are incidental to the said principal issue. Hence,
the determination of all other issues, which respondent insists to be factual, shall not be allowed to deter the expeditious
resolution of this case.
WHEREFORE, premises considered, the respondent's motion for reconsideration is hereby DENIED, for lack of merit.
Notify the counsels.
SO ORDERED.15
Petitioner filed a Petition for Certiorari16 with the CA, docketed as CA G.R SP No. 03843, arguing that the trial court
committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing its June 27, 2008 and September
5, 2008 Orders. It asserted that under Section 6, Rule 1617 and Section 8, Rule 6518 of the 1997 Rules of Civil Procedure
(1997 Rules), the trial court, by conducting a hearing on its affirmative defenses as if a motion to dismiss had been filed,
may dismiss respondent's Petition if it finds the same to be patently without merit, prosecuted manifestly for delay, or that
the questions raised therein are too unsubstantial to require consideration. Moreover, that the trial court must conduct a
hearing on the factual issues as well, as they are critical to the judicious resolution of the main issues; that the legal and
factual issues raised are substantial and should not have been ignored by the trial court, which was duty-bound instead to
resolve the same. Petitioner claimed that the trial court's refusal to set a hearing constituted a disregard of Rule 3.05 of the
Code of Judicial Conduct19 and Supreme Court Administrative Circular No.1, issued on January 28, 1988.20 redarc law
On July 27, 2011, the CA rendered the assailed judgment, stating as follows: Lawlib ra ryofCRAlaw
To begin with, the sole office of the prerogative writ of certiorari is to correct errors of jurisdiction including the commission
of grave abuse of discretion amounting to lack of jurisdiction. Thus, certiorari is not issued to cure errors in proceedings or
correct erroneous conclusions of law or fact. As long as a court acts within its jurisdiction, any alleged errors committed in
the exercise of its jurisdiction will amount to nothing more than errors of judgment which are reviewable by timely appeal
and not by a special civil action of certiorari.
In the case at bar, We hold that public respondent did not act with grave abuse of discretion when it issued the challenged
orders. It was well within the trial court's discretion to determine whether or not there was a necessity to hear the
affirmative defenses presented by petitioner in its answer.
It is true that Sec. 8 of Rule 65 provides that after the comment or other pleadings required by the court are filed, or the
time for the filing thereof has expired, the court mayhear the case or require the parties to submit memoranda The use of
the permissive word "may" in the aforesaid provision indicates that a hearing is only optional and not mandatory in nature.
In other words, the matter of holding a hearing on the affirmative defense is discretionary on the part of the trial court.
As to petitioner's invocation of Sec. 6, Rule 16 of the Rules of Court, the same provides that a preliminary hearing on the
affirmative defenses is subject to the discretion of the court, thus: Lawlibra ryofCRAlaw
Sec. 6 -Pleading grounds as affirmative defenses -If no motion to dismiss has been filed, any of the grounds for dismissal
provided for in this Rule may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a
preliminary hearing may be had thereon as if a motion to dismiss has been filed.
Moreover, the trial court in order to expedite the petition for mandamus, had a valid reason to dispense with the hearing. As
aptly put by the RTC in its second assailed Order, since the primary issue to be resolved in a mandamus suit is whether or
not private respondent (PPA) could be compelled to perform an act which the law specifically enjoins as a duty, all other
issues which PPA insists to be heard are merely incidental to the principal issue.
Petitioner failed to demonstrate how the issuance of the assailed Orders constituted a whimsical and capricious exercise of
judgment. Even if there was error of judgment on the part of the RTC, nevertheless, the same cannot be considered as grave
abuse of discretion which could be corrected through certiorari. As We have stated, certiorari will issue only to correct errors
of jurisdiction and not to correct errors of procedure or mistake in the findings of [sic] conclusions of the judge.
WHEREFORE, premises considered, the Petition for Certiorari is DENIED.

SO ORDERED.21
Petitioner filed its Motion for Reconsideration,22 reiterating in essence all its arguments in the Petition. However, the appellate
court denied the same in its second assailed August 10, 2012 disposition.
Hence, the instant Petition.
In a November 25, 2013 Resolution,23 this Court resolved to give due course to the Petition.
Issue
Petitioner argues that the CA erred in ruling that the trial court did not commit grave abuse of discretion in issuing the June
27, 2008 and September 5, 2008 Orders.
In its Petition and Reply24 praying for reversal of the assailed CA dispositions and that the trial court be ordered to conduct a
hearing on its affirmative defenses, petitioner reiterates its arguments in its CA Petition that it is a matter of urgent necessity
that a hearing be held on its affirmative defenses. It argues that by conducting a hearing on its affirmative defenses as if a
motion to dismiss had been filed, the trial court would be able to properly appreciate and resolve the legal and factual issues
and affirmative defenses raised in its answer, and thus dismiss the case if it finds that respondent's Petition for Mandamus is
patently without merit. Petitioner insists that such procedure is precisely warranted under Section 6, Rule 16 and Section 8,
Rule 65 of the 1997 Rules; and that the trial court's refusal to conduct a hearing on its affirmative defenses violates Rule
3.05 of the Code of Judicial Conduct and Supreme Court Administrative Circular No. 1 of January 28, 1988.
In its Comment25 seeking denial of the Petition, respondent claims that the Petition should be denied as the CA correctly held
that the trial court did not act with grave abuse of discretion in issuing its assailed Orders, and that the instant Petition has
been rendered moot and academic by judgment on the merits issued by the trial court on December 4, 2008.
Our Ruling
On December 4, 2008, the RTC issued a Decision26 in Civil Case No. CEB-33982, decreeing as follows: Lawlib raryofCR Alaw
WHEREFORE, the petition is GRANTED. Consequently, the respondent is ordered to comply with the mandate of Republic Act
6758 by actually integrating the COLA and AA into the basic salaries of petitioners, and until this was [sic] complied with,
respondent is ordered to pay the COLA and AA differentials from July 15, 1999 until the same shall have been actually
integrated into the petitioners' basic salaries, at the rates of 40% and 10% thereof, respectively.
All other claims and counterclaims are hereby dismissed. No pronouncement as to costs.
SO ORDERED.27
Petitioner appealed the trial court's Decision before the CA, which appeal was docketed as CA-G.R. CEB SP No. 04212. In a
January 21, 2013 Decision,28 the appellate court granted petitioner's appeal and thus reversed and set aside the RTC's
December 4, 2008 Decision in Civil Case No. CEB-33982 and ordered the dismissal of the case.
Respondent filed a Petition for Review on Certiorari before this Court, docketed as G.R. No. 209433. It remains pending.29 reda rc law
Considering that judgment on the merits has been issued in Civil Case No. CEB-33982, there is no need to resolve the instant
Petition, which has been rendered moot and academic. There is no need to scrutinize the actions of the trial court relative to
its issuance of the assailed orders after it has rendered judgment in the case.
Courts of justice constituted to pass upon substantial rights will not consider questions where no actual interests are
involved. Thus, the well-settled rule that courts will not determine a moot question. Where the issues have become moot and
academic, there ceases to be any justiciable controversy, thus rendering the resolution of the same of no practical value.
Courts will decline jurisdiction over moot cases because there is no substantial relief to which petitioner will be entitled and
which will anyway be negated by the dismissal of the petition. The Court will therefore abstain from expressing its opinion in
a case where no legal relief is needed or called for.30
While in their respective pleadings the parties insist on a resolution of the case on its merits -respondent even went so far as
to suggest that the instant case be ordered consolidated with G.R No. 209433 - the Court finds no cogent reason to do so;
indeed, there are no exceptional circumstances to justify such action. The case involves a simple controversy regarding the
application of a clear-cut law that has become the subject of a number of precedents; no constitutional question or
paramount public interest is involved. As we have held in Mattel, Inc. v. Francisco,31 redarclaw
Admittedly, there were occasions in the past when the Court passed upon issues although supervening events had rendered
those petitions moot and academic. After all, the "moot and academic" principle is not a magical formula that can
automatically dissuade the courts from resolving a case. Courts will decide cases, otherwise moot and academic, if:
first, there is a grave violation of the Constitution; second, the exceptional character of the situation and the
paramount public interest is involved; third, when the constitutional issue raised requires formulation of
controlling principles to guide the bench, the bar, and the public; and fourth, the case is capable of repetition
yet evading review.
Thus, in Constantino v. Sandiganbayan (First Division), Constantino, a public officer, and his co-accused, Lindong, a private
citizen, filed separate appeals from their conviction by the Sandiganbayan for violation of Section 3(e) of Republic Act No.
3019 or the Anti-Graft and Corrupt Practices Act. While Constantino died during the pendency of his appeal, the Court still
ruled on the merits thereof, considering the exceptional character of the appeals of Constantino and Lindong in relation to
each other; that is, the two petitions were so intertwined that the absolution of the deceased Constantino was determinative
of the absolution of his co-accused Lindong.
In Public Interest Center, Inc. v. Elma, the petition sought to declare as null and void the concurrent appointments of
Magdangal B. Elma as Chairman of the Presidential Commission on Good Government (PCGG) and as Chief Presidential Legal
Counsel (CPLC) for being contrary to Section 13, Article VII and Section 7, par. 2, Article IX-B of the 1987 Constitution. While
Elma ceased to hold the two offices during the pendency of the case, the Court still ruled on the merits thereof, considering
that the question of whether the PCGG Chairman could concurrently hold the position of CPLC was one capable of repetition.
In David v. Arroyo, seven petitions for certiorari and prohibition were filed assailing the constitutionality of the declaration of
a state of national emergency by President Gloria Macapagal-Arroyo. While the declaration of a state of national emergency
was already lifted during the pendency of the suits, this Court still resolved the merits of the petitions, considering that the
issues involved a grave violation of the Constitution and affected the public interest.
The Court also affirmed its duty to formulate guiding and controlling constitutional precepts, doctrines or rules, and
recognized that the contested actions were capable of repetition.
In Pimentel, Jr. v. Ermita, the petition questioned the constitutionality of President Gloria Macapagal-Arroyo's appointment of
acting secretaries without the consent of the Commission on Appointments while Congress was in session. While the
President extended ad interim appointments to her appointees immediately after the recess of Congress, the Court still
resolved the petition, noting that the question of the constitutionality of the President's appointment of department
secretaries in acting capacities while Congress was in session was one capable of repetition.
In Atienza v. Villarosa, the petitioners, as Governor and Vice-Governor, sought for clarification of the scope of the powers of
the Governor and Vice Governor under the pertinent provisions of the Local Government Code of 1991. While the terms of
office of the petitioners expired during the pendency of the petition, the Court still resolved the issues presented to formulate
controlling principles to guide the bench, bar and the public.
In Gayo v. Verceles, the petition assailing the dismissal of the petition for quo warranto filed by Gayo to declare void the
proclamation of Verceles as Mayor of the Municipality of Tubao, La Union during the May 14, 2001 elections, became moot
upon the expiration on June 30, 2004 of the contested term of office of Verceles. Nonetheless, the Court resolved the petition
since the question involving the one-year residency requirement for those running for public office was one capable of
repetition.
In Albaña v. Commission on Elections, the petitioners therein assailed the annulment by the Commission on Elections of their
proclamation as municipal officers in the May 14, 2001 elections. When anew set of municipal officers was elected and
proclaimed after the May 10, 2004 elections, the petition was mooted but the Court resolved the issues raised in the petition
in order to prevent a repetition thereof and to enhance free, orderly, and peaceful elections.
The instant case does not fall within the category of any of these exceptional cases in which 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. The issues in the present case call for an appraisal of factual considerations which
are peculiar only to the transactions and parties involved in this controversy. The issues raised in this petition do not call for
a clarification of any constitutional principle. Perforce, the Court dispenses with the need to adjudicate the instant case.
(Emphasis supplied)
Similarly, this case is not among those exceptional cases that must be adjudicated although the issues have become moot
and academic.
WHEREFORE, the Petition is DISMISSED for being moot and academic.
SO ORDERED. cralawlawlib
SECOND DIVISION
G.R. No. 201405, August 24, 2015

LIWAYWAY ANDRES, RONNIE ANDRES, AND PABLO B. FRANCISCO, Petitioners, v. STA. LUCIA REALTY &
DEVELOPMENT, INCORPORATED, Respondent.
DECISION
DEL CASTILLO, J.:
Not all may demand for an easement of right-of-way. Under the law, an easement of right-of-way may only be demanded by
the owner of an immovable property or by any person who by virtue of a real right may cultivate or use the same.
This Petition for Review on Certiorari assails the November 17, 2011 Decision1 of the Court of Appeals in CA-G.R. CV No.
87715, which reversed and set aside the May 22, 2006 Decision2 of the Regional Trial Court (RTC), Binangonan, Rizal,
Branch 68 granting petitioners Pablo B. Francisco (Pablo), Liwayway Andres (Liwayway), Ronnie Andres (Ronnie) and their
co-plaintiff Liza Andres (Liza) a 50-square meter right-of-way within the subdivision of respondent Sta. Lucia Realty and
Development, Incorporated (respondent).
Likewise assailed is the March 27, 2012 CA Resolution3 which denied petitioners and Liza's Motion for Reconsideration
thereto.
Factual Antecedents
Petitioners and Liza filed a Complaint4 for Easement of Right-of-Way against respondent before the RTC on November
28,2000. They alleged that they are co-owners and possessors for more than 50 years of three parcels of unregistered
agricultural land in Pag-asa, Binangonan, Rizal with a total area of more or less 10,500 square meters (subject property). A
few years back, however, respondent acquired the lands surrounding the subject property, developed the same into a
residential subdivision known as the Binangonan Metropolis East, and built a concrete perimeter fence around it such that
petitioners and Liza were denied access from subject property to the nearest public road and vice versa. They thus prayed for
a right-of-way within Binangonan Metropolis East in order for them to have access to Col. Guido Street, a public road.
In its Answer,5 respondent denied knowledge of any property adjoining its subdivision owned by petitioners and Liza. At any
rate, it pointed out that petitioners and Liza failed to sufficiently allege in their complaint the existence of the requisites for
the grant of an easement of right-of-way.
During trial, Pablo testified that he bought a 4,000-square meter-portion of the subject property from Carlos Andres (Carlos),
the husband of Liwayway and father of Ronnie and Liza.6 According to Pablo, he and his co-plaintiffs are still in possession of
the subject property as evidenced by an April 13, 1998 Certification7 issued by the Barangay Chairman of Pag-asa.8 Further,
Pablo clarified that the easement of right-of-way that they are asking from respondent would traverse the latter's subdivision
for about 50 meters from the subject property all the way to another subdivision that he co-owns, Victoria Village, which in
turn, leads to Col. Guido Street.9 He claimed that the prevailing market value of lands in the area is about P600.00 per
square meter. Pablo also explained that the subject property is still not registered under the Land Registration Act since no
tax declaration over the same has been issued to them despite application with the Municipal Assessor of
Binangonan.10 When required by the court to submit documents regarding the said application,11 Pablo attached in his
Compliance,12 among others, Carlos' letter13 of Maty 18, 1998 to the Municipal Assessor of Binangonan requesting for the
issuance of a tax declaration and the reply thereto dated August 5, 199814 of the Provincial Assessor of Rizal. In the aforesaid
reply, the Provincial Assessor denied the request on the ground that the subject property was already declared for taxation
purposes under the name of Juan Diaz and later, in the name of Juanito15Blanco, et al. (the Blancos).
Liwayway testified next. According to her, she and her children Ronnie and Liza are the surviving heirs of the late Carlos who
owned the subject property.16 Carlos acquired ownership over the same after he had been in continuous, public and peaceful
possession thereof for 50 years,17 the circumstances of which he narrated in a Sinumpaang Salaysay18 that he executed while
he was still alive. Carlos stated therein that even before he was born in 1939, his father was already in possession and
working on the subject property; that in 1948, he started to help his father in tilling the land; that when his father became
weak and eventually died, he took over the land; and, that he already sought to register his ownership of the property with
the Department of Environment and Natural Resources (DENR) and to declare the same for taxation purposes.
For its part, respondent presented as a lone witness the then Municipal Assessor of Binangonan, Virgilio Flordeliza
(Flordeliza). Flordeliza confirmed that Carlos wrote him a letter-request for the issuance of a tax declaration.19 He, however,
referred the matter to the Provincial Assessor of Rizal since the property for which the tax declaration was being applied for
was already declared for taxation purposes in the name of one Juan Diaz.20 Later, the tax declaration of Juan Diaz was
cancelled and in lieu thereof, a tax declaration in the name of the Blancos was issued.21 For this reason, the Provincial
Assessor of Rizal denied Carlos' application for issuance of tax declaration.22 cralawredna d
The RTC rendered its Decision23 on May 22, 2006. It observed that petitioners and Liza's allegation in their Complaint that
they were in possession of the subject property for more than 50 years was not denied by respondent in its Answer. Thus,
the same is deemed to have been impliedly admitted by the latter. It then ratiocinated that based on Article 113724 of the
Civil Code, petitioners and Liza are considered owners of the subject property through extraordinary prescription. Having real
right over the same, therefore, they are entitled to demand an easement of right-of-way under Article 64925 of the Civil
cralawred
Code.
The RTC further held that Pablo's testimony sufficiently established: (1) that the subject property was surrounded by
respondent's property; (2) the area and location of the right-of-way sought; (3) the value of the land on which the right-of-
way is to be constituted which was P600.00 per square meter; and (4) petitioners and Liza's possession of the subject
property up to the present time.
In the ultimate, said court concluded that petitioners and Liza are entitled to an easement of right-of-way, thus: cralawlawl ibra ry
WHEREFORE, judgment is hereby rendered giving the plaintiffs a right of way of 50 square meters to reach Victoria Village
towards Col. Guido Street. Defendant Sta. Lucia is hereby ordered to grant the right of way to the plaintiffs as previously
described upon payment of an indemnity equivalent to the market value of the [50-square meter right of way].
SO ORDERED.26
Respondent filed a Notice of Appeal27 which was given due course by the RTC in an Order28 dated June 27, 2006.
On appeal, respondent argued mat petitioners and Liza were neither able to prove that they were owners nor that they have
any real right over the subject property intended to be the dominant estate. Hence, they are not entitled to demand an
easement of right-of-way. At any rate, they likewise failed to establish that the only route available from their property to
Col. Guido Street is through respondent's subdivision.
In a Decision29 dated November 17, 2011, the CA held that the evidence adduced by petitioners and Liza failed to sufficiently
establish their asserted ownership and possession of the subject property. Moreover, it held that contrary to the RTC's
observation, respondent in fact denied in its Answer the allegation of petitioners and Liza that they have been in possession
of subject property for more than 50 years. In view of these, the CA concluded that petitioners and Liza have no right to
demand an easement of right-of-way from respondent, thus: cralawlawli bra ry
WHEREFORE, in view of the foregoing, the appeal is hereby GRANTED. Accordingly, the May 22, 2006 Decision of the
Regional Trial Court of Binangonan, Rizal, Branch 68 is REVERSED and SET ASIDE. Civil Case No. 00-037-B is ordered
DISMISSED.
SO ORDERED.30
Petitioners and Liza's Motion for Reconsideration31 was denied in the CA Resolution32 dated March 27, 2012.
Hence, petitioners seek recourse to this Court through this Petition for Review on Certiorari.
Issue
Whether petitioners are entitled to demand an easement of right-of-way from respondent.
Our Ruling
The Petition has no merit.
Under Article 649 of the Civil Code, an easement of right-of-way may be demanded by the owner of an immovable or by any
person who by virtue of a real right may cultivate or use the same.
Here, petitioners argue that they are entitled to demand an easement of right-of-way from respondent because they are the
owners of the subject property intended to be the dominant estate. They contend that they have already acquired ownership
of the subject property through ordinary acquisitive prescription.33 This is considering that their possession became adverse
as against the Blancos (under whose names the subject property is declared for taxation) when Carlos formally registered his
claim of ownership with the DENR and sought to declare the subject property for taxation purposes in 1998. And since more
than 10 years34 had lapsed from that time without the Blancos doing anything to contest their continued possession of the
subject property, petitioners aver that ordinary acquisitive prescription had already set in their favor and against the Blancos.
In the alternative, petitioners assert that they have already become owners of the subject property through extraordinary
acquisitive prescription since (1) they have been in open, continuous and peaceful possession thereof for more than 50
years; (2) the subject property, as depicted in the Survey Plan they caused to be prepared is alienable and disposable; (3)
Carlos filed a claim of ownership over the property with the DENR, the agency charged with the administration of alienable
public land; and (4) Carlos' manifestation of willingness to declare the property for taxation purposes not only had the effect
of giving notice of his adverse claim on the property but also strengthened his bona fide claim of ownership over the same.
It must be stressed at the outset that contrary to petitioners' allegations, there is no showing that Carlos filed a claim of
ownership over the subject property with the DENR. His April 13, 1998 letter35 to the said office which petitioners assert to
be an application for the registration of such claim is actually just a request for the issuance of certain documents and
nothing more. Moreover, while Carlos indeed attempted to declare the subject property for taxation purposes, his application,
as previously mentioned, was denied because a tax declaration was already issued to the Blancos.
Anent petitioners' invocation of ordinary acquisitive prescription, the Court notes that the same was raised for the first time
on appeal. Before the RTC, petitioners based their claim of ownership on extraordinary acquisitive prescription under Article
1137 of the Civil Code36 such that the said court declared them owners of the subject property by virtue thereof in its May
22, 2006 Decision.37 Also with the CA, petitioners initially asserted ownership through extraordinary acquisitive
prescription.38 It was only later in their Motion for Reconsideration39 therein that they averred that their ownership could also
be based on ordinary acquisitive prescription.40 "Settled is the rule that points of law, theories, issues and arguments not
brought to the attention of the lower court need not be considered by a reviewing court, as they cannot be raised for the first
time at that late stage. Basic considerations of fairness and due process impel this rule."41cralaw rednad
Even if timely raised, such argument of petitioners, as well as with respect to extraordinary acquisitive prescription, fails.
"Prescription is one of the modes of acquiring ownership under the Civil Code."42 There are two modes of prescription
through which immovables may be acquired - ordinary acquisitive prescription which requires possession in good faith and
just title for 10 years and, extraordinary prescription wherein ownership and other real rights over immovable property are
acquired through uninterrupted adverse possession for 30 years without need of title or of good faith.43 However, it was
clarified in the Heirs of Mario Malabanan v. Republic of the Philippines,44 that only lands of the public domain subsequently
classified or declared as no longer intended for public use or for the development of national wealth, or removed from the
sphere of public dominion and are considered converted into patrimonial lands or lands of private ownership, may be
alienated or disposed through any of the modes of acquiring ownership under the Civil Code.45 And if the mode of acquisition
is prescription, whether ordinary or extraordinary, it must first be shown that the land has already been converted to private
ownership prior to the requisite acquisitive prescriptive period. Otherwise, Article 1113 of the Civil Code, which provides that
property of the State not patrimonial in character shall not be the subject of prescription, applies.46 c ralawred nad
Sifting through petitioners' allegations, it appears that the subject property is an unregistered public agricultural land. Thus,
being a land of the public domain, petitioners, in order to validly claim acquisition thereof through prescription, must first be
able to show that the State has -
expressly declared through either a law enacted by Congress or a proclamation issued by the President that the subject
[property] is no longer retained for public service or the development of the national wealth or that the property has been
converted into patrimonial. Consequently, without an express declaration by the State, the land remains to be a property of
public dominion and hence, not susceptible to acquisition by virtue of prescription.47
In the absence of such proof of declaration in this case, petitioners' claim of ownership over the subject property based on
prescription necessarily crumbles. Conversely, they cannot demand an easement of right-of-way from respondent for lack of
personality.
All told, the Court finds no error on the part of the CA in reversing and setting aside the May 22, 2006 Decision of the RTC
and in ordering the dismissal of petitioners' Complaint for Easement of Right-of-Way against respondent.
WHEREFORE, the Petition is DENIED. The November 17, 2011 Decision and March 27, 2014 Resolution of the Court of
Appeals in CA-G.R. CV No. 87715 are AFFIRMED.
SO ORDERED. chanrobles virtua
SECOND DIVISION
G.R. No. 200114, August 24, 2015
SOCIAL SECURITY SYSTEM, Petitioner, v. DEBBIE UBAÑA, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails: 1) the July 29, 2011 Decision2 of the Court of Appeals (CA) denying the
Petition for Certiorari in CA-G.R. SP No. 110006 and affirming the March 6, 2007 Order3 of the Regional Trial Court (RTC) of
Daet, Camarines Norte, Branch 39 in Civil Case No. 7304; and 2) the CA's January 10, 2012 Resolution4 denying petitioner's
Motion for Reconsideration of the herein assailed Decision.
Factual Antecedents
On December 26, 2002, respondent Debbie Ubana filed a civil case for damages against the DBP Service Corporation,
petitioner Social Security System (SSS), and the SSS Retirees Association5 before the RTC of Daet, Camarines Norte. The
case was docketed as Civil Case No. 7304 and assigned to RTC Branch 39.
In her Complaint,6 respondent alleged that in July 1995, she applied for employment with the petitioner. However, after
passing the examinations and accomplishing all the requirements for employment, she was instead referred to DBP Service
Corporation for "transitory employment." She took the pre-employment examination given by DBP Service Corporation and
passed the same. On May 20, 1996, she was told to report for training to SSS, Naga City branch, for immediate deployment
to SSS Daet branch. On May 28, 1996, she was made to sign a six-month Service Contract Agreement7 by DBP Service
Corporation, appointing her as clerk for assignment with SSS Daet branch effective May 27, 1996, with a daily wage of only
P171.00. She was assigned as "Frontliner" of the SSS Members Assistance Section until December 15, 1999. From December
16, 1999 to May 15, 2001, she was assigned to the Membership Section as Data Encoder. On December 16, 2001, she was
transferred to the SSS Retirees Association as Processor at the Membership Section until her resignation on August 26, 2002.
As Processor, she was paid only P229.00 daily or P5,038.00 monthly, while a regular SSS Processor receives a monthly
salary of P18,622.00 or P846.45 daily wage. Her May 28, 1996 Service Contract Agreement with DBP Service Corporation
was never renewed, but she was required to work for SSS continuously under different assignments with a maximum daily
salary of only P229.00; at the same time, she was constantly assured of being absorbed into the SSS plantilla. Respondent
claimed she was qualified for her position as Processor, having completed required training and passed the SSS qualifying
examination for Computer Operations Course given by the National Computer Institute, U.P. Diliman from May 16 to June 10,
2001, yet she was not given the proper salary. Because of the oppressive and prejudicial treatment by SSS, she was forced
to resign on August 26, 2002 as she could no longer stand being exploited, the agony of dissatisfaction, anxiety,
demoralization, and injustice. She asserted that she dedicated six years of her precious time faithfully serving SSS, foregoing
more satisfying employment elsewhere, yet she was merely exploited and given empty and false promises; that defendants
conspired to exploit her and violate civil service laws and regulations and Civil Code provisions on Human Relations,
particularly Articles 19, 20, and 21.8 As a result, she suffered actual losses by way of unrealized income, moral and
exemplary damages, attorney's fees and litigation expenses.
Respondent prayed for an award of P572,682.67 actual damages representing the difference between the legal and proper
salary she should have received and the actual salary she received during her six-year stint with petitioner; P300,000.00
moral damages; exemplary damages at the discretion of the court; P20,000.00 attorney's fees and P1,000.00 appearance
fees; and other just and equitable relief.
Petitioner and its co-defendants SSS Retirees Association and DBP Service Corporation filed their respective motions to
dismiss, arguing that the subject matter of the case and respondent's claims arose out of employer-employee relations,
which are beyond the RTC's jurisdiction and properly cognizable by the National Labor Relations Commission (NLRC).
Respondent opposed the motions to dismiss, arguing that pursuant to civil service rules and regulations, service contracts
such as her Service Contract Agreement with DBP Service Corporation should cover only a) lump sum work or services such
as janitorial, security or consultancy services, and b) piece work or intermittent jobs of short duration not exceeding six
months on a daily basis.9 She posited that her service contract involved the performance of sensitive work, and not merely
janitorial, security, consultancy services, or work of intermittent or short duration. In fact, she was made to work
continuously even after the lapse of her 6-month service contract. Citing Civil Service Commission Memorandum Circular No.
40, respondent contended that the performance of functions outside of the nature provided in the appointment and receiving
salary way below that received by regular SSS employees amount to an abuse of rights; and that her cause of action is
anchored on the provisions of the Civil Code on Human Relations.
On October 1, 2003, the RTC issued an Order10 dismissing respondent's complaint for lack of jurisdiction, stating that her
claim for damages "has a reasonable causal connection with her employer-employee relations with the defendants"11 and "is
grounded on the alleged fraudulent and malevolent manner by which the defendants conspired with each other in exploiting
[her], which is a clear case of unfair labor practice,"12 falling under the jurisdiction of the Labor Arbiter of the NLRC. Thus, it
decreed: cralawlaw lib rary
WHEREFORE, premises considered, the aforementioned Motion to Dismiss the complaint of the herein plaintiff for lack of
jurisdiction is hereby GRANTED. The above-entitled complaint is hereby DISMISSED.
SO ORDERED.13
Respondent moved for reconsideration. On March 6, 2007, the RTC issued another Order14 granting respondent's motion for
reconsideration. The trial court held:c ralawlawli bra ry
Section 2(1), Art. K-B, 1987 Constitution, expressly provides that "the civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the government, including government-owned or controlled corporation[s] with original
charters." Corporations with original charters are those which have been created by special law[s] and not through the
general corporation law. In contrast, labor law claims against government-owned and controlled corporations without original
charters fall within the jurisdiction of the Department of Labor and Employment and not the Civil Service Commission. (Light
Rail Transit Authority vs. Perfecto Venus, March 24, 2006.)
Having been created under an original charter, RA No. 1161 as amended by R.A. 8282, otherwise known as the Social
Security Act of 1997, the SSS is governed by the provision[s] of the Civil Service Commission. However, since the SSS
denied the existence of an employer-employee relationship, and the case is one for Damages, it is not the Civil Service
Commission that has jurisdiction to try the case, but the regular courts.
A perusal of the Complaint filed by the plaintiff against the defendant SSS clearly shows that the case is one for Damages.
Paragraph 15 of her complaint states, thus: ChanRoblesvirt ual Lawlib rary

xxx. Likewise, they are contrary to the Civil Code provisions on human relations which [state], among others, that Every
person, must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and
observe honesty and good faith (Article 19) and that Every person who, contrary to law, willfully or negligently [causes]
damages to another, shall indemnify the latter for the same. (Art. 20)
"Article 19 provides a rule of conduct that is consistent with an orderly and harmonious relationship between and among men
and women It codifies the concept of what is justice and fair play so that abuse of right by a person will be prevented. Art.
20 speaks of general sanction for all other provisions of law which do not especially provide their own sanction. Thus,
anyone, who, whether willfully or negligently, in the exercise of his legal right or duty, causes damage to another, shall
indemnify his or her victim for injuries suffered thereby." (Persons and Family Relations, Sta. Maria, Melencio, Jr. (2004) pp.
31-32.)
Wherefore, all premises considered, the Motion for Reconsideration is hereby GRANTED. The case against defendant Social
Security System represented by its President is hereby reinstated in the docket of active civil cases of this court.
SO ORDERED.15 [Italics in the original]

Petitioner moved for reconsideration, but the RTC stood its ground in its June 24, 2009 Order16 c ralawre dnad
In a Petition for Certiorari17 filed with the CA and docketed as CA-G.R. SP No. 110006, petitioner sought a reversal of the
RTC's June 24, 2009 and March 6, 2007 Orders and the reinstatement of its original October 1, 2003 Order dismissing Civil
Case No. 7304, insisting that the trial court did not have jurisdiction over respondent's claims for "unrealized salary income"
and other damages, which constitute a labor dispute cognizable only by the labor tribunals. Moreover, it claimed that the
assailed Orders of the trial court were issued with grave abuse of discretion. It argued that the trial court gravely erred in
dismissing the case only as against its co-defendants DBP Service Corporation and SSS Retirees Association and maintaining
the charge against it, considering that its grounds for seeking dismissal are similar to those raised by the two. It maintained
that DBP Service Corporation and SSS Retirees Association are legitimate independent job contractors engaged by it to
provide manpower services since 2001, which thus makes respondent an employee of these two entities and not of SSS; and
that since it is not the respondent's employer, then there is no cause of action against it.
On July 29, 2011, the CA issued the assailed Decision containing the following pronouncement: cralawlawli bra ry
Hence, petitioner seeks recourse before this Court via this Petition for Certiorarichallenging the RTC Orders. For the
resolution of this Court is the sole issue of:
c ralawlawl ibra ry
WHETHER OR NOT THE RTC HAS JURISDICTION TO HEAR AND DECIDE CIVIL CASE NO. 7304.
The petition is devoid of merits.
The rule is that, the nature of an action and the subject matter thereof, as well as, which court or agency of the government
has jurisdiction over the same, are determined by the material allegations of the complaint in relation to the law involved and
the character of the reliefs prayed for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs. A
prayer or demand for relief is not part of the petition of the cause of action; nor does it enlarge the cause of action stated or
change the legal effect of what is alleged. In determining which body has jurisdiction over a case, the better policy is to
consider not only the status or relationship of the parties but also the nature of the action that is the subject of their
controversy.
A careful perusal of Ubana's Complaint in Civil Case No. 7304 unveils that Ubana's claim is rooted on the principle of abuse of
right laid in the New Civil Code. She was claiming damages based on the alleged exploitation [perpetrated] by the
defendants depriving her of her rightful income. In asserting that she is entitled to the damages claimed, [she] invoked not
the provisions of the Labor Code or any other labor laws but the provisions on human relations under the New Civil Code.
Evidently, the determination of the respective rights of the parties herein, and the ascertainment whether there were abuses
of such rights, do not call for the application of the labor laws but of the New Civil Code. Aproposthereto, the resolution of
the issues raised in the instant complaint does not require the expertise acquired by labor officials. It is the courts of general
jurisdiction, which is the RTC in this case, which has the authority to hear and decide Civil Case No. 7304.
Not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in
the exercise of their adjudicatory or quasi-judicial powers. Where the claim to the principal relief sought is to be resolved not
by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil
law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In
such situations, [resolution] of the dispute requires expertise, not in labor management relations nor in wage structures and
other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears.
It is the character of the principal relief sought that appears essential in this connection. Where such principal relief is to be
granted under labor legislation or a collective bargaining agreement, the case should fall within the jurisdiction of the Labor
Arbiter and the NLRC, even though a claim for damages might be asserted as an incident to such claim.
The pivotal question is whether the Labor Code has any relevance to the principal relief sought in the complaint. As pointed
out earlier, Ubana did not seek refuge from the Labor Code in asking for the award of damages. It was the transgression of
Article[s] 19 and 20 of the New Civil Code that she was insisting in wagering this case. The primary relief sought herein is for
moral and exemplary damages for the abuse of rights. The claims for actual damages for unrealized income are the natural
consequence for abuse of such rights.
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by labor laws, but also
damages governed by the Civil Code, these reliefs must still be based on an action that has a reasonable causal connection
with the Labor Code, other labor statutes, or collective bargaining agreements. Claims for damages under paragraph 4 of
Article 217 must have a reasonable causal connection with any of the claims provided for in the article in order to be
cognizable by the labor arbiter. Only if there is such a connection with the other claims can the claim for damages be
considered as arising from employer-employee relations. In the present case, Ubana's claim for damages is not related to
any other claim under Article 217, other labor statutes, or collective bargaining agreements.
All told, it is ineluctable that it is the regular courts that has [sic] jurisdiction to hear and decide Civil Case No. 7304.
In Tolosa v. NLRC,18 the Supreme Court held that, "[i]t is not the NLRC but the regular courts that have jurisdiction over
action for damages, in which the employer-employee relations is merely incidental, and in which the cause of action proceeds
from a different source of obligation such as tort. Since petitioner's claim for damages is predicated on a quasi-delict or tort
that has no reasonable causal connection with any of the claims provided for in Article 217, other labor statutes or collective
bargaining agreements, jurisdiction over the action lies with the regular courts not with the NLRC or the labor arbiters." The
same rule applies in this case.
WHEREFORE, premises considered, the instant petition is DENIED and the Order dated March 6, 2007 of the Regional Trial
Court, Branch 39 of Daet, Camarines Norte in Civil Case No. 7304 is hereby AFFIRMED.
SO ORDERED.19
Petitioner filed a Motion for Reconsideration,20 but the CA denied the same in its January 10, 2012 Resolution.21 Hence, the
present Petition.
Issue
Petitioner simply submits that the assailed CA dispositions are contrary to law and jurisprudence.
Praying that the assailed CA dispositions be set aside and that the RTC's October 1, 2003 Order dismissing Civil Case No.
7304 be reinstated, petitioner essentially maintains in its Petition and Reply22that respondent's claims arose from and are in
fact centered on her previous employment. It maintains that there is a direct causal connection between respondent's claims
and her employment, which brings the subject matter within the jurisdiction of the NLRC. Petitioner contends that
respondent's other claims are intimately intertwined with her claim of actual damages which are cognizable by the NLRC.
Moreover, petitioner alleges that its existing manpower services agreements with DBP Service Corporation and SSS Retirees
Association are legitimate; and that some of respondent's claims may not be entertained since these pertain to benefits
enjoyed by government employees, not by employees contracted via legitimate manpower service providers. Finally,
petitioner avers that the nature and character of the reliefs prayed for by the respondent are directly within the jurisdiction
not of the courts, but of the labor tribunals.
In her Comment,23 respondent maintains that her case is predicated not on labor laws but on Articles 19 and 20 of the Civil
Code for petitioner's act of exploiting her and enriching itself at her expense by not paying her the correct salary
commensurate to the position she held within SSS. Also, since there is no employer-employee relationship between her and
petitioner, as the latter itself admits, then her case is not cognizable by the Civil Service Commission (CSC) either; that since
the NLRC and the CSC have no jurisdiction over her case, then it is only the regular courts which can have jurisdiction over
her claims. She argues that the CA is correct in ruling that her case is rooted in the principle of abuse of rights under the Civil
Code; and that the Petition did not properly raise issues of law.
Our Ruling
In Home Development Mutual Fund v. Commission on Audit,24 it was held that while they performed the work of regular
government employees, DBP Service Corporation personnel are not government personnel, but employees of DBP Service
Corporation acting as an independent contractor. Applying the foregoing pronouncement to the present case, it can be said
that during respondent's stint with petitioner, she never became an SSS employee, as she remained an employee of DBP
Service Corporation and SSS Retirees Association - the two being independent contractors with legitimate service contracts
with SSS.
Indeed, "[i]n legitimate job contracting, no employer-employee relation exists between the principal and the job contractor's
employees. The principal is responsible to the job contractor's employees only for the proper payment of wages."25 cralawred cralaw rednad
In her Complaint, respondent acknowledges that she is not petitioner's employee, but that precisely she was promised that
she would be absorbed into the SSS plantilla after all her years of service with SSS; and that as SSS Processor, she was paid
only P229.00 daily or P5,038.00 monthly, while a regular SSS Processor receives a monthly salary of P18,622.00, or P846.45
daily wage. In its pleadings, petitioner denied the existence of an employer-employee relationship between it and
respondent; in fact, it insists on the validity of its service agreements with DBP Service Corporation and SSS Retirees
Association - meaning that the latter, and not SSS, are respondent's true employers. Since both parties admit that there is
no employment relation between them, then there is no dispute cognizable by the NLRC. Thus, respondent's case is premised
on the claim that in paying her only P229.00 daily - or P5,038.00 monthly - as against a monthly salary of P18,622.00, or
P846.45 daily wage, paid to a regular SSS Processor at the time, petitioner exploited her, treated her unfairly, and unjustly
enriched itself at her expense.
For Article 217 of the Labor Code to apply, and in order for the Labor Arbiter to acquire jurisdiction over a dispute, there
must be an employer-employee relation between the parties thereto. cha nrob leslaw
x x x It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and
no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction, x x x The action is within the realm of civil law hence
jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor
laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent
where no employer-employee relation exists. Article 217 of the Labor Code as amended vests upon the labor arbiters
exclusive original jurisdiction only over the following: Cha nRoblesvi rt ual Lawlib rary
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes and lockouts;
and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from
employer- employee relations, including those of persons in domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
In all these cases, an employer-employee relationship is an indispensable jurisdictional requisite x x x.26

Since there is no employer-employee relationship between the parties herein, then there is no labor dispute cognizable by
the Labor Arbiters or the NLRC.
There being no employer-employee relation or any other definite or direct contract between respondent and petitioner, the
latter being responsible to the former only for the proper payment of wages, respondent is thus justified in filing a case
against petitioner, based on Articles 19 and 20 of the Civil Code, to recover the proper salary due her as SSS Processor. At
first glance, it is indeed unfair and unjust that as, Processor who has worked with petitioner for six long years, she was paid
only P5,038.00 monthly, or P229.00 daily, while a regular SSS employee with the same designation and who performs
identical functions is paid a monthly salary of P18,622.00, or P846.45 daily wage. Petitioner may not hide under its service
contracts to deprive respondent of what is justly due her. As a vital government entity charged with ensuring social security,
it should lead in setting the example by treating everyone with justice and fairness. If it cannot guarantee the security of
those who work for it, it is doubtful that it can even discharge its directive to promote the social security of its members in
line with the fundamental mandate to promote social justice and to insure the well-being and economic security of the
Filipino people.
In this jurisdiction, the "long honored legal truism of 'equal pay for equal work'" has been "impregnably institutionalized;"
"[p]ersons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be
paid similar salaries."27 "That public policy abhors inequality and discrimination is beyond contention. Our Constitution and
laws reflect the policy against these evils. The Constitution in the Article on Social Justice and Human Rights exhorts
Congress to 'give highest priority to the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities.' The very broad Article 19 of the Civil Code requires every person,
'in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith'."28 cralawrednad
WHEREFORE, the Petition is DENIED. The assailed July 29, 2011 Decision and January 10, 2012 Resolution of the Court of
Appeals in CA-G.R. SP No. 110006 are AFFIRMED. The case is ordered remanded with dispatch to the Regional Trial Court
of Daet, Camarines Norte, Branch 39, for continuation of proceedings.
SO ORDERED. chanrobles virtuallawlib
A.C. No. 8084, August 24, 2015

PATROCINIA H. SALABAO, Complainant, v. ATTY. ANDRES C. VILLARUEL, JR., Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a complaint for disbarment filed by Patrocinia H. Salabao (complainant) against Atty. Andres C. Villaruel, Jr.
(respondent) for abuse of court processes in violation of Canons 10 and 12 of the Code of Professional Responsibility.1 After
respondent filed his Answer2 we referred this case to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.3 redarclaw
Factual Background
The facts pertinent to this complaint are summarized in the Report and Recommendation of Investigating Commissioner
Oliver A. Cachapero as follows: Lawlib raryofCR Alaw
Complainant narrates that in 1995 she filed a case against Elmer Lumberio for his deceitful or fraudulent conduct of taking
her precious real property situated in Taguig City. After hearing, the Regional Trial Court (RTC), Branch 162, Pasig City
issued its resolution in her favor in 2002.
Respondent then entered the picture as counsel for Lumberio. From then on, Complainant complained that Respondent had
made her suffer because of his abuse of processes and disregard for her rights as a litigant.
She narrates as follows: Lawlib raryofCRAlaw
In 2002, the Regional Trial Court, Branch 162, Pasig City which tried Civil Case No. 65147 issued its resolution in her favor.
In order to delay the case, Respondent brought the case on appeal to the Court of Appeals under CA-GR CV No. 76360. The
Court of Appeals decided in her favor on January 13, 2004 but Respondent again filed an appeal before the Supreme Court
under GR No. 167413. Lumberio lost and the case became final and executory.
Undeterred, respondent tried to defer the execution of the decision of the RTC, Branch 162, by bringing to the Court of
Appeals a Petition for Annulment of Judgment under CA-GR SP No. 97564. When rebuffed, he again appealed to the
Supreme Court under GR No. 181243 sans a clear or new arguments other than what he had presented before the Court of
Appeals.
Still, Respondent filed a Petition for Certiorari seeking to annul the 29 November 2007 Order of the RTC before the Court of
Appeals under CA-GR SP No. 101992 which was however dismissed. From hereon, there was not stopping the Respondent.
Once again he filed a new complaint before the RTC of Mauban, Quezon, Branch 64 under Civil Case No. 08-0666-M. Apart
from this, Respondent filed several Motion, Inhibition and Contempt that were meant to delay the resolution of the case. He
likewise filed an administrative case against Judge Briccio Ygaña of RTC Branch 153, Taguig City. Complainant then
complained that Respondent had done more than enough to suppress her rights as a winning litigant and filed this case for
abuse of processes pursuant to Rule 10.03 and Rule 10.02 of Canon 10 and Rule 12.04 of Canon 12 of the Code of
Professional Responsibility (CPR).
Respondent, for his part, denied the accusation and clarified that the several pleadings he had filed had centered on the
legality of the court's decision ordering the cancellation of the title of Lumberio in such ordinary proceeding for cancellation of
the title. To his mind, the said ordinary proceeding for cancellation of title before the RTC Branch 153, Taguig City was void
because the law vests upon the government through the Solicitor General the power to initiate a reversion case if there is
such a ground to cancel the title issued by the Land Management Bureau in favor of Lumberio.
With respect to the civil case before the RTC of Ma[u]ban, Branch 64, he explained that the said case does not show that
herein counsel committed any act of dishonesty which may subject him to any prosecution as he is just exercising his
profession to the best of his ability.4
In his Report and Recommendation, the Investigating Commissioner found at respondent "relentlessly filed petitions and
appeals in order to exhaust all possible remedies to obtain relief for his client"5 which he considered as tantamount to
"abusive and a spiteful effort to delay the execution of Judgment."6 He noted that after the Regional Trial Court (RTC) of
Pasig City, Branch 162 issued a Resolution in Civil Case No. 65147 adverse to his client, respondent filed a barrage of
cases/pleadings such as an appeal to the Court of Appeals (CA) which affirmed the RTC ruling, a petition for review with the
Supreme Court which was denied for having been filed out of time; a petition for annulment of the RTC judgment which was
dismissed by the CA; another petition for review before this Court which was again denied; a petition for certiorari which was
dismissed by the CA; another civil case before the RTC of Mauban, Quezon which was dismissed for "improper venue, res
judicata, and violation of the anti-forum shopping law"7 and that it involved the same issues as the one filed in Pasig RTC.
Moreover, he filed several inhibitions, motions and an administrative complaint against the presiding judge. The Investigating
Commissioner, stated: Lawlibra ryofCRAlaw
x x x [O]ne can immediately appreciate and see the abusive and spiteful conduct of Respondent. He as a lawyer could have
hardly missed knowing that his subsequent actions were merely meant to harass the opposing litigant as in fact the Supreme
Court had already issued its final ruling on the matter. After the ruling of the High Court, Respondent should have known
that the case had been finally adjudicated and no amount of judicial exercise could turn the decision in his client's favor.
From then on, he should have saved his efforts of filing cases and motions in court, as they are futile anyway, because he
has his duty to the court above that to his client.
Needless to state, the Respondent is found herein to have violated Canon 12, Rule 12.02 and Rule 12.04 of the CPR for which
he should be meted with the appropriate administrative penalty.8
He thus recommended that respondent be meted out the penalty of suspension for four months.
In its Resolution No. XX-2013-251 dated 20 March 2013, the IBP Board of Governors adopted and approved the findings and
recommendation of the Investigating Commissioner.
Respondent filed a Motion for Reconsideration on July 20, 2013, stating that: Lawlibra ryofCRAlaw
2. x x x he had only exhausted all possible remedies available under the premises;
xxxx
With all candor and honesty, undersigned believes that he was only doing his legal duty as a lawyer to exhaust all legal
remedies taking steps within its framework. He has not done any wrongdoing while taking such routes. He has never been
dishonest;
xxxx
4. Respondent believes that undersigned deserves an acquittal given the fact that it was not shown that he acted in bad:
faith in taking such legal remedies.
5. Respondent cannot also be charged with abuse of judicial process because complainant has other recourse available to
execute the said decision in her favor while there were petitions filed, complainant also did not allege that respondent has
abused the judicial process. The courts to which the said petitions were filed also did not cite the respondent in contempt of
court [nor was a warning] given.
xx x x
6. Moreover, respondent is now suffering from renal failure which requires him to undergo dialysis three (3) times in a week.
To suspend him for four months would mean that he would stop his dialysis for four moths [sic] which may cause his
immediate death. This Honorable Commission would not be too happy to see one of its members begging for alms from
PCSO and government officials to shoulder his dialysis of about P100,000.00 per month.9
In a subsequent Resolution No. XXI-2014-182 dated March 23, 2014, the IBP Board of Governors affirmed its earlier
Resolution and denied respondent's Motion for Reconsideration, saying that there was no cogent reason to reverse the
findings of the Commission on Bar Discipline.
The Court's Ruling
While it is true that lawyers owe "entire devotion" to the cause of their clients,10 it cannot be emphasized enough that their
first and primary duty is "not to the client but to the administration of justice."11 Canon 12 of the Code of Professional
Responsibility states that "A lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient
administration of justice." Thus, in the use of Court processes, the lawyer's zeal to win must be tempered by the paramount
consideration that justice be done to all parties involved, and the la|wyer for the losing party should not stand in the way of
the execution of a valid judgment. This is a fundamental principle in legal ethics and professional responsibility that has
iterations in various forms: Lawli bra ryof CRAlaw
The Lawyer's Oath: LawlibraryofCR Alaw
x x x I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, nor give aid nor consent to the
same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge
and discretion with all good fidelity as well to the courts as to my clients x x x (Emphasis supplied)
Rule 138, Section 20, Rules of Court: Lawlibra ryofCRAlaw
Duties of attorneys. - It is the duty of an attorney: xxxx
(c) To counsel or maintain such actions or proceedings only as appear to him to be just, and such defenses only as he
believes to be honestly debatable under the law;
xxxx
(g) Not to encourage either the commencement or the continuance of an action or proceeding, or delay any man's
cause, from any corrupt motive or interest; (Emphasis supplied)
Code of Professional Responsibility: Law lib raryofCRAlaw
Rule 1.03 - A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man's
cause.
Rule 10.03 - A lawyer shall observe the rules of procedure and shall not misuse them to defeat the ends of justice.
Rule 12.02 - A lawyer shall not file multiple actions arising from the same cause.
Rule 12.04 - A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse Court processes.
(Emphasis supplied)
Because a lawyer is an officer of the court called upon to assist in the administration of justice, any act of a lawyer that
obstructs, perverts, or impedes the administration of justice constitutes misconduct and justifies disciplinary action against
him.12redarclaw
In this case, the judgment in favor of complainant had become final and executory by July 27, 2005. Respondent however
proceeded to file no less than twelve (12) motions and cases in various courts subsequent to the Entry of Judgment: Lawlib raryofCR Alaw
Regional Trial Court of Taguig City:
Urgent Motion for Reconsideration of the Order dated April 27,2006
Motion to Admit Affidavit of Third-Party Claimant
Motion for Early Resolution
Motion to Observe Judicial Courtesy while the case is pending appeal with the Court of Appeals
Urgent Motion to Defer/Suspend Execution in view of the Order of the CA
Urgent Motion to Reconsider Order
Court of Appeals:
Urgent Motion for Issuance of Temporary Restraining Order with the Court of Appeals
Motion for Reconsideration
Petition for Certiorari
Urgent Motion to Reiterate the Issuance of Order for Judicial Courtesy
Supreme Court:
Petition for Certiorari
Motion for Issuance of Temporary Restraining Order
From the nature and sheer number of motions and cases filed, it is clear that respondent's intention was to delay the
execution of the final judgment.
But even assuming for the sake of argument that respondent was only doing his duty as a lawyer to exhaust all legal
remedies to protect the interest of his client, his other actions belie his claim of good faith. Respondent filed a civil case for
damages with the Regional Trial Court of Mauban, Quezon in what was clearly a case of forum-shopping. Moreover,
respondent filed three Motions to Inhibit against the three judges hearing these cases, and even a motion to cite the sheriff
in contempt of court who was simply carrying out his duty to execute the decision.
In his defense, respondent argued that the Courts did not call attention to his improper behavior and dilatory tactics. This is
not true. In her Order inhibiting herself from the case, Judge Homena-Valencia stated: Lawl ibra ryofCRAlaw
This presiding judge would like to emphasize that, having assumed her position as acting presiding judge of this branch only
last September 2005, she does not know any of the parties from Adam. As such, she could not be inclined to show bias in
favor of one of them. She refuses, however, to be drawn into a discussion, to put it mildly, with respondent's counsel as to
her knowledge of the law.
However, to obviate any suspicion as to her objectivity, she inhibits herself from further hearing this case although the
reasons stated by the defendant are not one of those provided for in the Rules for the voluntary inhibition of a judge.
Respondent's counsel is hereby advised to be more professional in his language, he, being a lawyer, is first and foremost an
officer of the court.13
In the October 23, 2007 Decision14 of the CA in CA-G.R. SP No. 97564, respondent was rebuked for the misuse of court
processes, thus: Lawlibra ryofCRAlaw
This Petition for Annulment of Judgment is petitioner's last-ditch effort to defer the execution of the 31 July 2002 Decision of
the Regional Trial Court of Pasig City, Branch 162, which has long attained finality.
xxxx
In epitome, to sustain petitioner's insinuation of extrinsic fraud is to make a mockery of Our judicial system. We take
exception to the unjustified delay in the enforcement of the RTC Decision dated 31 July 2002 which has long become final
and executory. This is obviously a spiteful ploy to deprive respondent of the fruits of her victory.
WHEREFORE, the Petition for Annulment of Judgment is hereby DISMISSED.15

Moreover, in his Omnibus Order16 dated September 18, 2008, Judge Briccio C. Ygaña17 stated: Lawlibra ryofCRAlaw
This case is a clear example of how a party, aided by a smart lawyer, could unduly delay a case, impede the execution of
judgment or misuse court processes. Defendant and counsel are very lucky that the herein plaintiff has the patience of Job.
Should this case reach the attention of the Supreme Court, where the whole story will be known, they will have a lot of
explaining to do.18
It is quite clear that respondent has made a mockery of the judicial process by abusing Court processes, employing dilatory
tactics to frustrate the execution of a final judgment, and feigning ignorance of Ms duties as an officer of the court. He has
breached his sworn duty to assist in the speedy and efficient administration of justice, and violated the Lawyer's Oath, Rules
10.03 and 12.04 of the Code of Professional Responsibility, and Rule 138, Sec. 20 (c) and (g) of the Rules of Court. In so
doing, he is administratively liable for his actions.
Rule 138, Sec. 27 of the Rules of Court provides the penalties of disbarment and suspension as follows: Lawli bra ryofCRAlaw
Disbarment or suspension of attorneys by Supreme Court; grounds therefor. - A member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such
office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the
oath which he is required to take before admission to practice, or for a wilful disobedience of any lawful order of a superior
court, or for corruptly or wilfully appearing as an attorney for a party to a case without authority so to do x x x.
In previous decisions involving abuse of court processes,19 this Court has imposed the penalty of suspension ranging from six
months to two years. In light of the following aggravating circumstances - multiplicity of motions and cases filed by
respondent, the malice evinced by his filing of various motions to prevent the judges and sheriff from fulfilling their legal
duties, feigned ignorance of his duties as an officer of the court, and his lack of remorse for his actions - the Court finds that
a penalty of suspension for 18 months would be commensurate to the damage and prejudice that respondent has inflicted on
complainant Salabao for his actions.
WHEREFORE, premises considered, respondent Atty. Andres C. Villaruel, Jr. is hereby found GUILTY of violation of the
Lawyer's Oath and Rules 10.03 and 12.04 of the Code of Professional Responsibility and is hereby suspended from the
practice of law for a period of eighteen (18) months.
Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Villaruel's record as a member of
the Bar.
SO ORDERED. cralawlawlibra ry
SECOND DIVISION
G.R. No. 198643, August 19, 2015
MARSMAN & COMPANY AND QUIRINO R. ILEDAN, Petitioners, v. ARTEMIO M. LIGO, Respondent.
DECISION
DEL CASTILLO, J.:
An employee who was wrongly accused of criminal acts, illegally arrested and detained, presented to the media at a
humiliating press conference against his will, and prosecuted in an unfounded criminal suit is entitled to damages for
malicious prosecution.
This Petition for Review on Certiorari1 seeks to set aside the April 29, 2011 Decision2 of the Court of Appeals in CA-G.R. CV
No. 87004, as well as its September 16, 2011 Resolution3 denying reconsideration thereof.
Factual Antecedents
Petitioner Marsman & Company, Inc. (Marsman) - now Metro Drug, Inc. - is a domestic corporation engaged in the business
of distributing pharmaceutical products. Petitioner Quirino R. Iledan (Iledan) was Marsman's Warehouse Manager during the
time material to this case.
Respondent Artemio M. Ligo was then Marsman's Warehouse Supervisor and was primarily responsible for the destruction of
bad order and expired drugs.4 Bad order drugs are those that are retrieved from the market for being unfit for human
consumption, while expired drugs are those which have reached their expiry date.5 re darclaw
Sometime in February 1993, Iledan supposedly received a telephone call from Isabelito Miguel (Miguel), informing him that
some of Marsman's bad order and expired drugs that were intended for destruction were not actually destroyed but were
sold at the back of the Sto. Nino Church in Parañaque. Iledan relayed this information to Marsman President and Chief
Executive Officer Dr. Eligio Santos (Santos), who called a meeting with Iledan and Marsman Assistant Vice-President for
Human Resources Manolette Pilapil (Pilapil). During the meeting, Santos instructed Pilapil to seek the assistance of the
National Bureau of Investigation (NBI) in the investigation of the matter. Thus, Pilapil sent a letter-request dated March 15,
1993 to NBI Director Epimaco Velasco (NBI Director Velasco).6 redarclaw
The NBI7 conducted surveillance on several dates in coordination with Iledan. On May 7, 1993, it arrested several individuals
who were supposedly caught in the act of distributing these medicines that should have been destroyed.8 However,
respondent was not one of them.
The following day, or on May 8, 1993, Iledan asked respondent to accompany him to the NBI office on the pretext of visiting
one of the suspects arrested, Francisco Mercado (Mercado),9 one of respondent's colleagues at work. Tjhey proceeded to the
NBI headquarters in Manila, where respondent was arrested and placed in a detention cell.10 Thereafter, respondent and
other individuals were presented to the media during a live conference as the suspects in the distribution and sale of bad
order and expired medicines. Their photographs were taken, and later published, by news reporters of The Daily Inquirer,
Philippine Star, Bulletin, Taliba, Balita, and Tempo.11
redarclaw
Respondent was detained at the NBI headquarters for at least 10 days, after which he was provisionally released after
posting bond.12 He was criminally charged with violation of Republic Act No. 372013 as amended by Executive Order No.
17514 (RA 3720) which prohibits the sale, dispensing or delivery of expired or rejected pharmaceutical products. The criminal
case was docketed with the Metropolitan Trial Court of Taguig City, Branch 74 as Criminal Case No. 9070. However, the court
issued an Order15 on October 12, 1994 acquitting respondent of the charge. The Order held in part: Lawlib raryofCR Alaw
From this evidence, the court finds that indeed the prosecution has miserably failed to prove the principal elements of the
crime charged, that is there was no showing that the accused has [sic] sold or was [sic] selling much less dispensing the
expired medicines. While it is true that the destructing [sic] or transferring [sic] the expired drugs is prohibited as defined in
Section 11 of Republic Act 3720, the destruction or transfer referred to in the act is distributing or transferring the drugs to
any third person or persons. From the testimony of witness NBI Agent Arnel Azul is [sic] that when they arrested the
accused, the accused were transferring the expired drugs from one vehicle to another, to be exact from a 10 wheeler truck to
[a] white delivery van and this transfer is not the transfer contemplated, defined and penalized; under Section 11 of R.A.
3720.
It is also the observation that from the evidences [sic] adduced by the prosecution that assuming arguendo that the transfer
of the expired drugs from one vehicle to another is a crime by itself, from the evidence, it appears that the transfer was done
and consummated in Angono, Rizal and therefore not within the territorial jurisdiction of this court and it is elementary in
criminal prosecution that criminal cases has [sic] to be filed and prosecuted in the place [sic] it was committed except those
continuing offenses, in the case at bar nowhere from the prosecution's evidence shows [sic] that the crime charged or any of
its ingredient [sic] has been committed here in [Taguig], Metro Manila, the territorial jurisdiction of this court. Of course this
is not impugned in the demurrer to evidence, this is but the observation of this court from the evidence adduced by the
prosecution.
Viewed [from] the foregoing, the court finds that the prosecution has failed to establish the elements of the crime charged
amounting to failure to prove the guilt of the accused beyond reasonable doubt and accordingly therefore, the above-entitled
case is hereby dismissed with costs de officio.
xxxx
SO ORDERED.16
Respondent was likewise charged with serious misconduct, breach of trust, and commission of a crime against Marsman.
After several hearings, was terminated from employment on the ground of "negligence and breach of trust and confidence"
as well as failure to perform the "sensitive task of supervising the burning and destroying of expired, obsolete, bad order
drugs and medicines,"17 but not for commission of a crime against Marsman.
In October 1995, respondent filed a Complaint18 for damages against petitioners Marsman and Iledan with the Regional Trial
Court of Las Piñas, docketed as Civil Case No. LP-95-022 and assigned to Branch 275. Respondent alleged that petitioners
maliciously conspired to frame him and fabricate a criminal charge against him by making it appear that he feloniously sold,
dispensed or delivered expired or bad order medicines; that he was illegally arrested by the NBI on May 8, 1993, humiliated
in a press conference, and unlawfully detained for 10 days; that photographs taken during the press conference were
published in major dailies, and he became the object of embarrassing news reports on radio and television; that he was
falsely charged criminally with violation of RA 3720 (Criminal Case No. 9070) and illegally dismissed from employment; that
he was subsequently acquitted in Criminal Case No. 9070; that as a result of the frame-up, he and his family became the
object of ridicule in the community, school and workplace, which thus forced them to relocate in order to avoid further shame
and embarrassment; and that in a demand letter to petitioners, he sought restitution, but was ignored. He thus prayed for
indemnity in the amount of P5 million as moral damages, P1 million as exemplary damages, P50,000.00 as actual damages,
25% of the total amount as attorney's fees, and costs of suit.
Respondent's complaint particularly noted that when Iledan assumed his position as warehouse manager, he was arrogant
and hostile toward the employees and even manifested his desire to replace respondent and other employees assigned at
respondent's warehouse.19 redarclaw
In their Answer with Counterclaim,20 petitioners insisted that respondent was involved in a scheme of selling expired and bad
order drugs which he was supposed to destroy; that respondent's modus operandi became the subject of three preliminary
surveillances conducted by the NBI, which revealed that the scheduled destruction of medicines through burning did not take
place, and that respondent left the site without supervising the complete destruction of the medicines, while his cohorts
transferred the medicines from the company truck to another vehicle; that on May 7, 1993, respondent's cohorts were
intercepted and arrested by the NBI; that boxes of expired medicines scheduled for destruction were confiscated from them;
that the next day, May 8, 1993, respondent reported for work and submitted a false Certificate of Destruction stating that all
medicines scheduled for destruction the day before were destroyed; that respondent was arrested and charges were lodged
against him and his cohorts; that an investigation for serious misconduct, breach of trust and commission of felony was also
conducted by Marsman; that while photographs of respondent were taken at the NBI and published, they could not be held
responsible therefor; that the dismissal of Criminal Case No. 9070 was grounded on lack of jurisdiction and not based on the
merits; and that they acted in good faith, pursuant to duty, and in defense of Marsman's rights in reporting the suspected
illegal operation to the NBI. By way of counterclaim, petitioners prayed to be awarded P10 million as moral damages; PI
million as exemplary damages; and P250,000.00 as attorney's fees and litigation expenses.
Trial ensued. The evidence of the parties were summed up by the trial court, as follows: Lawlib raryofCR Alaw
EVIDENCE FOR THE PLAINTIFF
xxxx
ARTEMIO LIGO, x x x testified that he was employed by defendant Marsman & Co., Inc. from February 5, 1970 to July 15,
1993. He was then the Warehouse Supervisor x x x receiving and supervising stocks, burning and destroying condemned
medicines, x x x.
xxxx
x x x The last lime plaintiff led the destruction was on May 7, 1993 at Angono, Rizal. Defendant Iledan requested a BIR
representative and a Duncan pharmacist by the name of Rolando Rotoni and Susan Ferrer, respectively, xxx Loading of
medicines started at about 8:00 in the morning xxx. With him in the van were Mr. Rotoni, Ms. Ferrer and Francisco Mercado,
the company driver. They left for Angono, Rizal at around 9:30 and arrived at site at around 12:00 noon. The medicines were
unloaded which took them more than 1 hour. During the unloading, Mr. Rotoni and Ms. Ferrer saw the bottled medicines x x
x. At around 2:00 in the afternoon, the representatives wanted to leave because of heat, bad odor and flies in the area xxx.
Defendant Iledan instructed him to attend to the representatives' needs.
x x x Around 6:30 in the morning of May 8, 1993, he reported to defendant Iledan on the accomplished mission, to which
[Iledan remarked] "very good." Then Francisco's son arrived and informed him about Francisco's arrest in the afternoon of
May 7, 1993. Surprised, he reported the matter immediately to defendant Iledan who pretended not to know it and [said]
that they will go to NBI headquarters. They left at around 10:00 in the morning. Upon arrival, he was suddenly arrested
while defendant Iledan who was beside him turned his back and left. Defendant Iledan did nothing when he was arrested. He
was brought to the detention cell and then [to] the 2nd floor where he was forced to admit the accusation, xxx (A)t the 2nd
floor, he saw Francisco and companions. Director Epimaco Velasco entered the room and called them [to] the table where
expired medicines were placed. Then news reporters of Balita, Tempo and others went inside and took them [sic] pictures,
during which defendant Iledan was at his back, hiding. He had no occasion to talk to defendant Iledan. Then they were
brought back to the detention cell x x x.
After 10 days, he was able to post a bond and was provisionally released. [A criminal] charge was filed against him by the
NBI at the instance of defendant Iledan x x x. Hearings were conducted on the case and after a period of less than 2 years,
the case was dismissed x x x.
Plaintiff had clean record in his 21 years of service at defendant company and received [an] award, a plaque of loyalty and
appreciation letters x x x. Defendant Iledan would have caused the filing of the fabricated case because he was angry with
union members as they were organizing a supervisors' union [in] which he was active. He engaged the services of a lawyer
to protect his rights and interest at a fee of more than P50,000.0. He was restless, experienced sleepless nights, felt
humiliated and was ashamed to his friends, relatives and neighbors, co-teachers of his wife and classmates of his children,
being labeled "manloloko." He got sick often and they were constrained to transfer their residence x x x to avoid the hurling
of bad remarks, x x x.
xxxx
He left the site at Angono on May 7,1993 when some items were not yet burned[,] x x x as he was instructed by defendant
Iledan to attend to the needs of the representatives when they leave the site. At [the] time he left, there were still bad order
and expired medicines to be burned. During the burning, present were Mr. Rotoni, Ms. Ferrer, Francisco Mercado and brother
and nephews, several scavengers and a policeman of Angono whom Francisco paid to help maintain peace and order, x x x
(TSN, 12 September 1997).
xxxx
FRANCISCO MERCADO testified that he knows defendant company because he worked in that office from April 1, 1977 until
May 7, 1993 when he was apprehended by NBI agents for selling condemned medicines, x x x [T]he last time [he was
assigned to destroy the bad order medicines] was on May 7, 1993. xxx The representatives were from the BIR, DFA [sic] and
pharmacist of the companies that have the bad order medicines. Plaintiff called the representatives. The destruction site on
May 7, 1993 was at Angono, Rizal (TSN, 22 May 1998).
x x x On December 18, 1992, he invited defendant Iledan x x x for dinner [during which] Iledan said "kayong mga unionista,
ida-down ko kayong lahat sa warehouse." Defendant was mad with the unionista and those in the warehouse, x x x On May
7, 1993, he was arrested by the NBI agents who blocked his way near the dump site at Angono. Around 8:00 in the morning,
defendant Iledan called up their office and instructed him and plaintiff to burn the medicines. In the office, he saw the BIR
representative and pharmacist of Duncan Co. They loaded the medicines to be burned [inside] the 10-wheeler truck xxx. The
zebra van he was driving was not loaded with medicines. At [the] site, he was instructed by plaintiff to unload the medicines
to be burned. Due to stingy bad odor and heat of the sun, plaintiff and the representatives left the area at about 2:30 in the
afternoon. He stayed to conduct the burning as instructed by defendant Iledan (TSN, 28 September 1998).
The bottled medicines were ordered separated and placed [inside] the van as they cannot be burned as they will explode.
These were brought to Taguig, the contents thrown and the bottles given to the helpers x x x. He was not able to reach the
shop because the NBI agents, 7 of them on board 3 vehicles blocked [his path] and arrested him. Two agents were armed,
asked him to alight from the vehicle and poked a gun at him. He was handcuffed and was asked the key of the van which he
refused to give because it was his responsibility, x x x. They left and while on their way, somebody called by radio,
introduced himself as defendant Iledan x x x.
x x x On December 27 or 28, 1992, x x x defendant Iledan said that the union members will not stay long because he will file
cases against them and he will terminate [the] witness from the service, x x x The arrest was masterminded by defendant
Iledan x x x (TSN, 24 February 1999).
xxxx
ROLANDO ROTONI testified that he was a Revenue Examiner of the BIR x x x. Per referral by the Revenue District Officer, he
represented the BIR in the destruction of bad order and expired medicines of defendant company on May 7, 1993. x x x.
There was also a representative from Duncan Pharmaceuticals, Susan. They left the site at about 12:00 noon to 1:00 in the
afternoon. Destruction started after arriving at the place. He was present during the burning of all the medicines, x x x
On cross-examination, he admitted that x x x [n]ot all the medicines were destructed [sic] when they left the site, but [he]
made sure that substantially all the medicines were actually destroyed, x x x. All the medicines were placed in 1 fire and
were burned, using gasoline. He was checking while the medicines were being unloaded from the truck. No medicine was
left, [the] truck was empty. None of the medicines were returned to any of the vehicles undestroyed. He was not sure that at
the time he left the site, there were medicines still not destroyed. xxx. He left without making sure that all trie medicines
were actually destroyed because they were already x x x on fire. He would not know the other procedure for bottled
medicines for destruction. The bottled medicines were not crushed as they were placed in 1 fire together with the capsules
and tablets, then gasoline [was] poured on the single [pile] xxx and [set on fire].
xxxx
EVIDENCE FOR THE DEFENSE
Evidence for the defense consists of the testimonies of defendant Quirino Iledan, Efren Cruz, Leonora Pacson, Atty. Ferdinand
Lavin and Exhibits "1" to "15," inclusive of submarkings.
QUIRINO ILEDAN testified that he was x x x the Warehouse Operations Manager since March 1984, responsible for the
operations of the entire warehouse, xxx. He knew plaintiff being the warehouse supervisor, responsible for the receipt of
good stocks from manufacturers and x x x the destruction of expired and bad order medicines, xxx. Francisco Mercado
assisted plaintiff in the destruction, x x x. Stocks were to be destroyed, tablets should be crushed, bottles should be crushed
and liquids should be thrown out of the bottles and the bottles should be crushed or perforated so that [they become]
valueless. They should be unfit for human consumption as it is a requirement of the manufacturer to prevent its reuse. The
certificate of destruction should be signed by plaintiff, representatives of the BIR, BFAD, Auditor and the manufacturer which
certifies that the products have been destroyed. It was plaintiffs responsibility to make sure that the bad order medicines
were completely destroyed.
hi February 1998,21 he received a call from Isabelito Miguel that expired and bad order medicines were being sold at the back
of Sto. Nino church. He immediately informed Mr. Santos by telephone who called up the AVP, HRD to report the matter to
the NBI. x x x. He informed the agents of the dates when to conduct the surveillance operations during the scheduled
destruction, x x x. On May 8, 1993, he received a call from plaintiff informing him that Francisco was arrested by the NBI. x x
x. He went to the NBI headquarters with plaintiff to visit Francisco in the afternoon and looked for the arresting officer, x x x
After he left the NBI headquarters, he was informed that plaintiff was arrested, x x x. The NBI filed a criminal case against
plaintiff in which he had no participation, x x x. When plaintiff was informed that Francisco was arrested by NBI agents, he
already heard but pretended not to know because he had the idea that plaintiff was involved and he might flee. He denied
the truth of plaintiffs statement on June 4, 1997 that upon arrival at the NBI headquarters with plaintiff, the latter was
suddenly arrested. Instead, they were told to execute [a] statement, after which he asked that he x x x be allowed to leave.
He knew of the pictures taken by the NBI x x x but he did not know who took the pictures and who asked the photographers
to go to the premises. He denied the truth in the statement of plaintiff taken on July 1, 1997 that the reason why defendant
Iledan caused the filing of complaint that led to his arrest was because defendant Iledan was angry with union members
knowing that plaintiff organized and was an active union member, x x x. He also denied the plaintiffs testimony on July 30,
1997 that he manifested hostility and was angry with plaintiff and other employees especially at the warehouse division x x x
(TSN, 15 February 2001).
He recalled that he has gone to Francisco's residence in December 1992, but denied x x x having stated "kayong mga
unionista, ida-down ko kayong lahat sa warehouse." As a matter of procedure, plaintiff was authorized to leave the
destruction site before the bad order medicines were destroyed, to have lunch with the representatives. After which, plaintiff
must go back to the destruction site to witness the complete destruction. In that case, plaintiff no longer returned which was
not the correct procedure, x x x
xxxx
EFREN CRUZ testified that he x x x was then the Employee Relations Manager x x x and was aware of [plaintiffs] termination
due to violation of company policies and procedures, on the basis of NBI surveillance reports[,] x x x particularly in the
conduct of destruction of expired and bad order drugs.
x x x The surveillance reports furnished by the NBI to the company served as basis for the investigation they conducted, x x
x
xxxx
On redirect examination, he confirmed that he did not know if the surveillance reports were accurate or not. The basis of
plaintiff s termination was his breach of trust and confidence and negligence in the performance of his duty based on such
report and information gathered during the investigation that they conducted x x x (TSN, 24 April 2003).
xxxx
ATTY. FERDINAND LAVESf testified that he x x x was employed as Chief, Anti-Organized Crime Division of the NBI. x x x. He
knew defendant company because they investigated its complaint (Exh. "1") requesting for investigative assistance, x x x.
Then [a] series of case conferences and surveillance operations were conducted, x x x.22
On February 28, 2005, the trial court issued its Decision23 in Civil Case No. LP-95-022, decreeing thus: Lawl ibra ryofCRAlaw
PREMISES CONSIDERED, judgment is rendered in favor of the plaintiff and against the defendants who hereby are found to
have maliciously prosecuted the plaintiff and they are directed to pay the plaintiff, jointly and severally, the following
amounts, to wit: Lawlib raryofCRAlaw
1. Three Million (P3,000,000.00) Pesos by way of moral damages;
2. Five Hundred Thousand (P500,000.00) Pesos by way of exemplary damages;
3. 25% of the total amount awarded to plaintiff as attorney's fees and pay the cost of the suit.
SO ORDERED.24
The trial court held that all the elements of malicious prosecution have been proved, namely, that (1) the prosecution did
occur and the defendant was himself the prosecutor, and the criminal action terminated in an acquittal; (2) in bringing the
action, the prosecutor acted without probable cause; and (3) the prosecutor was actuated or impelled by legal malice, i.e. by
improper or sinister motive.25 It declared that petitioners knowingly and deliberately caused the investigation and
prosecution of respondent through a false and unfounded letter-complaint coursed through the NBI that was based on the
supposed tip of Miguel who was not even called to testify in court. Acting without probable cause and with full knowledge
that respondent and his colleagues were proceeding in accordance with accepted company practices regarding the
destruction of the bad order and expired medicines and subsequent disposition of the medicine bottles - which, after
emptying and destroying their contents, were cleaned and then awarded to the helpers as their compensation or sold,
petitioners nonetheless caused the unlawful arrest of respondent and his colleagues while the latter were on their way to
dispose of the bottled medicines (in accordance with said company-accepted procedure) on May 7, 1993 - on the false
supposition or pretext that they were carrying out their modus operandi of selling and distributing the company's bad
medicines. The trial court added that all the surveillance operations previously conducted by the NBI proved nothing other
than that the employees were transporting the medicines to places where they would be destroyed and disposed of pursuant
to accepted practices.
The trial court added that respondent and his colleagues were subjected to a humiliating press conference, and petitioners
failed to assist them or shield them from embarrassment despite the fact that Iledan was then present at the press briefing;
that he was detained for 10 days together with 40 other hardened criminal-inmates who threatened him every now and then
and made him their servant for the whole duration of his detention, in a cell where they were packed like sardines; that he
was then falsely charged in Criminal Case No. 9070 and subsequently acquitted for lack of evidence; and that he was
terminated from employment.
The trial court concluded that for petitioners' malicious acts resulting in his unwarranted arrest, detention, prosecution, public
humiliation, and suffering, respondent was entitled to indemnity.
Petitioners interposed an appeal with the CA contending essentially that not all the elements of malicious prosecution were
present; that there was probable cause in filing the complaint and in requesting NBI assistance; that based on the
surveillance reports, respondent committed anomalies which thus warranted a finding of probable cause; that the trial court
erred in awarding damages to respondent; and that it was erroneous for the trial court to dismiss their counterclaim.
On April 29, 2011, the CA issued the assailed Decision, finding that there was indeed malicious prosecution of respondent;
that the trial court was correct in declaring that Iledan knew from the start that the accusation against respondent was false
and baseless; that the NBI surveillance operations merely revealed an irregularity in the manner of destruction of Marsman's
expired and bad order medicines, and that no destruction took place on the dates when these surveillance operations were
conducted - not that respondent was guilty of selling, dispensing or delivering expired or rejected pharmaceutical products;
that Iledan knew and approved of the practice of reselling the empty medicine bottles rather than destroying ithem, which
practice he should have disclosed to Marsman; and that Marsman should have conducted its own internal investigation of the
case, instead of immediately seeking NBI assistance and subjecting respondent to a humiliating experience and unnecessary
media exposure. The CA likewise sustained the trial court's award of moral and exemplary damages, noting that respondent's
detention, media exposure, and unwarranted prosecution in an unfounded suit caused him and his family great damage,
mental anguish, and serious anxiety. Thus, the appellate court decreed: Lawlib raryofCRAlaw
WHEREFORE, PREMISES CONSIDERED, the court a quo's decision dated 28 February 2005 is hereby AFFIRMED IN TOTO.
SO ORDERED.26
Petitioners moved for reconsideration, but in its September 16, 2011 Resolution, the CA stood its ground. Hence, the instant
Petition.
Issues
Petitioners raise the following issues: Lawli bra ryofCRAlaw
THREE OUT OF THE FOUR ELEMENTS OF MALICIOUS PROSECUTION WERE NOT ESTABLISHED; chanRoblesvi rtua lLawl ibra ry
THERE IS NO BASIS TO AWARD DAMAGES, ATTORNEY'S FEES AND COSTS; AND
THE AWARD OF P3,500,000.00 IN MORAL AND EXEMPLARY DAMAGES AND P875,000.00 IN ATTORNEY'S FEES IS EXCESSIVE
AND UNJUST.27
In their Petition and Reply,28 petitioners seek a reversal of the assailed CA dispositions and the consequent dismissal of
respondent's complaint in Civil Case No. LP-95-022. They argue that three of the four elements required for a malicious
prosecution suit to prosper are lacking, namely: 1) that the defendant in the malicious prosecution case is himself the
prosecutor in the criminal, civil or other legal proceeding or case, or that he instigated its commencement; 2) that in bringing
the action, the defendant acted without probable cause; and 3) that the defendant was impelled by legal malice -- an
improper or sinister motive. In connection with the first requisite, petitioners contend that they did not act as prosecutors,
nor did they commence the criminal case against respondent; that it was the NBI that investigated and caused the filing of
Criminal Case No. 9070, and their role was limited to requesting the NBI's assistance in investigating the respondent's
alleged pilferage of bad medicines; that they did not seek NBI assistance to prosecute respondent, but merely
to investigate him; and that it was the NBI alone which determined what crime respondent should be charged with.
Relative to the second element, petitioners insist that they acted with probable cause in seeking the investigation of
respondent and his colleagues, based on the tip provided by Miguel that bad medicines were being sold in Parañaque; that
probable cause was established through the surveillance operations of the NBI and the State Prosecutor's recommendation to
file Criminal Case No. 9070; that acquittal does not disprove the existence of probable cause,29 and so it was erroneous for
the CA to declare that respondent's acquittal implies lack of probable cause, as his acquittal was based on failure to prove
guilt beyond reasonable doubt - not lack of probable cause.
On the third element, or the issue of legal malice, petitioners argue that since there was probable cause to charge
respondent, then this is tantamount to absence of malice; stated otherwise, the absence of probable cause and malice must
concur in an action for malicious prosecution.30 Moreover, good faith is presumed in the absence of clear and convincing
evidence of malice.
Petitioners add that they should not be penalized for exercising their right to litigate or for requesting NBI assistance in
investigating respondent and his colleagues; that the mere act of submitting a case to the authorities for prosecution does
not make them liable for malicious prosecution, since the law does not mean to impose a penalty on the right to
litigate;31 and that they acted as a sensible and prudent citizen would upon being told by the informant Miguel of the
purported sale of bad medicines in Parañaque.
Finally, on the issue of indemnity, petitioners submit that since all the elements of malicious prosecution were not proved,
there is no ground to hold them liable for damages, attorney's fees and costs; that the award is excessive; and that
respondent's case should suffer the same fate as that instituted by Mercado,32 which was dismissed for lack of merit - and
which dismissal was affirmed with finality by the CA in CA-G.R. CV No. 88732.
On the other hand, respondent - seeking affirmation of the assailed CA pronouncements - maintains in his Comment and
Addendum33 thereto that the Petition is a rehash of petitioners' arguments in the CA; that Iledan's malice and hostile attitude
toward his subordinates are the reasons for filing the criminal case against him; that instead of aiding his subordinates when
they were arrested on May 7 and 8, 1993, Iledan instigated a humiliating press conference where photographs and footage
of respondent and his companions were taken and published in the newspapers and aired on television; that Mercado's civil
case is different from his, in that he and Mercado are not similarly situated - a fact which the trial court itself realized in
disposing of Civil Case No. LP-96-0040; and that overall, the CA's pronouncements are correct and must be upheld.
Our Ruling
In Magbanua v. Junsay,34 malicious prosecution was defined and characterized as follows: Lawlib raryofCRAlaw
In this jurisdiction, the term 'malicious prosecution' has been defined as 'an action for damages brought by one against
whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause,
after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein.' While generally
associated with unfounded criminal actions, the term has been expanded to include unfounded civil suits instituted just to
vex and humiliate the defendant despite the absence of a cause of action or probable cause.
This Court, in Drilon v. Court of Appeals, elucidated, viz.:

Lawlib ra ryofCRAlaw
The term malicious prosecution has been defined in various ways. In American jurisdiction, it is defined as: Lawlib ra ryofCRAlaw
One begun in malice without probable cause to believe the charges can be sustained (Eustace v. Dechter, 28 Cal. App. 2d.
706, 83 P. 2d. 525). Instituted with intention of injuring defendant and without probable cause, and which terminates in
favor of the person prosecuted. For this injury an action on the case lies, called the action of malicious prosecution (Hicks v.
Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen, 96 N.W. 803, 119 Wis. 625).'
In Philippine jurisdiction, it has been defined as:
Lawlib raryofCRAlaw
'An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been
instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in
favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose
of vexation or injury (Cabasaan v. Anota, 14169-R, November 19,1956).'
The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code
on Human Relations and on damages particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). To constitute
malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and
humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for
malicious prosecution.
This Court has drawn the four elements that must be shown to concur to recover damages for malicious prosecution.
Therefore, for a malicious prosecution suit to prosper, the plaintiff must prove the following: (1) the prosecution did occur,
and the defendant was himself the prosecutor or that he instigated its commencement; (2) the criminal action finally ended
with an acquittal; (3) in bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was
impelled by legal malice — an improper or a sinister motive. The gravamen of malicious prosecution is not the filing of a
complaint based on the wrong provision of law, but the deliberate initiation of an action with the knowledge that the charges
were false and groundless.35
The CA is correct in declaring that all the elements of malicious prosecution exist in this case. First of all, there is no question
that the investigation of respondent for alleged participation in a purported syndicate that sells Marsman's bad medicines was
prompted by a supposed telephone call tip from Miguel, which resulted in Pilapil's March 15, 1993 request to then NBI
Director Velasco for an investigation of the matter. Secondly, respondent was acquitted in the resulting criminal case -
Criminal Case No. 9070 - for lack of evidence and lack of jurisdiction, through an October 12, 1994 Order of the Taguig City
Metropolitan Trial Court, Branch 74. There is no doubt that Marsman instigated the investigation and prosecution of
respondent and his colleagues. Petitioners cannot claim that they merely sought to investigate - and not prosecute -
respondent; certainly, prosecution follows as a necessary consequence if the NBI believes that a crime has been committed,
and petitioners cannot prevent the filing of charges, even if they wanted to. As correctly observed by the appellate court, if
indeed petitioners simply sought to investigate and not prosecute respondent, they should have first conducted their own
internal investigation of the matter instead of immediately referring the case to the NBI; the option to prosecute may be
exercised later. In fact, this should have been the case; nothing prevented them from fielding confidential personnel to pose
as buyers of these bad medicines they believe were being sold in Parañaque. Their so-called informant Miguel - if he actually
existed - could have produced more than a simple telephone report.
On the question of probable cause,36 it must be said that against the respondent, no probable cause existed to warrant his
prosecution for violation of the provisions of RA 3720. There is no legal ground to suppose that respondent was involved in a
syndicate which sold Marsman's bad medicines in Parañaque; the supposed tipster Miguel was not presented in court to
identify the alleged perpetrators of the illegal act - hence, the basis for the accusation is lacking. Although informants are
usually not presented in court because of the need to hide their identity and maintain their valuable service to the
police,37 this rule cannot apply in Miguel's case because he was not a confidential informant; his identity was precisely
divulged. Likewise, there is no evidence to prove that respondent was involved in or committed any act violative of RA 3720.
He was not even part of the group that was arrested by the NBI on May 7, 1993; he was arrested and detained - illegally, in
fact - only the next day. His participation in any manner or degree has not been shown. Quite the contrary, the evidence
indicates that on May 7, 1993, respondent was with the BIR representative Rotoni and Duncan Pharmaceuticals employee
Ferrer the whole time. Rotoni testified as well that on that day, all the bad medicines were placed in a single pile, poured
with gasoline, and burned, and nothing was left in the 10-wheeler truck and van that brought the bad medicines to the
destruction site; this he made sure before he left - only that he, Ferrer and respondent left without making sure that all the
bad medicines in the pile were completely destroyed. Nonetheless, if anything was recovered from the burning pile after
Rotoni and respondent left, respondent did not actually participate in the recovery as he had to take Rotoni and Ferrer home.
Moreover, if it is true that the NBI recovered bad medicines from respondent's colleagues on May 7, 1993 when they were
arrested, this does not appear to constitute a violation of RA 3720: according to Mercado, the bottled bad medicines could
not be burned in the pile because they would explode - which is true as a matter of experience -and thus, they had to be
brought to a location in Taguig where their contents would be emptied, destroyed and the bottles recovered and given to the
helpers as compensation, in accordance with accepted practice sanctioned by the petitioners. However, before they could get
to the said location, they were intercepted and arrested by the NBI. Also, prior surveillance operations conducted by the NBI
in March 1993 do not even indicate that respondent and his colleagues were involved in a syndicate relative to the sale of
bad medicines; the testimony of NBI agent Lavin yields nothing other than that they conducted surveillance and tailing
operations; he does not even know the identities of the individuals they were tailing at the time. The photographs taken
during the operations do not show that respondent was there, or that he was performing illegal acts or omissions. Petitioners'
very own witness, Marsman Employee Manager Efren Cruz, admitted that he doubted the accuracy of the surveillance
operations.38reda rclaw
In short, while Marsman officials confined themselves to their secure and relaxed offices, they simply relied on Iledan's claim
that he received a tip from a so-called informant and did not even lift a finger to verify the truth of allegations that their bad
medicines were being peddled in Parañaque. On the strength of a questionable and unreliable third party tip - by telephone
at that, petitioners set into motion an investigative and prosecutorial process that resulted in a bungled, crackpot operation
and the inevitable acquittal of the respondent. If petitioners and the NBI were prudent and clever enough, they would have
taken the surveillance operations all the way to the point where the bad medicines were being actually sold to the public,
before any arrests were made; instead, their half-baked and poorly planned operation yielded nothing to build a case on. As
expected, Criminal Case No. 9070 could only be dismissed.
The fact that the plaintiff in a malicious prosecution case is acquitted of the criminal charge precisely places the prior finding
of probable cause in issue, which must be determined in the malicious prosecution case. If the plaintiff was acquitted for
reasons other than lack of probable cause, then certainly the malicious prosecution case cannot prosper. Thus, petitioners
are correct in arguing that acquittal does not disprove the existence of probable cause. However, they are mistaken in
concluding that respondent's acquittal was based on failure to prove guilt beyond reasonable doubt and not lack of probable
cause. As a matter of fact, respondent's acquittal was due to lack of evidence, which presupposes lack of probable cause.
The Court is inclined to believe respondent and Mercado's statements that there is a standing company practice not to
include bottled medicines in the burning process and that, instead, these are emptied of their contents and the bottles given
to helpers as compensation or sold to the junk shops. Firstly, if these bottled medicines are burned, they would in all
likelihood explode and potentially harm respondent and his colleagues; in short, it is not - from a practical point of view -
acceptable procedure to burn them. Secondly, notwithstanding petitioners' claim that such procedure is not sanctioned, they
have not offered any proof of strict protocol regarding disposal of bottled medicines other than to say that these medicine
bottles should be crushed - which procedure, again, is unsafe and potentially harmful to respondents, his colleagues, and the
public in general, since it is apparent that petitioners have not provided respondent and his colleagues the appropriate
equipment and venue for crushing the bottles safely and efficiently. Quite the opposite, it appears that petitioners have
adopted an irresponsible, unsafe, unhygienic, dangerous, unconscientious and lax procedure relative to the disposal of
Marsman's bad medicines; their overwhelming attitude appears to be that it does not matter where or how the bad
medicines are disposed, so long as they are gotten rid of. Indeed, the lack of safeguards and the multiple loopholes relative
to the procedure of disposal, as well as the indifference and unconcerned attitude adopted by petitioners, are simply
astounding. There is an absolute lack of strict protocol and procedure in the disposal of bad medicines. There is no controlled
environment for the complete destruction of these potentially harmful chemicals: they are simply brought to a vacant lot or
open space - where scavengers gather and ogle, hoping to salvage something from the pile of hazardous substances - or
private residential or commercial lot, there to be burned without regard for the health and safety of bystanders and
residents. The bad medicines are burned openly and the fumes allowed to escape freely, contaminating the environment,
wreaking havoc and causing unimaginable damage and deadly disease; worse, the resultant chemical reactions caused by
burning - which have permanent effects on the soil, groundwater, and all animal life in general - are of no concern to
petitioners. The destruction is carried out and witnessed by lowly employees of Marsman - bereft of proper accountability and
training — and whose attention is distracted as they must simultaneously attend to the personal needs of the BIR and
pharmaceutical company representatives, feed them and men drive them home.39 The warehouse head Iledan, all the while,
simply sits idly in his comfortable office, there to conveniently await the return of his supervisor. It is as if Marsman actually
encourages the pilferage of bad medicines. If any such pilferage occurs, Marsman and its officials should be prosecuted
together with the perpetrators; indeed, Marsman should be held responsible for downright negligence in failing to carry out
strict procedure for the disposal of its bad medicines, which promotes permanent environmental damage and the introduction
of these harmful products to the public at large. If there is anyone who should be prosecuted criminally for flagrant violations
of RA 3720 and environmental laws, it should be the petitioners.
On the issue of legal malice, the Court notes respondent's complaint which specifically alleged that when Iledan assumed his
position as warehouse manager, he was arrogant and hostile toward the employees and even manifested his desire to
replace respondent and other employees of the respondent's warehouse. Respondent testified particularly that Iledan did not
relish his attempt in 1992 at establishing a supervisors' union, and that Iledan was angry at union members. Mercado
corroborated this, testifying that in December 1992, he invited Iledan and his family to their house for dinner, where Iledan
became intoxicated and said "Kayong mga unionista, ida-down ko kayong lahat sa warehouse;" that was "mad with the
unionista and those in the warehouse;" that union members like him will not stay long because Iledan will file cases against
them; that Iledan will terminate him from the service; that Iledan was not able to say anything more as his wife - Malou,
whom he knew - persuaded him to leave because what he was doing was wrong; and that he reported the incident to the
union president, which prompted the union to send a letter to Iledan. For his part, Iledan affirmed that he and his family
attended the December 1992 dinner at Mercado's home, but simply denied that he was intoxicated and made the remark
about targeting union members. He did not present his wife to testify in his favor; nor did he refute the letter sent to him by
the union pertaining to the December 1992 incident.
As against Iledan's denial, respondent's declarations and Mercado's testimony deserve weight. Iledan was prompted by
hatred, malice and bad faith in deliberately initiating a baseless action against respondent, Mercado and their colleagues,
with the solitary purpose of humiliating and harassing them and ultimately causing their removal from Marsman. It must be
recalled that Iledan was the recipient of the supposed telephone tip from Miguel, whose identity and existence is exceedingly
questionable since he was not presented in court. Relying blindly on Iledan's supposed information, Marsman immediately
sought NBI assistance without the benefit of tackling the matter internally in order to make sikre that the tip was reliable in
the first place. When respondent was illegally arrested in the presence of Iledan, no protest was heard from petitioners as a
measure of concern for one of their long-serving employees. They allowed respondent and his colleagues to be humiliated
and shamed before a press conference, where their photographs were taken and published indiscriminately in several
newspapers as members of a supposed syndicate which sold Marsman's bad medicines - even before their guilt or innocence
could be preliminarily or finally determined. Respondent was then illegally detained in an NBI detention cell for at least 10
days, where he experienced untold suffering. All these culminated in a false criminal charge and respondent's dismissal from
Marsman.
On the issue of indemnity, we hold that since respondent has shown that all the elements of a malicious prosecution case are
present, and that petitioners acted with evident bad faith, malice, and in gross disregard of respondent's rights, a grant of
damages is only proper. Suffice it to state that the Court is in total agreement with the CA when it held that: Lawlibra ryofCRAlaw
As regards the award of moral and exemplary damages as well as attorney's fees, We affirm the court a quo's findings that
defendants-appellants are liable for damages for the malicious prosecution of appellee x x x
xxxx
The award of moral damages is proper when the following circumstances concur: (1) there is an injury, whether physical,
mental or psychological, clearly sustained by the claimant; (2) there is a culpable act or omission factually established; (3)
the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the
award of damages is predicated on any of the cases stated in Article 2219.
Exemplary damages are awarded in addition to moral damages if the basis for the latter was established. It must be shown
that the party acted in a wanton, oppressive or malevolent manner for the award of exemplary damages to be proper.
The discretion of the court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal, and equitable
justification, without which the award is a conclusion without a premise, its basis being improperly left to speculation and
conjecture. In all events, the court must state the reason for the award of attorney's fees.
As discussed by the court a quo and We agree, plaintiff-appellee's detention, presentation to the media and prosecution in an
unfounded suit caused him and his family great damage, mental anguish, and serious anxiety which entitles him to the
damages awarded. Also, the court a quo opined that defendants-appellants had several chances in rectifying [sic] their error
particularly when the criminal case was dismissed but the latter failed to do so. Thus, plaintiff-appellee was constrained to go
to court.40
WHEREFORE, the Petition is DENIED. The assailed April 29, 2011 Decision and September 16, 2011 Resolution of the Court
of Appeals in CA-G.R. CV No. 87004 are AFFIRMED IN TOTO.
Let a copy of this Decision be furnished to the Department of Environment and Natural Resources for the conduct of
investigation on Marsman's practice of disposing its bad order and expired medicines through unsanitary and unsafe means
in violation of Republic Act No. 696941 and other applicable environmental and safety laws, and the filing of proper criminal,
civil, and other charges if warranted.
SO ORDERED.
SECOND DIVISION
G.R. No. 196875, August 19, 2015
TEDDY MARAVILLA, Petitioner, v. JOSEPH RIOS, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the July 25,2008 Resolution2 of the Court of Appeals (CA) in CA-G.R.
CEB SP No. 03594 dismissing herein petitioner's Petition for Review, as well as the CA's April 4, 2011 Resolution3 denying
petitioner's Motion for Reconsideration.4
reda rclaw
Factual Antecedents
In 2:003, respondent Joseph Rios filed a criminal case against petitioner Teddy Maravilla for reckless imprudence resulting in
serious physical injuries before the Municipal Trial Court in Cities (MTCC) of Himamaylan City, Negros Occidental, docketed as
Criminal Case No. 2168-MTCC. Respondent accused petitioner of recklessly driving his jeep which caused it to collide with the
motorcycle he (respondent) was then driving; as a result, respondent was injured and incapacitated to work for more than
ninety days.
After trial, the MTCC rendered judgment5 on December 14, 2006, pronouncing as follows: Lawlib raryofCRAlaw
WHEREFORE, premises considered, the Quantum of proof necessary for the conviction of the accused not having been clearly
established beyond any reasonable doubt, accused Teddy Maravilla is hereby acquitted of the crime charged. However, as
the court finds preponderance of evidence to hold the accused liable in damages for the injuries sustained by the private
complainant as a result of the lack of proof or lack [sic] basis and, as adverted to above, the accused is hereby ordered to
pay private complainant the sum of P20,000.00 as temperate damages.
Other claim for damages is hereby ordered dismissed either for lack of basis and/or the same not proper [sic] in this case.
SO ORDERED.6
Respondent interposed an appeal before the trial court. On May 19, 2008, the Regional Trial Court of Negros Occidental, 6th
Judicial Region, Branch 56 issued its Decision7 in the appealed case - Criminal Case No. 2049 - decreeing as follows: Lawlib raryofCR Alaw
WHEREFORE, viewed in the light of all the foregoing considerations, the decision of the Municipal Trial Court in Cities of
Himamaylan City, Negros Occidental dated December 14, 2006, is hereby modified as follows: Lawlib ra ryofCRAlaw
The award of temperate damages in the amount of P20,000.00 is hereby deleted; and
Accused-appellee is hereby held liable to pay private complainant Joseph Rios the amount of Two Hundred Fifty Six Thousand
Three Hundred Eighty Six Pesos and Twenty Five Centavos (P256,386.25) as actual and compensatory damages; chanRoble svirtual Lawlib ra ry
No award for moral damages and Attorney's Fees and no costs.
SO ORDERED.8
Petitioner filed a Petition for Review with the CA, docketed as CA-G.R. CEB SP No. 03594. However, in its assailed July 25,
2008 Resolution, the CA dismissed the Petition, decreeing thus: Lawlibra ryofCRAlaw
Filed before Us is a petition for review under Rule 42 filed by the petitioner on June 19, 2008 seeking to reverse/set aside the
assailed Decision of the Regional Trial Court, Branch 56 of Himamaylan City, Negros Occidental dated 19 May 2008.
As viewed, the instant petition is defective in substance: Lawlib raryofCR Alaw
It failed to incorporate a written explanation why the preferred personal mode of filing under Section 11, Rule 13, Revised
Rules of Court, was not availed of; cha nRoblesvi rt ual Lawlib rary
Some relevant and pertinent pleadings and documents, which are necessary for a better understanding and resolution of the
instant petition, were not attached therein, in violation of Section 2(d), Rule 429 of the Revised Rules of Court, to wit: Lawli bra ryofCRAlaw
Copy of the information filed before the municipal trial court;
Copy of the appellant's brief filed before the RTC;
Copy of the appellee's brief, if any;
Other pieces of evidence/documents adduced before the lower court.
While it is true that litigation is not a game of technicalities and that the rules of procedure should not be strictly enforced at
the cost of substantial justice, this does not mean that the Rules of Court may be ignored at will and at random to the
prejudice of the orderly presentation and assessment of the issues and their just resolution. Justice eschews anarchy.
Thus, for failure of the petitioner to comply with pertinent provisions of the Rules, the petition is hereby DISMISSED.
SO ORDERED.10
Petitioner moved for reconsideration, but in its second assailed Resolution, the C A stood its ground, stating -
The petitioner subsequently filed a motion for reconsideration of the aforesaid Resolution by invoking the rule on liberal
application of procedural laws. In trying to rectify the dearth in his petition, the petitioner attached to his motion certain
portions of the record of the case in the court a quo.
A perusal of petitioner's motion for reconsideration, as well as the attachments thereto, shows that the petitioners [sic] still
failed to comply with Section 2(d), Rule 42 of the Revised Rules of Court. There are allegations in the petition that draw
support from the transcripts of stenographic notes, formal offer of evidence by the respondent, and the Order of the trial
court that admitted said formal offer of evidence. The petitioner, however, had not appended the aforesaid documents to the
petition. Thus, with such deficiency, the Court resolves to deny petitioner's motion for reconsideration.
WHEREFORE, premises considered, the petitioner's motion for reconsideration is hereby denied.
SO ORDERED.11
Issues
Petitioner raises the following issues for resolution: Lawlib raryofCR Alaw
1.
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR REVIEW UNDER RULE 42 DUE TO
TECHNICALITIES.
2.
PETITIONER HAS A MERITORIOUS CASE AND [THE] PETITION IS NOT FRIVOLOUS AND DILATORY.12
In his Petition and Reply13 seeking reversal of the assailed CA dispositions and a remand of the case to the CA for
consideration on its merits, petitioner argues that while the CA has discretion to dismiss the appeal, its discretion must be a
sound one, and it must consider the circumstances of the case, the tenets of justice and fair play, and the fact that an appeal
is an essential part of the judicial process, to the end that technicalities should be avoided.14 Petitioner asserts that the
courts must afford every party litigant the amplest opportunity for the just and proper determination of his case free from
the constraints of technicalities. He claims that Ms failure to submit pertinent documents required by the CA was due to
misapprehension of Section 2(d) of Rule 42, as the said section mentions only copies of the judgments or orders of the lower
courts, which brought him to the realization that other pleadings or documents may be submitted later on, as the need arises
or as may be necessary. He argues that the Revised Internal Rules of the CA (Section 3[d], Rule 3) states that when a
petition does not contain the complete annexes of the required number of copies, "the Chief of the Judicial Records Division
shall require the petitioner to complete the annexes or file the necessary number of copies of the petition before docketing
the case;" thus, the defect was cured when he submitted the required pleadings/documents together with his motion for
reconsideration with the CA. Moreover, he insists that he has a meritorious case since there is no basis for the trial court's
award of actual damages because respondent failed to prove and testify as to the same -respondent failed to present actual
receipts of his hospital expenses, but merely relied on the hospital's statement of account (Exhibit "N") containing the
amount of expenses allegedly incurred by him, which does not qualify as proof of actual expenses incurred; respondent failed
to identify the said statement of account at the trial; and finally, respondent's other exhibits do not prove that he incurred
medical expenses.
In his Comment,16 respondent supports the dismissal of the Petition by the CA. He contends that while petitioner submitted
additional pleadings and documents when he filed his Motion for Reconsideration, still the same was insufficient. The CA may
not be expected to rule properly on the petition without said pleadings and documents, since - unlike in an ordinary appeal -
the trial court record is not automatically elevated to the appellate court in a petition for review. Respondent insists that
petitioner may not invoke liberality in the application of the Rules. The cases he cited are not applicable because the parties
complied wholly with their duty to attach all the relevant pleadings and documents necessary for the consideration of their
petition whereas in his case, there was no complete compliance with the Rules because he failed to attach all the required
pleadings and documents. Besides, petitioner has not given a valid excuse for failing to complete the required documents. In
any case, while the phrase "of the pleadings and other material portions of the record" in Section 2 (d), Rule 42 -followed by
the phrase "as would support the allegations of the petition" - means that petitioner has the discretion to select the
documents that must be annexed to the petition, it is still the CA that will ultimately determine if the supporting documents
are sufficient to even make out a prima facie case.17 Moreover, there is no question of law involved in the instant case, which
justifies the denial of the petition. Respondent also avers that petitioner's plea for a re-examination of the evidence to justify
his recourse is not allowed at this stage; and that just the same, respondent has sufficiently proved his entitlement to actual
damages through the various pieces of evidence submitted and admitted in the court below.
Our Ruling
Under Section 2, Rule 42 of the 1997 Rules of Civil Procedure (1997 Rules), a petition for review shall be accompanied by,
among others, copies of the pleadings and other material portions of the record as would support the allegations of the
petition. Section 3 of the same rule states that failure of the petitioner to comply with any of the requirements regarding the
contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof.
In Galvez v. Court of Appeals,18 this Court held that there are three guideposts in determining the necessity of attaching
pleadings and portions of the record to petitions under Rules 42 and 65 of the 1997 Rules, to wit: Lawl ibra ryofCRAlaw
First, not all pleadings and parts of case records are required to be attached to the petition. Only those which are relevant
and pertinent must accompany it. The test of relevancy is whether the document in question will support the material
allegations in the petition, whether said document will make out a prima facie case of grave abuse of discretion as to
convince the court to give due course to the petition.
Second, even if a document is relevant and pertinent to the petition, it need not be appended if it is shown that the
contents thereof can also [be] found in another document already attached to the petition. Thus, if the material
allegations in a position paper are summarized in a questioned judgment, it will suffice that only a certified true copy of the
judgment is attached.
Third, a petition lacking an essential pleading or part of the case record may still be given due course or reinstated (if earlier
dismissed) upon showing that petitioner later submitted the documents required, or that it will serve the higher
interest of justice that the case be decided on the merits.
The guideposts, which equally apply to a petition for review filed in the CA under Rule 42, reflect that the significant
determinant of the sufficiency of the attached documents is whether the accompanying documents support the allegations of
the petition.19 (Emphasis supplied)
It is true that in the case of Spouses Espejo v. Ito,20 which petitioner cites, the petitioners therein rectified their mistake by
submitting the necessary pleading - in this case a copy of the complaint - to the CA, thus completing the attachments to their
petition for review. The Court in said case held:Lawli bra ryofCRAlaw
It should be noted that in this case, petitioners immediately acted to rectify their earlier procedural lapse by submitting,
together with their Motion for Reconsideration of the 19 December 2006 Resolution of the Court of Appeals, a Motion to
Admit a copy of their Complaint for Unlawful Detainer. Submission of a document together with the motion for
reconsideration constitutes substantial compliance with the requirement that relevant or pertinent documents be submitted
along with the petition, and calls for the relaxation of procedural rules.
Moreover, the Court held in Spouses Lanaria v. Planta that under Section 3(d), Rule 3 of the Revised Internal Rules of the
Court of Appeals, the Count of Appeals is with authority to require the parties to submit additional documents as may be
necessary to promote the interests of substantial justice. Therefore, the appellate court, instead of dismissing outright the
Petition, could just as easily have required petitioners to submit the necessary document, i.e., a copy of petitioners'
Complaint for Unlawful Detainer filed with the MeTC.21
In petitioner's case, however, while he submitted additional necessary attachments along with his Motion for
Reconsideration, he left out important parts of the record - excerpts of the transcript of stenographic notes, the respondent's
formal offer of evidence, and the trial court's Order admitting said formal offer of evidence - that would support his claim that
the trial court erred in awarding damages to respondent since the latter failed to testify as to his hospital expenses and
identify particular exhibits.
Since petitioner was acquitted of the criminal charge, the only issue left in the appealed case (Criminal Case No. 2049) is the
matter of damages. In disposing of this issue, the trial court held: Lawl ibra ryofCRAlaw
This court, after a considered and exhaustive review and perusal of the records of this case resolves to disagree with the
findings of the lower court. It has concluded that, indeed, as correctly pointed [out] by herein appellant, prosecution has
proffered competent and [sic] documentary proof sustaining private complainant's plea for an award of actual and
compensatory damages including the basis thereof.
It is evident that in this case prosecution has sufficiently established the injuries sustained by private complainant
consequent to the vehicular mishap. The evidence on record has shown that Joseph Rios was admitted at the Doctor's
Hospital, Inc., Bacolod City from October 28, 2001 to February 4, 2002 per Admission and Discharge Record issued by said
hospital (Exh. "F"). He underwent a surgical operation on October 28, 2001 and was diagnosed for [sic] a) fracture open type
II middle femur left; b) laceration left knee; c) fracture open II, distal tibia, repair of laceration (Exh. "D"). While being
admitted at the hospital, he incurred expenses in the amount of P203,343.00 per certification (Exh. "E") and the Statement
of Account (Exh. "N") issued by the said hospital in the amount of P256,386.25.
True it is, prosecution in its presentation of evidence failed to identify said exhibit in court. Nonetheless, said defect had been
waived no less by accused-appellee in failing to seasonably object to its authenticity and its eventual admission in evidence
by the court a quo. In the order dated August 12, 2005, the court a quo admitted in evidence said Exhibits "E" and "N"
formally offered by the prosecution. Said order has already become final and likewise unassailable as herein accused-
appellee never questioned the admission in evidence of said exhibits. The adverted order thus binds the parties. It is too late
in a [sic] day at this stage for accused-appellee to claim that said exhibits have not been identified.
The mere fact that private complainant was admitted in the hospital from October 28, 2001 to February 4, 2002 and had
undergone a surgical operation provides sufficient basis for the award of compensatory damages. The amount of the award
could hardly be concluded as proceeding from sheer conjectures and guesswork as the same has been detailed in the
Statement of Account (Exh. "N") issued no less by the hospital which naturally keeps records of expenses incurred to be
made payable by the patient.
While the law and jurisprudence obviously require competent proof for an award of compensatory damages, such competent
proof does not limit itself to the presentation of receipts. Other documentary proof as in this case the Certification (Exh. "E")
and the Statement of Account (Exh. "N") would suffice as they are the best evidence to prove hospital expenses. The
absence of receipts was duly elucidated and justified by private complainant as the hospital bill at the time said Statement of
Account was issued, had no[t] been paid and satisfied and still remains the accountability of private complainant.
To the mind of this court, Exhibits "E" and "N" presented by the private complainant and clearly unrebutted by the accused-
appellee provides the plainest, easiest and most accurate measure in determining the amount of actual damages with
reasonable certainty. Accordingly, an award in this case for actual damages in the amount of P256,386.25 as shown in Exh.
"N" would surely subserve the ends of justice.22
Nowhere in the trial court's recitations above may be found any reference to the transcript covering respondent's testimony,
which petitioner assails. The same is true with the MTCC's Decision; a perusal thereof generates the same conclusion. In the
absence of such reference, it was incumbent upon petitioner to attach to his CA Petition such portions of the evidence and
transcript as are relevant to and supportive of his claim. Without them, the appellate court could not have any factual basis
to resolve the case or, at the very least, make out a prima facie case for him.
Thus, going by the ruling in Galvez, petitioner's failure to attach relevant portions of the evidence and transcript of
stenographic notes - to his Petition, initially, and Motion for Reconsideration, subsequently - which were not tackled in the
decisions of the courts below, but which are material to his claim that respondent failed to testify as to and prove actual
damages, is fatal to his Petition for Review before the CA. In short, none of the three guideposts spelled out in Galvez were
observed in petitioner's case.
In Magsino v. de Ocampo,23 the Court articulated the reason for requiring -through Section 2 of Rule 42 - that pleadings and
other material portions of the record as would support the allegations must be attached to the Petition, in the following
manner: Lawlibra ryofCRAlaw
It is worth mentioning that pursuant to the third guidepost recognized in Galvez the petitioner could still have submitted the
omitted documents at the time he filed his motion for reconsideration vis-a-vis the first assailed resolution of the CA. Yet, he
did not do so. Instead, he boldly proposed in his motion for reconsideration vis-a-vis the first assailed resolution that the CA
should have bowed to the "greater imperative of doing substantial justice" by not hampering the appeal "sticking
unflaggingly to such rules," to wit:
Lawli bra ryofCRAlaw
If this Honorable Court would really want to inform itself more, it is submitted that all that it has to do is to order the
elevation of all the records to it. The Rules of Court, and for that matter all rules of procedure should bow to the greater
imperative of doing substantial justice. Rather, routinely applying a rule of procedure when the same is not necessary in
order to arrive at an intelligent resolution of the issues, it is submitted, would hamper or repress rather than promote the
search for truth.
xxxx
It may be cliche, but it is still true today as when it first found its way into the human mind, that when technical rules of
procedure already serve to hamper justice they must be left to the dustbin of the legally forgettable, and at the cost of
setting them aside, should unobtrusively pursue the ends of justice and the search for truth.
xxxx
Now must this Honorable Court sacrifice the law for technical rules of procedure? Must it countenance mediocrity, nay,
ignorance, by sticking unflaggingly to such rules? Can this honorable Court afford to pass up the rare opportunity to decide a
constitutional issue with right of a party to due process of law on the line?
xxxx
ONCE AGAIN, we ask: Is it necessary for this Honorable Court to still pursue those pleadings when the issues confronting
them are legal issues which even lesser legal intellects can resolve?
This Honorable Court is respectfully reminded the law is made for man, not man for the law.
We cannot agree with the petitioner's arrogant but unworthy proposition. The CA was only just in denying his motion for
reconsideration through the second assailed resolution on the following terms, viz[.]: Lawlib ra ryofCRAlaw
A careful perusal of the said provision would reveal that the documents or annexes therein mentioned are required to be
appended to the petition and the mandatory character of such requirement may be inferred from Section 3 of Rule 42 x x x.
The petitioner's further argument that it is the Court which should get all the records from the court a quo if it
really wants to be more informed of the issues, is not well-taken. Precisely, the annexes mentioned in Section
2(d) of Rule 42 are required to be appended to the petition in order to enable this Court to determine even
without consulting the record if the petition is patently without merit or the issues raised therein are too
insubstantial to require consideration, in which case the petition should be dismissed outright, or whether there
is a need to require the respondent to comment on the petition. In short, the mere fact that a petition for review
is filed does not call for the elevation of the record, which means that until this Court finds that the elevation of
the record is necessary, such record should remain with the trial court during the pendency of the appeal in
accordance with Section 2 of Rule 39, let alone the fact that in ejectment cases the decision of the RTC is
immediately executory pursuant to Section 21 of the Revised Rule on Summary Procedure. Thus, more often
than not, this Court has resolved petitions for review under Rule 42 without unnecessary movement of the
original record of the case which could entail not only undue delay but also the possibility of the record being
lost in transit.
The petitioner urged us to rely on the documents and pleadings he appended in his petition which merely consisted of the
MTC Judgment, the assailed RTC Order, the Motion for Reconsideration, and the questioned Order dated November 6, 2003
denying his Motion for Reconsideration. None of the aforementioned documents set out the factual milieu of his claims.
Instead of manifesting that he would submit the additional documentary evidence, the petitioner remained [adamant] in his
stand not to submit the additional pleadings and other material portions of the record. He maintained that what he has
submitted based on his discretion, are all that are necessary to support his allegations in his petition. As we have already
mentioned, the accompanying documents were insufficient to support the petition. Also, the petitioner could have easily
ended his debacle by merely attaching the supplemental documents in his Motion for Reconsideration. Instead, the petitioner
stubbornly chose to insist that this Court direct the elevation of the records of the case if we deem that the relevant
documents were not appended to the petition.
xxxx
It is not disputed that it is petitioner who knows best what pleadings or material portions of the record of the case would
support the allegations in the petition. The petitioner's discretion in choosing the documents to be attached to the petition is
however not unbridled. The Court has the duty to check the exercise of this discretion, to see to it that the submission of
supporting documents is not merely perfunctory. The practical aspect of this duty is to enable us to determine at the earliest
possible time the existence of prima facie merit in the petition. Moreover, Section 3 of Rule 42 of the Revised Rules of Court
provides that if petitioner fails to comply with the submission of "documents which should accompany the petition", it "shall
be sufficient ground for the dismissal thereof."
In this case, the insufficiency of the supporting documents coupled with the unjustified refusal of the petitioner to even
attempt to substantially comply with the attachment requirement justified the dismissal of his petition. (Emphasis supplied)
Thus, even though petitioner exercises the initiative to select what will be attached to his Petition for Review, it is the CA that
ultimately determines the sufficiency of these attachments. As held in Atillo v. Bombay.24 redarclaw
The phrase "of the pleadings and other material portions of the record" in Section 2 (d), Rule 42 x x x followed by the phrase
"as would support the allegations of the petition" clearly contemplates the exercise of discretion on the part of the petitioner
in the selection of documents that are deemed to be relevant to the petition. However, while it is true that it is petitioner who
initially exercises the discretion in selecting the relevant supporting documents that will be appended to the petition, it is the
CA that will ultimately determine if the supporting documents are sufficient to even make out a prima facie case. It can be
fairly assumed that the CA took pains in the case at bar to examine the documents attached to the petition so that it could
discern whether on the basis of what have been submitted it could already judiciously determine the merits of the petition.
The crucial issue to consider then is whether x x x the documents accompanying the petition before the CA sufficiently
supported the allegations therein.
xxxx
As mentioned earlier, it is not disputed that it is petitioner who knows best what pleadings or material portions of the record
of the case would support the allegations in the petition. Petitioner's discretion in choosing the documents to be attached to
the petition is however not unbridled. The CA has the duty to check the exercise of this discretion, to see to it that the
submission of supporting documents is not merely perfunctory. The practical aspect of this duty is to enable the CA to
determine at the earliest possible time the existence of prima facie merit in the petition. Moreover, Section 3 of Rule 42 of
the Rules of Court provides that if petitioner fails to comply with the submission of "documents which should accompany the
petition," it "shall be sufficient ground for the dismissal thereof." In this case, the insufficiency of the supporting documents
combined with the unjustified refusal of petitioner to even attempt to substantially comply with the attachment requirement
justified the dismissal of [his] petition.
As for petitioner's claim that based on the evidence on record, his case is meritorious, it must be said that this Court may not
consider such claim. In the absence of recognized exceptional circumstances,25the Court will not analyze or weigh such
evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed below.
WHEREFORE, the Petition is DENIED. The July 25, 2008 and April 4, 2011 Resolutions of the Court of Appeals in CA-G.R.
CEB SP No. 03594 are AFFIRMED.
SO ORDERED.
EN BANC
G.R. No. 210164, August 18, 2015
ROMMEL C. ARNADO, Petitioner, v. COMMISSION ON ELECTIONS AND FLORANTE CAPITAN, Respondents.
DECISION
DEL CASTILLO, J.:
Only natural-born Filipinos who owe total and undivided allegiance to the Republic of the Philippines could run for and hold
elective public office.
Before this Court is a Petition for Certiorari1 filed under Rule 64 in relation to Rule 65 of the Rules of Court assailing the Per
Curiam Resolution2 dated December 9, 2013 of respondent Commission on Elections (Comelec) En Banc in SPA No. 13-309
(DC), which affirmed the Resolution3 dated September 6, 2013 of the Comelec Second Division. The Comelec, relying on our
ruling in Maquiling v. Commission on Elections,4 disqualified petitioner Rommel C. Arnado (Arnado) from running in the May
13, 2013 elections, set aside his proclamation as elected mayor of Kauswagan, Lanao del Norte, and declared respondent
Florante T. Capitan (Capitan) as the duly elected mayor of said municipality.
Factual Antecedents
Petitioner Arnado is a natural-born Filipino citizen who lost his Philippine citizenship after he was naturalized as citizen of the
United States of America (USA). Subsequently, and in preparation for his plans to run for public office in the Philippines,
Arnado applied for repatriation under Republic Act No. 92255 (RA 9225) before the Consul General of the Philippines in San
Franciso, USA. He took an Oath of Allegiance to the Republic of the Philippines on July 10, 2008 and, on even date, an Order
of Approval of Citizenship Retention and Re acquisition was issued in his favor. On April 3, 2009, Arnado executed an
Affidavit of Renunciation of his foreign citizenship.
On November 30, 2009, Arnado filed his Certificate of Candidacy (CoC) for the mayoralty post of Kauswagan, Lanao del
Norte for the May 10, 2010 national and local elections.
Linog C. Balua (Balua), another mayoralty candidate, however, filed a petition to disqualify Arnado and/or to cancel his CoC
on the ground, among others, that Arnado remained a US citizen because he continued to use his US passport for entry to
and exit from the Philippines after executing aforesaid Affidavit of Renunciation.
While Balua's petition remained pending, the May 10, 2010 elections proceeded where Arnado garnered the highest number
of votes for the mayoralty post of Kauswagan. He was proclaimed the winning candidate.
On October 5, 2010, the Comelec First Division issued a Resolution holding that Arnado's continued use of his US passport
effectively negated his April 3, 2009 Affidavit of Renunciation. Thus, he was disqualified to run for public office for failure to
comply with the requirements of RA 9225. The Comelec First Division accordingly nullified his proclamation and held that the
rule on succession should be followed.
Arnado moved for reconsideration. In the meantime, Casan Macode Maquiling (Maquiling), another mayoralty candidate who
garnered the second highest number of votes, intervened in the case. He argued that the Comelec First Division erred in
applying the rule on succession.
On February 2, 2011, the Comelec En Banc rendered a Resolution reversing the ruling of the Comelec First Division. It held
that Arnado's use of his US passport did not operate to revert his status to dual citizenship. The Comelec En Banc found
merit in Arnado's explanation that he continued to use his US passport because he did not yet know that he had been issued
a Philippine passport at the time of the relevant foreign trips. The Comelec En Banc further noted that, after receiving his
Philippine passport, Arnado used the same for his subsequent trips.
Maquiling then sought recourse to this Court by filing a petition docketed as G.R No. 195649.
While G.R No. 195649 was pending, the period for the filing of CoCs for local elective officials for the May 13, 2013 elections
officially began. On October 1, 2012, Arnado filed his CoC6 for the same position. Respondent Capitan also filed his CoC for
the mayoralty post of Kauswagan.
On April 16, 2013, this Court rendered its Decision in Maquiling. Voting 10-5, it annulled and set aside the Comelec En Banc's
February 2, 2011 Resolution, disqualified Arnado from running for elective position, and declared Maquiling as the duly
elected mayor of Kauswagan, Lanao Del Norte in the May 10, 2010 elections. In so ruling, the majority of the Members of the
Court opined that in his subsequent use of his US passport, Arnado effectively disavowed or recalled his April 3, 2009
Affidavit of Renunciation. Thus:ChanRoblesvi rtua lLawl ibra ry
We agree with the pronouncement of the COMELEC First Division that "Arnado's act of consistently using his US passport
effectively negated his "Affidavit of Renunciation." Tills does not mean that he failed to comply with the twin requirements
under R.A. No. 9225, for he in fact did. It was after complying with the requirements that he perfonned positive acts which
effectively disqualified him from running for an elective public office pursuant to Section 40(d) of the Local Government Code
of 1991.
The purpose of the Local Government Code in disqualifying dual citizens from running for any elective public office would be
thwarted if we were to allow a person who has earlier renounced his foreign citizenship, but who subsequently represents
himself as a foreign citizen, to hold any public office.
xxxx
We therefore hold that Arnado, by using his US passport after renouncing his American citizenship, has recanted the same
Oath of Renunciation he took. Section 40(d) of the Local Government Code applies to his situation. He is disqualified not only
from holding the public office but even from becoming a candidate in the May 2010 elections.7
The issuance of this Court's April 16, 2013 Decision sets the stage for the present controversy.
On May 9, 2013 or shortly after the Court issued its Decision in Maquiling, Arnado executed an Affidavit Affirming Rommel C.
Arnado's "Affidavit of Renunciation Dated April3, 2009."8 cralaw rednad
The following day or on May 10, 2013, Capitan, Arnado's lone rival for the mayoralty post, filed a Petition9 seeking to
disqualify him from running for municipal mayor of Kauswagan and/or to cancel his CoC based on the ruling of this Court
in Maquiling. The case was docketed as SPA No. 13-309 (DC) and was raffled to the Comelec's Second Division. The
resolution of said petition was, however, overtaken by the May 13, 2013 elections where Arnado garnered 8,902 votes (84%
of the total votes cast) while Capitan obtained 1,707 (16% of the total votes cast) votes only.
On May 14, 2013, Arnado was proclaimed as the winning candidate.
Unfazed, Capitan filed another Petition10 this time seeking to nullify Arnado's proclamation. He argued that with the April 16,
2013 Decision of this Court in Maquiling, there is no doubt that Arnado is disqualified from running for any local elective
office. Hence, Arnado's proclamation is void and without any legal effect.
Ruling of the Comelec Second Division
On September 6, 2013, the Comelec Second Division promulgated a Resolution granting the petition in SPA No. 13-309 (DC)
and disqualify Arnado from running in the May 13, 2013 elections. Following Maquiling, it ratiocinated that at the time he
filed his CoC on October 1, 2012, Arnado still failed to comply with the requirement of RA 9225 of making a personal and
sworn renunciation of any and all foreign citizenship. While he executed the April 3, 2009 Affidavit of Renunciation, the same
was deemed withdrawn or recalled when he subsequently traveled abroad using his US passport, as held in Maquiling.
The Comelec Second Division also noted that Arnado failed to execute another Affidavit of Renunciation for purposes of the
May 13, 2013 elections. While a May 9, 2013 Affidavit Affirming Rommel C. Arnado's "Affidavit of Renunciation dated April 3,
2009" was submitted in evidence, the same would not suffice because it should have been executed on or before the filing of
the CoC on October 1, 2012.
The dispositive portion of the Comelec Second Division's Resolution reads: ChanRoble svi rtual Lawli bra ry
WHEREFORE, premises considered, the instant Petition is granted. Respondent Rommel Cagoco Arnado is disqualified from
running in the 13 May 2013 National and Local Elections.
SO ORDERED.11
Ruling of the Comelec En Banc
Aggrieved, Arnado filed a Verified Motion for Reconsideration.12 He argued that the Comelec Second Division erred in
applying Maquiling claiming that the said case is not on all fours with the present controversy; that Capitan's Petition was
filed beyond the 25-day reglementary period reckoned from the filing of the CoC sought to be cancelled; and, that the
Comelec must uphold the sovereign will of the people of Kauswagan who expressed, thru the ballots, their overwhelming
support for him as their mayor. Arnado prayed that the Comelec Second Division's September 6, 2013 Resolution be
reversed and that he be declared as eligible to run for mayor ofKauswagan.
On December 9, 2013, the Comelec En Banc affirmed the ruling of the Comelec Second Division. It accordingly annulled the
proclamation of Arnado and declared Capitan as the duly elected mayor of Kauswagan. The dispositive portion of the
Comelec En Banc's Resolution reads: ChanRoblesvi rtua lLawl ibra ry
WHEREFORE, premises considered, the instant motion for reconsideration is hereby DISMISSED. The Proclamation of Private
Respondent Rommel C. Arnado as the duly elected mayor of Kauswagan, Lanao del Norte is hereby ANNULLED and SET
ASIDE. FLORANTE T. CAPITAN is hereby DECLARED the duly elected Mayor of Kauswagan, Lanao del Norte inthe May 13,
2013 Elections.
SO ORDERED.13
Hence, on December 16, 2013 Arnado filed the instant Petition with ancillary prayer for injunctive relief to maintain the
status quo ante. On December
26, 2013, Arnado filed an Urgent Motion for Issuance of Status Quo Ante Order or Temporary Restraining Order14 in view of
the issuance by the Comelec En Banc of a Writ of Execution to implement its December 9, 2013 Resolution.
On January 14, 2014, this Court issued a Resolution15 requiring the respondents to file their respective comments on the
petition. In the same Resolution, this Court granted Arnado's ancillary relief for temporary restraining order.
Capitan thus filed an Urgent Motion to Lift and/or Dissolve Temporary Restraining Order dated January 14,
2014,16 contending that the acts sought to be restrained by Arnado are already fait accompli. He alleged that the Comelec En
Banc had already issued a Writ of Execution17 and pursuant thereto a Special Municipal Board of Canvassers was convened.
It proclaimed him to be the duly elected mayor of Kauswagan and on January 2, 2014 he took his oath of office. Since then,
he has assumed and performed the duties and functions of his office.
In a Resolution18 dated February 25, 2014, this Court ordered the issuance of a Status Quo Ante Order directing the parties
to allow Arnado to continue performing his functions as mayor of Kauswagan pending resolution of this case.
Issues
In support of his Petition, Arnado raises the following issues: ChanRoblesvi rtua lLawl ib rary
WHETHER x x x THE COMELEC EN BANC AND 2ND DIVISION VIOLATED PROCEDURAL DUE PROCESS AND COMMITTED GRAVE
ABUSE OF DISCRETION IN FAILING TO DISMISS THE PETITIONS OF RESPONDENT CAPITAN ON THE GROUND OF FORUM-
SHOPPING AND/OR LATE FILING, ETC.
II
WHETHER x x x THE COMELEC EN BANC VIOLATED DUE PROCESS AND COMMITTED GRAVE ABUSE OF DISCRETION BY
ALLOWING COM. ELIAS YUSOPH TO REVIEW THE DECISION HE WROTE FOR THE 2ND DIVISION.
III
WHETHER x x x THE COMELEC COMMITTED GRAVE ABUSE OF DISCRETION IN DISENFRANCHISING 84% OF THE VOTERS OF
KAUSWAGAN IN THE MAY 2013 ELECTIONS.
IV
WHETHER x x x THE COMELEC COMMITTED GRAVE ABUSE OF DISCRETION IN DISQUALIFYING PETITIONER WHO HAS FULLY
COMPLIED WITH THE REQUIREMENTS OF RA 9225 BEFORE THE FILING OF HIS COC ON OCTOBER 1, 2012.19
Arnado claims that the Comelec committed grave abuse of discretion and violated his right to procedural due process in not
dismissing Capitan's Petition in SPA No. 13-309 (DC). He avers that Capitan is guilty of forum-shopping because the latter
subsequently filed a similar case docketed as SPC No. 13-019. In addition, SPA No. 13-309 (DC) was filed beyond the 25-day
prescriptive period reckoned from the time of the filing of his CoC on October 1, 2012.
Arnado likewise claims that the proceeding before the Comelec is peppered with procedural infirmities. He asserts that the
Comelec violated its own rules in deciding SPA No. 13-309 (DC) without first resolving Capitan's motion to consolidate; that
SPA No. 13-309 (DC) was not set for trial and no hearing for the reception of evidence was ever conducted; and, that the
Comelec did not follow its own rules requiring the issuance of a notice of promulgation of resolutions.
Arnado further claims that the Comelec En Banc not only committed grave abuse of discretion but also violated his
constitutional right to due process when it allowed Commissioner Elias R. Yusoph (Commissioner Yusoph) to participate in the
review of the Decision he penned for the Second Division. Furthermore, the Comelec En Banc committed grave abuse of
discretion when it disqualified him from running in the May 13, 2013 elections, thereby disenfranchising 84% of the voters of
Kauswagan who all voted for him.
Finally, Arnado avers that further inquiry and examination of the notarial register of his former counsel, Atty. Thomas Dean
M. Quijano, revealed that he executed an Affidavit of Renunciation with Oath of Allegiance20 on November 30, 2009. Hence,
at the time he filed his CoC on October 1, 2012, he is a citizen of the Philippines who does not owe allegiance to any other
country and, therefore, is qualified to run for mayor of Kauswagan in the May 13, 2013 elections.
Our Ruling

Petition for certiorari is limited to the
determination of whether the respondent
tribunal acted with grave abuse of discretion
amounting to lack or excess of jurisdiction.
In a petition for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, the primordial issue to be resolved is
whether the respondent tribunal committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing
the assailed resolution. And as a matter of policy, this Court will not interfere with the resolutions of the Comelec unless it is
shown that it had committed grave abuse of discretion.21 Thus, in the absence of grave abuse of discretion, a Rule 64
petition will not prosper. Jurisprudence, on the other hand, defines grave abuse of discretion as the "capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction."22 "Mere abuse of discretion is not enough; it must be
grave."23 Grave abuse of discretion has likewise been defined as an act done contrary to the Constitution, the law or
jurisprudence.24 cralaw redna d
In this case, and as will be discussed below, there is no showing that the Comelec En Banc acted capriciously or whimsically
in issuing its December 9, 2013 Resolution. Neither did it act contrary to law or jurisprudence.
Arnado's allegations that Capitan

violated the rule against forumshopping
and that the latter's petition in
SPA No.13-309(DC) was filed late,
unsubstantiated and erroneous.
There is forum-shopping when two or more actions or proceedings, founded on the same cause, are instituted by a party on
the supposition that one or the other court would make a favorable disposition.25 It exists when the elements of litis
cra lawred
pendentia are present or where a final judgment in one case will amount to res judicata in the other.26 Thus, there is forum-
shopping when in both actions there exist: (1) identity of parties, or at least such parties as would represent the same
interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(3) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of
which party is successful, amount to res judicata in the action under consideration.27 cralaw rednad
Here, Arnado failed to substantiate his claim of forum-shopping. He merely made a general averment that in resolving the
petitions of Capitan in SPA No. 13-309 (OC) and SPC No. 13-019, the Comelec En Banc, as well as its Second Division, failed
to comply with this Court's Revised Circular No. 28-91,28without demonstrating how forum-shopping was supposed to be
present. He has not shown that the petitions in SPA No. 13-309 (DC) and SPC No. 13-019 involved the same parties, issues,
and reliefs. In fact, Arnado did not even bother to submit to this Court a copy of the Petition in SPC No. 13-019 (annulment
of proclamation case). As the party insisting that Capitan committed forum-shopping, Arnado bears the burden of
establishing the same. After all, it is settled that he who alleges has the burden of proving it; mere allegation is not
sufficient.29 cra lawredna d
Besides, and as correctly observed by the Solicitor General, the parties in SPA No. 13-309 (DC) and SPC No. 13-019 are not
the same. In the first case, the parties are only Capitan and Arnado. In the second case, the Municipal Board of Canvassers
of Kauswagan, Lanao del Norte is impleaded as respondent. There is also dissimilitude in the reliefs sought. The former case
sought to disqualify Arnado and/or to cancel his CoC while the latter case prayed for the annulment of Arnado's proclamation
as mayor of Kauswagan.
With regard to the alleged tardiness in the filing of Capitan's Petition in SPA No. 13-309 (DC), it appears that Arnado either
failed to grasp the import of Capitan's allegations therein or he made a deliberate partial misrepresentation in stating that
the same is one for cancellation of CoC. A copy30 thereof annexed to Arnado's herein petition states that it is a petition "to
disqualify and/or cancel the certificate of candidacy" of Arnado. The allegations therein state in no uncertain terms that it is
one for disqualification based on Arnado's failure to comply with the requisites of RA 9225 and on the ruling of this Court
in Maquiling. Thus, the Comelec Second Division appropriately treated it as a petition for disqualification with the alternative
prayer to cancel Arnado's CoC. It is elementary that the nature of the action is determined by the allegations in the
petition.31 c ralawre dnad
Under Section 3, Rule 25 of the Comelec Rules of Procedure,32 a petition for disqualification should be filed "any day after the
last day for filing of certificates of candidacy but not later than the date of proclamation." Here, Arnado was proclaimed as
the winning candidate on May 14, 2013.33 Thus, the petition in SPA No. 13-309 (DC) was seasonably filed on May 10,
2013.34cralaw rednad
The other procedural lapses allegedly

committed by the Comelec are likewise
unsubstantiated. Assuming the allegations of
Arnado to be true, the Comelec did not commit
grave abuse of discretion amounting to lack or
excess of jurisdiction.
Arnado's claim that the Comelec gravely abused its discretion in deciding SPA No. 13-309 (DC) without first resolving
Capitan's motion to consolidate likewise lacks substantiation. In the first place, Arnado has not attached a copy of said
motion to his petition. This alone is sufficient ground for the dismissal of his Rule 64 Petition, filed in relation to Rule 65 of
the Rules of Court, for not being accompanied by pleadings and documents relevant and pertinent thereto.35 Also, it was
Capitan who filed the motion for consolidation. Not being the movant, Arnado is not in a position to question the alleged
inaction of the Comelec on said motion. And even assuming that he has, by filing a Verified Motion for Reconsideration with
the Comelec En Banc and subsequently appealing to this Court despite the still unresolved motion for consolidation, Arnado
effectively abandoned said motion for consolidation. In Cayago v. Hon. Lina,36it was held that once a party elevates the case
before the appellate tribunal, the appellant is deemed to have abandoned the unresolved motion which remains pending with
the tribunal of origin. "[I]t is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards make a volte face and deny that same jurisdiction."37 cra lawredna d
In any case, under Section 9, Rule 3 of the Comelec Rules of Procedure, consolidation is only permissive. It is not mandatory.
Section 9 reads: ChanRoblesvi rtual Lawli bra ry
Sec. 9. Consolidation of Cases.- When an action or proceeding involves a question of law and fact which is similar to or
common with that of another action or proceeding, the same may be consolidated with the action or proceeding bearing the
lower docket number.
In Muñoz v. Comelec,38 this Court accentuated "that the term 'may' is indicative of a mere possibility, an opportunity or an
option. The grantee of that opportunity is vested with a right or faculty which he has the option to exercise. If he chooses to
exercise the right, he must comply with the conditions attached thereto, which in this case require that the cases to be
consolidated must involve similar questions of law and fact."39 In this case, the consolidation of SPA No. 13-309 (DC) and
SPC No. 13-019 does not appear to be necessary. As earlier mentioned, said cases do not even involve the same parties and
reliefs sought. Hence, no grave abuse of discretion can be attributed to the Comelec in not consolidating them.
Arnado's protestation that the Comelec violated its own rules when it decided SPA No. 13-309 (DC) without setting it for trial
likewise deserves scant consideration. The proceedings in a special action for disqualification of candidates under Rule 25 of
the Comelec Rules of Procedure are summary in nature where a trial type proceeding may be dispensed with.40 In Diangka
v. Comelec,41 this Court held that: ChanRoblesvirt ual Lawlib rary
Again, our ingrained jurisprudence is that technical rules of evidence should not be rigorously applied in administrative
proceedings specially where the law calls for the proceeding to be summary in character. Pursuant to Section 4, Rule 25 of
the 1993 COMELEC Rules of Procedure, petitions for disqualifications are subject to summary hearings. In relation thereto,
Section 3, Rule 17 of the said Rules provides that it remains in the sound discretion of the COMELEC whether clarification
questions are to be asked the witnesses-affiants, and whether the adverse party is to be granted opportunity to cross-
examine said witnesses affiants. Furthermore, when the COMELEC en banc reviews and evaluates a party's petition, or as in
the case at bar, a party's answer and the supporting papers attached thereto, the same is tantamount to a fair "hearing" of
his case.42
Arnado's claim that the Comelec En Banc

committed grave abuse of discretion and violated
his right to due process in allowing Commissioner
Yusoph to participate in the deliberation of the assailed
Comelec En Banc Resolution is likewise bereft of
substantiation.
Arnado's claim that Commissioner Yusoph penned both the September 6, 2013 Resolution of the Comelec Second Division
and the December 9, 2013 Resolution of the Comelec En Banc is not correct. While Commissioner Yusoph, together with
Commissioners Maria Gracia Cielo M. Padaca and Luie Tito F. Guia, signed said Resolution, there is nothing therein which
would indicate that Commissioner Yusoph was the writer or the ponente of said Resolution. The September 6, 2013
Resolution of the Comelec Second Division does not state who the ponente is. The same goes true with the questioned
December 9, 2013 Per Curiam Resolution43 of the Comelec En Banc. As a per curiam resolution, it was arrived at by the
Comelec En Banc as a whole and without any particular ponente. Hence, we need not belabor Arnado's claim of denial of due
process as his basis therefor lacks factual moorings.
Arnado has not yet satisfied the twin

requirements of Section 5(2) of RA 9225 at
the time he filed his CoC for the May 13, 2013
elections; subsequent compliance does not suffice.
Under Section 4(d) of the Local Government Code, a person with "dual citizenship" is disqualified from running for any
elective local position. In Mercado v. anzano,44 it was clarified that the phrase "dual citizenship" in said Section 4(d) must be
understood as referring to "dual allegiance.''45 Subsequent, Congress enacted RA 9225 allowing natural-born citizens of the
Philippines who have lost their Philippine citizenship by reason of their naturalization abroad to reacquire Philippine
citizenship and to enjoy full civil and political rights upon compliance with the requirements of the law. They may now run for
public office in the Philippines provided that they: (1) meet the qualifications for holding such public office as required by the
Constitution and existing laws; and, (2) make a personal and sworn renunciation of any and all foreign citizenships before
any public officer authorized to administer an oath46 prior to or at the time of filing of their CoC. Thus:ChanRoblesvirt ual Lawlib rary
Section 5. Civil and Political Rights and Liabilities- Those who retain or re-acquire Philippine citizenship under this Act shall
enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under existing laws of the
Philippines and the following conditions: ChanRoblesv irtual Lawlib rary
xxxx
(2) Those seeking elective public office in the Philippines shall meet the qualification for holding such public office as required
by the Constitution and existing laws and, at the time of the filing of the certificate of candidacy, make a personal and sworn
renunciation of any and all foreign citizenship before any public officer authorized to administer an oath;
In the case at bench, the Comelec Second Division, as affirmed by the Comelec En Banc, ruled that Arnado failed to comply
with the second requisite of Section 5 (2) of RA 9225 because, as held in Maquiling v. Commission on Elections,47 his April 3,
2009 Affidavit of Renunciation was deemed withdrawn when he used his US passport after executing said affidavit.
Consequently, at the time he filed his CoC on October 1, 2012 for purposes of the May 13, 2013 elections, Arnado had yet to
comply with said second requirement. The Comelec also noted that while Arnado submitted an affidavit dated May 9, 2013,
affirming his April 3, 2009 Affidavit of Renunciation, the same would not suffice for having been belatedly executed.
The Comelec En Banc did not err, nor did it commit grave abuse of discretion, in upholding the Resolution of the Comelec
Second Division disqualifying Arnado from running for public office. It is worth noting that the reason for Arnado's
disqualification to run for public office during the 2010 elections — being a candidate without total and undivided allegiance
to the Republic of the Philippines - still subsisted when he filed his CoC for the 2013 elections on October 1, 2012. The
Comelec En Banc merely adhered to the ruling of this Court in Maquiling lest it would be committing grave abuse of
discretion had it departed therefrom.
Moreover, it cannot be validly argued that Arnado should be given the opportunity to correct the deficiency in his qualification
because at the time this Court promulgated its Decision in Maquiling on April 16, 2013, the period for filing the CoC for local
elective office had already lapsed. Or, as Justice Arturo D. Brion puts it in his Dissenting Opinion, "[t]o the extent that Arnado
was denied the chance to submit a replacement oath of renunciation in 2013, then there was an unfair and abusive denial of
opportunity equivalent to grave abuse of discretion." Besides, shortly after learning of the Court's April 16, 2013 ruling
in Maquiling or on May 9, 2013, Arnado substantially complied therewith by executing an affidavit affirming his April3, 2009
Affidavit of Renunciation.
The ruling in Maquiling is indeed novel in the sense that it was the first case dealing with the effect of the use of a foreign
passport on the qualification to run for public office of a natural-born Filipino citizen who was naturalized abroad and
subsequently availed of the privileges under RA 9225. It was settled in that case that the use of a foreign passport amounts
to repudiation or recantation of the oath of renunciation. Yet, despite the issue being novel and of first impression, plus the
fact that Arnado could not have divined the possible adverse consequences of using his US passport, the Court
in Maquiling did not act with leniency or benevolence towards Arnado. Voting 10-5, the Court ruled that matters dealing with
qualifications for public elective office must be strictly complied with. Otherwise stated, the Court in Maquiling did not
consider the novelty of the issue as to excuse Arnado from strictly complying with the eligibility requirements to run for
public office or to simply allow him to correct the deficiency in his qualification by submitting another oath of renunciation.
Thus, it is with more reason that in this case, we should similarly require strict compliance with the qualifications to run for
local elective office.
The circumstances surrounding the qualification of Arnado to run for public office during the May 10, 2010 and May 13, 2013
elections, to reiterate for emphasis, are the same. Arnado's use of his US passport in 2009 invalidated his oath of
renunciation resulting in his disqualification to run for mayor of Kauswagan in the 2010 elections. Since then and up to the
time he filed his CoC for the 2013 elections, Arnado had not cured the defect in his qualification. Maquiling, therefore, is
binding on and applicable to this case following the salutary doctrine of stare decisis et non quieta movere, which means to
adhere to precedents, and not to unsettle things which are established.48 Under the doctrine, "[w]hen the court has once laid
down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases
where facts are substantially the same."49 It enjoins adherence to judicial precedents and bars relitigation of the same
issue.50
cra lawredna d
It may not be amiss to add that as early as 2010, the year when Balua filed a petition to disqualify him, Arnado has gotten
wind that the use of his US passport might pose a problem to his candidacy. In other words, when Arnado filed his CoC on
October 1, 2012, he was not totally unaware that the use of his US passport after he had executed the Affidavit of
Renunciation might have an impact on his qualification and candidacy. In fact, at that time, Maquiling had already reached
this Court. But despite the petitions filed against him questioning his qualification to run for public office in 2010, Arnado filed
his CoC on October 1, 2012 unmindful of any possible legal setbacks in his candidacy for the 2013 elections and without
executing another Affidavit of Renunciation. In short, the argument that Arnado should be given the opportunity to correct
the deficiency in his CoC since Maquiling was promulgated after the lapse of the period for filing a CoC for the 2013 elections,
is totally bereft of merit. Consistent with our April 16, 2013 ruling in Maquiling, Arnado should be made to face the
consequences of his inaction since he could have remedied it at the time he filed his CoC on October 1, 2012 or even before
that. There is no law prohibiting him from executing an Affidavit of Renunciation every election period if only to avert
possible questions about his qualifications.
The alleged November 30, 2009

Affidavit of Renunciation with Oath of
Allegiance cannot be given any
probative weight.
As to the alleged recently discovered November 30, 2009 Affidavit of Renunciation with Oath of Allegiance, the same is highly
suspect. As correctly pointed out by the Solicitor General, the original or certified true copy thereof was not presented. In
addition, such crucial evidence sufficient to alter the outcome of the case was never presented before the Comelec much less
in the Maquiling case. Curiously, it only surfaced for the first time in this petition. In Jacot v. Dal,51 this Court disallowed the
belated presentation of similar evidence on due process considerations. Thus: ChanRoblesvirt ual Lawlib rary
As a rule, no question will be entertained on appeal unless it has been raised in the proceedings below. Points of law,
theories, issues and arguments not brought to the attention of the lower court, administrative agency or quasi- judicial body
need not be considered by a reviewing court, as they cannot be raised for the first time at that late stage. Basic
considerations of fairness and due process impel this rule. Courts have neither the time nor the resources to accommodate
parties who chose to go to trial haphazardly.
Likewise, this Court does not countenance the late submission of evidence. Petitioner should have offered the Affidavit dated
7 February 2007 during the proceedings before the COMELEC.
Section 1 of Rule 43 of the COMELEC Rules of Procedure provides that "In the absence of any applicable provisions of these
Rules, the pertinent provisions of the Rules of Court in the Philippines shall be applicable by analogy or in suppletory
character and effect." Section 34 of Rule 132 of the Revised Rules of Court categorically enjoins the admission of evidence
not formally presented: c ralawlawl ibra ry
SEC. 34. Offer of evidence.- The court shall consider no evidence which has not been formally offered. The purpose for which
the evidence is offered must be specified.
Since the said Affidavit was not formally offered before the COMELEC, respondent had no opportunity to examine and
controvert it. To admit this document would be contrary to due process. Additionally, the piecemeal presentation of evidence
is not in accord with orderly justice.52
Moreover, in Maquiling it was mentioned that Arnado used his US passport on January 12, 2010 and March 23, 2010.
Thus:ChanRoblesvirt ual Lawlib rary
Balua likewise presented a certification from the Bureau of Immigration dated 23 April 201 0, certifying that the name
"Arnado, Rommel Cagoco" appears in the available Computer Database/Passenger manifest/IBM listing on file as of 21 April
2010, with the following pertinent travel records: ChanRob lesvi rtua lLawl ibra ry
DATE OF Arrival:01/12/2010
NATIONALITY :USA-AMERICAN
PASSPORT :057782700
DATE OF Arrival:03/23/2010
NATIONALITY :USA-AMERICAN
PASSPORT :05778270053
Despite the existence of such statement in Maquiling, We are puzzled why Arnado never bothered to correct or refute it. He
neither alleged nor presented evidence in this petition to prove that he did not travel abroad on those dates using his US
passport.
Justice Marvic M.V.F. Leonen, however, dissents and maintains the same position he had taken in Maquiling that Arnado's
use of his US passport in 2009 is an isolated act justified by the circumstances at that time. At any rate, Arnado started to
use his Philippine passport in his travels abroad beginning December 11, 2009 and thenceforth. This, according to J. Leonen,
is borne out by Arnado's Philippine passport.
With due respect to my esteemed colleague, it appears that J. Leonen is not only reviving an issue that had already been
settled with finality in the Maquiling case, but he is also going beyond the issues raised in this petition. To reiterate for
clarity, Arnado's argument in this case-that he is qualified to run for mayor as he has satisfied the requirements of Sec. 5(2)
of RA 9225 relative to the May 13, 2013 elections- is premised only on the alleged newly discovered November 30, 2009
Affidavit. Nothing more. He does not claim in this case that his use of US passport in his travel abroad in 2009 is an isolated
act, as J. Leonen insists. In Vazquez v. De Borja,54 it was held that courts do not have jurisdiction over issues neither raised
in the pleading nor tried with the express or implied consent of the parties. They cannot render judgment based on issues
that have never been raised before them. Equally settled is the rule that "points of law, theories, issues, and arguments not
brought to the attention of the lower [tribunal] need not be, and ordinarily will not be, considered by a reviewing court, as
these cannot be raised for the first time at such late stage. Basic considerations of due process underlie this rule."55 The
same goes true with J. Brion's theory that what was cancelled by virtue of Maquiling was only the April 3, 2009 Affidavit of
Renunciation where Arnado expressly renounced any foreign citizenship; not the July 10, 2008 Oath of Allegiance which
carried with it an implied abdication of foreign citizenship. For J. Brion, "[t]he requirement of an express renunciation x x x
does not negate the effect of, or make any less real, the prior implicit renunciation of citizenship and allegiance made upon
taking the oath of allegiance." Again, this was never raised in this petition. At any rate, the execution of an Oath of
Allegiance is required by Section 356 of RA 9225. For those who avail themselves of RA 9225 and intend to run for public
office, Section 5(2) thereof provides the additional requirement of making a personal and sworn renunciation of any and all
foreign citizenships prior to or at the time of filing of their CoC. Definitely, the provisions of Section 5(2) are not useless or
meaningless surplusage. When the law expressly requires an explicit renunciation, an implicit one would be insufficient.
Furthermore, even assuming that Arnado's 2008 implied renunciation is sufficient, the same has also been negated by his
use of his US passport in 2009, following the ruling in Maquiling.
Otherwise, we would give more weight to an implied renunciation than to an express one specifically required by law.
Besides, the Decision of this Court in Maquiling holding that Arnado's use of his US passport effectively recanted his Affidavit
of Renunciation has already become final and immutable. We can no longer resurrect in this case the issues that have
already been resolved there with fmality.
In maintaining that Arnado used his Philippine passport in travelling abroad in the first quarter of 2010, J. Leonen relies on
the copy thereof attached to the rollo of the Maquiling case. But said copy of Arnado's Philippine passport57 is a mere
"CERTIFIED TRUE COPY FROM THE MACIDNE COPY ON FILE" as attested to by Rosario P. Palacio, Records Officer Ill of
the Comelec.58 This is clearly stamped on aforesaid copy of Arnado's Philippine passport. A machine copy or photocopy is a
mere secondary evidence.59 As such, it cannot be admitted in evidence until and unless the offeror has proven the due
execution and the subsequent loss or unavailability of the original.60 In this case, however, Arnado's Philippine passport is not
missing. Thus, said photocopy of Arnado's Philippine passport cannot sway us to depart from the uncontroverted certification
of the Bureau ofimmigration that Arnado used his US passport on January 12, 2010 and March 23, 2010. Consequently, even
assuming that the recently discovered November 30, 2009 Affidavit of Renunciation with Oath of Allegiance is true and
authentic, Arnado once more performed positive acts on January 12, 2010 and March 23, 2010, which effectively negated the
alleged November 30, 2009 Affidavit resulting in his disqualification to run for an elective public office.
Landslide election victory cannot

override eligibility requirements.
In Maquiling, this Court emphasized that popular vote does not cure the ineligibility of a candidate. Thus, while in this case
Arnado won by landslide majority during the 2013 elections, garnering 84% of the total votes cast, the same "cannot
override the constitutional and statutory requirements for qualifications and disqualifications."61 In Velasco v. Comelec,62 this
Court pronounced that election victory cannot be used as a magic formula to bypass election eligibility requirements;
otherwise, certain provisions of laws pertaining to elections will become toothless. One of which is Section 39 of the Local
Government Code of 1991, which specifies the basic positive qualifications of local government officials. If in Velasco the
Court ruled that popular vote cannot override the required qualifications under Section 39,63a fortiori, there is no reason why
the Court should not follow the same policy when it comes to disqualifications enumerated under Section 4064 of the same
law. After all, "[t]he qualifications set out in [Section 39] are roughly half of the requirements for election to local public
offices. The other half is contained in the succeeding section which lays down the circumstances that disqualify local
candidates."65cralawrednad
Finally, this case is strikingly similar to the case of Lopez v. Comelec.66 In that case, petitioner Lopez was also a natural-born
Filipino who lost his Philippine citizenship after he became a naturalized US citizen. He later reacquired his Philippine
citizenship by virtue of RA 9225. Thereafter, Lopez filed his candidacy for Chairman of Barangay Bagacay, San Dionisio, Iloilo
in the synchronized Barangay and Sangguniang Kabataan Elections held on October 29, 2007 without first making a personal
and sworn renunciation of his foreign citizenship. In spite of the fact that Lopez won in the elections, this Court still affmned
the Resolution of the Comelec disqualifying Lopez as a candidate for a local elective position for his failure to comply with the
requirements of Section 5(2) of RA 9225. Thus: ChanRoblesvirtual Lawli bra ry
While it is true that petitioner won the elections, took his oath and began to discharge the functions of Barangay Chairman,
his victory cannot cure the defect of his candidacy. Garnering the most number of votes does not validate the election of a
disqualified candidate because the application of the constitutional and statutory provisions on disqualification is not a matter
of popularity.67
In fine, this Court finds no grave abuse of discretion on the part of the Comelec En Banc in sustaining the Resolution of the
Comelec Second Division disqualifying Arnado from running in the May 13, 2013 elections and in accordingly setting aside his
proclamation as elected mayor of Kauswagan, Lanao del Norte and proclaiming Capitan as the duly elected mayor of said
municipality.
WHEREFORE, the instant Petition is hereby DISMISSED and the assailed Comelec Resolutions are AFFIRMED. The Status
Quo Ante Order issued by this Court is LIFTED.
SO ORDERED. chanrobles virtuallawlibrary
SECOND DIVISION
A.M. No. CA-12-26-P, August 17, 2015

OFFICE OF THE COURT ADMINISTRATOR, Complainant, v. ANA MARIE ABARENTOS, RECORDS OFFICER IV, COURT
OF APPEALS, CEBU CITY, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This administrative complaint stemmed from an anonymous letter1 dated February 9, 2011 addressed to Chief Justice Renato
C. Corona charging respondent Anna Marie Abarintos, former Records Officer IV at the Judicial Records Division of the Court
of Appeals, Cebu station, of tampering the date of receipt of the Petition for Review filed in CA-G.R. SP No.
05464.2 Respondent allegedly made it appear that said pleading was timely filed on November 4, 2010 to favor her
husband's kumpadre who filed it. In the same letter, respondent likewise accused of taking the ATM card of her officemate,
Records Officer II Elizabeth Gilos (Gilos), and withdrawing therefrom P10,000.00 without the latter's knowledge and consent.
In her Comment,3 respondent denied the accusations. She averred that the issue of tampering had already been clarified and
that it did not prejudice the rights and interest of any of the parties in CA-G.R. SP No. 05464. With regard to the alleged
unauthorized withdrawal, respondent explained that the same is a personal issue between two friends arising from a simple
misunderstanding. According to respondent, the anonymous letter does not deserve the attention of this Court and that the
same has caused undue stress and pain to her father-in-law, Associate Justice Pampio A. Abarintos, who was then the
Chairperson of the Nineteenth Division of the Court of Appeals, Cebu station. Thus, on February 14, 2011 she resigned from
the Court of Appeals.4 redarc law
On December 3, 2012, upon recommendation of the Office of the Court Administrator (OCA), this case was re-docketed as a
regular administrative matter and referred to the Court of Appeals, Cebu station for investigation, report and
recommendation.5 redarclaw
Administrative hearings thereafter ensued.
On March 18, 2013, however, this Court modified its December 3, 2012 Resolution by referring the case to the Court of
Appeals, Manila for investigation, report and recommendation.6 redarc law
Thus, the new Investigating Justice in Manila set this case for hearing on January 10, 2014 for the reception of respondent's
evidence.7 But respondent instead filed a Manifestation Under Oath8 stating that after consulting her family, she decided not
to present any controverting evidence other than those mentioned in her Comment.
Recommendation of the Investigating

Justice
On April 15, 2014, the Investigating Justice submitted his Report and Recommendation,9 finding the charge of tampering
unsupported by substantial evidence. He based his conclusion on the testimony of Atty. Lucila C. Enjambre (Atty. Enjambre),
Assistant Clerk of Court of the Court of Appeals, Cebu station, explaining that the Petition in CA-G.R. SP No. 05464 was
actually filed and received by the Receiving Section of the Judicial Records Division on November 4, 2010. The date
November 5, 2010 appearing thereon indicates the date the Office of the Division Clerk of Court received said pleading.
With respect to the charge of unauthorized withdrawal from the account of Gibs, however, the Investigating Justice found
sufficient evidence to hold respondent liable therefor. Thus: Lawlib raryofCRAlaw
Elizabeth Gilos' identification of respondent in the CCTV recording and her testimony that respondent admitted the
withdrawal and even paid her two thousand pesos (P2,000.00) as partial payment for the ten thousand pesos (510,000.00)
that was withdrawn from her account conclusively prove that respondent committed the act of withdrawing money from her
Land Bank deposit [account with the use of] her ATM card without her consent.10
The Investigating Justice categorized the unauthorized withdrawal as a grave misconduct and recommended the penalty of
disqualification from holding public office for one year.
Thereafter, this case was referred to OCA for evaluation, recommendation and report.11 redarclaw
Recommendation of the OCA
In its Memorandum dated February 17, 2015, the OCA opined that respondent is guilty of conduct prejudicial to the best
interest of the service for having received a pleading beyond office hours and without authority to do so. Anent the
unauthorized withdrawal, it agreed with the Investigating Justice that respondent is guilty of grave misconduct, with the
modification that the same also constitutes dishonesty. Since respondent had already resigned, the OCA recommended the
penalty of P20,000.00 fine with forfeiture of retirement benefits, except accrued leave benefits, and perpetual disqualification
from holding public office. Thus: Lawlib raryofCRAlaw
Section 50, Rule 10 of the RRACS provides that if the respondent is found guilty of two (2) or more charges or counts, the
penalty to be imposed should be that corresponding to the most serious charge and the rest shall be considered as
aggravating circumstances. However, considering that respondent Abarintos already resigned from the service effective 14
February 2011, the penalty of dismissal can no longer be imposed. The penalty of fine is therefore deemed proper.
Furthermore, Section 52 of the same rule provides that the penalty of dismissal carries with it cancellation of eligibility,
forfeiture of retirement benefits, perpetual disqualification from holding public office and [being] bar[red] from taking the
civil service examination.
RECOMMENDATION: It is respectfully recommended for the consideration of the Honorable Court that: Lawlibra ryofCRAlaw
1. Anna Marie Abarintos, former Records Officer FV, Court of Appeals (Cebu Station) be found GUILTY of Grave Misconduct
and Conduct Prejudicial to the Best Interest of the Service, and be FFNED in the amount of Twenty Thousand Pesos
(¥20,000.00) and with forfeiture of retirement benefits except accrued leave benefits, and perpetual disqualification from
holding office in any branch or instrumentality of the government, including government-owned or controlled corporations;
and
2. The Finance Management Office of the Court of Appeals be DIRECTED to DEDUCT the fine of P20,000.00 imposed against
Anna Marie Abarintos from whatever sums are due to her as accrued leave credits, if sufficient.12
This Court's Ruling
The Court partially adopts the

recommendation of the OCA.
The charge of tampering is not supported by sufficient evidence.
In finding respondent liable for tampering the date of receipt of the Petition in CA-G.R. SP No. 05464, the OCA essentially
relied on the following circumstances: it is not part of respondent's duty to receive pleadings as there are four (4) court
personnel in the Receiving Section tasked to do the same; and, she received said pleading after office hours or at 5:10 in the
afternoon of November 4,2010.
At first blush, the circumstances enumerated by OCA are enough to raise a quizzical eyebrow. But administrative liability
cannot rest on mere suspicion or speculation.13 There must be substantial evidence to support a finding that respondent is
responsible for the reprehensible act imputed against her. "Substantial evidence in an administrative case consists of that
amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."14 redarclaw
In this case, respondent is being charged with tampering the date of actual receipt of the Petition in CA-G.R. SP No. 05464.
Thus:Lawlibra ryofCRAlaw
Sensing that the filing was out of the desired date, ANNA personally tampered the date at our receiving section to make it
appear that the pleading was filed on time as November 4 instead of November 5, extrinsically a dismissible ground by
technicality, x x x15
The aforesaid circumstances relied upon by the OCA do not, however, prove that respondent altered or intercalated the
actual date of receipt of the Petition in CA-G.R. SP No. 05464 as appearing on the face thereof. There is no showing that said
pleading was actually filed on November 5, 2010, but that through respondent's intervention or manipulation she changed
the date and made it appear that the same was seasonably filed on November 4, 2010. On the contrary, Atty. Enjambre
categorically declared under oath that said pleading was filed on November 4, 2010, viz.: Lawli bra ryofCRAlaw
Q: Can you assist the Investigator with [regard] to this Petition for Review and
show to me when this Petition for Review was received?
A: On page 16 of the rollo, Your Honor, we have the Petition for Review. On its
face on page 16 there is a mark ["]Received - November 4, 2010["] and this is
the signature of Anna Marie Abarintos. This petition was supposedly received by
her on November 4, 2010 at 5:10, Your Honor.
xxxx
Q: So, Atty. Enjambre, you said that it was received on 4 November, right?
A: Appearing on page 1 of the Petition, Your Honor.
Q: Yes. There is a stamp here on the right side portion of the first page of the
Petition for Review as mentioned November 4, but on the left side, Atty.
Enjambre, there also appears a stamp ["JReceived - 19th Division, November 5,
2010["]. What is the significance of this other stamp Received?
A: From the Receiving Section, Your Honor, the same will be forwarded to the SP
Section and then they will docket the case and then they will assign a docket
number and then forward it to the Raffle Committee for raffle and after the
raffle, the same will be forwarded to the Division Clerk of Court concerned.16
We also note that the CA's February 21, 2011 Resolution in CA-G.R. SP No. 05464 outrightly dismissed the petition for: (i)
being patently without merit; (ii) lack of competent evidence of identity; and, (iii) failure of the notary public before whom
the verification and certification was subscribed to indicate his/her notarial commission number. It did not include tardiness
as one of the grounds for dismissing said petition.
As regards respondent's alleged lack of authority, no office order or memorandum was, however, cited or presented to
establish that only the four court personnel in the Receiving Section, to the exclusion of all others, are authorized to receive
pleadings. Put differently, there is no proof that respondent, who is the head of the Judicial Records Division, is prohibited
from receiving pleadings. On the other hand, The 2002 Revised Manual for Clerks of Court outlines the functions and duties
of the Chief Judicial Staff Officer of Judicial Records Division as follows: Lawli bra ryofCRAlaw
5.1. Adjudicative Support Functions: Lawlib raryofCR Alaw
5.1.1. Takes charge of docketing all cases received by the Court;
5.1.2. Receives and reports to the Divisions concerned all pleadings and communications relative to the cases already filed;
x x x x17
Since it has not been established that respondent is forbidden to receive pleadings, she should not be administratively held
liable for doing so.
Furthermore, we cannot subscribe to the recommendation of the OCA that respondent's receipt of subject pleading several
minutes after office hours raises a presumption that she used her office to extend a favor to a litigant. There is simply no
such presumption that exists in the Rules on Evidence or in statute books. On the other hand, it is basic that court officials
and personnel are presumed to have regularly performed their official duties.18 At this point, it may not be amiss to state
that the circulars issued by this Court pertaining to the observance of prescribed working hours19 are intended to promote
punctuality and prevent tardiness or absenteeism "if only to recompense the government and, ultimately, the people, who
shoulder the cost of maintaining the Judiciary."20 They are not intended to deny public service to the same people who come
to court to transact business, even if they arrive a few minutes after the prescribed working hours, when there are still court
personnel present who could serve them. Neither should they be construed as to prohibit dedicated court personnel to render
genuine public service beyond the regular office hours. "Truly, public servants at times should share a part of their extra time
and skills in order to facilitate swift delivery of service to the public."21 redarclaw
The acts of respondent in taking the

ATM card of Gilos and making an
unauthorized withdrawal constitute
grave misconduct and dishonesty.
The Court adopts the recommendation of the OCA that the acts of respondent in taking the ATM card of her officemate and
making an unauthorized withdrawal therefrom do not only constitute grave misconduct, but amount to dishonesty as well.
Misconduct has been defined "as 'a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by a public officer.' The misconduct is grave if it involves any of the additional elements of
corruption, willful intent to violate the law, or to disregard established rules, which must be established by substantial
evidence."22 Dishonesty, on the other hand, "has been defined as a disposition to lie, cheat, deceive or defraud. It implies
untrustworthiness, lack of integrity, lack of honesty, probity or integrity in principle on the part of the individual who failed to
exercise fairness and straightforwardness in his or her dealings."23 redarclaw
In Rojas, Jr. v. Mina,24 the respondent therein was found guilty of gross misconduct and dishonesty for stealing and
encashing the checks payable to trial court judges without their knowledge and consent.
In this case, the fact that respondent took the ATM card of Gilos and the manner by which respondent was able to withdraw
P10,000.00 from her account on November 12, 2010 have been duly proven by substantial evidence. Gilos testified that
earlier that day she gave her PIN to respondent to inquire thru phone banking the balance of her account. The CCTV files of
the ATM from which the money was withdrawn show that respondent withdrew said amount from Gilos's account.25 Gilos also
testified that respondent admitted to her having withdrawn the amount of P10,000.00, and even paid her P2,000.00 as
partial payment. Thus: Lawlibra ryofCRAlaw
[Justice Yap]
Q: Who would know your PIN x x x other than you, of course? Who else did you
share [it] with?
[Gilos]
A: We have phone banking. So, during that time I shared that ATM PIN x x x
[with] the respondent because she was inquiring her bank account while I
[was] doing the encoding in my table where the telephone was and then she
also inquired the balance x x x of my ATM [deposit account].
Q: When would that be? Is it the same day that you discovered the P10,000.00
was withdrawn?
A: The same day that the money was withdrawn.
Q: November 12 based on Exhibit "A-7"?
A: Yes, Your Honor.26
xxxx
A: That is why I made a manifestation earlier that I did not approach her. She
voluntarily went with me to the bank when she learned that I will be going
there to file my complaint because to my belief it was debited by the bank
erroneously or system error. That is really my intention of going to the bank to
file a complaint so that they will act on it because I am very sure that I did not
[make] any withdrawal for that P10,000.00. So, I wanted them to know so that
they could conduct an investigation and then would show to me that they really
have debited that as a system error.
Q: Your first impression was that it was just erroneously debited from your
account and you wanted the bank to rectify the system error they committed?
A: Yes, that [was] my intention.
Q: So, your account is with Land Bank. [In] which branch?
A: Capitol Branch.
Q: When you went to Land Bank, Ms. Abarintos accompanied you?
A: Yes.27
xxxx
Q: Land Bank did not [restitute] the amount that was withdrawn or did not return
or deposit P10,000.00 to your account?
A: No, because according to them x x x it is not a [system] error.
xxxx
Q: So right now that amount is still unaccounted for[;] it has not been returned to
you whether it's system error or unauthorized withdrawal?
A: A portion of that was returned.
xxxx
Q: How much is the amount?
A: P2,000.00.
xxxx
Q: Who [returned the] P2,000.00?
A: Ms. Abarintos.
Q: Where did she do that, here in the office?
A: In the office.
Q: Was there any explanation why she paid you P2,000.00?
A: That is the only money she could afford during that time.
Q: Was that the only x x x [explanation for] the P2,000.00? No other statements
were made such as the withdrawal or anything to do with your ATM card or
other statements on that regard?
A: She made a statement that she did it.
Q: And how were you able to take that from her?
A: I did not even [ask] her to pay even after viewing. I did not tell her that I
already viewed it x x x.
Q: This happened after your viewing of the CCTV slides?
A: Yes, Your Honor.
Q: Could it be before February 14?
A: Yes.
Q: So, [the P2,000.00 was just given to you] and then Ms. Abarintos [admitted
responsibility]?
A: Before she gave that P2,000.00 to me she already called me at home and then
she told me that she really did it and x x x apolog[ized] and then after giving
the P2,000.00 she told me that she will give me the remaining amount as
[soon] as she x x x has the money.28
As head of the Judicial Records Division, and involved in the administration of justice, respondent "ought to live up to the
strictest standards of honesty and integrity in public service."29 Indeed, "[n]o position demands greater moral righteousness
and uprightness from its holder than an office in the judiciary. Court employees should be models of uprightness, fairness
and honesty to maintain the people's respect and faith in the judiciary."30 "[A]ny conduct, act or omission on the part of
those who would violate the norm of public accountability and diminish or even just tend to diminish the faith of the people in
the judiciary shall not be countenanced."31
The resignation of respondent from the service on February 14, 2011 is of no moment. Resignation from the service will not
extricate court employees from the consequences of their acts. It is settled that the cessation from office neither warrants
the dismissal of the administrative complaint filed against the respondents while they were still in the service nor does it
render the case moot and academic.32 "A contrary rule would be fraught with injustices and pregnant with dreadful and
dangerous implications,"33as nothing "would prevent a corrupt and unscrupulous government employee from committing
abuses and other condemnable acts knowing fully well that they would soon be beyond the pale of the law and immune to all
administrative penalties[.]"34 The only effect of respondent's resignation is that it rendered moot the imposition of the
penalty of dismissal.
Under Section 52(A) of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty and grave misconduct are
classified as grave offenses meriting the supreme penalty of dismissal from service even for the first offense, with the
accessory penalties of forfeiture of retirement benefits, except accrued leave credits, and perpetual disqualification from re-
employment in the government service. In view of respondent's resignation, however, the penalty that can be imposed
against her is a fine with the same accessory penalties of forfeiture and disqualification. Although the OCA recommended a
fine of P20,000.00, circumstances in this case warrant a lesser amount. While We do not condone the lamentable act of
respondent in making an unauthorized withdrawal, it does not escape Our attention that respondent is a first-time offender.
She eventually admitted to Gilos that she took the money which she returned, albeit partially. After consulting her family,
respondent did not present controverting evidence in this case and effectively submitted her fate to the judicious resolution
of this case. Finally, to save her family from embarrassment and unnecessary emotional stress, respondent resigned. To Our
mind, these circumstances evince her sincere remorse and wholehearted repentance for committing a regrettable misstep in
her life. In Apiag v. Judge Cantero,35 this Court treated the indiscretion committed by a repentant respondent as follows: Lawl ib raryofCRAlaw
Man is not perfect. At one time or another, he may commit a mistake. But we should not look only at his sin. We should also
consider the man's sincerity in his repentance, his genuine effort at restitution and his eventual triumph in the reformation of
his life.
Thus, and out of compassion and mercy, We deem it just and proper to reduce the recommended fine to P5,000.00.
WHEREFORE, the Court finds respondent Anna Marie Abarintos, former Records Officer IV of the Court of Appeals, Cebu
station, guilty of Dishonesty and Gross Misconduct and orders her to pay a fine of P5,000.00 with forfeiture of whatever
benefits still due her from the government, except accrued leave credits. Respondent is likewise declared disqualified from
employment in any branch or instrumentality of the government including government-owned or controlled corporations.
SECOND DIVISION
G.R. No. 201822, August 12, 2015
MARINA PORT SERVICES, INC.*, Petitioner, v. AMERICAN HOME ASSURANCE CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:

This Petition for Review on Certiorari1 filed pursuant to Rule 45 of the Rules of Court assails the December 29, 2011
Decision2 and May 8, 2012 Resolution3 of the Court of Appeals (CA) in CA GR. CV No. 88321, which granted the appeal filed
therein by respondent American Home Assurance Corporation (AHAC) and reversed and set aside the October 17, 2006
Decision4 of the Regional Trial Court (RTC), Pasig City, Branch 271 dismissing AHAC's Complaint5 for Damages against
petitioner Marina Port Services, Inc. (MPSI).
Factual Antecedents
On September 21, 1989, Countercorp Trading PTE., Ltd. shipped from Singapore to the Philippines 10 container vans of soft
wheat flour with seals intact on board the vessel M/V Uni Fortune. The shipment was insured against all risks by AHAC and
consigned to MSC Distributor (MSC).
Upon arrival at the Manila South Harbor on September 25, 1989, the shipment was discharged in good and complete order
condition and with safety seals in place to the custody of the arrastre operator, MPSI. After unloading and prior to hauling,
agents of the Bureau of Customs officially broke the seals, opened the container vans, and examined the shipment for tax
evaluation in the presence of MSC's broker and checker. Thereafter, the customs inspector closed the container vans and
refastened them with safety wire seals while MSC's broker padlocked the same. MPSI then placed the said container vans in
a back-to-back arrangement at the delivery area of the harbor's container yard where they were watched over by the
security guards of MPSI and of the Philippine Ports Authority.
On October 10, 1989, MSC's representative, AD's Customs Services (ACS), took out five container vans for delivery to MSC.
At the compound's exit, MPSI issued to ACS the corresponding gate passes for the vans indicating its turnover of the subject
shipment to MSC. However, upon receipt of the container vans at its warehouse, MSC discovered substantial shortages in the
number of bags of flour delivered. Hence, it filed a formal claim for loss with MPSI.
From October 12 to 14, 1989 and pursuant to the gate passes issued by MPSI, ACS took out the remaining five container
vans from the container yard and delivered them to MSC. Upon receipt, MSC once more discovered substantial shortages.
Thus, MSC filed another claim with MPSI.
Per MSC, the total number of the missing bags of flour was 1,650 with a value of £257,083.00.
MPSI denied both claims of MSC. As a result, MSC sought insurance indemnity for the lost cargoes from AHAC. AHAC paid
MSC the value of the missing bags of flour after finding the tetter's claim in order. In turn, MSC issued a subrogation receipt
in favor of AHAC.
Thereafter, AHAC filed a Complaint6 for damages against MPSI before the RTC.
AHAC averred in its Complaint that the partial loss of the bags of flour was due to the fault or negligence of MPSI since the
loss happened while the shipment was still in MPSI's custody.
MPSL, on the other hand, disclaimed any liability. It essentally maintained in its Answer7 that the bags of flour were inside
sealed container vans when it received the same; that it handled the subject shipment with the diligence required of it; and,
mat the container vans were turned over by it to MSC in the same condition that they were in at the time of their discharge
from the vessel. MPSI likewise countered that the failure of MSC to request for a bad order survey belied the latter's claim for
loss.
Trial then ensued.
On October 17, 2006, the RTC rendered a Decision8 dismissing AHAC's Complaint. It held that while there was indeed a
shortage of 1,650 sacks of soft wheat flour, AHAC's evidence failed to clearly show that the loss happened while the subject
shipment was still under MPSI's responsibility. Hence, the dispositive portion of the RTC Decision:Lawlib raryofCRAlaw
WHEREFORE, premises considered, the complaint is hereby DISMISSED.
SO ORDERED.9
Aggrieved, AHAC appealed to the CA.
In its Decision10 dated December 29, 2011, the CA stressed that in a claim for loss filed by a consignee, the burden of proof
to show due compliance with the obligation to deliver the goods to the appropriate party devolves upon the arrastre
operator. In consonance with this, a presumption of fault or negligence for the loss of the goods arises against the arrastre
operator pursuant to Articles 126511 and 198112 of the Civil Code. In this case, the CA found that MPSI failed to discharge
such burden and to rebut the aforementioned presumption. Thus, it was held liable to AHAC for the value of the missing bags
of flour, viz.:
Lawli bra ryofCRAlaw
We conclude that x x x MPSI was negligent in the handling and safekeeping of the subject shipment. It did not create and
implement a more defined, concrete and effective measure to detect, curb and prevent the loss or pilferage of cargoes in its
custody. This is manifested by the fact that [MPSI] never took any action to address such complaint even after it received
the formal claim of loss in the first five (5) vans. As a consequence, more bags of flour were eventually lost or pilfered in the
remaining container vans that were still in [MPSI's] custody at that time. Case law tells us that negligence is that conduct
which creates undue risk of harm to another, the failure to observe that degree of care, precaution and vigilance which the
circumstance[s] justly demand, whereby that other person suffers injury. Clearly, [MPSI] breached its arrastre obligations to
the consignee for it failed to deliver said bags in good and complete condition.
In view of MPSI's failure to exercise that degree of diligence, precaution and care the law [requires] of arrastre operators in
the performance of their duties to the consignee, [MPSI] is legally bound to reimburse [AHAC] for the value of the missing
bags of flour that it paid to MSC pursuant to the insurance policy.13
In view of the same, the said court disposed of the appeal in this wise: Lawl ib raryofCRAlaw
WHEREFORE, premises considered, the appeal is GRANTED. The Decision of the Regional Trial Court of Pasig City, Branch
271 dated 17 October 2006 is REVERSED and SET ASIDE. Appellee Marina Port Services, Inc. is ORDERED to pay appellant,
American Home Assurance Corporation, the sum of Two Hundred Fifty Seven Thousand and Eighty Three Pesos
(PhP257,083.00) with interest thereon at Six percent (6%) [per annum] from the filing of this complaint on 24 September
1990 until the decision becomes final and executory, and thereafter, at the rate of twelve (12) percent [per annum] until
fully paid, and additionally, to pay the x x x sum of Fifty Thousand Pesos (PhP50,000.00) as attorney's fees.
SO ORDERED.14
MPSI moved for reconsideration but the CA denied the same in its Resolution15 dated May 8, 2012.
Hence, the present recourse.
Issue
The core issue to be resolved in this case is whether MPSI is liable for the loss of the bags of flour.
Our Ruling
There is merit in the Petition.
Albeit involving factual questions, the

Court shall proceed to resolve this case
since it falls under several exceptions to
the rule that only questions of law are
proper in a petition for review on
certiorari.
At the outset, it is evident that the resolution of the instant case requires the scrutiny of factual issues which are, however,
outside the scope of the present petition filed pursuant to Rule 45 of the Rules of Court. However, the Court held in Asian
Terminals, Inc. v. Philam Insurance Co., Inc.16 that: LawlibraryofCR Alaw
But while it is not our duty to review, examine and evaluate or weigh all over again the probative value of the evidence
presented, the Court may nonetheless resolve questions of fact when the case falls under any of the following exceptions: Lawli bra ryofCRAlaw
(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on
a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals
went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to 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.17
The Court finds that the instant case falls under the aforementioned second, fourth, fifth, and seventh exceptions. Hence, it
shall proceed to delve into factual matters essential to the proper determination of the merits of this case.
Several well-entrenched legal principles

govern the relationship of an arrastre
operator and a consignee.
The relationship between an arrastre operator and a consignee is similar to that between a warehouseman and a depositor,
or to that between a common carrier and the consignee and/or the owner of the shipped goods.18 Thus, an arrastre operator
should adhere to the same degree of diligence as that legally expected of a warehouseman or a common carrier19 as set forth
in Section 3[b] of the Warehouse Receipts [Act]20 and Article 1733 of the Civil Code.21 As custodian of the shipment
discharged from the vessel, the arrastre operator must take good care of the same and turn it over to the party entitled to its
possession.22 reda rclaw
In case of claim for loss filed by a consignee or the insurer as subrogee,23 it is the arrastre operator that carries the burden
of proving compliance with the obligation to deliver the goods to the appropriate party.24 It must show that the losses were
not due to its negligence or that of its employees.25 It must establish that it observed the required diligence in handling the
shipment.26 Otherwise, it shall be presumed that the loss was due to its fault.27 In the same manner, an arrastre operator
shall be liable for damages if the seal and lock of the goods deposited and delivered to it as closed and sealed, be broken
through its fault.28 Such fault on the part of the arrastre operator is likewise presumed unless there is proof to the
contrary.29redarc law
MPSI was able to prove delivery of the

shipment to MSC in good and complete
condition and with locks and seals intact.
It is significant to note that MPSI, in order to prove that it properly delivered the subject shipment consigned to MSC,
presented 10 gate passes marked as Exhibits 4 to 13.30 Each of these gate passes bore the duly identified signature31 of
MSC's representative which serves, among others, as an acknowledgement that: Lawlibra ryofCRAlaw
Issuance of [the] Gate Pass constitutes delivery to and receipt by consignee of the goods as described above in good order
and condition, unless an accompanying B.O. certificate duly issued and noted on the face of [the] Gate Pass appears.32
As held in International Container Terminal Services, Inc. v. Prudential Guarantee & Assurance Co., Inc.,33 the signature of
the consignee's representative on the gate pass is evidence of receipt of the shipment in good order and condition.34 redarc law
Also, that MPSI delivered the subject shipment to MSC's representative in good and complete condition and with lock and
seals intact is established by the testimonies of MPSFs employees who were directly involved in the processing of the subject
shipment. Mr. Ponciano De Leon testified that as MPSI's delivery checker, he personally examined the subject container vans
and issued the corresponding gate passes that were, in turn, countersigned by the consignee's representative. MPSI's other
witness, Chief Claims Officer Sergio Icasiano (Icasiano), testified that the broker, as the consignee's representative, neither
registered any complaints nor requested for an inspection, to wit: Lawlib raryofCRAlaw
RE-DIRECT EXAMINATION:
Atty. Laurente
xxxx
Q [A]fter receipt by the broker of the container van containing the cargo, do you
require the broker to issue you a report or certification as to the appearance of
the container van?
A [W]e only rely on the gate pass.
Q [A]nd you don't place there "the padlock is still intact or the wirings still intact"?
A [I]t is stated in the gate pass, your Honor.
xxxx
Q [A]nd the findings [are counter-signed] by the representative of the broker also
on the same date?
A [Y]es, your honor.35
xxxx
RE-CROSS EXAMINATION
Atty. Laino
q [B]ut did you not say that in the gate pass it is stated there as to the external
appearance of the container van?
a [I]here was no indication of any inspection of the container van x x x
meaning the container vans were all in good condition, sir.
q [Y]ou said a [while] ago that you did not receive any complaint for broken
seals, is it not?
a [Y]es, sir.
q [B]ut the complaint that you received indicates that there were losses,
a [W]e did not receive any complaint from the broker, sir.
q [I]f the broker will complain they have to file a request for inspection of the
cargo so that they will know if there [are] shortages x x x.
a [Y]es, sir.
[C]ourt
q [A]nd if the broker would notice or detect [something] peculiar, the way the
door of the container van appears whether close[d] or not, they have to
request for an inspection[?]
a [Y]es, your honor.
q [O]r in the absence of the padlock or wirings, the broker will request for an
inspection[?]
a [Y]es,your honor[;] they can require for the examination of the cargo.
q [B]ut there was no request at all by the broker?
a [T]here was none, your Honor.36
Verily, the testimonies of the aforementioned employees of MPSI confirm that the container vans, together with their
padlocks and wirings, were in order at the time the gate passes were issued up to the time the said container vans were
turned over to ACS.
AHAC justifies the failure of ACS to immediately protest the alleged loss or pilferage upon initial pick-up of the first batch of
container vans. According to it, ACS could not have discovered the loss at that moment since the stripping of container vans
in the pier area is not allowed. The Court cannot, however, accept such excuse. For one, AHAC's claim that stripping of the
container vans is not allowed in the pier area is a mere allegation without proof. It is settled that "[m]ere allegations do not
suffice; they must be substantiated by clear and convincing proof."37 For another, even assuming that stripping of the
container vans is indeed not allowed at the pier area, it is hard to believe that MSC or its representative ACS has no
precautionary measures to protect itself from any eventuality of loss or pilferage. To recall, ACS's representative signed the
gate passes without any qualifications. This is despite the fact that such signature serves as an acknowledgment of ACS's
receipt of the goods in good order and condition. If MSC was keen enough in protecting its interest, it (through ACS) should
have at least qualified the receipt of the goods as subject to inspection, and thereafter arrange for such an inspection in an
area where the same is allowed to be done. However, no such action or other similar measure was shown to have been
undertaken by MSC. What is clear is that ACS accepted the container vans on its behalf without any qualification. As aptly
observed by the RTC: Lawlib raryofCR Alaw
During [the] period of tum-over of goods from the arrastre to [ACS], there had been no protest on anything on the part of
consignee's representative x x x. Otherwise, the complaint would have been shown [on] the gate passes. In fact, each gate
pass showed the date of delivery, the location of delivery, the truck number of the truck used in the delivery, the actual
quantity of goods delivered, the numbers of the safety wires and padlocks of the vans and the signatures of the receiver.
More importantly, the gate passes bared the fact that the shipments were turned-over by [MPSI] to [ACS] on the same dates
of customs inspections and turnovers.38
There being no exception as to bad order, the subject shipment, therefore, appears to have been accepted by MSC, through
ACS, in good order.39 "It logically follows [then] that the case at bar presents no occasion for the necessity of discussing the
diligence required of an [arrastre operator] or of the theory of [its] prima facie liability x x x, for from all indications, the
shipment did not suffer loss or damage while it was under the care x x x of the arrastre operator x x x."40 redarclaw
Even in the light of Article 1981, no

presumption of fault on the part of MPSI
arises since it was not sufficiently shown
that the container vans were re-opened
or that their locks and seals were broken
for the second time.
Indeed, Article 1981 of the Civil Code also mandates a presumption of fault on the part of the arrastre operator as follows: Lawlib raryofCR Alaw
Article 1981. When the thing deposited is delivered closed and sealed, the depositary must return it in the same condition,
and he shall be liable for damages should the seal or lock be broken through his fault.
Fault on the part of the depositary is presumed, unless there is proof to the contrary.
As regards the value of the thing deposited, the statement of the depositor shall be accepted, when the forcible opening is
imputable to the depositary, should there be no proof to the contrary. However, the courts may pass upon the credibility of
the depositor with respect to the value claimed by him.
When the seal or lock is broken, with or without the depositary's fault, he shall keep the secret of the deposit.
However, no such presumption arises in this case considering that it was not sufficiently shown that the container vans were
re-opened or that their locks and seals were broken for the second time. As may be recalled, the container vans were opened
by a customs official for examination of the subject shipment and were thereafter resealed with safety wires. While this fact
is not disputed by both parties, AHAC alleges that the container vans were re-opened and this gave way to the alleged
pilferage. The Court notes, however, that AHAC based such allegation solely on the survey report of the Manila Adjuster &
Surveyors Company (MASCO). As observed by the RTC: Lawlib ra ryofCRAlaw
AHAC x x x claim[s] that there were two instances when the seals were broken. [First], when the customs officer examined
the shipment and had it resealed with safety wires. [Second], when the surveyor and consignee's broker visually inspected
the shipment and allegedly found the safety wires of the customs officer to have been detached and missing which they then
replaced. This second instance is only upon their say so as there is no x x x documentary or testimonial proof on the matter
[other] than the [MASCO] survey report.41
However, the person who prepared the said report was not presented in court to testify on the same. Thus, the said survey
report has no probative value for being hearsay. "It is a basic rule that evidence, whether oral or documentary, is hearsay, if
its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not
on the witness stand."42 Moreover, "an unverified and unidentified private document cannot be accorded probative value. It
is precluded because the party against whom it is presented is deprived of the right and opportunity to cross-examine the
person to whom the statements or writings are attributed. Its executor or author should be presented as a witness to provide
the other party to the litigation the opportunity to question its contents. Being mere hearsay evidence, failure to present the
author of the letter renders its contents suspect and of no probative value."43 redarc law
There being no other competent evidence that the container vans were reopened or that their locks and seals were broken
for the second time, MPSI cannot be held liable for damages due to the alleged loss of the bags of flour pursuant to Article
1981 of the Civil Code.
At any rate, the goods were shipped

under "Shipper's Load and Count"
arrangement. Thus, protection against
pilferage of the subject shipment was
the consignees lookout.
At any rate, MPSI cannot just the same be held liable for the missing bags of flour since the consigned goods were shipped
under "Shipper's Load and Count" arrangement. "This means that the shipper was solely responsible for the loading of the
container, while the carrier was oblivious to the contents of the shipment. Protection against pilferage of the shipment was
the consignee's lookout. The arrastre operator was, like any ordinary depositary, duty-bound to take good care of the goods
received from the vessel and to turn the same over to the party entitled to their possession, subject to such qualifications as
may have validly been imposed in the contract between the parties. The arrastre operator was not required to verify the
contents of the container received and to compare them with those declared by the shipper because, as earlier stated, the
cargo was at the shipper's load and count. The arrastre operator was expected to deliver to the consignee only the container
received from the carrier."44 reda rclaw
All told, the Court holds that MPSI is not liable for the loss of the bags of flour.
WHEREFORE, the Petition is GRANTED. The Decision dated December 29, 2011 and Resolution dated May 8, 2012 of the
Court of Appeals in CA-GR. CV No. 88321 are REVERSED AND SET ASIDE. The Decision dated October 17, 2006 of the
Regional Trial Court, Branch 271, Pasig City in Civil Case No. 90-54517 is REINSTATED and the Complaint in the said case
is DISMISSED.
SO ORDERED
SECOND DIVISION
G.R. No. 202967, August 05, 2015
ALICIA Y. LAUREL, SUBSTITUTED BY HER SOLE HEIR AND LEGAL REPRESENTATIVE JUAN MIGUEL Y.
LAUREL, Petitioner, v. FERDINAND M. VARDELEON, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails: 1) the October 13, 2011 Decision2 of the Court of Appeals (CA) denying the
appeal in CA-G.R. CEB CV No. 01360 and affirming the October 12, 2005 Order3 of the Regional Trial Court (RTC), 6th Judicial
Region, Kalibo, Aklan, Branch 6 in Civil Case No. 7249; and 2) the CA's June 20, 2012 Resolution4 denying herein petitioner's
motion for reconsideration of the herein assailed Decision.
Factual Antecedents
On July 23, 2004, petitioner Alicia Y. Laurel filed a Complaint5 for recovery of possession and ownership and/or quieting of
title against respondent Ferdinand M. Vardeleon concerning a 20,306-square meter island in Caticlan, Malay, Aklan. The case
was docketed as Civil Case No. 7249 and assigned to Branch 6 of the RTC of Kalibo, Aklan.
Respondent denied the material allegations in the complaint, claiming that he bought the island on April 9, 1973 from Avelina
Casimero, and that petitioner was guilty of laches in filing her claim.6reda rclaw
In a July 6, 2005 Pre-Trial Order,7 petitioner was scheduled to present her evidence on three separate dates: September 7,
2005; October 12, 2005; and November 23, 2005.
Previously, on August 1, 2005, respondent moved to correct the Pre-Trial Order, in order to reflect therein petitioner's
supposed admission made during pre-trial that she knew of respondent's possession of the subject property since
1975.8 Petitioner opposed the same.9 redarclaw
In an August 19, 2005 Order,10 the trial court denied respondent's motion to correct the Pre-Trial Order. Respondent filed a
motion for reconsideration11 but the trial court did not act on the motion.
On September 2, 2005, petitioner's counsel moved to reset the scheduled September 7, 2005 hearing to October 12, 2005 or
any available date.12 The trial court, in a September 7, 2005 Order,13 granted the motion provided that petitioner defrays the
transportation expenses as well as the appearance fee of respondent's counsel. Petitioner moved to reconsider,14 but the
court failed to act on the same.
During the scheduled October 12, 2005 hearing, petitioner was present, together with substitute counsel Atty. Roy Villa and
her first witness. Petitioner moved in open court to postpone trial on the ground that there are pending motions that have to
be resolved, and that the substitute lawyer had yet to confer with the witness, since her true counsel, Atty. De la Vega - who
originally interviewed the witness - was not present. This time, the trial court, in an Order15 of even date, denied: 1)
petitioner's oral motion to postpone trial; 2) her motion for reconsideration of the trial court's September 7, 2005 Order
directing her to defray respondent's counsel's transportation expenses and appearance fees; and 3) respondent's motion for
reconsideration of the trial court's August 19, 2005 Order denying his motion to correct the Pre-Trial Order. It likewise
dismissed Civil Case No. 7249 on the ground of failure to prosecute on petitioner's part, pursuant to Section 3, Rule 17 of the
1997 Rules of Civil Procedure.16 It decreed, thus:LawlibraryofCR Alaw
Resolving the Motion for Reconsideration filed by the plaintiff, the same is hereby DENIED. The alleged illness of Atty. Maria
Theresa Diaz-dela Vega which allegedly prevented [sic] from appearing at the initial trial is not supported by a medical
certificate that is under oath. (Sec. 4, Rule 30, 1997 Rules of Civil Procedure).
As regards the Motion for Reconsideration filed by the defendant, the same was just a rehash of the ground mentioned in
their [sic] first motion which was amply discussed in the Order sought to be reconsidered. Said Motion for Reconsideration is
also DENIED.
Called for trial, plaintiff is unable to present anew her evidence. She is asking for the postponement of the trial. It is
significant to take note that when this case was set for trial on September 7, 2005, plaintiff failed to present evidence based
on the alleged illness of her counsel. And today, plaintiff is not again ready to present evidence.
Defendant opposed the motion, and manifested that he is willing that the counterclaim be dismissed to facilitate the eventual
dismissal of this case.
WHEREFORE, plaintiffs verbal motion to postpone the trial is hereby DENIED and the case is DISMISSED for failure to
prosecute. The counterclaim is also DISMISSED.
SO ORDERED.
Open Court, Kalibo, Aklan.

October 12, 2005.
On November 9, 2005, petitioner filed a motion for reconsideration17 of the trial court's October 12, 2005 Order, but in a
January 31, 2006 Order,18 the trial court denied the same, stating among others that -
The fact that another trial date was left for her to present evidence cannot be made as a justification because for two
settings, i.e., September 7, 2005 and October 12,2005, she admittedly failed to present evidence. As a matter of fact, on
September 7, 2005, the Court was already inclined to dismiss the case for failure of the plaintiff to appear, especially that her
motion to postpone the
hearing failed to comply with the 3-day period to file and serve the motion prior to the date of the hearing. The motion was
filed two (2) days before the date of the hearing. Nonetheless, the Court had to bend the procedural rules by granting the
motion and set the presentation of plaintiffs evidence on October 12,2005 as previously set during the trial. The reason
therefor is just to allow the plaintiff to present her evidence and decide the case on the merits. Unfortunately, as earlier
stated, plaintiff was again unable to present evidence.
Some pending incidents mentioned by the plaintiff is [sic] not a legal justification for her not to present evidence. The same
were already resolved when the Court directed plaintiff to proceed with the presentation of her evidence. However, plaintiff
refused to do so.
Hence, the dismissal of the complaint for failure to prosecute as mentioned at the outset.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.19
Petitioner filed an appeal before the CA, docketed as CA-G.R. CEB CV No. 01360. She claimed that the trial court should not
have dismissed her case since she still had one more scheduled hearing — November 23, 2005 — for the presentation of her
evidence. Petitioner asserted that she could not begin trial since respondent's motion for reconsideration of the trial court's
August 19, 2005 Order remained unresolved and was still awaiting resolution. Moreover, her own motion for reconsideration
of the trial court's September 7, 2005 Order directing her to defray the transportation expenses and appearance fee of
respondent's counsel was still pending at the time. But in an October 13, 2011 Decision, the CA denied the appeal, stating
thus:Lawlibra ryofCRAlaw
Appellant claims that it was her honest belief that during the hearing on October 12, 2005, the trial court would first hear
and resolve appellee's motion for reconsideration from the Order denying his earlier motion to correct the pre-trial order. She
was caught by surprise when the trial court outrightly denied appellee's motion for reconsideration and directed her to
present her witness. Moreover, under the Pre-Trial Order, she still had another date to present her evidence, that is, on
November 23, 2005.
We are not impressed with appellant's contentions.
Under Section 3, Rule 17 of the Rules of Court, if, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence-in-chief on the complaint, or to prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon
the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise provided by the
court.
There is failure to prosecute when the plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial
or when postponements in the past were due to the plaintiffs own making, intended to be dilatory or caused substantial
prejudice on the part of the defendant.
Appellant could not pretend that she did not know that she would be presenting her evidence on October 12, 2005. Appellant
was duly notified of the hearing dates. The Pre-Trial Order dated July 6, 2005 clearly stated that appellant was set to present
her evidence on the following dates: September 7, 2005, October 12, 2005 and November 23, 2005 at 9:30 in the morning.
When appellant's counsel filed a motion to reset the hearing, the trial court granted the same.
With due notice of the proceedings, appellant and her counsel were both well aware that they had to present their evidence
on October 12, 2005. This was their chosen date, but instead of coming prepared, appellant moved for another
postponement. Appellant's justification that her counsel was not yet able to talk to the witness is not a meritorious ground to
defer the hearing of the case. In fact, under Sec. 3, Rule 30 of the Rules of Court, a motion to postpone a trial on the ground
of absence of evidence can be granted only upon affidavit showing the materiality or relevancy of such evidence and that due
diligence had been utilized to procure it. There was no such affidavit in this case, nor was there any showing that due
diligence had been exerted to procure the attendance of the intended witness.
The fact that the trial court no longer heard appellee's motion for reconsideration is of no moment. Appellant's complacent
attitude and lack of preparedness [in pursuing] her case warrants its dismissal for failure to prosecute, xxx [A] plaintiff is
duty-bound to prosecute his action with utmost diligence and with reasonable dispatch in order to obtain the relief prayed for
and, at the same time, minimize the clogging of court dockets. The expeditious disposition of cases is as much the duty of
the plaintiff as the court's.
The trial court therefore did not err in issuing the assailed Order since it was only performing its duty in ensuring that
litigations are prosecuted and resolved with dispatch. To allow appellant to postpone the case until such time that she is
ready to present her evidence would only cause unreasonable delay and violate appellee's right to speedy trial.
Accordingly, We sustain the trial court's dismissal of appellant's complaint for failure to prosecute.
WHEREFORE, the Appeal is DENIED. The Order dated October 12, 2005 of the Regional Trial Court, 6th Judicial Region,
Branch 6 of Kalibo, Aklan in Civil Case No. 7249 is AFFIRMED in toto. Costs on plaintiff-appellant.
SO ORDERED.20
Petitioner moved to reconsider, but in its assailed June 20, 2012 Resolution, the CA held its ground. Hence, the present
Petition.
Issues
Petitioner submits that -
THE HONORABLE COURT OF APPEALS AND THE COURT A QUO COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF
DISCRETION IN DISMISSING PETITIONER'S COMPLAINT FOR SUPPOSED FAILURE TO PROSECUTE DESPITE THE FACT THAT
PETITIONER THROUGH HER COUNSEL HAD ACTIVELY PARTICIPATED IN THE PROCEEDINGS IN THE COURT A QUO AND
DESPITE THE FACT THAT THERE WAS A PENDING UNRESOLVED MOTION INVOLVING THE PRE-TRIAL ORDER.
BOTH THE COURT A QUO AND THE HONORABLE COURT OF APPEALS HAVE CLEARLY DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION BY THIS
HONORABLE COURT.21
Praying that the assailed CA dispositions be set aside and that Civil Case No. 7249 be reinstated, petitioner essentially
maintains in her Petition and Reply22 that during the October 12, 2005 scheduled hearing, her counsel and witness were
present but they did not commence trial because they honestly believed that the respondent's pending motion for
reconsideration of the trial court's August 19, 2005 Order denying his motion to correct/amend the July 6, 2005 Pre-Trial
Order needed to be resolved first. Petitioner insists that said motion for reconsideration had a direct bearing on the course of
the trial, thus the necessity of resolving it first. In any case, it was already agreed upon during pre-trial and allowed by the
trial court in its pre-trial order, that she still had one more opportunity to present her evidence on the scheduled hearing on
November 23, 2005. Thus, the RTC -instead of dismissing the case - should have allowed her to present evidence on said
date. Petitioner posits that agreements reached at the pre-trial conference and embodied in the pre-trial order control the
course of trial and should not be disturbed unless there would be manifest injustice.23 Since she had one more scheduled
hearing available to her, it cannot be concluded that she has failed to prosecute her case. In addition, petitioner claims that
she has a meritorious case since she purchased the property from a seller who has a valid tax declaration his name, while
respondent himself admitted during pre-trial that his supposed predecessor-in-interest Avelina Casimero had no document or
tax declaration to support her title to the subject property.24 She points out that the trial court erred in not giving the parties
the opportunity to present their arguments on their pending motions for reconsideration, and instead denied them outright
on October 12, 2005; and that the power to dismiss the case for failure to prosecute should be exercised with care, as it may
forever bar a litigant from pursuing judicial relief, and so the circumstances surrounding the case should be considered to the
end that technicality shall not take precedence over substantial justice.25redarclaw
In his Comment,26 respondent maintains that the CA is correct in affirming the dismissal. He labels petitioner's insistence for
the RTC to resolve first the pending motions for reconsideration before trial could commence, and for her to be allowed to
commence the presentation of evidence on November 23, 2005, as specious and flimsy. He argues that these claims even
constitute glaring proof of petitioner's lack of interest in prosecuting her case; and that if petitioner was keen on pursuing her
case, then the substitute counsel (Arty. Villa) should nonetheless have been prepared on October 12, 2005. He avers that
petitioner has exhibited a complacent attitude toward her case in violation of his right to speedy trial/ disposition of his case.
Finally, he contends that petitioner has been accorded due process and given ample opportunity to present her case.
Our Ruling
The Petition must be granted.
This Court has said that "[t]he fundamental test for non prosequitur is whether, under the circumstances, the plaintiff is
chargeable with want of due diligence in failing to proceed with reasonable promptitude. There must be unwillingness on the
part of the plaintiff to prosecute."27
redarclaw
To constitute failure to prosecute, his non-appearance must be equated with unwillingness to proceed with the trial as
when both plaintiff and counsel made: no appearance at all, or with the assumption that plaintiff has already lost interest in
prosecuting his action, in the same way that should the ground for dismissal be delay, this delay or failure to proceed must
be for an unreasonable length of time beyond the reasonable allowance which by judicial leniency
litigant is normally entitled.28
Likewise -
While a court can dismiss a case on the ground of non prosequitur, the real test of such power is whether, under the
circumstances, plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude. In the
absence of a pattern or a scheme to delay the disposition of the case or a wanton failure to observe the mandatory
requirement of the rules on the part of the plaintiff, x x x courts should decide to dispense rather than wield their authority to
dismiss.29
Finally, in Padua v. Hon. Ericta,30 the following pronouncement was made: LawlibraryofCR Alaw
... (T)rial courts have ... the duty to dispose of controversies after trial on the merits whenever possible. It is
deemed an abuse of discretion for them, on their own motion, to enter a dismissal which is not warranted by the
circumstances of the case' (Municipality of Dingras v. Bonoan, 85 Phil. 458-59 [1950]). While it is true that the
dismissal of an action on grounds specified under Section 3, Rule 17 of the Revised Rules of Court is addressed
to their discretion (Flores v. Phil. Alien Property Administrator, 107 Phil. 778 (I960]; Montelibano v. Benares, 103 Phil. 110
[1958]; Adorable v. Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L-17631, October 19,
1966, 18 SCRA 390), such discretion must be exercised soundly with a view to the circumstances surrounding
each particular case(Vernus-Sanciangco v. Sanciangco, L-12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve
as mitigating circumstances for the delay, the same should be considered and dismissal denied or set aside (Rudd v.
Rogerson, 15 ALR 2d 672; Cervi v. Greenwood, 147 Colo 190, 362 P. 2d 1050 [1961]), especially where the suit appears
to be meritorious and the plaintiff was not culpably negligent and no injury results to defendant (27 C.J.S. 235-
36; 15 ALR 3rd 680). (Abinales vs. Court of First Instance of Zamboanga City, Br. 1, 70 SCRA 590, 595). (Emphasis
supplied)
With the above-cited pronouncements as guides, the Court declares that the trial court erred in dismissing Civil Case No.
7249, and the appellate court should not have affirmed such dismissal. Petitioner's actuations indicate that she was not at all
unwilling to prosecute her case; nor can it be said that - as the trial court puts it - she "refused" to present her evidence. Far
from these, she was indeed more than eager to see her case through. When she instituted Civil Case No. 7249 in 2004,
petitioner was already eighty-one (81) years of age.31 Yet, despite her advanced age, the record indicates that petitioner
attended the scheduled hearing of October 12, 2005, together with her counsel and the first witness - only that the lawyer
who attended was a mere proxy, and not petitioner's true counsel who previously conferred with the witness. Moreover, in
coming to court that day, petitioner and the substitute counsel were acting in the honest belief that trial cannot proceed on
account of pending incidents which the trial court has failed to resolve, that is: 1) her motion for reconsideration of the trial
court's September 7, 2005 Order directing her to defray respondent's counsel's transportation expenses and appearance
fees; and 2) respondent's motion for reconsideration of the trial court's August 19, 2005 Order denying his motion to correct
the Pre-Trial Order. Given the circumstances petitioner was confronted with at the time, it is understandable that she should
seek another continuance. Given her advanced age, determination, the surrounding circumstances of the case, and the fact
that no prejudice is caused to respondent by further postponement of trial since petitioner - by prior agreement during pre-
trial - is expected to conclude her case within the agreed three settings, the trial court should have extended to petitioner the
courtesy she deserved by granting a continuance.
Then; is merit in petitioner's argument that since she was granted three scheduled hearings within which to present her
evidence, then she should have been afforded such opportunity. Thus, it was error for the trial court to summarily dismiss
the case after only the second hearing. Since petitioner and respondent agreed to the three settings during pre-trial, then
petitioner should have been given three opportunities to present her case, and not merely two. As far as the parties are
concerned, an allocation of time for trial has been made and agreed upon by and between them. So long as the parties act
within schedule, then none of them should complain. Besides, the delay or failure to prosecute contemplated under Section
3, Rule 17 of the 1997 Rules must be for an "unreasonable length of time." In petitioner's case, the continuance she sought
was not for an unreasonable length of time. It was within the period expected by and made known to the defendant and the
trial court during pre-trial. In fact, it was only until the next scheduled setting on November 23, 2005, which was just over
one month away. This may not be characterized as delay, as such scheduled hearing was expected by respondent and could
not have come as a surprise to him. He was expected, as he agreed, to wait until the termination of these three scheduled
hearings. Within such period, he can do nothing but await his turn to present evidence, unless petitioner terminates it earlier.
Moreover, respondent could not have been prejudiced by the postponement being sought. The trial court even ordered
petitioner to reimburse his counsel's expenses and attorney's fees for the scheduled September 7, 2005 hearing. Using this
as precedent, it could have ordered the same with respect to the October 12, 2005 setting.
In a number of previous cases, we have consistently warned that courts must ensure that litigations are prosecuted and
resolved with dispatch. We also held 1hat although the grant or denial of postponements rests entirely on the sound
discretion of the judge, we cautioned that the exercise of that discretion must be reasonably and wisely
exercised. Postponements should not be allowed except on meritorious grounds, in light of the attendant
circumstances. Deferment of the proceedings may be allowed or tolerated especially where the deferment
would cause no substantial prejudice to any party. 'The desideratum of a speedy disposition of cases should not, if at
all possible, result in the precipitate loss of a party's right to present evidence and either in the plaintiffs being non-suited or
of the defendant's being pronounced liable under an ex-parte judgment' While a court can dismiss a case on the ground
of non-prosequitur, the real test for the exercise of such power is whether, under the circumstances, plaintiff is chargeable
with want of due diligence in failing to proceed with reasonable promptitude.32 (Emphasis supplied)
As the Court has ruled in Shimizu Philippines Contractors, Inc. v. Magsalin:33 redarclaw
While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The repressive or
restraining effect of the rule amounting to adjudication upon the merits may cut short a case even before it is fully litigated;
a ruling of dismissal may forever bar a litigant from pursuing judicial relief under the same cause of action. Hence, sound
discretion demands vigilance in duly recognizing the circumstances surrounding the case to the end that technicality shall not
prevail over substantial justice.
For its part, the trial court was remiss in its duty to act on the two pending motions before it. It appears that it did not even
grant the parties the opportunity to comment respectively on these motions, and instead simply summarily denied them in
open court during the October 12,2005 scheduled hearing. The trial court should be reminded that "the unreasonable delay
of a judge in resolving a pending incident is a violation of the norms of judicial conduct and constitutes a ground for
administrative sanction against the defaulting magistrate."34 redarc law
On respondent's argument that he is entitled to a speedy disposition of his case by agreeing to grant petitioner three
scheduled hearings for the presentation of her evidence, respondent is expected to honor such agreement and await his turn.
So long as petitioner acts within the period allowed her for the presentation of her evidence, respondent may not complain;
any grumbling on his part would be flimsy, arbitrary, and unfair. As far as petitioner is concerned, no right of respondent has
been violated by her actions; as elsewhere declared herein, petitioner is not guilty of delay and/or failure to prosecute her
case for an unreasonable length of time.
The foregoing disquisition is consistent with the trial court's exercise of discretion in deciding how best to administer justice,
taking into consideration the rules of procedure, applicable jurisprudence, and the circumstances of the case. In not
assuming a similar stance, the trial court and the CA committed evident error, thus resulting in misguided and unjust
dispositions that unnecessarily took the parties all the way to this Court.
WHEREFORE, the Petition is GRANTED. The assailed October 13, 2011 Decision and June 20, 2012 Resolution of the Court
of Appeals in CA-G.R. CEB CV No. 01360 are REVERSED and SET ASIDE. Civil Case No. 7249 is REINSTATED, and the
Regional Trial Court, 6th Judicial Region, Kalibo, Aklan, Branch 6 is ORDERED to forthwith set the case for the reception of
petitioner Alicia Y. Laurel's evidence.
SECOND DIVISION
G.R. No. 200969, August 03, 2015
CONSOLACION D. ROMERO AND ROSARIO S.D. DOMINGO, Petitioners, v. ENGRACIA D. SINGSON, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the February 29, 2012 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 114363 which granted herein respondent's Petition for Review, reversed the December 11, 2009 Order3 of the
Regional Trial Court of Pasig City, Branch 160 (RTC) in SCA No. 3144, and reinstated the said RTC's April 29, 2009 Decision.4
Factual Antecedents
The parties herein - petitioners Consolacion Domingo Romero and Rosario S.D. Domingo and respondent Engracia Domingo
Singson - are siblings. Their parents, Macario and Felicidad Domingo, own a 223-square meter piece of property (the subject
property) located at 127 F. Sevilla Street, San Juan City, Metro Manila covered by Transfer Certificate of Title No. (32600)
(23937) 845-R5 (TCT 845-R) which was issued in 1953. It appears that petitioners and other siblings, Rafael and Ramon
Domingo, are the actual occupants of the subject property, having stayed there with their parents since birth. On the other
hand, respondent took up residence in Mandaluyong City after getting married.
On February 22, 1981, Macario passed away, while Felicidad died on September 14, 1997.6
On June 7, 2006, TCT 845-R was cancelled and a new certificate of title -Transfer Certificate of Title No. 12575-R7 or
125758 (TCT 12575) - was issued in respondent's name, by virtue of a notarized "Absolute Deed of Sale"9 ostensibly
executed on June 6, 2006 by and between Macario and Felicidad - as sellers, and respondent - as buyer. And this despite the
fact that Macario and Felicidad were then already deceased.
Soon thereafter, respondent sent letters to her siblings demanding that they vacate the subject property, under pain of
litigation.
Petitioners and their other siblings just as soon filed a Complaint10 against respondent and the Register of Deeds of San Juan
City for annulment and cancellation of TCT 12575 and the June 6, 2006 deed of sale, reconveyance, and damages, on the
claim that the deed of sale is a forgery and that as heirs of Macario and Felicidad, the true owners of the subject property,
they were entitled to a reconveyance of the same. The case was docketed as Civil Case No. 70898-SJ and assigned to Branch
160 of the RTC of Pasig City.
Ruling of the Metropolitan Trial Court (MeTC)
On September 26, 2006, respondent filed an unlawful detainer suit against petitioners and her brothers Rafael and Ramon
before the MeTC of San Juan City. Docketed as Civil Case No. 9534 and assigned to MeTC Branch 58, respondent in her
Complaint11 sought to evict her siblings from the subject property on the claim that she is the owner of the same; that her
siblings' stay therein was merely tolerated; and that she now needed the premises to serve as her daughters' residence.
Thus, she prayed that her siblings be ordered to vacate the premises and pay monthly rent of P2,000.00 from date of
demand until they vacate the premises, as well as attorney's fees and costs of suit.
In their Answer,12 petitioners prayed for dismissal, claiming that the June 6, 2006 deed of sale was a forgery, and no
certificate of title in her name could be issued; that they thus remained co-owners of the subject property, and respondent
had no right to evict them; and that the pendency of Civil Case No. 70898-SJ bars the ejectment suit against them.
After proceedings or on September 17, 2007, the MeTC rendered a Decision,13 decreeing as follows:
chanRoble svirtual Lawlib ra ry
Anent the first issue of jurisdiction, the Court answers in the affirmative xxx.
xxxx
From the above-quoted verse, the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts have the
exclusive original jurisdiction over this case. Moreover, in the case of Hilario vs. Court of Appeals, (260 SCRA 420,426 citing:
Refugia, Et al[.] vs. Court of Appeals, Et al[.,] G.R. No. 118284, July 4, 1996) the Supreme Court held: 'xxx inferior courts
retain jurisdiction over ejectment cases even if the question of possession cannot be resolved without passing upon the issue
of ownership; but this is subject to the caveat that the issue raised as to ownership be resolved by the Trial Court for the
sole purpose of determining the issue of possession x x x.' Thus, even where the defendants assert in their Answer,
ownership of or Title to the property, the inferior Court is not deprived of its jurisdiction, xxx
xxxx
As to the second issue as to whether or not plaintiff may validly eject the defendants, again this Court answers in the
affirmative, since the plaintiff is a holder of a Torrens Title which is a right in rem. The defendants in their defense that they
have filed a case before the Regional Trial Court questioning the Title of the plaintiff is their right and prerogative, unless
however restrained by higher court, this Court will proceed as mandated by law and jurisprudence. This action for unlawful
detainer is sanctioned by Rule 70 of the 1997 Rules of Civil Procedure which provides:
xxxx
While the defendants claim that their parents are still the owner[s] of the subject property in litigation and during their
lifetime have not awarded nor alienated said property to anybody, why then has plaintiff the Title of said property? If it was
secured fraudulently, the same is of no moment since it has its own forum to address to [sic]. Moreover, the pendency of an
action questioning the ownership of the property does not bar the filing or consideration of an ejectment suit nor the
execution of the judgment therein xxx. As correctly pointed out by the plaintiff, 'ownership may be exercised over things or
rights,' Art. 427 of the New Civil Code. Likewise, Art. 428 of the same code provides that: 'the owner has the right to enjoy
and dispose of a thing, without other limitations than those established by law. The owner has also a right of action against
the holder and possessor of the thing in order to recover it.' Further, Art. 434 states that 'in an action to recover, the
property must be identified, and the plaintiff must rely on the strength of his Title and not on the weakness of the
defendant's claim.' The defendants therefore can be validly ejected from the premises in question since this is not accion
publiciana as claimed by the defendants.
Finally, on the third issue of damages and the side issue of reasonable compensation for the use of the subject premises, the
Supreme Court in the case of Balanon-Anicete vs. Balano, 402 SCRA 514 held: 'xxx persons who occupy the land of another
at the latter's tolerance or permission without any contract between them [are] necessarily bound by an implied promise that
they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.'
Hence, upon demand, plaintiff is entitled to collect reasonable compensation for the actual occupation of the subject property
which is P2,000.00 per month and the payment of attorney's fees. Since no evidence was presented relative to damages, the
Court cannot award the same.
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Ordering the defendants and all persons claiming rights under them to vacate the subject property known as No. 127 F.
Sevilla St., San Juan, Metro Manila and to surrender peaceful possession thereof to the plaintiff in this case;
2. Ordering the defendants to pay plaintiff the amount of P2,000.00 per month for the actual use and occupation of the
subject property reckoned from date of extrajudicial demand which is August 7, 2006, until defendants shall have finally
vacated the premises;
3. Ordering the defendants to pay plaintiff the amount of P10,000.00 as and by way of attorney's fees; and
4. The costs of suit.
chanroblesv irt uallawl ibra ry Ruling of the Regional Trial Court
In an appeal before the RTC docketed as SCA Case No. 3144, petitioners and their co-defendants argued that the MeTC erred
in not resolving the issue of ownership, in ordering them to vacate the premises, in deciding issues which were not framed by
the parties, and in not granting them damages and awarding the same instead to respondent.
On April, 29, 2009, the RTC rendered its Decision,15 pronouncing as follows:
Stripped of its non-essentials, the appeal primarily hinges on the lower court's failure to rule upon the issue on the validity of
Transfer Certificate of Title No. 12575 of the lot, subject of the ejectment suit.
Upon a judicious consideration of the arguments raised by the parties in their respective memorandum vis-a-vis the decision
of the court a quo, this court opines and so holds that the said court did not err in its findings. The validity of a transfer
certificate of title cannot be raised in the said ejectment suit as it partakes of a collateral attack against the said title. This is
not allowed under the principle of indefeasibility of a Torrens title. The issue on the validity of title i.e., whether or not it was
fraudulently issued, can only be raised in an action expressly instituted for that purpose.
The ruling of the Supreme Court in the case of Raymundo and Perla De Guzman vs. Praxides J. Agbagala, G.R. No. 163566,
February 19, 2008 is revelatory, thus:
'Indeed, a decree of registration or patent and the certificate of title issued pursuant thereto may be attacked on the ground
of falsification or fraud within one year from the date of their issuance. Such an attack must be direct and not by a collateral
proceeding. The rationale is this:
xxx [The] public should be able to rely on the registered title. The Torrens System was adopted in this country because it
was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility
once the claim of ownership is established and recognized.'
For reasons aforestated, the appeal is hereby DENIED.
WHEREFORE, premises considered, judgment is hereby rendered affirming in toto in [sic] the decision of the lower court
dated September 17, 2007.
With costs against the appellant.
On motion for reconsideration, however, the RTC reversed itself. Thus, in a December 11, 2009 Order,17it held that -
2. This Court's Findings
At the outset, it should be mentioned that the court a quo should have dismissed the complaint outright for failure to comply
with a condition precedent under Section 10, Rule 16 of the Rules of Civil Procedure, the parties being siblings and there
being no allegations in the complaint as regards efforts at compromise having been exerted, a matter that was raised in the
answer of defendants Consolation Romero and Rosario D. Domingo.
2.1. The Issue of MeTC Jurisdiction
The court a quo is correct in ruling that it has jurisdiction over this case, the allegations in the complaint being so phrased as
to present one apparently for unlawful detainer. It did not matter that after answers were filed and further proceedings were
had, what emerged were issues of ownership and possession being intricately interwoven, the court being clothed with
jurisdiction to provisionally adjudicate the issue of ownership, it being necessary in resolving the question of possession.
2.2. The Issue of Whether or Not Plaintiff Can Eject Defendants
In Barnachea vs. Court of Appeals, et al., it was held that one of the features of an unlawful detainer case is possession of
property by defendant being at the start legal, becoming illegal by reason of the termination of right to possess based on his
contract or other arrangement with plaintiff.
hi this case, the legal possession of subject premises by defendants-appellants, they being the heirs of original owners
Macario and Felicidad Domingo, has not ceased. The basis for the claimed ownership by plaintiff-appellee is a deed of
absolute sale dated 06 June 2006 (Exhibit "2") showing the signatures of vendor Sps. Domingo whose respective death
certificates indicate that Macario died on 22 February 1981 and Felicidad on 14 September 1997. It is clear that the deed of
sale became the basis for the transfer of subject property in plaintiff-appellee's name under TCT No. 12575 (Exhibit "A"), a
fact that prompted herein defendants-appellants to file a complaint for annulment of sale and reconveyance of ownership,
docketed as Civil Case No. 70898-SJ earlier than this subject case.
It appearing that defendants-appellants' occupancy of subject property is premised on their right thereto as co-owners, being
compulsory heirs of their parents, and it not being established that they had alienated such right in favor of their sister,
herein plaintiff-appellee, the latter cannot eject them therefrom.
2.3. The Issue of Whether or Not Defendants are Entitled to Damages
While defendants Rafael and Ramon Domingo allege and pray for actual and moral damages and attorney's fees in their
answer and all [the] defendants do so in their position paper, the court can award only the last, it being established that they
were compelled to litigate to protect their right, and such award being just and equitable. As for actual and moral damages,
there is no sufficient basis for a grant thereof. It is noted that not a single affidavit of any of the four defendants is attached
to their position paper, as required under Section 10, Rule 70, Rules of Civil Procedure, and Section 9, Revised Rule on
Summary Procedure.
WHEREFORE, the foregoing considered, the court hereby grants the motion for reconsideration of its decision on appeal
affirming in toto the decision of the Metropolitan Trial Court, Branch 58, San Juan City. Consequently, it hereby reverses said
decision by decreeing that plaintiff-appellee has no cause of action against herein defendants-appellants who are entitled to
possession of the subject premises, rendering the complaint dismissible and hereby dismisses it. Corrolarily, plaintiff-
appellee's motion for execution is hereby denied. Plaintiff-appellee is hereby ordered to pay defendants-appellants P8,000.00
each in attorney's fees. Costs against plaintiff-appellee.
Respondent filed a Motion for Reconsideration,19 which the RTC denied in a subsequent Order20 dated May 17, 2010. The trial
court held:
In essence, plaintiff argues that possession and not ownership should have been the central issue in this appealed ejectment
suit. As the subject property is titled in plaintiffs name, necessarily, she has better right of possession than defendants.
The court is not persuaded. Germane is Section 16, Rule 70 of the 1997 Rules of Civil Procedure, to wit:
Section 16. Resolving defense of ownership. - When the defendant raises the defense of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved
only to determine the issue of possession.
Having determined the ownership issue in resolving defendants' right of possession pursuant to the aforestated rule, the
court hereby finds no cogent reason or sufficient justification to reconsider its previous ruling dated 11 December 2009.
WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.

chanroblesv irt uallawl ibra ry
Respondent filed a Petition for Review22 with the CA, docketed as CA-G.R. SP No. 114363. On February 29, 2012, the CA
rendered judgment, as follows:
Petitioner seeks to reverse and set aside the assailed Orders since the RTC allegedly erred:
'I.
IN RULING THAT THE RESPONDENTS CANNOT BE EJECTED FROM THE SUBJECT PREMISES, THEIR OCCUPANCY BEING
PREMISED ON THEIR RIGHT AS CO-OWNERS, BEING COMPULSORY HEIRS OF THEIR [PETITIONER] PARENTS AND IT NOT
BEING ESTABLISHED THAT THEY HAD ALIENATED SUCH RIGHT IN FAVOR OF THE PETITIONER.
II.
IN RULING THAT THE RESPONDENTS ARE ENTITLED TO THE AWARD OF ATTORNEY'S FEES.'
This Court's Ruling
Contending that the RTC erred when it held that respondents cannot be ejected from the subject lot because they are co-
owners thereof and heirs of their deceased parents, petitioner points out that the only issue that should be tackled in an
unlawfol detainer case is the right of a plaintiff to possession de facto over the property in question.
For their part, respondents argue that they have legal and actual possession of the subject lot as they are the heirs of their
deceased parents who are the registered owners of said subject lot. On the other hand, the title to the subject lot that was
registered under petitioner's name is null and void for it was issued based on a forged deed of absolute sale.
The petition has merit.
In an unlawful detainer case, the defendant's possession of a property becomes illegal when he is demanded by the plaintiff
to vacate therefrom due to the expiration or termination of his right to possess the same under the contract but the
defendant refuses to heed such demand. Thus, the sole issue to be resolved is who between the parties have [sic] a right to
the physical or material possession of the property involved, independently of any claim of ownership by any of the parties.
However, where the issue of ownership is raised by any of the parties, the rule in Sec. 16, Rule 70 of the Revised Rules of
Court is explicit:
Section 16. Resolving defense of ownership. - When the defendant raises the defense of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved
only to determine the issue of possession.
In other words, while only possession de facto is the issue to be determined in an ejectment case, the issue of ownership
may be tackled if raised by any of the parties and only for the purpose of reaching a conclusion on the issue of possession.
Thus, in Esmaquel vs. Coprada, the Supreme Court had the occasion to once again hold that:
'The sole issue for resolution in an unlawful detainer case is physical or material possession of the property involved,
independent of any claim of ownership by any of the parties. Where the issue of ownership is raised by any of the parties,
the courts may pass upon the same in order to determine who has the right to possess the property. The adjudication is,
however, merely provisional and would not bar or prejudice an action between the same parties involving title to the
property. Since the issue of ownership was raised in the unlawful detainer case, its resolution boils down to which of the
parties' respective evidence deserves more weight.'
In the case at bar, both petitioner and respondents are claiming ownership over the subject lot. On the part of petitioner, she
maintains that she has a right to possession because she is the registered owner thereof, as evidenced by TCT No. 12575-R
which was issued in her name in 2006. On the other hand, respondents maintain that they cannot be ejected from the
subject lot because they are the compulsory heirs of their deceased parents under whose names the subject lot was
registered, as shown in TCT No. 845-R.
As between the two parties, this Court rules in favor of petitioner for she holds a more recently-issued certificate of title, i.e.,
2006, than that of their deceased parents whose certificate of title was issued in 1953. The issuance of the certificate of title
in 2006 may be traced from TCT No. 845-R wherein at the last page of its Memorandum of [E]ncumbrances is an entry which
explicitly states that the title was transferred to the name of petitioner on June 6, 2006 for a consideration of
Php1,000.000.00. Clearly, the certificate of title of the deceased parents was effectively cancelled in favor of petitioner.
Hence, petitioner has a better right to the possession de facto of the subject lot for, as held in Asuncion Urieta Vda. de
Aguilar vs. Alfaro, 'the titleholder is entitled to all the attributes of ownership of the property, including possession.'
Respondents' insistence that the Torrens Certificate of petitioner should not be given any probative weight because it is null
and void is of no moment. The validity of a certificate of title cannot be collaterally attacked. Rather, the attack should be
made in an action instituted mainly for that purpose, x x x
xxxx
In short, a Torrens Certificate is evidence of the indefeasibility of the title to the property and the person whose name
appears therein is entitled to the possession of the property unless and until his title is nullified. The reason being that the
Torrens System was adopted as it is the most effective measure that will guarantee the integrity of land titles and protect
their indefeasibility once the claim of ownership is established and recognized. Hence, the age-old rule that 'the person who
has a Torrens Title over a land is entitled to possession thereof.'
Unless there is already a judgment declaring petitioner's certificate of title as null and void, the presumption of its validity
must prevail, x x x
xxxx
All said, petitioner's right to possession over the subject lot must be respected in view of the certificate of title thereto issued
in her name.
WHEREFORE, the petition is GRANTED. The assailed Orders of the Regional Trial Court, Pasig City, Branch 160 are REVERSED
and SET ASIDE. Its Decision dated April 29, 2009 affirming the Decision dated September 17, 2007 of the Metropolitan Trial
Court, San Juan City, Branch 58 is REINSTATED.
In a July 10, 2013 Resolution,24 this Court resolved to give due course to the Petition. chanrob leslaw
Issues
Petitioners raise the following issues for resolution:

THE COURT OF APPEALS (TWELFTH DIVISION) OBVIOUSLY ERRED IN FAILING TO DISMISS THE COMPLAINT (ANNEX H)
BECAUSE IT DID NOT COMPLY WITH THE JURISDICTIONAL ELEMENT REQUIRED BY LAW (SEC. 3, RULE 8, REVISED RULE OF
COURT).
THE DECISION GRAVELY ERRED IN NOT HAVING RULED THAT RESPONDENT'S CAUSE OF ACTION IN HER EJECTMENT
COMPLAINT (ANNEX H) IS INDISPENSABLY INTERTWINED WITH THE ISSUE OF OWNERSHIP RAISED BY PETITIONERS'
DEFENSE, THUS RENDERING SAID COMPLAINT NOT AN UNLAWFUL DETAINER CASE OVER WHICH THE MeTC HAS
JURISDICTION, AS DECIDED IN THE ORDER DATED DECEMBER 9, 2009 (ANNEX X).
THE DECISION IS SERIOUSLY MISTAKEN IN NOT HAVING UPHELD THE AWARD OF DAMAGES BY JUDGE MYRNA Y. LM-
VERANO IN FAVOR OF DEFENDANTS AND AGAINST RESPONDENT WHO OBVIOUSLY OBAINED HER TITLE (ANNEX F) USING
AN UNDISPUTABLY FRAUDULENT DEED OF ABSOLUTE SALE (ANNEX G).
THE DECISION INCORRECTLY RULED THAT PETITIONERS IN RAISING OWNERSHIP AS THEIR DEFENSE (SEC. 16 IN
RELATION TO SEC. 18, RULE 70, REVISED RULES OF COURT) CONSTITUTE A COLLATERAL ATTACK ON THE TITLE OF
RESPONDENT OBVIOUSLY AND UNDENIABLY PROCURED THRU FRAUD.25 cralawlawli bra ry
In their Petition and Reply26 seeking reversal of the assailed CA dispositions and reinstatement of the RTC's December 11,
2009 Order dismissing respondent's ejectment case, petitioners essentially argue that since the parties to the case are
siblings and no attempt at compromise was made by the respondent prior to the filing of Civil Case No. 9534, then it should
be dismissed for failure to comply with Rule 16, Section 1(j) of the 1997 Rules of Civil Procedure27 in relation to Article 151 of
the Family Code28 and Article 222 of the Civil Code;29 that they could not be evicted from the subject property since they are
co-owners of the same, having inherited it from their deceased parents; that respondent's title was derived from a forged
deed of sale, which does not make her the sole owner of the subject property; that as co-owners and since respondent's title
is void, they have a right of possession over the subject property and they may not be evicted therefrom; that their defense
that respondent obtained her title through a forged deed of sale does not constitute a collateral attack on such title, but is
allowed in order to prove their legal right of possession and ownership over the subject property.
In her Comment30 seeking denial of the Petition, respondent claims that the Petition should have been dismissed since only
two of the respondents in CA-G.R. SP No. 114363 filed the Petition before this Court; that the findings of the CA do not merit
review and modification, the same being correct; and that the Petition is a mere reiteration of issues and arguments already
passed upon exhaustively below. chan roble slaw
Our Ruling
The procedural issue of lack of attempts at compromise should be resolved in respondent's favor. True, no suit between
members of the same family shall prosper unless it should appear from the verified complaint or petition that earnest efforts
toward a compromise have been made. However, the failure of a party to comply with this condition precedent is not a
jurisdictional defect. If the opposing party fails to raise such defect in a motion to dismiss, such defect is deemed waived.31
hi arriving at its pronouncement, the CA passed upon the issue or claim of ownership, which both parties raised. While the
procedure taken is allowed -under Section 16, Rule 70 of the 1997 Rules of Civil Procedure,32 the issue of ownership may be
resolved only to determine the issue of possession - the CA nonetheless committed serious and patent error in concluding
that based solely on respondent's TCT 12575 issued in her name, she must be considered the singular owner of the subject
property and thus entitled to possession thereof- pursuant to the principle that "the person who has a Torrens Title over a
land is entitled to possession thereof."33 Such provisional determination of ownership should have been resolved in
petitioners' favor.
When the deed of sale in favor of respondent was purportedly executed by the parties thereto and notarized on June 6,
2006, it is perfectly obvious that the signatures of the vendors therein, Macario and Felicidad, were forged. They could not
have signed the same, because both were by then long deceased: Macario died on February 22, 1981, while Felicidad passed
away on September 14, 1997. This makes the June 6, 2006 deed of sale null and void; being so, it is "equivalent to nothing;
it produces no civil effect; and it does not create, modify or extinguish a juridical relation."34
And while it is true that respondent has in her favor a Torrens title over the subject property, she nonetheless acquired no
right or title in her favor by virtue of the null and void June 6, 2006 deed. "Verily, when the instrument presented is forged,
even if accompanied by the owner's duplicate certificate of title, the registered owner does not thereby lose his title, and
neither does the assignee in the forged deed acquire any right or title to the property."35
In sum, the fact that respondent has in her favor a certificate of title is of no moment; her title cannot be used to validate
the forgery or cure the void sale. As has been held in the past:
Insofar as a person who fraudulently obtained a property is concerned, the registration of the property in said
person's name would not be sufficient to vest in him or her the title to the property. A certificate of title merely
confirms or records title already existing and vested. The indefeasibility of the Torrens title should not be used
as a means to perpetrate fraud against the rightful owner of real property. Good faith must concur with registration
because, otherwise, registration would be an exercise in futility. A Torrens title does not furnish a shield for fraud,
notwithstanding the long-standing rule that registration is a constructive notice of title binding upon the whole
world. The legal principle is that if the registration of the land is fraudulent, the person in whose name the land is registered
holds it as a mere trustee.36 (Emphasis supplied)
Since respondent acquired no right over the subject property, the same remained in the name of the original registered
owners, Macario and Felicidad. Being heirs of the owners, petitioners and respondent thus became, and remain co-owners -
by succession - of the subject property. As such, petitioners may exercise all attributes of ownership over the same,
including possession - whether de facto or dejure; respondent thus has no right to exclude them from this right through an
action for ejectment.
With the Court's determination that respondent's title is null and void, the matter of direct or collateral attack is a foregone
conclusion as well. "An action to declare the nullity of a void title does not prescribe and is susceptible to direct, as well as to
collateral, attack;"37 petitioners were not precluded from questioning the validity of respondent's title in the ejectment case.
It does not appear either that petitioners are claiming exclusive ownership or possession of the subject property. Quite the
contrary, they acknowledge all this time that the property belongs to all the Domingo siblings in co-ownership. In the
absence of an allegation - or evidence - that petitioners are claiming exclusive ownership over the co-owned property,
respondent has no alternative cause of action for ejectment which should prevent the dismissal of Civil Case No. 9534. The
pronouncement in a previous case applies here:
True it is that under Article 487 of the Civil Code,38 a co-owner may bring an action for ejectment against a co-owner who
takes exclusive possession and asserts exclusive ownership of a common property. It bears stressing, however, that in this
case, evidence is totally wanting to establish John's or Juliet's exclusive ownership of the property in question. Neither did
Juliet obtain possession thereof by virtue of a contract, express or implied, or thru intimidation, threat, strategy or stealth.
As borne by the record, Juliet was in possession of the subject structure and the sari-sari store thereat by virtue of her being
a co-owner thereof. As such, she is as much entitled to enjoy its possession and ownership as John.39 cralawlawli bra ry
Indeed, it is respondent who is claiming exclusive ownership of the subject property owned in common.
Thus, left with no cause of action for ejectment against petitioners, respondent's ejectment case must be dismissed.
There is likewise no merit to respondent's argument that since only two of the defendants in the ejectment case filed the
instant Petition, the same must necessarily be dismissed. There is no rule which requires that all the parties in the
proceedings before the CA must jointly take recourse with this Court or else such recourse would be dismissible. The fact that
Ramon and Rafael did not join in the instant Petition does not bar petitioners from pursuing their case before this Court.
Moreover, since petitioners, Ramon and Rafael are siblings, co-heirs, co-owners, and occupants of the subject property, they
all have common interests, and their rights and liabilities are identical and so interwoven and dependent as to be
inseparable. The reversal of the assailed CA judgment should therefore inure to the benefit of Ramon and Rafael as well. The
December 11, 2009 Order of the RTC — decreeing dismissal as against petitioners, Ramon, and Rafael, as well as the
payment of attorney's fees to all of them - may be reinstated in all respects.
xxx This Court has always recognized the general rule that in appellate proceedings, the reversal of the judgment on appeal
is binding only on the parties in the appealed case and does not affect or inure to the benefit of those who did not join or
were not made parties to the appeal. An exception to the rule exists, however, where a judgment cannot be reversed as to
the party appealing without affecting the rights of his co-debtor, or where the rights and liabilities of the parties are so
interwoven and dependent on each other as to be inseparable, in which case a reversal as to one operates as a reversal as to
all. This exception, which is based on a communality of interest of said parties, is recognized in this jurisdiction. x x x40 cralawlawl ibra ry
WHEREFORE, the Petition is GRANTED. The February 29, 2012 Decision of the Court of Appeals in CA-G.R. SP No.
114363 is REVERSED and SET ASIDE. The December 11, 2009 Order of the Regional Trial Court of Pasig City, Branch 160
in SCA No. 3144 is REINSTATED and AFFIRMED.
SO ORDERED. ChanRoblesVirtualawl ibra ry
SECOND DIVISION
G.R. No. 197709, August 03, 2015
JOSE YULO AGRICULTURAL CORPORATION, Petitioner, v. SPOUSES PERLA CABAYLO DAVIS AND SCOTT
DAVIS, Respondents.
DECISION
DEL CASTILLO, J.:
The general rule is that where two certificates of title purport to include the same land, the earlier in date prevails.
Assailed in this Petition for Review on Certiorari1 are dispositions of the Court of Appeals (CA), particularly: 1) its May 29,
2009 Decision2 in CA-G.R. CV No. 00155 which denied herein petitioner's appeal and instead affirmed the March 21, 2003
Decision3 of the Regional Trial Court (RTC) of Himamaylan City, Negros Occidental, Branch 55 in Civil Case No. 648; and 2)
its July 6, 2011 Resolution4denying petitioner's motion for reconsideration.
Factual Antecedents
Lot 62-A in Binalbagan, Negros Occidental, consisting of 204,560 square meters, was registered as Transfer Certificate of
Title No. (TCT) T-1081 in the name of Jose L. Yulo (Yulo). It was subdivided in 1963 into lots covered by TCT Nos. 36824 to
36852.
TCT 36852, covering Lot 29 with an area of 198,595 square meters, was further subdivided in 1969 into several lots which
were all registered in Yulo's name. Among these lots are Lots 24, 25, 72 (TCT T-62499), 91 (TCT T-64737), 92 (TCT T-
64738), and 96 (TCT T-64742). The titles to Lots 91, 92 and 96 were issued in 1971.
Yulo sold Lots 91, 92 and 96 to spouses Ignacio Madrina, Jr. and Teresa Saldua (the Madrinas) in 1975.
Lots 24,5 25,6 91,7 928 and 969 were subsequently mortgaged to Nation Bank, which eventually foreclosed and became owner
of the lots. At the time of the foreclosure and sale to Nation Bank, the said lots already contained improvements in the form
of a house and fence which were constructed by the previous occupants, spouses Ernesto and Wendelina Gabayeron (the
Gabayerons). In 1992, Nation Bank sold these five lots with existing improvements to the herein respondents, spouses Scott
and Perla Cabaylo Davis. Consequently, TCT Nos. T-163622, T-163623 and T-163624 over Lots 91, 92 and 96, respectively,
were issued in respondents' favor on December 11, 1992.
On the other hand, TCT T-62499 covering Lot 72 - consisting of 183,920 square meters - was cancelled and TCT T-113437
was issued in 1979 in the name of herein petitioner Jose L. Yulo Agricultural Corporation.
In 1982, Lot 72 was further subdivided into several lots and registered in petitioner's name. Among these lots are Lots
310 (TCT T-126644), 411 (TCT T-126645), and 512 (TCT T-126646). In 1994, Lot 5 was sold to spouses Jose and Petronila
Trajera (the Trajeras), and thus TCT T-167841 over said lot was issued in their favor.
In 1999, respondents received separate demand letters from petitioner and the Trajeras requiring them to remove a portion
of the Gabayeron home and fence which they claim encroached upon their respective properties (petitioner's Lots 3 and 4,
and the Trajeras' Lot 5) - to the extent of 60.89 square meters with respect to the Trajeras' property, and 100 square meters
for petitioner's Lot 3 and 102 square meters for its Lot 4. Respondents also received a letter from the Local Building Official
of Binalbagan, Negros Occidental threatening them with sanction under the National Building Code unless they remove the
encroaching improvements which allegedly extended beyond the boundary lines of their property.
A relocation survey was conducted on respondents' land, which indicated that their concrete fence encroached upon the
adjacent lands to the extent of 16 square meters.
On March 10, 1999, respondents filed a case for quieting of title and damages against the Trajeras, Yulo, Nation Bank and
the Binalbagan Local Building Official, Engineer Patrick Mabag (Mabag) before the RTC of Himamaylan City, Negros
Occidental. The case was docketed as Civil Case No. 648 and assigned to Branch 55.
After trial, the RTC rendered a Decision13 on March 21, 2003 as follows:
The issues confronting the court are: (1) whether the house and concrete fence of the plaintiffs have occupied portions of Lot
No. 3 x x x; and (2) whether the house and concrete fence x x x have occupied portion[s] of Lot Nos. 4 and 5 xxx. With
respect to the first issue, the answer is in the negative while in the second issue the answer is in the affirmative.
As noted by the court, Lot Nos. 24,25,91,92 and 96 x x x were already existing when Lot No. 72 which is a portion of Lot No.
29, was subdivided sometime in 1982 and the corresponding certificates of title for Lots 3, 4 and 5 x x x were issued in 1983.
The subdivision made in 1982 did not only cover the whole area of Lot No. 72. The testimony of Petronilo Ayson of the Ayson
Surveying Office herein quoted, to wit:
Q. And what was included in Lot 3?

A. The whole of Lot 92 of the spouses Davis contains an area of 100 square meters.
So, 100 square meters is now the are included in Lot 3 block 12 the area of lot 92.
Q. And how about lots 91 and 96 are they included in the titles of lots 5 and 4?
A. So, lots 91 and 96 are x x x included in the title of lot 4 block 12 and lot 5 block 12.
is clear that the whole area of Lot No. 92 x x x consisting of an area of one hundred (100) square meters x x x in the name
of Perla Cabaylo Davis x x x is included or overlapped by Lot No. 3 x x x owned by Jose L. Yulo Agricultural Corporation while
Lot No. 91 x x x and Lot No. 96 x x x are all included or overlapped by Lot No. 4 and Lot No. 5 x x x respectively registered
in the name of Jose L. Yulo Agricultural Corporation and Spouses Jose and Petronila Trajera. Considering that [Lot] Nos. 91,
92 and 96 were all registered and the corresponding certificates of title were issued ahead of Lot Nos. 3, 4 and 5 x x x, the
overlapped portions consisting of nine-five (95) square meters for Lot No. 91, one hundred (100) square meters for Lot No.
92 and forty-six (46) square meters of Lot No. 96 are all owned by Perla Cabaylo Davis married to Scott Davis. In this
regard, it is relevant to cite the ruling of the High Court in the case of Verdant Acres, Inc. vs. Hernandez, 157 SCRA 495
where it held, thus:
"Lands described and embraced in the certificate of title asserted by both parties which overlapped each other, on the
question of who, as between the parties, is entitled to the overlapped portion, the earlier registered title is the owner."
Indubitably, the wall or concrete wall of the spouses Davis' house has occupied sixteen (16) square meters of Lot Nos. 4 and
5 x x x.
However, since the said house was already existing when the spouses Perla x x x and Scott Davis purchased the lots where
said house stands, from Nation Bank x x x, the said spouses cannot be considered a builder in bad faith. The existence of the
house before the spouses Davis bought the lots is admitted by defendant Jose Trajera when he testified under cross-
examination in court on June 26, 2000 x x x.
xxxx
The Spouses x x x Davis deserve to be accorded with the benefits granted to a builder in good faith.
As the spouses x x x Davis are not builders in bad faith, the rights of the plaintiffs and the defendants are governed by the
provision of Article 448 of the Civil Code x x x:
xxxx
Under this provision, the choice or option belongs to the owner of the land, in this case Jose L. Yulo Agricultural Corporation
and the Spouses x x x Trajera. However, the choice or option granted to them is not absolute. Since it is impractical to allow
them to own the concrete wall of the plaintiffs' house as there is a possibility of an invasion of the plaintiffs' right to privacy,
the workable solution is for the defendants Jose L. Yulo Agricultural Corporation and the Spouses xxx Trajera to select the
second alternative, namely, to sell to the Spouses xxx Davis that part of their land on which was constructed a portion of the
plaintiffs' house (Leonor Grana and Julieta Torralba vs. Court of Appeals, et al., L-12486, August 31, 1960).
The boundary disputes arose when Lot No. 72, which is part of Lot No. 29, was subdivided into seventy-six (76) sublots as a
result of which Lot No. 3 overlapped the whole area of Lot No. 92 while Lot Nos. 4 and 5 overlapped the whole area of Lot
Nos. 91 and 96.
Moral damages may be awarded by reason of the sufferings, physical or mental, sustained by the claiming party. However,
the grant of such damages is not subject to the whims and caprices of judges or courts. The court's discretion in granting or
refusing it is governed by reason and justice. In order that an individual may be made liable, the law requires that his act be
wrongful. The adverse result of an action does not per se make it wrongful as to justify an assessment of damages against
the actor (Rubio vs. Court of Appeals, 141 SCRA 488).
In this case, there is no basis to justify the award for moral damages. As owner, Jose L. Yulo Agricultural Corporation has the
right to have Lot No. 72 subdivided into sublots. The overlapping of Lot No. 3 over Lot No. 92 was caused by an error
committed by the Geodetic Engineer who conducted the [survey] of said lot. In a similar situation, the overlapping of Lot
Nos. 4 and 5 over Lot Nos. 91 and 96 was due to the subdivision of Lot No. 72 into sublots made by a Geodetic Engineer. In
other words, the wrongful act was not committed by the management of the corporation in order for it to be held liable for
moral damages. Settled is the rule that moral damages cannot be awarded in the absence of a wrongful act or omission or of
fraud or bad faith (Siasat vs. Intermediate Appellate Court, 139 SCRA 238).
As Local Building Official of the Municipality of Binalbagan, Engineer Patrick Mabag, is clothed with authority to enforce the
provision of the National Building Code, x x x However, the fault cannot be ascribed to the Spouses x x x Davis as the house
was already existing when they bought it from the former owner and they did not introduce any improvement on the said
house. This fact was admitted by the defendant Jose Trajera when he testified in court on June 26, 2000.(TSN p.22).
Exemplary or corrective damages are imposed by way of example or correction for the public good. This is in addition to
moral, temperate, liquidated or compensatory damages. Public policy requires the award of exemplary damages in order to
suppress wanton acts committed against the aggrieved party. However, in the absence of moral, temperate, liquidated, or
compensatory damages, as in this case, no exemplary damages can be granted x x x.
However, considering that the Spouses x x x Davis were compelled to litigate in order to protect their interest, they incurred
expenses in prosecuting their case. Prudence demands that they should be awarded litigation and attorney's fees.
WHEREFORE, based on the foregoing premises and consideration, the court hereby renders a decision in favor of the
plaintiffs and against the defendants confirming plaintiffs' title to Lot No. 92, Binalbagan Cadastre, overlapped by Lot No. 3,
Block 12 and to Lot Nos. 91 and 96, all of Binalbagan Cadastre, overlapped by [Lot] Nos. 4 and 5 respectively and hereby:
1) Orders the appropriation of the sixteen (16) square meters land owned by defendants Jose L. Yulo Agricultural Corporation
and Spouses Jose and Petronila Trajera occupied by the house which was already existing when the plaintiffs bought [Lot]
Nos. 91 and 96 upon payment of the value of the portion of said lots based on the prevailing market value;
2) Orders the defendant Jose L. Yulo Agricultural Corporation to pay the plaintiffs the amount of P88,818.40 and P75,000.00
representing [the price of] their plane ticketfs] as actual damages, P50,000.00 Attorney's Fees and P1,500.00 per court
appearance as appearance fees deducting therefrom the value of the portion of Lot No. 4 occupied by the house of the
plaintiffs;
3) Orders the plaintiffs to observe the provision on easement of light and view in order to protect the privacy of the
defendant Spouses Jose and Petronila Trajera.
chanroblesv irt uallawl ibra ry Ruling of the Court of Appeals
Petitioner and the Trajeras interposed an appeal before the CA. Docketed as CA-G.R. CV No. 00155, the appellants therein
essentially argued that since Lots 91, 92 and 96 are non-existent as per records of the Land Registration Authority (LRA), it
was erroneous for the RTC to have ruled in favor of the respondents.
On May 29, 2009, the CA issued its Decision affirming the RTC's March 21, 2003 judgment.
Anent the first error, defendants-appellants claim that contrary to what their titles purport to show, Lots 91, 92 and 96
allegedly owned by the Davis spouses are not valid subdivisions of Lot 29, Psd-69136 covered by TCT T-36852. In support of
their allegation, they presented a letter from the LRA signed by one Renato R. Obra as Chief of the Plan Examination Section,
Subdivision & Consolidation Division which essentially explained that Lots 91, 92, and 96 could not have resulted from the
subdivision survey of Lot 29 pursuant to plan (LRC) Psd-118336 since only 74 lots resulted therefrom. In addition, they
introduced the LRA-certified copy of the subdivision survey/plan Psd-118336 wherein Lots 91, 92 and 96 do not appear as
sublots therein.
xxxx
In an action for quieting of title, the issue to be resolved is who, between the parties, has a better right to the challenged
property. After an exhaustive examination of the evidence and the records in this case, We rule in favor of the Davis
spouses.
A perusal of the boundaries of the disputed lots discloses that these lots supposedly adjoin each other, all being portions of
Lot 29. For the Davis spouses, Lot 92 is east of Lot 91 while Lot 96 is south of Lot 91. On the northern side of Lots 91 and
92. they are adjoined by Lots 24 and 25 also registered in the name of the Davis spouses. Adjacent to Lots 96 and 92 on the
southern side is Lot 72 which is from where Lots 3, 4 and 5 of the defendants-appellants are derived. Conversely, the titles of
defendants-appellants show that Lot 5 is west of Lot 4 while Lot 3 is adjacent to Lot 4 on the east. But on the north, they are
all described to be bounded by Lot 24 only, resulting in the anomaly wherein Lots 91, 92 and 96 as well as Lot 25 appear to
be completely missing. Faced with these facts, it becomes clear that what is involved herein is a case of overlapping of titles
over the same property. It must be noted, however, that the lots in dispute in this case involve only Lots 91, 92 and 96 of
the Davis spouses as against Lots 3, 4, and 5 of the defendants-appellants. Consequently, in view of the overlapping, it is
imperative to determine which of the parties' titles [were issued] earlier.
From a cursory glance at the titles (T-163622 to 163624) of the Davis spouses over Lots 91, 92 and 96, it is apparent that
their issuance was recent, having been issued only on December 11, 1992. However, Teody Teovisio (Record Officer of the
Register of Deeds of Negros Occidental) and surveyor Ariel Penaranda testified that Lots 91, 92 and 96 covered by T-163622
to 163624 have the same technical description as Lots 91, 92 and 96 covered by TCT T-64737, T-64738 and T-64742 and
registered in the name of Jose L. Yulo. In other words, the titles of the Davis spouses are derived from Jose L. Yulo who, as
early as October 18, 1971, was issued the transfer certificates of title for Lots 91, 92, and 96. On the other hand, the titles
(T-126644 to 126646) of the defendants- appellants over Lots 3, 4 and 5 are derived from TCT T-113427 [sic] covering Lot
72 which mother title was issued only on September 3, 1979.
From the foregoing, it is apparent that at the time the predecessor-in-interest of defendants-appellants were issued its titles
in 1979, Lots 91, 92, and 96 now owned by the Davis spouses were already in existence. As testified to by surveyor Petronilo
Ayson, it was Lots 91, 92 and 96 that were overlapped by Lots 3, 4 and 5 and not the [other way around] since the
defendants-appellants' lots resulted only after the subdivision survey of Lot 72 in 1982. In MWSS vs. Court of Appeals,15 the
Honorable Supreme Court pronounced:
"Where two certificates (of title) purport to include the same land, the earlier in date prevails. In successive registrations,
where more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the
prior certificate is entitled to the estate or interest; and the person is deemed to hold under the prior certificate who is the
holder of, or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued
in respect thereof."
Hence, in priority of issuance, the title of the Davis spouses must be upheld over that of the defendants-appellants, but only
with respect to the overlapped portions.
But defendants-appellants insist that Lots 91, 92 and 96 are inexistent lots as can easily be seen from the certified copy of
subdivision plan Psd-118336 that they secured from the LRA. However, as between the Torrens titles of the Davis spouses
confirming their ownership of Lots 91, 92 and 96 and the subdivision plan of defendants-appellants disproving such fact, the
Torrens titles must inevitably prevail over the survey plan as the more superior proof of ownership.16
It bears stressing that defendants-appellants anchor their appeal on the alleged non-existence of Lots 91, 92 and 96 which
are now registered in the name of the plaintiffs-appellees. But to sustain such allegations would necessarily entail the
cancellation of the titles of the Davis spouses, which is equivalent to an indirect attack on such titles. Well-settled is the rule
that a certificate of title cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.
Hence, on this score, defendants-appellants' claim must likewise fail.
Lastly, defendants-appellants question the RTC's order requiring them to "give up" the sixteen (16) square meters that are
allegedly included in Lots 91,92 (and) 96. But a thorough reading of the RTC Decision implies no such ruling. Perhaps the
defendants-appellants misunderstood the full import of the RTC's decision. What the court a quoconcluded - which judgment
We wholly sustain - was that plaintiffs-appellees are considered builders in good faith who are duly entitled to the benefits
flowing therefrom pursuant to Article 448 of the New Civil Code.
It must be remembered that the Davis spouses purchased their titled lots from Nation Bank [which] foreclosed the same
from the Gabayeron spouses. Included in such purchase was the Gabayerons' house and fence now owned by the Davises
and challenged by the defendants-appellants as encroaching on their lots. Since the Gabayeron spouses constructed the said
house and fence on land which they believed was theirs, they are considered builders in good faith which benefit likewise
extends in favor of the Davis spouses who purchased the property unaware of any flaw in the same. Article 448 has been
applied to improvements or portions of improvements built by mistaken belief on land belonging to the adjoining owner. We
quote with approval the ratiocination of the court a quo on this matter:
xxxx
It must be noted that good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the
burden of proof. This being the case, the rights of plaintiffs-appellees as builders in good faith cannot be denied.
WHEREFORE, in view of the foregoing premises, the appeal is hereby DENIED. The assailed Decision of the Regional Trial
Court, Branch 55 of Himamaylan City, Negros Occidental in Civil Case No. 648 is AFFIRMED.
Petitioner filed its Motion for Reconsideration, which the CA denied in its assailed July 6, 2011 Resolution. The appellate court
held that petitioner raised the same issues which were passed upon in the main decision. As for the award of damages, it
held that petitioner did not raise the award as an issue in its appeal, and questioned the same for the first time only in its
motion for reconsideration; thus, the award must stand.
Hence, the present Petition. chan robleslaw
Issues
Petitioner raises the following issues:

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE RESPONDENTS HAVE BETTER RIGHTS THAN THE
(PETITIONER] IN AS FAR AS LOTS 91, 92 AND 96 ARE CONCERNED AS [IT] DERIVED [OWNERSHIP OVER SAID LOTS] FROM
JOSE L. YULO WHO AS EARLY AS OCTOBER 18, 1971 WAS ISSUED THE TRANSFER CERTIFICATES OF TITLE FOR LOTS 91, 92
AND 96.
II
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF DAMAGES IN THE FORM OF COST OF PLANE
[FARE] AND ATTORNEY'S FEES.18 cralawlawlib rary
Petitioner argues in its Petition and Reply19 that Lots 91, 92 and 96 are nonexistent lots and thus the titles thereto are
spurious. It points out that Lot 29 (then covered by TCT 36852 and from which Lots 91, 92 and 96 were derived) was
subdivided in 1969 into 74 lots only (or Lots 1 to 74 only). Petitioner insists as irrelevant the earlier registration of Lots 91,
92 and 96 in 1971, as compared to the registration of Lots 3, 4 and 5 in 1979, precisely since Lots 91, 92 and 96 are non-
existent lots, and thus the titles thereto are void ab initio. And, for the same reason that the titles to Lots 91, 92 and 96 are
spurious, there could be no overlapping of titles. Petitioner also argues that respondents were not buyers in good faith as
they did not cause the survey of the properties at the time they bought the same; that had they inspected the properties and
gone beyond the titles thereto prior to the sale, they would have discovered that the house and fence encroached upon
adjacent lots. Finally, petitioner contends that the grant of damages and attorney's fees was erroneous because of the
absence of a cause of action against it, and because respondents did not suffer any injury.
Thus, petitioner prays that Lots 91, 92 and 96 be declared non-existent; that respondents be ordered to return the land
which they occupy; that the award of damages and attorney's fees be deleted; that respondents be ordered to remove the
improvements which encroached upon its land; and that its counterclaim be granted.
Respondents, on the other hand, argue in their Comment20 that the Petition requires a re-evaluation of the evidence, which is
proscribed by Rule 45 of the 1997 Rules of Civil Procedure; that in raising the issue of good faith, the petitioner questions the
findings of fact of the CA which, as far as this Court is concerned, are final; and that given the unanimous conclusion arrived
at by the trial and appellate courts, there is no reason to review their findings of fact and law. chanrobles law
Our Ruling
A petition to review the decision of the CA is not a matter of right but of sound judicial discretion.21 It has been repeatedly
held that the jurisdiction of this Court in cases brought before it from the CA is limited to reviewing errors of law; findings of
fact of the appellate court are conclusive upon this Court, as it is not its function to analyze and weigh the evidence all over
again. There are recognized exceptions to the rule, however, such as: (1) when the findings are grounded entirely on
speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when
there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee; (7) when the findings are contrary to 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; (10) when the findings
of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (11) when the CA
manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a
different conclusion.22
However, petitioner has not shown that this case falls under any of the above exceptions. On the contrary, We are in
agreement with the appellate court's pronouncement that respondents' title must be upheld over that of the petitioner's as it
is derived from titles that were issued earlier - in 1971, as opposed to 1979 with respect to petitioner's and the Trajeras'
properties. The CA's citation of Manila Waterworks and Sewerage System v. Court of Appeals23 is correct. The
pronouncement in said case was reiterated in Spouses Carpo v. Ayala Land, Inc.,24 thus:
x x x (T)his controversy has been reduced to the sole substantive issue of which between the two titles, purporting to cover
the same property, deserves priority. This is hardly a novel issue. As petitioners themselves are aware, in Realty, it was held
that:
In this jurisdiction, it is settled that '(t)he general rule is that in the case of two certificates of title, purporting to
include the same land, the earlier in date prevails xxx. hi successive registrations, where more than one certificate is
issued in respect of a particular estate or interest in land, the person claiming under the prior certificate is entitled to
the estate or interest; and that person is deemed to hold under the prior certificate who is the holder of, or
whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued
in respect thereof x x x.'
In Degollacion v. Register of Deeds ofCavite,25 we held that '[w]here two certificates of title purport to include the same land,
whether wholly or partly, the better approach is to trace the original certificates from which the certificates of title were
derived.'
Tracing the origins of the titles involved will disclose that they all came from a single individual - Yulo - who caused his
landholding (Lot 62-A) to be subdivided into what are now the contested lots. Indeed, what he did each time -his business
model, so to speak - was to subdivide his large landholding into several small plots and one large plot. The small plots he
sold, while he kept for future use the single large parcel - to be subdivided once more if he desired to. Thus, in 1963, Yulo
subdivided Lot 62-A into several small plots and one large plot (Lot 29). In 1969, he once more subdivided Lot 29 into
several plots and one large plot (Lot 72). At this point, the titles from which respondents' titles were derived were issued. Lot
72, on the other hand, was titled in the name of petitioner Jose L. Yulo Agricultural Corporation - which, judging from the
nomenclature alone, can safely be said belonged to Yulo, or is connected to him. Then again, in 1982, Lot 72 was further
subdivided into several lots and registered in petitioner's name. At this point, the Trajeras purchased one of the subdivided
lots.
Given the foregoing, Yulo - and petitioner for that matter, which is a corporation that belonged to Yulo himself or is
connected to him and which became his successor-in-interest - knew everything as far as his land is concerned, or is charged
with knowledge at least. Yulo was the sole owner of the properties involved, and he and his outfit were the sellers of the
properties which eventually were acquired by the respondents and the Trajeras. They cannot claim to be ignorant of
everything that went on with the properties they owned. They cannot be allowed to benefit from their own mistakes at the
expense of the respondents. Indeed, if there is anybody who must be considered in bad faith, it is they; they should have
known that there was an overlapping of titles in their very own lands. And if it is true that Lots 91, 92 and 96 are non-
existent lots, Yulo and petitioner would have known it; yet Yulo sold them in 1975 to the Madrinas, and eventually found
their way to respondents. Indeed, as testified to by the Records Officer of the Register of Deeds of Negros Occidental, Lots
91, 92 and 96 covered by T-163622 to 163624 in the name of respondents have the same technical description as Lots 91,
92 and 96 covered by TCT T-64737, T-64738 and T-64742 and registered in the name of Yulo. In other words, there is no
doubt that respondents' titles were derived from Yulo's; this fact is not even assailed or denied by petitioner in any of its
pleadings.
As for damages, we can only reiterate what the CA has said. Since the award of damages was raised for the first time in
petitioner's motion for reconsideration of the assailed CA Decision and not in its appellant's brief, the award must stand.
The general rule is that issues raised for the first time on appeal and not raised in the proceedings in the lower court are
barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to
be considered by a reviewing court, as these cannot be raised for the first time on appeal. To consider the alleged facts and
arguments raised belatedly would amount to trampling on the basic principles of fair play, justice, and due process.26 cralawlawl ib rary
WHEREFORE, the Petition is DENIED. The assailed May 29, 2009 Decision and July 6, 2011 Resolution of the Court of

SO ORDERED. ChanRoblesVirtualawl ibra ry
G.R. No. 175188 July 15, 2015
COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
LA TONDENA DISTILLERS, INC. (LTDI [now GINEBRA SAN MIGUEL], Respondent.
DECISION
DEL CASTILLO, J.:
The transfer of real property to a surviving corporation pursuant to a merger is not subject to Documentary Stamp
Tax (DST).1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the September 26, 2006
Decision3 and the October 31, 2006 Resolution4 of the Court of Tax Appeals (CTA) in C.T.A. EB No. 178.
Factual Antecedents
On September 17, 2001, respondent La Tondeña Distillers, Inc. entered into a Plan of Merger5 with Sugarland
Beverage Corporation (SBC), SMC Juice, Inc. (SMCJI), and Metro Bottled Water Corporation (MBWC).6 As a result
of the merger, the assets and liabilities of the absorbed corporations were transferred to respondent, the surviving
corporation.7 Respondent later changed its corporate name to Ginebra San Miguel, Inc. (GSMI).8
On September 26, 2001, respondent requested for a confirmation of the tax-free nature of the said merger from the
Bureau of Internal Revenue (BIR).9
On November 5, 2001, the BIR issued a ruling stating that pursuant to Section 40(C)(2)10 and (6)(b)11 of the 1997
National Internal Revenue Code (NIRC), no gain or loss shall be recognized by the absorbed corporations as
transferors of all assets and liabilities.12 However, the transfer of assets, such as real properties, shall be subject to
DST imposed under Section 19613 of the NIRC.14
Consequently, on various dates from October 31, 2001 to November 15, 2001, respondent paid to the BIR the
following DST, to wit:
DST
Property Locations Total Assets
Payments
A. Metro Bottled Water Corp.
General Trias, Cavite 326,508,953.0015 4,897,635.00
Mandaue City, Cebu 14,078,381.00 211,185.00
Pavia, Iloilo 10,644,861.00 159,675.00
B. Sugarland Beverage Corp.
Navotas, Metro Manila 171,790,790.00 2,576,865.00
Imus, Cavite 218,114,261.00 3,272,175.00
Pine Street, Mandaluyong 201,562,148.00 3,023,445.00
Totals 942,729,393.00 14,140,980.00 16
On October 14, 2003, claiming that it is exempt from paying DST, respondent filed with petitioner Commissioner of
Internal Revenue (CIR) an administrative claim for tax refund or tax credit in the amount of 14,140,980.00,
representing the DST it allegedly erroneously paid on the occasion of the merger.17
On the same day, respondent filed with the CTA a Petition for Review, docketed as C.T.A. Case No. 6796 and
raffled to the Second (2nd) Division of the CTA.18
Ruling of the Court of Tax Appeals Division
On January 6, 2006, the 2nd Division of the CTA rendered a Decision19 finding respondent entitled to its claim for tax
refund or tax credit in the amount of 14,140,980.00, representing its erroneously paid DST for the taxable year
2001.20 The 2nd Division of the CTA ruled that Section 196 of the NIRC does not apply because there is no
purchaser or buyer in the case of a merger.21 Citing Section 8022 of the Corporation Code of the Philippines, the 2nd
Division of the CTA explained that the assets of the absorbed corporations were not bought or purchased by
respondent but were transferred to and vested in respondent as an inherent legal consequence of the merger,
without any further act or deed.23 It also noted that any doubts as to the tax-free nature of the merger had been
already removed by the subsequent enactment of Republic Act No. (RA) 9243,24 which amended Section 19925 of the
NIRC by specifically exempting from the payment of DST the transfer of property pursuant to a merger.26Aggrieved,
petitioner moved for reconsideration but the 2nd Division of the CTA denied the same in a Resolution dated April 4,
2006.27
Unfazed, petitioner elevated the matter to the CTA En Banc via a Petition for Review, docketed as C.T.A.EB No.
178.
Ruling of the Court of Tax Appeals En Banc
On September 26, 2006, the CTA En Banc rendered the assailed Decision, finding no reversible error on the part of
the 2nd Division of the CTA in granting respondent’s claim for tax refund or tax credit.28 The CTA En Banc opined
that Section 196 of the NIRC does not apply to a merger as the properties subject of a merger are not sold, but are
merely absorbed by the surviving corporation.29 In other words, the properties are transferred by operation of law,
without any further act or deed.30
Petitioner sought reconsideration of the assailed Decision.
On October 31, 2006, the CTA En Banc issued the assailed Resolution, denying petitioner’s motion for
reconsideration.31
Issue
Hence, petitioner filed the instant Petition for Review on Certiorari raising the sole issue of whether the CTA En
Banc erred in ruling that respondent is exempt from payment of DST.32 Petitioner’s Arguments
Petitioner posits that DST is levied on the exercise of the privilege to convey real property regardless of the manner
of conveyance.33 Thus, it is imposed on all conveyances of realty, including realty transfer during a corporate
merger.34 As to the subsequent enactment of RA 9243, petitioner claims that respondent cannot benefit from it as
laws apply prospectively.35 Respondent’s Arguments
Respondent, on the other hand, contends that DST is imposed only on conveyances, deeds, instruments, or writing,
where realty sold shall be conveyed to a purchaser or buyer.36 In this case, there is no purchaser or buyer as a
merger is neither a sale nor a liquidation of corporate property but a consolidation of properties, powers, and
facilities of the constituent companies.37
Our Ruling
In Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation,38 the Supreme Court already ruled
that Section 196of the NIRC does not include the transfer of real property from one corporation to another pursuant
to a merger. It explained that:
[W]e do not find merit in petitioner’s contention that Section 196 covers all transfers and conveyances of real
property for a valuable consideration. A perusal of the subject provision would clearly show it pertains only to sale
transactions where real property is conveyed to a purchaser for a consideration. The phrase "granted, assigned,
transferred or otherwise conveyed" is qualified by the word "sold" which means that documentary stamp tax under
Section 196 is imposed on the transfer of realty by way of sale and does not apply to all conveyances of real
property. Indeed, as correctly noted by the respondent, the fact that Section 196 refers to words "sold", "purchaser"
and "consideration" undoubtedly leads to the conclusion that only sales of real property are contemplated therein.
Thus, petitioner obviously erred when it relied on the phrase "granted, assigned, transferred or otherwise conveyed"
in claiming that all conveyances of real property regardless of the manner of transfer are subject to documentary
stamp tax under Section 196. It is not proper to construe the meaning of a statute on the basis of one part. x x x
xxxx
It should be emphasized that in the instant case, the transfer of SPPC’s real property to respondent was pursuant to
their approved plan of merger. In a merger of two existing corporations, oneof the corporations survives and
1âw phi 1
continues the business, while the other is dissolved, and all its rights, properties, and liabilities are acquired by the
surviving corporation. Although there is a dissolution of the absorbed or merged corporations, there is no winding up
of their affairs or liquidation of their assets because the surviving corporation automatically acquires all their rights,
privileges, and powers, as well as their liabilities. Here, SPPC ceased to have any legal personality and respondent
PSPC stepped into everything that was SPPC’s, pursuant to the law and the terms of their Plan of Merger.
Pertinently, a merger of two corporations produces the following effects, among others:
Sec. 80. Effects of merger or consolidation. – x x x
xxxx
4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the rights, privileges,
immunities and franchises of each of the constituent corporations; and all property, real or personal, and all
receivables due on whatever account, including subscriptions to shares and other choses in action, and all and
every other interest of, or belonging to, or due to each constituent corporations, shall be taken and deemed to be
transferred to and vested in such surviving or consolidated corporation without further act or deed;
In a merger, the real properties are not deemed "sold" to the surviving corporation and the latter could not be
considered as "purchaser" of realty since the real properties subject of the merger were merely absorbed by the
surviving corporation by operation of law and these properties are deemed automatically transferred to and vested
in the surviving corporation without further act or deed. Therefore, the transfer of real properties to the surviving
corporation in pursuance of a merger is not subject to documentary stamp tax. As stated at the outset, documentary
stamp tax is imposed only on all conveyances, deeds, instruments or writing where realty sold shall be conveyed to
a purchaser or purchasers. The transfer of SPPC’s real property to respondent was neither a sale nor was it a
conveyance of real property for a consideration contracted to be paid as contemplated under Section 196 of the Tax
Code. Hence, Section 196 of the Tax Code is inapplicable and respondent is not liable for documentary stamp
tax.39(Emphasis in the original)
Following the doctrine of stare decisis, which dictates that when a court has reached a conclusion in one case, it
should be applied to those that follow if the facts are substantially the same, even though the parties may be
different,40 we find that respondent is not liable for DST as the transfer of real properties from the absorbed
corporations to respondent was pursuant to a merger. And having complied with the provisions of Sections
204(C)41and 22942 of the NIRC, we agree with the CTA that respondent is entitled to a refund of the DST it
erroneously paid on various dates between October 31, 2001 to November 15, 2001 in the total amount of
14,140,980.00.
Likewise without merit is petitioner’s contention that respondent cannot claim exemption under RA 9243 as this was
enacted only in 2004 or after respondent’s tax liability accrued. To be clear, respondent did not file its claim for tax
refund or tax credit based on the exemption found in RA 9243. Rather, it filed a claim for tax refund or tax credit on
the ground that Section 196 of the NIRC does not include the transfer of real property pursuant to a merger. In fact,
the ratio decidendi (or reason for the decision) in Pilipinas Shell Petroleum Corporation43 was based on Section 196
of the NIRC, in relation to Section 80 of the Corporation Code, not RA 9243. In that case, RA 9243 was mentioned
only to emphasize that "the enactment of the said law now removes any doubt and had made clear that the transfer
of real properties as a consequence of merger or consolidation is not subject to [DST]."44
All told, we find no error on the part of the CTA in granting respondent's claim for tax refund or tax credit in the
amount of ₱14,140,980.00, representing its erroneously paid DST for the taxable year 2001.
In closing, we must stress that taxes must not be imposed beyond what the law expressly and clearly declares as
tax laws must be construed strictly against the State and liberally in favor of the taxpayer.45
WHEREFORE, the Petition is hereby DENIED. The assailed September 26, 2006 Decision and the October 31,
2006 Resolution of the Court of Tax Appeals in C.T.A. EB No. 178 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
A.M. No. P-07-2293 July 15, 2015

(Formerly A.M No. 06-12-411-MTC)
OFFICE OF THE COURT ADMINISTRATOR, Complainant,

vs.
JOEBERT C. GUIAN, former Clerk of Court, Bulan, Sorsogon, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Clerks of courts are custodians of the court's funds and revenues. Any delay in its remittance, or any shortages in
the amounts, shall make the clerk of court administratively liable. Respondent Joebert C. Guan (Guan), former Clerk
of Court of Municipal Trial Court (MTC), Bulan, Sorsogon, was found remiss in his duties and is accordingly
penalized.
Factual Background
A financial audit of the books of accounts of MTC, Bulan, Sorsogon covering the period July 28, 1993 to August 31,
2004 disclosed that: (1) some collections were not properly and accurately recorded in the cashbooks; (2) there
were shortages in the Judiciary Development Fund (JDF) and Special Allowance for the Judiciary Fund in the
amounts of ₱48,207.10 and ₱5,l 16.00, respectively; p~ (3) the financial reports on the JDF, General/Special
Allowance for the Judiciary Fund (SAJF) and Fiduciary Fund (FF) were not regularly submitted to the Accounting
Division of the Office of the Court Administrator (OCA); (4) the records control is not systematic; (5) no legal fees
forms were attached to the case records; (6) daily transactions in the FF account were not duly recorded in the
cashbooks; and, (7) documents needed to validate withdrawals of cash bonds from the Municipal Treasurer’s Office
(MTO) of Bulan were missing. The audit team thus made the following recommendation in its Partial Report1 on the
financial audit:
PREMISES CONSIDERED, it is most respectfully recommended that:
I. This report be docketed as a complaint against Mr. Joebert C. Guan, former Clerk of Court of MTC, Bulan,
Sorsogon and DIRECT Mr. Guan to:
1. IMMEDIATELY RESTITUTE his incurred shortages [in the] Judiciary Development Fund and Special Allowance
for the Judiciary Fund amounting to Forty Eight Thousand Two Hundred Seven Pesos and 10/100 (48,207.10) and
Five Thousand [One] Hundred Sixteen Pesos and 00/100 (5,116.00) respectively by depositing the same to [their]
respective bank account[s] through Mr. Joseph G. Guim,2 the incumbent Officer-in-Charge, copy furnished the Fiscal
Monitoring Division, Court Management Office with the machine validated deposit slip/s as proof of compliance.
2. EXPLAIN within ten (10) days from notice why he incurred such shortages and why he should not be
administratively dealt with for failure to comply with the court circulars and issuances regarding proper handling of
court collections;
3. SECURE from the Municipal Treasurer’s Office of Bulan[,] Sorsogon an itemized list of Unwithdrawn Fiduciary
Fund or cashbonds he deposited thereat, certified correct by the Municipal Accountant and the Municipal Treasurer;
and
4. TRANSMIT to [the Office of the Court Administrator] through the Fiscal Monitoring Division, Court Management
Office all the documents regarding the deposits and withdrawals of cashbonds from the Municipal Treasurer’s Office
for the period covering May 1998 to July 31, 2005, i.e., triplicate copies of Official Receipts issued, Fiduciary Fund
official cashbooks, and file copies of monthly Reports of Collections, Deposits and Withdrawals together with the
corresponding supporting documents like the court order, original copy of surrendered official receipts, vouchers and
acknowledgment receipts as proof that all withdrawn cashbonds were properly received by the bondsmen or their
authorized representatives.
x x x x3
Then Court Administrator Christopher O. Lock approved4 the recommendation and submitted the same to the
Court.5 On January 29, 2007, the Court issued a Resolution6 adopting the recommendation of the OCA. In addition,
this Court held in abeyance any claim of Guan for separation benefits pending resolution of the administrative matter
against him.
Subsequently, Guan wrote the Court a letter7 dated March 12, 2007 requesting that the monetary value of his leave
credits be applied as payment for his accountability amounting to 53,323.10.He explained that he could no longer
account for the shortages because some of the records pertaining thereto, as well as his Judiciary and General
Fund reports, could no longer be found.
In a Resolution8 dated August 13, 2007, the Court deferred action on Guan’s request pending submission of the
documents required of him, specifically (1) an itemized list from the MTO of the unwithdrawn fiduciary fund or cash
bonds, certified correct by the Municipal Accountant and Municipal Treasurer; and (2) all documents regarding the
deposits to and withdrawals of cash bonds from the MTO for the period covering May 1998 to July 31, 2005. But
since Guan still failed to submit all the required documents, he was directed, through a Resolution9 dated October
17, 2011, (1) to show cause why he should not be held in contempt for such failure and (2) to comply by submitting
the said documents.
In a letter10 dated August 26, 2011, Guan explained that while he was able to secure from the MTO a list of
cashbond deposits made by him, the Fiscal Monitoring Division (FMD) of the OCA did not accept the same for being
incomplete. He thus exerted all efforts to secure a complete list but what was issued him was the same incomplete
list, which when submitted was again rejected by the FMD. And while he was also able to present to the FMD a
certification from the MTO that its records were damaged by typhoon "Melenyo" in July 2007 (which thereby
hindered the MTO from providing a complete list), the same still proved futile as the FMD did not accept the
certificate. Therefore, Guan requested that an audit be conducted in the MTC of Bulan, Sorsogon. Granting Guan’s
request, the Court, via a Resolution11 dated August 13, 2012, directed Executive Judge Adolfo G. Fajardo of the
Regional Trial Court, Branch 65 of Bulan, Sorsogon, to conduct a financial audit on the itemized list of unwithdrawn
fiduciary fund or cashbonds deposited by Guan and to thereafter submit a report thereon. Unfortunately, Judge
Fajardo, in his Compliance12 dated January 24, 2013, informed the Court that he cannot make an intelligible and
comprehensive financial audit as several pertinent records were nowhere to be found. In view of this, the Court
issued its July 24, 2013 Resolution13 directing the OCA to constitute a financial audit team to conduct the audit.
Accordingly, an audit team was again sent to the MTC of Bulan, Sorsogon.
Upon the conclusion of the audit, it was revealed that both the former Officer-In-Charge, Joseph C. Guim (Guim)
and the incumbent Clerk of Court, Emerose F. Denso, have no accountability insofar as their periods of
accountability are concerned as their books of account were in order. With respect to Guan, however, the audit team
found him accountable for the following:
I. FIDUCIARY FUND (FF)

FOR THE PERIOD COVERED: June 17, 1998 to September 23, 2004
Guan’s final accountability/shortage is 238,000.00. The audit team noted that Guan’s FF accountability was not due
to undeposited collections but to lacking documentations, specifically the deficient supporting documents on
cashbonds withdrawal transactions.
II. JUDICIAL DEVELOPMENT FUND (JDF)
FOR THE PERIOD COVERED: September 1 to 23, 2004
Guan’s accountability/shortage is 1,402.00. This comprised the unreported and undeposited collections for the
period covered.
III. SPECIAL ALLOWANCE FOR THE JUDICIARY FUND (SAJF)
FOR THE PERIOD COVERED: September 1 to 23, 2004
Guan’s SAJF accountability/shortage is 708.00. This comprised the unreported and undeposited collections for the
covered period.14
Thus, including his previous accountabilities for JDF and SAJF as found during the earlier audit in 2006, Guan’s
balance of accountabilities are as follows:
BALANCE
FUND/ PERIOD/S ACCOUNTABILITY
ACCOUNT NAME AUDITED (SHORTAGE/
(OVERAGE)
Fiduciary Fund 17 June 1998 to
23 Sept. 2004 [P]238,000.00
Judiciary Development
Fund (Unrestituted
Shortages from previous 28 July 1993 to
audit) 31 Aug. 2004 [P]48,207.10
Judiciary Development
Fund 1 to 23 Sept. [P] 1,402.00
2004
Special Allowance for the
Judiciary Fund
(Unrestituted Shortages
from previous audit) 11 Nov. 2003 to
31 Aug. 2004 [P] 5,116.00
Special Allowance for the Judiciary
Fund 1 to 23 Sept. [P] 708.0015
2004
In its report16 dated November 7, 2014, the OCA concluded that Guan was remiss in the performance of his duties
and is administratively liable for:
1) failing to properly remit his cash collections in contrast with the requirements set forth in the Commission on Audit
(COA) and Department of Finance (DOF) Joint Circular 1-81 and in Administrative Circular No. 13-92 dated March
1, 1992 as amended by Administrative Circular(A.C.) No. 3-2000 dated June 15, 2000;17 and,
2) failing to remit FF collections, in complete derogation of Administrative Circular No. 50-95 dated October 11,
1995.18
Thus, it recommended that:
1. Mr. Joebert C. Guan, former Clerk of Court II, Municipal Trial Court, Bulan, Sorsogon, be found GUILTY of
Violation of Office Rules and Regulations and Simple Neglect of Duty and that he be ordered to PAY A FINE of
10,000.00 to be deducted from the monetary value of his earned leave credits and/or other retirement benefits;
2. the Office of the Administrative Services, OCA be DIRECTED to provide the Financial Management Office (FMO),
OCA with the following documents pertaining to Mr. Joebert C. Guan:
2.1) Official Service Record;
2.2) Certification of Leave Credits; and
2.3) Notice of Salary Adjustment (NOSA) if any.
3. The FMO, OCA be further DIRECTED to:
3.1) PROCESS the money value of the terminal leave benefits of Mr. Joebert C. Guan, dispensing with the usual
documentary requirements, and apply the same to the following shortages:
Name of Fund Period Covered Amount

Fiduciary Fund 17 June 1998 to [P]238,000.00
23 September 2004
Judiciary Development 28 July 1993 to [P] 49,609.10
Fund 23 September 2004
Special Allowance for the 28 July 1993 to [P] 5,824.00
Judiciary Fund 23 September 2004
Total [P]293433.10
3.2) COORDINATE with the Fiscal Monitoring Division, Court Management Office, OCA, before the processing of
the checks to be issued in favour of the Fiduciary Fund account of the
MTC, Bulan, Sorsogon, and for the preparation of the necessary communication with the incumbent Clerk of
Court/Officer-in-Charge thereat;
4. ORDER Mr. Guan to restitute the remaining shortages in case the monetary value of his earned leave credits
and/or other benefits would not be sufficient to cover the aforementioned shortages; and
5. CLEAR MR. JOSEPH G. GUIM AND MS. EMEROSE F. DENSO, former Officer-in-Charge and incumbent Clerk
of Court, respectively, MTC, Bulan, Sorsogon, of any accountability insofar as their corresponding periods of
accountability are concerned, after having been audited of their books of accounts which were found to be in order.19
Our Ruling
The Court modifies the findings and recommendations of the OCA.
As found by the audit team, Guan’s accountabilities were either due to unreported or undeposited collections or to
deposited collection but with lacking documentation. This only demonstrates Guan’s disorganized way of managing
and documenting his collections which, as aptly observed by the OCA, is in violation of Administrative Circular No.
5-93 that provides, viz.: 3. Duty of the Clerks of Court, Officers-in-Charge or accountable officers. – The Clerk of
Court, Officers-in-Charge ofthe Office of the Clerk of Court, or their accountable duly authorized representative
designated by them in writing, who must be accountable officers, shall receive the Judiciary Development Fund
collections, issue the proper receipt therefor, maintain a separate cash book properly marked CASH BOOK FOR
JUDICIARY DEVELOPMENT FUND, deposit such collections in the manner herein prescribed and render the
proper Monthly Report of Collections for said Fund.
However, the Court disagrees with the OCA’s finding that Guan’s transgressions constitute simple neglect of duty
only.
In the Office of the Court Administrator v. Acampado,20 the Court declared that any shortages in the amounts to be
remitted and the delay in the actual remittance thereof constitute gross neglect of duty for which the clerk of court
shall be held administratively liable. Moreover, in the Office of the Court Administrator v. Melchor, Jr.,21 it was held
that delayed remittance of cash collections constitutes gross neglect of duty because this omission deprives the
court of interest that could have been earned if the amounts were deposited in the authorized depository bank. This
was also reiterated in the fairly recent case of Office of the Court Administrator v. Mrs. Aurora T. Zuniga.22
Here, Guan’s shortages with respect to the JDF in the total amount of 49,609.10 and to the SAJF totaling to
5,824.00 were both due to unreported and undeposited collections. In other words, Guan’s transgressions did not
1âwphi 1
merely consist of delay in the remittance of his collections but to his total failure to deposit the same as well. This is
a clear case of gross neglect of duty. As held, "[g]ross neglect is such neglect which, from the gravity of the case or
the frequency of instances, becomes so serious in its character as to endanger or threaten the public welfare."23 In
this case, the frequency of the instances alone, i.e., for two separate periods of accountability, Guan was both found
to have incurred shortages with respect to the JDF and SAJF due to unreported and undeposited collections, makes
respondent’s neglect of duty so serious in its character as to threaten the public welfare.
Anent Guan’s accountability of 238,000.00 in FF, the audit team noted that the same was not due to unreported or
undeposited collections but to incomplete documentation to support cash bond withdrawals therefrom. Still, it is well
to state that documentation of cash collections is essential to the orderly administration of justice.24 It is for this
reason that court circulars and other relevant rules for proper documentation such as by submission to the court of
reports of collections of all funds and proper issuance of receipts, among others, were designed. Evidently,
respondent failed to comply with the same and this likewise constitutes gross neglect of duty.25
"Gross neglect of duty is classified as a grave offense and punishable by dismissal even if for the first offense
pursuant to Section 52(A)(2) of Rule IV of the Uniform Rules on Administrative Cases in the Civil Service."26 While
Guan had already been dropped from the rolls for being absent without official leave (AWOL) in A.M. No. 06-5-171-
MTC, he still remains administratively liable, although the penalty of dismissal cannot be imposed upon him.
Nevertheless, "[a] fine can be imposed, instead, and its amount is subject to the sound discretion of the Court.
Section 56 (e) of Rule IV of the Revised Uniform Rules provides that fine as a penalty shall be in an amount not
exceeding the salary for six months had the respondent not resigned [or been dropped from the rolls] the rate for
which is that obtaining at the time of his resignation. The fine shall be deducted from any accrued leave credits, with
the respondent being personally liable for any deficiency that should be directly payable to this Court. He is [also]
further declared disqualified from any future government service."27
As a final note, "Clerks of Court are the custodians of the courts’ ‘funds and revenues, records, properties, and
premises.’ They are ‘liable for any loss, shortage, destruction or impairment’ of those entrusted to them. Any
shortages in the amounts to be remitted and the delay in the actual remittance ‘constitute gross neglect of duty for
which the clerk of court shall beheld administratively liable.’"28
WHEREFORE, the Court finds respondent Joebert C. Guan GUILTY of gross neglect of duty and resolves to:
1. ORDER respondent TO PAY A FINE equivalent to his salary for six months computed at the salary rate of his
former position at the time he was dropped from the rolls to be deducted from the monetary value of his earned
leave credits and/or other retirement benefits, and, DECLARE him DISQUALIFIED from re-employment in any
branch or instrumentality of the government, including government-owned or controlled corporations;
2. DIRECT the Office of the Administrative Services of Office of the Court Administrator to provide the Financial
Management Office, Office of the Court Administrator, with the following documents pertaining to respondent
Joebert C. Guan:
a. Official Service Record;
b. Certification of Leave Credits; and
c. Notice of Salary Adjustment, if any.
3. FURTHER DIRECT the Financial Management Office of the Office of the Court Administrator to:
3.1 PROCESS the monetary value of the terminal leave benefits of respondent Joebert C. Guan, dispensing with
the usual documentary requirements, and whatever remains therefrom after deducting the fine imposed upon him,
APPLY the same to the following shortages:
Name of Fund Period Covered Amount

17 June 1998 to
Fiduciary Fund ₱238,000.00
23 September 2004
Judiciary 28 July 1993 to
₱49,609.10
Development Fund 23 September 2004
Special Allowance for 28 July 1993 to
₱5,824.00
the Judiciary Fund 23 September 2004
Total ₱293,433.10
3.2 COORDINATE with the Fiscal Monitoring Division, Court Management Office of the Office of the Court
Administrator, before the processing of the checks to be issued in favor of the Fiduciary Fund account of the MTC,
Bulan, Sorsogon, and for the preparation of the necessary communication with the incumbent Clerk of Court/Officer-
in-Charge thereat;
4. ORDER respondent Guan to pay any remainder of the fine and/or restitute any remaining shortages incase the
monetary value of his earned leave credits and/or other benefits would not be sufficient to cover the same; and,
5. CLEAR MR. JOSEPH G. GUIM AND MS. EMEROSE F. DENSO, former Officer-in-Charge and incumbent Clerk
of Court, respectively, MTC, Bulan, Sorsogon, of any accountability insofar as their corresponding periods of
accountability are concerned, after having been audited of their books of accounts which were found to be in order.
SO ORDERED.
SECOND DIVISION
G.R. No. 199660, July 13, 2015
U-BIX CORPORATION AND EDILBERTO B. BRAVO, Petitioners, v. VALERIE ANNE H. HOLLERO, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a Petition for Review on Certiorari1 of the Court of Appeals (CA) Decision2 dated August 9, 2011 and Resolution3 dated
December 7, 2011 in CA-G.R. SP No. 117199, which affirmed the National Labor Relations Commission (NLRC)
Resolution4 dated June 29, 2010 and Resolution5 dated September 27, 2010 denying the appeal of petitioners U-Bix
Corporation and Edilberto B. Bravo (petitioners) from Labor Arbiter Enrique S. Flores, Jr.'s (Labor Arbiter Flores) Order6 dated
April 16, 2010 approving the recomputation of the monetary award in favor of respondent Valerie Anne, H. Hollero
(respondent) and ordering the issuance of a writ of execution.
Factual Antecedents
Petitioners filed a complaint against respondent for reimbursement of training costs plus interest, exemplary damages,
attorney's fees and litigation expenses, docketed as NLRC-NCR-Case No. 00-05-03696-97. On the other hand, respondent
filed against petitioners a complaint for illegal dismissal, unpaid wages, backwages, moral and exemplary damages, and
attorney's fees, docketed as NLRC-NCR-Case No. 00-08-05988-97. The two complaints were later on consolidated.
In a Decision7 dated February 8, 1999, the Labor Arbiter found respondent's dismissal to be valid; she was also ordered to
reimburse the amount spent by petitioners for her training, with interest at the rate of 12% per annum.8 ChanRoblesVi rtua lawlib rary
On appeal, the NLRC reversed the Labor Arbiter's Decision. Finding respondent to have been illegally dismissed, it awarded
her backwages from the date of her dismissal up to the date of the NLRC Decision and separation pay in lieu of reinstatement
due to strained relations. Anent petitioners' complaint for reimbursement, the NLRC held that the same is one for collection
of sum of money over which it has no jurisdiction. Hence, the dispositive portion of the NLRC Resolution dated July 12,
1999:9 cra lawlawlib rary
WHEREFORE, premises considered, the assailed decision dated February 8, 1999, is hereby REVERSED and SET ASIDE and a
new one entered as follows:
A. Dismissing the complaint of the [petitioner] U-BFX CORPORATION, in NLRC NCR Case No. 00-05-03696-97 for lack of
jurisdiction; and
B. Finding the dismissal of [respondent] Valerie Anne H. Hollero in NLRC NCR Case No. 00-08-05988-97 to be illegal thereby
ordering [petitioners] U-BIX CORPORATION/Edilberto B. Bravo to pay the former the following:
1.
P520,000.00
Backwages
2.
Separation 60,000.00; and
Pay
TOTAL P580,000.00
All other claims for damages are dismissed for insufficiency of evidence.
SO ORDERED.10
Petitioners' Petition for Certiorari before the CA was dismissed through a Decision11 dated January 8, 2007. Since petitioners'
motion for reconsideration thereto was likewise denied by the CA,12 they elevated the case before this Court.
In a Decision13 dated October 31, 2008, the Court affirmed the CA Decision. This became final and executory on March 12,
2009.14 ChanRobles Vi rtua lawlib rary
Subsequently, respondent filed a Motion for Issuance of Writ of Execution before the Labor Arbiter.15 In the course of the
pre-execution conferences, petitioners moved for the recomputation of the monetary award. Acting on the same, Labor
Arbiter Elizabeth C. Avedoso (Labor Arbiter Avedoso) came up with a re-computed total monetary award of
P3,330,512.82.16 Petitioners opposed this re-computation for lack of legal basis.17 Thus, a second re-computation in the
reduced amount of P3,270,512.8218 was presented to the parties in a conference held on February 18, 2010. Still, they failed
to reach an agreement.
In the meantime, respondent filed a Supplemental Motion for Issuance of Writ of Execution19 to which petitioners filed an
Opposition.20 ChanRoble sVirt ualawli bra ry
In an Order21 dated April 16, 2010, Labor Arbiter Flores found the recomputation of the total award at P3,270,512.82 correct.
Hence, he ruled:
Finding the Motion for Issuance of Writ of Execution to be well taken, the same is hereby GRANTED.
WHEREFORE, the corresponding Writ of Execution be issued pursuant to the re-computed monetary award in the amount of
P3,270,512.8[2].
SO ORDERED.22
Accordingly, Labor Arbiter Flores issued a Writ of Execution23 dated April 20, 2010.
Petitioners filed before the NLRC a Notice and Memorandum of Appeal.24 At the same time, they posted a corresponding
supersedeas bond issued by Mapfre Insular Insurance Corporation (Mapfre) in the amount of P3,270,512.82. Subsequently,
petitioners also filed an Omnibus Motion to Quash Writ of Execution and to Lift Order of Garnishment.
In a Resolution25 dated June 29, 2010, the NLRC denied for lack of merit petitioners' Appeal and their Omnibus Motion to
Quash Writ of Execution and to Lift Order of Garnishment.
With respect to the appeal, the NLRC held that the supersedeas bond posted by petitioners has no force and effect, viz.:
A perusal of the bond, however, revealed that the Certification of Accreditation and Authority of Jose Midas P. Marquez,
Supreme Court Administrator, covers an authority to transact surety business in relation to CIVIL/SPECIAL
PROCEEDINGS CASES ONLYfiled/pending before the Regional Trial Courts of Caloocan City, City of Manila, Las Piñas City,
Makati City, Marikina City, Mandaluyong City, Muntinlupa City, Parañaque City, Pasay City, Pasig City and Quezon City x x
x.26 Clearly, the authority does not include labor cases filed before the NLRC. Thus, as far as the NLRC is concerned, the
[s]upersedeas bond posted by U-Bix Corporation has no force and effect.
Assuming only that it is authorized, it failed to present proof of security deposit or collateral securing the bond as required by
Section 6(c) of Rule 6, NLRC Rules of Procedure. U-Bix failed to perfect its appeal. Therefore, the Order appealed from has
attained finality.27
Anent the Motion to Quash Writ of Execution and to Lift Order of Garnishment, it held as follows:
As mentioned earlier, the Order approving the judgment award has become final and executory, thus, the issuance of the
writ of execution is proper. There is nothing more left to be done except its execution.28
Hence:
WHEREFORE, premises considered, the Appeal, Omnibus Motion to Quash Writ of Execution and to Lift Order of Garnishment
filed by U-Bix Corporation and Edilberto Bravo are DENIED for lack of merit.
SO ORDERED.29
Petitioners moved for reconsideration which was dismissed in a Resolution30 dated September 27, 2010.
Thus, petitioners sought recourse from the CA through a Petition for Certiorari with Prayer for the Issuance of Temporary
Restraining Order and/or Writ of Preliminary Injunction. They imputed upon the NLRC grave abuse of discretion amounting to
lack or in excess of jurisdiction when it denied their appeal outright on the ground that the supersedeas bond accompanying
the appeal has no force and effect. They argue that: (1) Mapfre is a bonding company accredited by this Court and the
NLRC; (2) petitioner Bravo's signature in the indemnity agreement constitutes his personal guarantee of the supersedeas
bond; and (3) the grounds relied upon in their memorandum of appeal are meritorious.31 ChanRoblesVirtualawl ibra ry
In a Decision32 dated August 9, 2011, the CA denied the Petition. Citing Article 22333 of the Labor Code and Section 634 Rule
VI of the New Rules of Procedure of the NLRC, it emphasized that the filing of a supersedeas bond for the perfection of an
appeal is mandatory and jurisdictional. In this case, the CA found the supersedeas bond posted by petitioners to be irregular
in view of the Certification of Accreditation and Authority issued by the Office of the Court Administrator (OCA) that Mapfre's
authority to transact business was limited only to Civil/Special cases and does not cover labor cases. Besides, the said court
found no meritorious ground to relax the requirement of posting a supersedeas bond. Thus:
WHEREFORE, in view of the foregoing premises, the petition filed in this case is hereby DENIED for lack of merit. The
Resolutions issued by the Third Division of the National Labor Relations Commission dated June 29, 2010 and September 27,
2010 in NLRC NCR Case No. 00-05-03696-97 is hereby AFFIRMED.
SO ORDERED.35
As petitioners' Motion for Reconsideration36 was likewise denied in a Resolution37 dated December 7, 2011, they are now
before this Court through this Petition for Review on Certiorari.
cralawlawl ibra ry
Issues
THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN AFFIRMING THE NLRC'S DECISION DISMISSING
OUTRIGHT PETITIONERS' APPEAL ON THE GROUND THAT THE ACCOMPANYING SUPERSEDEAS BOND WAS INVALID,
CONSIDERING THAT:
MAPFRE INSULAR INSURANCE CORPORATION IS A BONDING COMPANY ACCREDITED BY BOTH THE NLRC AND THE
SUPREME COURT.
PETITIONER BRAVO'S SIGNATURE IN THE INDEMNITY AGREEMENT CONSTITUTES HIS PERSONAL GUARANTEE OF THE
SUPERSEDEAS BOND.
PETITIONERS' MEMORANDUM OF APPEAL IS IMPRESSED WITH MERIT SUCH THAT A RESOLUTION OF THE SUBSTANTIAL
ISSUES RAISED THEREIN WAS WARRANTED.38
Our Ruling
Perfection of an appeal in the manner

and within the period prescribed by law
is not only mandatory and jurisdictional
and failure to conform to the rules will
render the judgment sought to be
reviewed final and unappealable.
Petitioners argue that the CA erred in concluding that the supersedeas bond they posted was irregular and therefore has no
force and effect based on the OCA certification that Mapfre's authority to transact business as a bonding company refers only
to civil and special cases. They call attention to the Memorandum39 dated June 8, 2010 issued by the NLRC's Legal and
Enforcement Division for the information and guidance of all Presiding/Commissioners and Executive/Labor Arbiters regarding
the list of bonding companies accredited by this Court with respect to criminal and civil cases, which include Mapfre.
Petitioners assert that the NLRC's endorsement of the said list to all Presiding Commissioners and Executive/Labor Arbiters
could only mean that the bonding companies therein listed can also well be considered for labor cases.
The Court agrees with petitioners. In the 2013 Guidelines for Accreditation of Surety Companies40 of the NLRC, one of the
requirements for the accreditation of a bonding company is the submission of a valid Certificate of Accreditation and
Authority issued by the OCA. Upon a bonding company's submission of the same and compliance with the other
requirements, the Legal and Enforcement Division of the NLRC shall furnish all Presiding/Commissioners and Deputy/
Executive Clerks of Court a copy of the Certificate of Accreditation and Authority and a list of accredited surety companies
and their agents. While the said guidelines were issued only in 2013, it is logical to conclude that the Memorandum dated
June 8, 2010 was for the same purpose mentioned, i.e., to furnish all Presiding/Commissioners and Executive/Labor Arbiters
a list of accredited bonding companies. For one, the said Memorandum was issued by the Legal and Enforcement Division to
all Presiding/Commissioners and Executive/Labor Arbiters or similar to what is outlined under the aforementioned guidelines.
For another, and as aptly pointed out by petitioners, there could have been no other plausible reason for the said issuance
but to apprise the concerned labor officials of the list of bonding companies which they may consider in transacting business
in their respective offices.
Nevertheless, the Court still finds that petitioners failed to comply with the bond requirement in perfecting their appeal.
Article 223 of the Labor Code provides in part:
Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. x x x
xxxx
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of
a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from. (Emphasis supplied)
In case of a surety bond, the applicable Section 6, Rule VI of the 2005 Revised Rules of Procedure of the NLRC requires that
the same should be accompanied by original and certified true copies of the following:
a) a joint declaration under oath by the employer, his counsel and the bonding
company, attesting that the bond posted is genuine, and shall be in effect until final
disposition of the case;
b) an indemnity agreement between the employer-appellant and bonding company;
c) proof of security deposit or collateral securing the bond; provided, that a check shall
not be considered as an acceptable security;
d) a certificate of authority from the Insurance Commission;
e) certificate of registration from the Securities Exchange Commission;
f) certificate of authority to transact surety business from the Office of the President;
g) certificate of accreditation and authority from the Supreme Court; and
h) notarized board resolution or secretary's certificate from the bonding company
showing its authorized signatories and their specimen signatures.
Here, petitioners did not submit any proof of security deposit or collateral securing the bond. They themselves admit this in
their Petition by stating that they no longer attached a separate document of security deposit or collateral securing the bond
because Mapfre did not find it necessary to require them to give a security deposit and/or collateral. According to them,
Mapfre finds it sufficient that the Indemnity Agreement attached to the Memorandum of Appeal was signed by petitioner
Bravo, the president of petitioner U-Bix, in his personal capacity.
The Court, however, cannot accept such flimsy excuse of petitioners.
It must be noted that right from the start, petitioners were well represented by counsel who is presumed to know the explicit
requirement under the aforementioned Section 6 that a surety bond should be accompanied by a proof of security deposit or
collateral. Hence, petitioners cannot reason out that they were not able to submit the same because Mapfre did not require
them to give such a deposit or collateral. What appears here instead is that while petitioners seem to be aware of the said
requirement, they risked dispensing with the same and chose to stand by the alleged word of Mapfre that they need not
submit any proof of security deposit or collateral. It is well to remind petitioners that parties are not at a liberty to choose
which rule of technicality to comply with or not. To stress, "[t]he requirements for perfecting an appeal must, as a rule, be
strictly followed. Such requirements are considered indispensable interdictions against needless delay and are necessary for
the orderly discharge of the judicial business."41ChanRoble sVirtualawl ibra ry
In the same vein, petitioners are clutching at straws in impressing upon this Court that petitioner Bravo, in signing the
Indemnity Agreement in his personal capacity, has already bound himself to be jointly and severally liable with Mapfre for
the monetary award and this has the effect of securing the bond. Suffice it to say that "[t]he obvious purpose of an appeal
bond is to ensure, during the period of appeal, against any occurrence that would defeat or diminish recovery by the
aggrieved employees under the judgment if subsequently affirmed."42 To the Court's mind, the intention in requiring a
security deposit or collateral to secure the bond, apart from the indemnity agreement between the employer-appellant and
the bonding company, is to further ensure recovery by the employee of the judgment award should the same be affirmed, in
any and all eventualities. This is also in keeping with the purpose of the bond requirement which is to "discourage employers
from using the appeal to delay, or even evade, their obligation to satisfy their employee's possible just and lawful
claims."43 Besides, it is an ail-too familiar rule in statutory construction that when a rule is clear and unambiguous,
interpretation need not be resorted to.44 Since Section 6, Rule VI of the 2005 NLRC Rules of Procedure requires that a surety
bond should be accompanied by both an indemnity agreement and proof of security deposit or collateral securing the bond,
among others, that two must be presented. The submission of one cannot be considered sufficient as to dispense with the
other. No resort to any interpretation is necessary, there is only room for application.45ChanRobles Vi rtua lawlib rary
It is a settled rule that "the perfection of an appeal in the manner and within the period prescribed by law is, not only
mandatory, but jurisdictional, and failure to conform to the rules will render the judgment sought to be reviewed final and
unappealable."46 As can be gleaned from the foregoing, petitioners failed to perfect their appeal in the manner prescribed by
the rules. Hence and as correctly ruled by the NLRC and affirmed by the CA, the April 16, 2010 Order of Labor Arbiter Flores
approving the recomputation of the money award and ordering the issuance of a writ of execution has already attained
finality and this warranted the dismissal of petitioners' appeal therefrom before the NLRC.
It is worth stating that indeed in several cases, the Court -

relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the
merits. This is in line with the time honored principle that cases should be decided only after giving all the parties the chance
to argue their causes and defenses. Technicality and procedural imperfections should thus not serve as bases of decisions. In
that way, the ends of justice would be better served. For indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to
promote the administration of justice.47
It must be emphasized, however, that "the policy of liberal interpretation is qualified by the requirement that there must be
exceptional circumstances to allow the relaxation of the rules. Absent exceptional circumstances, [the Court adheres] to the
rule that certain procedural precepts must remain inviolable x x x."48 After all, an "appeal is not a constitutional right, but a
mere statutory privilege. Thus, parties who seek to avail themselves of it must comply with the statutes or rules allowing
it."49 The Court adheres to the strict interpretation of the rule in this case in the absence of exceptional circumstance or
compelling reason to depart from the same.
The questioned recomputation of monetary award is in order.
Petitioners argue that the recomputation of the monetary award in the sum of P3,270,512.82 is erroneous. In particular,
they assail the computation of backwages from the time of respondent's dismissal up to the finality of the Court's October
31, 2008 Decision in the illegal dismissal case on March 12, 2009. They point out that full backwages is computed from the
time an illegally dismissed employee's compensation is withheld up to the time of his actual reinstatement. And since the July
12, 1999 Decision of the NLRC awarded separation pay in lieu of reinstatement, petitioners argue that backwages should no
longer accrue beyond the date of the said NLRC Decision. This is because when the NLRC awarded separation pay in lieu of
reinstatement in its Decision, the employment tie between petitioners and respondent was already effectively severed.
This Court has already meticulously explained in Bani Rural Bank Inc. v. De Guzman50 that:
The computation of separation pay is based on the length of the employee's service; and the computation of backwages is
based on the actual period when the employee was unlawfully prevented from working.
The basis of computation of backwages
The computation of backwages depends on the final awards adjudged as a consequence of illegal dismissal, in
that:
First, when reinstatement is ordered, the general concept under Article 279 of the Labor Code, as amended, computes the
backwages from the time of dismissal until the employee's reinstatement. The computation of backwages (and similar
benefits considered part of the backwages) can even continue beyond the decision of the labor arbiter or NLRC and ends only
when the employee is actually reinstated.
Second, when separation pay is ordered in lieu of reinstatement (in the event that this aspect of the case is
disputed) or reinstatement is waived by the employee (in the event that the payment of separation pay, in lieu,
is not disputed), backwages is computed from the time of dismissal until the finality of the decision ordering
separation pay.
Third, when separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening
event that makes the award of reinstatement no longer possible x x x backwages is computed from the time of dismissal
until the finality of the decision ordering separation pay.
The above computation of backwages, when separation pay is ordered, has been the Court's consistent ruling.
In Session Delights Ice Cream and Fast Foods v. Court Appeals Sixth Division, we explained that the finality of
the decision becomes the reckoning point because in allowing separation pay, the final decision effectively
declares that the employment relationship ended so that separation pay and backwages are to be computed up
to that point.
We may also view the proper computation of backwages (whether based on reinstatement or an order of separation pay) in
terms of the life of the employment relationship itself.
When reinstatement is ordered, the employment relationship continues. Once the illegally dismissed employee is reinstated,
any compensation and benefits thereafter received stem from the employee's continued employment. In this instance,
backwages are computed only up until the reinstatement of the employee since after the reinstatement, the employee begins
to receive compensation from his resumed employment.
When there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or
subsequently ordered in light of a supervening event making the award of reinstatement no longer possible), the
employment relationship is terminated only upon the finality of the decision ordering the separation pay. The
finality of the decision cuts-off the employment relationship and represents the final settlement of the rights
and obligations of the parties against each other. Hence, backwages no longer accumulate upon the finality of
the decision ordering the payment of separation pay since the employee is no longer entitled to any
compensation from the employer by reason of the severance of his employment.51 (Citations omitted; emphases
and underscoring supplied)
Clearly, therefore, respondent is entitled to backwages computed from the time she was illegally dismissed up to the date of
the finality of the Court's October 31, 2008 Decision in the illegal dismissal case on March 12, 2009. The Court, thus, finds
the subject recomputation of money award to be in order.
WHEREFORE, premises considered, the Petition is hereby DENIED. The Decision dated August 9, 2011 and the Resolution
dated December 7, 2011 of the Court of Appeals in CA-G.R. SP No. 117199 are hereby AFFIRMED.
G.R. No. 196853
ROBERT CHUA, Petitioner,

vs.
PEOPLE OF THE PIIlLIPPINES, Respondent.
DECISION
DEL CASTILLO, J.:
Petitioner Robert Chua (Chua) was charged with 54 counts of violation of Batas Pambansa Big. 22 (BP 22) for
issuing checks which were dishonored for either being drawn against insufficient funds or closed account.
Factual Antecedents
Chua and private complainant Philip See (See) were long-time friends and neighbors. On different dates from 1992
until 1993, Chua issued several postdated PSBank checks of varying amounts to See pursuant to their
rediscounting arrangement at a 3% rate, to wit:
PSBANK CHECK NO. DATED AMOUNT

1 018062 December 25, 1993 Php300,000.00
2 018061 December 23, 1993 Php350,000.00
3 017996 December 16, 1993 Php100,000.00
4 017992 December 14, 1993 Php200,000.00
5 017993 December 14, 1993 Php200,000.00
6 018138 November 22, 1993 Php 6,000.00
7 018122 November 19, 1993 Php 13,000.00
8 018120 November 18, 1993 Php 6,000.00
9 018162 November 22, 1993 Php 10,800.00
10 018069 November 17, 1993 Php 9,744.25
11 018117 November 17, 1993 Php 8,000.00
12 018149 November 28, 1993 Php 6,000.00
13 018146 November 27, 1993 Php 7,000.00
14 006478 November 26, 1993 Php200,000.00
15 018148 November 26, 1993 Php300,000.00
16 018145 November 26, 1993 Php 7,000.00
17 018137 December 10, 1993 Php150,000.00
18 017991 December 10, 1993 Php150,000.00
19 018151 December 10, 1993 Php150,000.00
20 017962 December 08, 1993 Php150,000.00
21 018165 December 08, 1993 Php 14,000.00
22 018154 December 07, 1993 Php100,000.00
23 018164 December 07, 1993 Php 14,000.00
24 018157 December 07, 1993 Php600,000.00
25 018161 December 06, 1993 Php 12,000.00
26 018160 December 05, 1993 Php 12,000.00
27 018033 November 09, 1993 Php 3,096.00
28 018032 November 08, 1993 Php 12,000.00
29 018071 November 06, 1993 Php150,000.00
30 018070 November 06, 1993 Php150,000.00
31 006210 October 21, 1993 Php100,000.00
32 006251 October 18, 1993 Php200,000.00
33 006250 October 18, 1993 Php200,000.00
34 017971 October 13, 1993 Php400,000.00
35 017972 October 12, 1993 Php335,450.00
36 017973 October 11, 1993 Php464,550.00
37 006433 September 24, 1993 Php520,000.00
38 006213 August 30, 1993 Php100,000.00
39 017976 December 13, 1993 Php100,000.00
40 018139 December 13, 1993 Php125,000.00
41 018141 December 13, 1993 Php175,000.00
42 018143 December 13, 1993 Php300,000.00
43 018121 December 10, 1993 Php166,934.00
44 018063 November 12, 1993 Php 12,000.00
45 018035 November 11, 1993 Php 7,789.00
46 017970 November 11, 1993 Php600,000.00
47 018068 November 18, 1993 Php 7,800.00
48 017956 November 10, 1993 Php800,000.00
49 018034 November 10, 1993 Php 7,116.00
50 017907 December 1, 1993 Php200,000.00
51 018152 November 30, 1993 Php 6,000.00
52 018067 November 30, 1993 Php 7,800.00
53 006490 November 29, 1993 Php100,000.00
54 018150 November 29, 1993 Php 6,000.001
However, See claimed that when he deposited the checks, they were dishonored either due to insufficient funds or
closed account. Despite demands, Chua failed to make good the checks. Hence, See filed on December 23, 1993 a
Complaint2 for violations of BP 22 before the Office of the City Prosecutor of Quezon City. He attached thereto a
demand letter3 dated December 10, 1993.
In a Resolution4 dated April 25, 1994, the prosecutor found probable cause and recommended the filing of charges
against Chua. Accordingly, 54 counts of violation of BP 22 were filed against him before the Metropolitan Trial Court
(MeTC) of Quezon City.
Proceedings before the Metropolitan Trial Court
During the course of the trial, the prosecution formally offered as its evidence5 the demand letter dated December
10, 1993 marked as Exhibit "B."6 Chua, however, objected7 to its admissibility on the grounds that it is a mere
photocopy and that it does not bear any proof that he actually received it. In view of these, Chua filed on April 14,
1999 a Motion to Submit Demurrer to Evidence.8 Per Chua’s allegation, however, the MeTC failed to act on his
motion since the judge of said court vacated his post.
Several years later, the prosecution filed a Motion to Re-Open Presentation of Prosecution’s Evidence and Motion to
Allow Prosecution to Submit Additional Formal Offer of Evidence9 dated March 28, 2003. It averred that while See
was still trying to locate a demand letter dated November 30, 1993 (which it alleged to have been personally served
upon Chua), the prosecution nevertheless decided to rest its case on February 24, 1999 so as not to further delay
the proceedings. However, sometime in February 2002, See decided to have his house rented out such that he
emptied it with all his belongings and had it cleaned. It was during this time that he found the demand letter dated
November 30, 1993.10 The prosecution thus prayed that it be allowed to submit a supplemental offer of evidence to
include said demand letter dated November 30, 1993 as part of its evidence. Again, the records of the case bear no
copy of an MeTC Order or Resolution granting the aforesaid motion of the prosecution. Nevertheless, extant on
records is a Formal Offer of Evidence11 filed by the private prosecutor submitting the demand letter dated November
30, 1993 as additional evidence. In his objection thereto,12 Chua averred that the papers on which the demand letter
dated November 30, 1993 are written were given to him as blank papers. He affixed his signature thereon
purportedly to give See the authority to retrieve a car which was supposed to serve as payment for Chua’s
obligation to See. In an Order13 dated November 18, 2005, the MeTC refused to take cognizance of the
supplemental formal offer on the ground that the same was filed by the private prosecutor without the conformity of
the public prosecutor. Be that as it may, the demand letter dated November 30, 1993 eventually found its way into
the records of this case as Exhibit "SSS."14
Later, the defense, with leave of court, filed a Demurrer to Evidence.15 It again pointed out that the demand letter
dated December 10, 1993 attached to See’s affidavit-complaint is a mere photocopy and not accompanied with a
Post Office Registry Receipt and Registry Return Receipt. Most importantly, it does not contain Chua’s signature
that would serve as proof of his actual receipt thereof. In view of these, the defense surmised that the prosecution
fabricated the demand letter dated November 30, 1993 to remedy the lack of a proper notice of dishonor upon
Chua. At any rate, it argued that while the November 30, 1993 demand letter contains Chua’s signature, the same
should not be given any probative value since it does not contain the date when he allegedly received the same.
Hence, there is simply no way of reckoning the crucial five-day period that the law affords an issuer to make good
the check from the date of his notice of its dishonor.
In an Order16 dated January 12, 2007, the MeTC denied the defense’s Demurrer to Evidence. The Motion for
Reconsideration thereto was likewise denied in an Order17 dated May 23, 2007. Hence, the trial of the case
proceeded.
In a Consolidated Decision18 dated May 12, 2008, the MeTC convicted Chua of 54 counts of violation of BP 22 after
it found all the elements of the offense obtaining in the case. Anent Chua’s receipt of the notice of dishonor, it
ratiocinated, viz.:
xxxx
The prosecution had proved also that private complainant personally sen[t] a written notice of dishonor of the
subject check to the accused and that the latter personally received the same. In fact, the defense stipulated in open
court the existence of the said demand letter and the signature of the accused as reflected in the face of the
demand letter. x x x In view of that stipulation, the defense is now estopped [from] denying its receipt thereof.
Although there was no date when accused received the demand letter x x x the demand letter was dated, thus it is
presumed that the accused received the said demand letter on the date reflected on it. It has been said that
"admission verbal or written made by the party in the course of the proceedings in the same case does not require
proof."x x x
[In spite of] receipt thereof, the accused failed to pay the amount of the checks or make arrangement for its payment
"[w]ithin five (5) banking days after receiving notice that the said checks have not been paid by the drawee bank. As
a result, the presumption of knowledge as provided for in Section 2 of Batas Pambansa Bilang 22 which was the
basis of reckoning the crucial five (5) day period was established.19
Hence, the dispositive portion of the MeTC Decision:
WHEREFORE, premises considered, this court finds accused Robert Chua GUILTY, beyond reasonable doubt, of
fifty four (54) counts of Violation of Batas Pambansa Bilang 22 and hereby sentence[s] him to suffer the penalty of
six (6) months imprisonment for each case and to restitute to the private complainant the total amount of the face
value of all the subject checks in these cases with legal interest of 12% per annum reckoned from the filing of the
informations until the full amount is fully paid and to pay the costs of suit.
SO ORDERED.20
Ruling of the Regional Trial Court (RTC)
Aggrieved, Chua appealed to the RTC where he argued that: (1) the complaint was prematurely filed since the
demand letter dated December 10, 1993 had not yet been sent to him at the time of filing of the Complaint; (2) the
demand letter dated November 30, 1993 has no probative value since it lacked proof of the date when Chua
received the same; and, (3) since Chua was acquitted in two other BP 22 cases involving the same parties, facts
and issues, he should likewise be acquitted in the present case based on the principle of stare decisis.
In a Decision21 dated July 1, 2009, the RTC likewise found all the elements of BP 22 to have been sufficiently
established by the prosecution, to wit:
(1) the making, drawing, and issuance of any check to apply for account or for value;
(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or
credit with the drawee bank for the payment of the check in full upon its presentment;
(3) the subsequent dishonor of the check by the drawee bank for insufficient funds or credit or dishonor for the same
reason had not the drawer, without any valid cause ordered the bank to stop payment.
As to first element, the RTC held that the evidence shows that Chua issued the checks in question. Next, on the
basis of the demand letter dated November 30, 1993 bearing Chua’s signature as proof of receipt thereof, it was
likewise established that he had knowledge of the insufficiency of his funds with the drawee bank at the time he
issued the checks, thus, satisfying the second element. It expounded:
Thus, in order to create the prima facie presumption that the issuer knew of the insufficiency of funds, it must be
shown that he or she received a notice of dishonor and, within five banking days thereafter, failed to satisfy the
amount of the check or make arrangement for its payment. x x x
In the present case, a demand letter (Exh. "SSS") was sent to accused-appellant informing him of the dishonor of
the check and demanding he make good of the checks. The prosecution offered this in evidence, and the accused’s
signature thereon evidences his receipt of the said demand letter. Accused-appellant argues that there is no proof
that he received the same considering that there is no date on his signature appearing on the document. But as
borne out by the records of the proceedings, the defense even stipulated in open court the existence of the demand
letter. x x x
Thus, considering that the demand letter was dated November 30, 1993, the reckoning of the crucial five day period
was established. Accused failed to make arrangement for the payment of the amount of check within five-day period
from notice of the checks’ dishonor.22
Finally, the RTC ruled that the prosecution was able to prove the existence of the third element when it presented a
bank employee who testified that the subject checks were dishonored due to insufficiency of funds or closed
account.
Anent the defense’s invocation of the principle of stare decisis, the RTC found the same inapplicable since there is a
distinction between the present case and the other cases where Chua was acquitted. In the instant case, the
prosecution, as mentioned, was able to establish the second element of the offense by way of the demand letter
dated November 30, 1993 duly received by Chua. Whereas in the other cases where Chua was acquitted, there was
no proof that he received a demand letter.
Hence, the dispositive portion of the RTC Decision:
WHEREFORE, the appealed decision dated May 12, 2008 is hereby AFFIRMED.
SO ORDERED.23
Ruling of the Court of Appeals (CA)
Before the CA, Chua argued against the probative value of the demand letter dated November 30, 1993 by pointing
out that: (1) for more than 10 years from the time the case was filed, the prosecution never adverted to its existence.
He thus surmised that this was because the document was not really missing but in fact inexistent – a mere
afterthought as to make it appear that the second element of the offense is obtaining in the case; (2) the subject
demand letter is not a newly discovered evidence as it could have been discovered earlier through the exercise of
due diligence; and, (3) his counsel’s admission of the physical existence of the subject demand letter and Chua’s
signature thereon does not carry with it the admission of its contents and his receipt of the same.
Unpersuaded, the CA, in its November 11, 2010 Decision24 brushed aside Chua’s arguments in this wise:
x x x [A]s aptly pointed out by the Solicitor General, See could not have waited for a decade just to fabricate an
evidence against petitioner. The contention that petitioner’s counsel was tricked by the prosecution into stipulating
on the admissibility of the demand letter is without basis. Once validly entered into, stipulations will not be set aside
unless for good cause. They should be enforced especially when they are not false, unreasonable or against good
morals and sound public policy. When made before the court, they are conclusive. And the party who validly made
them can be relieved therefrom only upon a showing of collusion, duress, fraud, misrepresentation as to facts, and
undue influence; or upon a showing of sufficient cause on such terms as will serve justice in a particular case.
Moreover, the power to relieve a party from a stipulation validly made lies in the court’s sound discretion which,
unless exercised with grave abuse, will not be disturbed on appeal.25
And just like the MeTC and the RTC, the CA concluded that the prosecution clearly established all the elements of
the offense of violation of BP 22. Ultimately, it ruled as follows:
WHEREFORE, the instant petition is hereby DENIED for lack of merit. The assailed decision dated July 1, 2009 and
order dated October 30, 2009 of the RTC of Quezon City, Branch 219, are hereby AFFIRMED.
SO ORDERED.26
Chua filed a Motion for Reconsideration,27 but the same was denied in a Resolution28 dated May 4, 2011.
Issues
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT UPHELD THE RULINGS OF THE TRIAL COURTS
THAT THE ACCUSED AT THE TIME OF THE ISSUANCE OF THE DISHONORED CHECKS HAD KNOWLEDGE
OF THE INSUFFICIENCY OF FUNDS FOR THE PAYMENT OF THE CHECKS UPON THEIR PRESENTMENT,
BASED MERELY ON THE PRESUMPTION THAT THE DATE OF THE PREPARATION OF THE LETTER IS THE
DATE OF RECEIPT BY THE ADDRESSEE.
II
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT CONSIDERED THE DEMAND LETTER DATED 30
NOVEMBER 1993 AS A NEWLYDISCOVERED EVIDENCE.29
Chua asserts that the second element of the offense charged, i.e, knowledge of the maker, drawer, or issuer that at
the time of issue there are no sufficient funds in or credit with the drawee bank for the payment of such check in full
upon its presentment, was not proved by the prosecution. He argues that the presumption that the issuer had
knowledge of the insufficiency of funds only arises after it is proved that the issuer actually received a notice of
dishonor and within five days from receipt thereof failed to pay the amount of the check or make arrangement for its
payment. Here, the date when Chua allegedly received the demand letter dated November 30, 1993 was not
established by the prosecution. Citing Danao v. Court of Appeals,30 he thus contends that since there is no date of
receipt from which to reckon the aforementioned five-day period, the presumption that he has knowledge of the
insufficiency of funds at the time of the issuance of the checks did not arise.
In any case, Chua argues that the demand letter dated November 30, 1993 is not a newly discovered evidence. He
points out that a newly discovered evidence is one which could not have been discovered even in the exercise of
due diligence in locating the same. In this case, See claims that he only found the letter after having his house
cleaned. This means that he could have found it early on had he exercised due diligence, which, however, was
neither shown by the prosecution.
On the other hand, respondent People of the Philippines, through the Office of the Solicitor General (OSG), avers
that Chua’s contention that there is no proof of the date when he actually received the demand letter dated
November 30, 1993 involves a factual issue which is not within the province of a certiorari petition. As to the matter
of whether the subject demand letter is a newly discovered evidence, the OSG calls attention to the fact that the
MeTC, RTC and the CA all considered the said document as a newly discovered evidence. Hence, such finding
deserves full faith and credence. Besides, Chua was correctly convicted for violation of BP 22 since all the elements
of the offense were sufficiently proven by the prosecution.
Our Ruling
The Petition is impressed with merit.
The issues raised by Chua involve

questions of law.
The OSG argues that the issues raised by Chua involve questions of fact which are not within the province of the
present petition for review on certiorari. The Court, however upon perusal of the petition, finds that the issues raised
and the arguments advanced by Chua in support thereof, concern questions of law. "Jurisprudence dictates that
there is a ‘question of law’ when the doubt or difference arises as to what the law is on a certain set of facts or
circumstances; on the other hand, there is a ‘question of fact’ when the issue raised on appeal pertains to the truth
or falsity of the alleged facts. The test for determining whether the supposed error was one of ‘law’ or ‘fact’ is not the
appellation given by the parties raising the same; rather, it is whether the reviewing court can resolve the issues
raised without evaluating the evidence, in which case, it is a question of law; otherwise, it is one of fact. In other
words, where there is no dispute as to the facts, the question of whether or not the conclusions drawn from these
facts are correct is a question of law. However, if the question posed requires a re-evaluation of the credibility of
witnesses, or the existence or relevance of surrounding circumstances and their relationship to each other, the issue
is factual."31
Chua raises two issues in this petition, to wit: (1) whether the MeTC, RTC and the CA correctly applied the legal
presumption that Chua has knowledge of the insufficiency of funds at the time he issued the check based on his
alleged receipt of the demand letter dated November 30, 1993 and his failure to make good the checks five days
from such receipt; and (2) whether the said courts correctly considered the demand letter dated November 30, 1993
as newly discovered evidence. As to the first issue, it is not disputed that the subject demand letter, while bearing
the signature of Chua, does not indicate any date as to his receipt thereof. There being no disagreement as to this
fact, the propriety of the conclusion drawn from the same by the courts below, that is, the date of the said letter is
considered as the date when Chua received the same for the purpose of reckoning the five-day period to make
good the checks, clearly refers to a question of law. Similarly, the second issue is one concerning a question of law
because it requires the application of the provision of the Rules of Court concerning a newly discovered evidence.32
Nevertheless, assuming that the questions posed before this Court are indeed factual, the rule that factual findings
of the lower courts are not proper subject of certiorari petition admits of exceptions. One of these exceptions is when
the lower courts failed to appreciate certain facts and circumstances which, if taken into account, would materially
affect the result of the case. The Court finds the said exception applicable in the instant case. Clearly, the petition
deserves the consideration of this Court.
The prosecution failed to prove all the

elements of the offenses charged.
In order to successfully hold an accused liable for violation of BP 22, the following essential elements must be
present: "(1) the making, drawing, and issuance of any check to apply for account or for value; (2) the knowledge of
the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee
bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the
drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any
valid cause, ordered the bank to stop payment."33 "Of the three (3) elements, the second element is the hardest to
prove as it involves a state of mind. Thus, Section 2 of BP 22 creates a presumption of knowledge of insufficiency of
funds, which, however, arises only after it is proved that the issuer had received a written notice of dishonor and that
within five days from receipt thereof, he failed to pay the amount of the check or to make arrangements for its
payment.34
In the instant case, what is in dispute is the existence of the second element. Chua asserts that the absence of the
date of his actual receipt on the face of the demand letter dated November 30, 1993 prevented the legal
presumption of knowledge of insufficiency of funds from arising. On the other hand, the MeTC opined that while the
date of Chua’s actual receipt of the subject demand letter is not affixed thereon, it is presumed that he received the
same on the date of the demand letter (November 30, 1993). Moreover, the lower courts banked on the stipulation
entered into by Chua’s counsel as to the existence of the demand letter and of Chua’s signature thereon. By reason
of such stipulation, they all held that Chua could no longer impugn the said demand letter.
In Danao v. Court of Appeals,35 the Court discussed the importance of proving the date of actual receipt of the notice
of dishonor, viz.:
In King vs. People, this Court, through Justice Artemio V. Panganiban, held: "To hold a person liable under B.P. Blg.
22, it is not enough to establish that a check issued was subsequently dishonored. It must be shown further that the
person who issued the check knew ‘at the time of issue that he does not have sufficient funds in or credit with the
drawee bank for the payment of such check in full upon its presentment.’ Because this element involves a state of
mind which is difficult to establish, Section 2 of the law creates a prima facie presumption of such knowledge, as
follows:
‘SEC 2. Evidence of knowledge of insufficient funds – The making, drawing and issuance of a check payment of
which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within
ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of
funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that
such check has not been paid by the drawee.
Thus, this Court further ruled in King, "in order to create the prima facie presumption that the issuer knew of the
insufficiency of funds, it must be shown that he or she received a notice of dishonor and, within five banking days
thereafter, failed to satisfy the amount of the check or make arrangement for its payment."
Indeed, the prima facie presumption in Section 2 of B.P. Blg. 22 "gives the accused an opportunity to satisfy the
amount indicated in the check and thus avert prosecution. This opportunity, as this Court stated in Lozano vs.
Martinez, serves to mitigate the harshness of the law in its application.
In other words, if such notice of non-payment by the drawee bank is not sent to the maker or drawer of the bum
check, or if there is no proof as to when such notice was received by the drawer, then the presumption
or prima facie evidence as provided in Section 2 of B.P. Blg. 22 cannot arise, since there would simply
be no way of reckoning the crucial 5-day period."36 (Italics in the original, emphasis supplied)
Similarly in the present case, there is no way to ascertain when the five-day period under Section 22 of BP 22 would
start and end since there is no showing when Chua actually received the demand letter dated November 30, 1993.
The MeTC cannot simply presume that the date of the demand letter was likewise the date of Chua’s receipt
thereof. There is simply no such presumption provided in our rules on evidence. In addition, from the inception of
this case Chua has consistently denied having received subject demand letter. He maintains that the paper used for
the purported demand letter was still blank when presented to him for signature and that he signed the same for
another purpose. Given Chua’s denial, it behooved upon the prosecution to present proof of his actual receipt of the
November 30, 1993 demand letter. However, all that the prosecution did was to present it without, however,
adducing any evidence as to the date of Chua’s actual receipt thereof. It must be stressed that ‘[t]he prosecution
must also prove actual receipt of [the notice of dishonor] because the fact of service provided for in the law is
reckoned from receipt of such notice of dishonor by the accused."37 "The burden of proving notice rests upon the
party asserting its existence. Ordinarily, preponderance of evidence is sufficient to prove notice. In criminal cases,
however, the quantum of proof required is proof beyond reasonable doubt. Hence, for B.P. Blg. 22 cases, there
should be clear proof of notice"38 which the Court finds wanting in this case.
Anent the stipulation entered into by Chua’s counsel, the MeTC stated:
In the course of the said proceedings, the defense counsel manifested that he is willing to stipulate as to the
existence of the demand letter and the signature of the accused as reflected on the face of the demand letter. x x x
xxxx
The prosecution had proved also that private complainant personally sent a written notice of dishonor of the subject
checks to the accused and that the latter personally received the same. In fact, the defense stipulated in open court
the existence of the said demand letter and the signature of the accused as reflected in the face of the demand
letter. x x x In view of that stipulation, the defense is now estopped in denying its receipt thereof.39
As earlier mentioned, this ruling of the MeTC was affirmed by both the RTC and the CA.
The Court, however, disagrees with the lower courts. It is plain that the stipulation only refers to the existence of the
demand letter and of Chua’s signature thereon. In no way can an admission of Chua’s receipt of the demand letter
be inferred therefrom. Hence, Chua cannot be considered estopped from claiming non-receipt. Also, the Court
observes that Chua’s admission with respect to his signature on the demand letter is consistent with his claim that
See made him sign blank papers where the contents of the demand letter dated November 30, 1993 were later
intercalated.
In view of the above discussion, the Court rules that the prosecution was not able to sufficiently prove the existence
of the second element of BP 22.
At any rate, the demand letter dated

November 30, 1993 deserves no weight
and credence not only because it does
not qualify as a newly discovered
evidence within the purview of the law
but also because of its doubtful
character.
As may be recalled, the prosecution had already long rested its case when it filed a Motion to Re-Open Presentation
of Prosecution’s Evidence and Motion To Allow Prosecution To Submit Additional Formal Offer of Evidence dated
March 28, 2003. Intending to introduce the demand letter dated November 30, 1993 as a newly discovered
evidence, See attached to the said motion an affidavit40 of even date where he stated the circumstances surrounding
the fact of his location of the same, viz.:
2. When we initially presented our evidence in support of these criminal complaints, I was already looking for a copy
of the demand letter personally served by the affiant (See) and duly received by [Chua];
3. That despite diligent efforts to locate the demand letter x x x dated November 30, 1993, the same was not located
until sometime in February 2002 when I was having our old house/office located at C-5 Christian Street, Grace
Village, Quezon City, cleaned and ready to be rented out;
4. x x x [upon] showing the same to the new handling public prosecutor, he advised the affiant to have it presented
in Court.41
In Ybiernas v. Tanco-Gabaldon,42 the Court held that:
x x x The question of whether evidence is newly discovered has two aspects: a temporal one, i.e., when was the
evidence discovered, and a predictive one, i.e., when should or could it have been discovered. It is to the latter that
the requirement of due diligence has relevance. We have held that in order that a particular piece of evidence may
be properly regarded as newly discovered to justify new trial, what is essential is not so much the time when the
evidence offered first sprang into existence nor the time when it first came to the knowledge of the party now
submitting it; what is essential is that the offering party had exercised reasonable diligence in seeking to locate such
evidence before or during trial but had nonetheless failed to secure it.
The Rules do not give an exact definition of due diligence, and whether the movant has exercised due diligence
depends upon the particular circumstances of each case. Nonetheless, it has been observed that the phrase is often
equated with "reasonable promptness to avoid prejudice to the defendant." In other words, the concept of due
diligence has both a time component and a good faith component. The movant for a new trial must not only act in a
timely fashion in gathering evidence in support of the motion; he must act reasonably and in good faith as well. Due
diligence contemplates that the defendant acts reasonably and in good faith to obtain the evidence, in light of the
totality of the circumstances and the facts known to him.43
"Under the Rules of Court, the requisites for newly discovered evidence are: (a) the evidence was discovered after
trial; (b) such evidence could not have been discovered and produced at the trial with reasonable diligence; and (c)
it is material, not merely cumulative, corroborative or impeaching, and is of such weight that, if admitted, will
probably change the judgment."44
In this case, the Court holds that the demand letter dated November 30, 1993 does not qualify as a newly
discovered evidence within the purview of the law. Per See’s statements in his affidavit, the said evidence was
already known to him at the time he filed his complaint against Chua. It was also apparently available considering
that it was just kept in his house. Undeniably, had See exercised reasonable diligence, he could have promptly
located the said demand letter and presented it during trial. However, the circumstances suggest otherwise.
Curiously, while See claims that the demand letter dated November 30, 1993 was already existing at the time he
filed the complaint, the same was not mentioned therein. Only the demand letter dated December 10, 1993 was
referred to in the complaint, which per See’s own allegations, was also not actually received by Chua. In addition,
the prosecution failed to present the original copy of the demand letter dated December 10, 1993 during trial. Clearly
on the basis of the demand letter dated December 10, 1993 alone, the prosecution cannot possibly establish the
existence of the second element of the offense. Indeed, the surrounding circumstances and the doubtful character
of the demand letter dated November 30, 1993 make it susceptible to the conclusion that its introduction was a mere
afterthought – a belated attempt to fill in a missing component necessary for the existence of the second element of
BP 22.
It may not be amiss to add at this point that out of the 54 cases for violation of BP 22 filed against Chua, 22 involve
checks issued on November 30, 1993 or thereafter. Hence, the lower courts grievously erred in convicting Chua for
those 22 cases on the basis of a purported demand letter written and sent to Chua prior to the issuance of said 22
checks. Checks can only be dishonored after they have been issued and presented for payment. Before that,
dishonor cannot take place. Thus, a demand letter that precedes the issuance of checks cannot constitute as
sufficient notice of dishonor within the contemplation of BP 22. It is likewise significant to note that aside from the
absence of a date, the signature of Chua appearing on the questioned November 30, 1993 demand letter is not
accompanied by any word or phrase indicating that he affixed his signature thereon to signify his receipt thereof.
Indeed, "conviction must rest upon the strength of the evidence of the prosecution and not on the weakness of the
evidence for the defense."45 In view of the foregoing, the Court cannot accord the demand letter dated November 30,
1993 any weight and credence. Consequently, it cannot be used to support Chua’s guilt of the offenses charged.
All told, the Court cannot convict Chua for violation of BP 22 with moral certainty.
Chua’s acquittal, however, does not entail the extinguishment of his civil liability for the dishonored checks.46 "An
acquittal based on lack of proof beyond reasonable doubt does not preclude the award of civil damages."47 For this
reason, Chua must be directed to testitute See the total amount of the face value of all the checks subject of the
case with legal interest at the rate of 12% per annum reckoned from the time the said checks became due and
demandable up to June 30, 2013 and 6% per annum from July 1, 2013 until fully paid.48
WHEREFORE, the Court GRANTS the Petition. The assailed Decision dated November 11, 2010 of the Court of
Appeals in CA-GR. CR No. 33079 which affirmed the Decisions of the Metropolitan Trial Court of Quezon City,
Branch 36 and the Regional Trial Court of Quezon City, Branch 219 finding petitioner Robert Chua guilty beyond
reasonable doubt of 54 counts of Violation of Batas Pambansa Big. 22 is REVERSED and SET ASIDE. Petitioner
Robert Chua is hereby ACQUITTED on the ground that his guilt has not been established beyond reasonable doubt
and ordered RELEASED immediately / unless he is detained for some other legal cause. He is ordered, however, to
indemnify the private complainant Philip See the total value of the 54 checks subject of this case plus legal interest
of 12% per annum from the time the said sum became due and demandable until June 30, 2013 and 6% per
annum from July 1, 2013 until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 200773 July 8, 2015
REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ANGELINE L. DAYAOEN, AGUSTINA TAUEL,**** and LAWANA T. BATCAGAN, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the February 23, 2012 Decision2 of the Court of Appeals
(CA) in CA-G.R CV No. 92584 affirming the September 11, 2008 Amended Decision3 of the Regional Trial Court
(RTC) of La Trinidad, Benguet, Branch 63 in LRC Case No. 03-LRC-0024.
Factual Antecedents
As determined by the appellate court, the facts are as follows:
Appellees Angeline Dayaoen (Angeline), Agustina Taule (Agustina) and Lawana Batcagan4 (Lawana) filed an
Application for Registration5 of three parcels of land located in Barangay Tabangaoen, La Trinidad, Benguet,
described as Lots 1, 6 and 7, each with an area of 994 square meters, 390 sq. m., and 250 sq. m. respectively, or, a
total of 1,634 sq. m. under Survey Plan Psu-1-002413.6
The subject parcels of land were originally owned and possessed since pre-war time by Antonio Pablo (Antonio), the
grandfather of Dado Pablo (Dado), husband of appellee Angeline. In 1963, Antonio gave the parcels of land in
question to appellee Angeline and Dado asa wedding gift. From that time on, they continuously occupied and
possessed the properties. In 1976 and 1977, appellee Angeline sold Lots 6 and 7 to co-appellees Agustina and
Lawana, pursuant to an Affidavit of Quitclaim and a Deed of Absolute Sale of a Portion of Unregistered Land,
respectively. Since 12 June 1945, appellees and their predecessor-in-interest have been in public, open, exclusive,
uninterrupted and continuous possession thereof in the concept of an owner. Appellees declared the questioned
properties for taxation purposes. There was no mortgage or encumbrance of any kind whatsoever affecting the said
parcels of land. Neither did any other person have an interest therein, legal or equitable, or was in possession
thereof.
On the scheduled initial hearing, appellees adduced pieces of documentary evidence to comply with the
jurisdictional requirements of notices, posting and publication. Appellee Angeline testified on the continuous, open,
public and exclusive possession of the lands in dispute.
Trial on the merits ensued. In a Decision7 dated 6 November 2007, the court a quo granted appellees’ application for
registration. Unflinching, the Office of the Solicitor General (OSG) moved for reconsideration but failed to attain
favorable relief as its Motion was denied by the court a quoin its Order dated 11 September 2008. On even date, the
court a quo rendered the assailed Amended Decision finding appellees to have the registrable title over the subject
properties.8
LRC Case No. N-453
Previously, or in 1979, herein respondents Angeline, Agustina and Lawana filed a similar application for registration
of the herein subject property which was docketed as LRC Case No. N-453 before the RTC La Trinidad, Branch 8.
The Republic opposed the application. After trial on the merits, a Decision9 dated December 26, 1994 was rendered
dismissing the application on the ground that respondents failed to prove that they or their predecessors-in-interest
have been in open, continuous, exclusive and notorious possession of the subject property under a bona fide claim
of ownership since June 12, 1945 or earlier. Respondents did not appeal the said Decision; thus, it became final and
executory.
Ruling of the Regional Trial Court in LRC Case No. 03-LRC-0024
The September 11, 2008 Amended Decision in LRC Case No. 03-LRC-0024 held as follows:
Well settled is the rule that the burden of proof in land registration cases is incumbent on the applicant who must
show that he is the real and absolute owner in fee simple of the land being applied for. x x x The applicant must
present specific acts of ownership to substantiate the claim and cannot just offer general statements which are more
conclusion of law than factual evidence of possession. Simply put, facts constituting possession must be duly
established by competent evidence. x x x
However, given the foregoing facts, as borne out by competent, reliable, concrete, and undisputed evidence, the
Court cannot conceive of any better proof of applicants’ adverse, continuous, open, public, peaceful, uninterrupted
and exclusive possession and occupation in concept of owners. The Court finds and concludes that the applicants
have abundantly shown the specific acts that would show such nature of their possession. In view of the totality of
facts obtaining in evidence on record, the applicants had ably complied with the burden of proof required of them by
law. The Court holds that the established facts are sufficient proof to overcome the presumption that the lots sought
to be registered form part of the public domain. Hence, they have fully discharged to the satisfaction of the Court
their burden in this proceeding. Moreover, the Court is mindful of what the Supreme Court said in Director of Lands
v. Funtillarx x x that "The attempts of humble people to have disposable lands they have been tilling for generations
titled in their names should not only be viewed with an understanding attitude but should, as a matter of policy, be
encouraged." For this reason, the Supreme Court limited the strict application of the rule stated in Heirs of
Amunategui v. Director of Forestry, x x x, that "In confirmation of imperfect title cases, the applicant shoulders the
burden of proving that he meets the requirements of Section 48, Commonwealth Act No. 141, as amended by
Republic Act 1942. He must overcome the presumption that the land he is applying for is part of the public domain
but that he has an interest therein sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open and notorious possession and
occupation of agricultural lands of the public domain under a bona fide claim of acquisition of ownership for at least
thirty (30) years preceding the filing of his application." Thus, in Director of Lands v. Funtillar, the Supreme Court
liberalized the aforecited rule and stated:
The Regalian doctrine which forms the basis of our land laws and, in fact, all laws governing natural resources is a
revered and long standing principle. It must, however, be applied together with the constitutional provisions on social
justice and land reform and must be interpreted in a way as to avoid manifest unfairness and injustice.
Every application for a concession of public land has to be viewed in the light of its peculiar circumstances. A strict
application of the Heirs of Amunategui vs. Director of Forestry (126 SCRA 69) ruling is warranted whenever a
portion of the public domain is in danger of ruthless exploitation, fraudulent titling, or other questionable practices.
But when an application appears to enhance the very reasons behind the enactment of Act 496, as amended, or the
Land Registration Act, and Commonwealth Act No. 141, as amended, or the Public Land Act, then their provisions
should not be made to stand in the way of their own implementation.
In the present case, there is no showing that any "portion of the public domain is in danger of ruthless exploitation,
fraudulent titling, or other questionable practices." Instead, it is very evident from applicants’ mass of undisputed
evidence that the present application will enhance social justice considerations behind the Public Land Law and the
Land Registration Act, in the light of the incontrovertible fact that applicant Angeline Dayaoen and her three (3)
children have long established their residential houses on the land subject of the application, which is "the policy of
the State to encourage and promote the distribution of alienable public lands as a spur to economic growth and in
line with the social justice ideal enshrined in the Constitution"(Republic vs. Court of Appeals, G.R. No. L-62680,
November 9, 1988).
In the case at bar, the tracing cloth (Diazo Polyester film) of the approved survey plan of the land embracing the lots
subject of the application was adduced in evidence as Exhibit "H" for the applicants. At its lower left hand corner is a
certification. It states in part: "x x x. This Survey is inside the alienable and disposable areas per Proc. No. 209, Lot-
A. The land herein described is outside any military or civil reservations. x x x" Aside from this certification, it is
further certified by Geronimo B. Fernandez, in his capacity as Supervising Geodetic Engineer I, "that this survey is
outside the Mountain State Agricultural College and it is within the Proclamation No. 209, Lot-A." Further scrutiny of
the tracing cloth plan also reveals that the survey plan was approved by Regional Director Sulpicio A. Taeza "For
the Director of Lands."
The Court takes judicial notice of Proclamation No. 20910 issued by then President Ramon Magsaysay on October
20, 1955. It provides:
"Upon recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the provisions of
Sections 83 and 89 of Commonwealth Act No. 141, as amended, I, RAMON MAGSAYSAY, President of the
Philippines do hereby exclude from the operation of Proclamation Nos. 99, 64, 39, 102 and 698, series of 1914,
1919, 1920, 1927 and 193[4], respectively, and declare the parcel or parcels of land embraced therein or portions
thereof situated in the Municipality of La Trinidad, Sub-province of Benguet, Mountain Province, open to disposition
under the provisions of the Public Land Act, to wit: x x x"
Lot A, mentioned in the aforestated certifications in the tracing cloth of the approved survey plan (Exh. "H"), is one of
the three (3) lots described in the aforecited Presidential Proclamation No. 209 opened to "disposition under the
provisions of the Public Land Act."
The categorical statement of facts in the tracing cloth of the approved survey plan (Exh. "H"), in conjunction with the
aforecited Proclamation No. 209, support the certification that the land subject of the survey is alienable and
disposable. The certifications therein attesting that the land, which embraced Lots 1, 6 and 7 subject of the present
application, is outside the Mountain State Agricultural College reservation, that it is within the Proclamation No. 209,
LotA; that the land is alienable and disposable – pursuant to the Proclamation No. 209, Lot-A, and that it is outside
any military or civil reservations. [This] statement of facts in the certifications in the tracing cloth of the approved
survey plan sufficiently contain all the essential factual and legal bases for any certification that may be issued by
the Department of Environment and Natural Resources that the lots subject of the present application are indeed
alienable and disposable. More importantly, the tracing cloth of the approved survey plan was approved by Regional
Director Sulpicio A. Taeza "For the Director of Lands." As such, the aforecited certifications in the tracing cloth of the
approved survey plan carry not only his imprimatur but also that of the Director of Lands for whom he was acting.
Thus, the approval of the survey plan was in effect the act of the Director of Lands. Necessarily, the certifications in
the approved survey plan were [those] of the Director of Lands, not only of the Supervising Geodetic Engineer I and
Regional Director Sulpicio A. Taeza. Under Commonwealth Act No. 141, the Director of Lands is empowered to
issue the approved survey plan and to certify that the land subject thereof is alienable and disposable (Exh. "H") x x
x. The law states the powers of the Director of Lands, as follows:
Sec. 3. The Secretary of Agriculture and Commerce shall be the executive officer charged with carrying out the
provisions of this Act through the Director of Lands, who shall act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct executive control of the survey, classifications,
lease, sale or any other form of concession or disposition and management of the lands of the public domain, and
his decisions as to questions of fact shall be conclusive when approved by the Secretary of Agriculture and
Commerce.
Sec. 5. The Director of Lands, with the approval of the Secretary of Agriculture and Commerce shall prepare and
issue such forms, instructions, rules, and regulations consistent with this Act, as may be necessary and proper to
carry into effect the provisions thereof and for the conduct of proceedings arising under such provisions.
Therefore, to require another certification to be issued by the Director of Lands attesting to same facts already
certified in the tracing cloth of the approved survey plan that the lots subject of the present application for
registration of titles are alienable and disposable is a needless ceremony, a pure act of supererogation.
It is clear, therefore, that the applicants have satisfactorily complied with their burden of proving "that the land
subject of an application for registration is alienable" considering that they have established "the existence of a
positive act of the government such as a presidential proclamation or an executive order, an administrative action,
investigation reports of Bureau of Lands investigators, and a legislative act or statute." The certifications
categorically cited Proclamation No. 209, Lot-A, as the basis in attesting that the land, which is the subject of the
survey and present application, is alienable and disposable because it is inside Lot A opened by the presidential
proclamation "to disposition under the provisions of the Public Land Act."
The Court finds it significant that the State has not adduced any evidence, in spite of the fact that it has all the
records, resources, and power in its command, to show that the lots subject of the present application are not
alienable and disposable part of the public domain. Having failed to refute the evidence on the very face of the
tracing cloth of the approved survey plan (Exh. "H"), which is a public document and part of a public record, the
presumption that the certifications therein contained, attesting that the lots subject of the present application for
registration are alienable and disposable, are true and correct have attained the status of concrete facts.
Hence, the Court now turns to resolve the sole issue of whether or not [sic] the herein applicants are entitled to the
confirmation of their titles to the lots subject of their present application.
It has been well established that since pre-war Antonio Pablo had been in possession and occupation of the land
(TSN, Oct. 19, 2005), which is corroborated by evidence that when the land was verbally given to applicant Angeline
Dayaoen and Dado Dayaoen as a wedding gift, the old man Antonio Pablo had already an old hut thereon (TSN,
May 29, 1984, p. 14) where the spouses stayed after their marriage (TSN, Oct. 19, 2005, p. 9), and there were
already on the land some fruit trees, and some other plants, consisting of guavas and avocados already bearing
fruits, which he had planted thereon (TSN, May 29, 1984, pp. 12-14). The anterior possession and occupation of
Antonio Pablo of the land since pre-war should be tacked to the possession and occupation of applicant Angeline
Dayaoen, and the latter’s possession and occupation, in turn, is tacked to the present possession and occupation of
her co-applicants, who acquired titles from her. Consequently, the applicants are entitled to the benefits of Sec.
48(b) of C.A. 141, as amended by R.A. 1942, which provides as follows:
"Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to
own such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the
Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a
certificate of title therefor under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of
acquisition of ownership, for atleast thirty years immediately preceding the filing of the application for confirmation of
title, except when prevented by war or force majeure. These shall be conclusively presumed to have performed all
the conditions essential to a government grant and shall be entitled to a certificate of title under the provisions of this
chapter."
This section was amended by Presidential Decree No. 1073, which took effect on January 25, 1977 (Republic vs.
Court of Appeals, G.R. No. 48327, August 21, 1991). Section 4 thereof provides:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act are hereby amended
in the sense that these provisions shall apply only to alienable and disposable lands of the public domain which
have been in open, continuous, exclusive and notorious possession and occupation by the applicant himself or thru
his predecessor-in-interest, under a bona fide claim of acquisition of ownership, since June 12, 1945
In the present case, it will be recalled that Antonio Pablo commenced possession and occupation of the land subject
of the application for confirmation of title since before the Second World War. Thus, applicant Angeline Dayaoen
was already in possession and occupation of the land under bona fide claim of acquisition of ownership for more
than thirty (30) years, including the anterior possession and occupation of Antonio Pablo, when P.D. 1073 amended
Sec. 48(b) if C.A. 141, as amended by R.A. 1942. Applicant Angeline Dayaoen already acquired vested right of
ownership over the land and, therefore, already excluded from the public domain, as it was already a private
property over which applicant Angeline Dayaoen has a confirmable title. Republic vs. Court of Appeals(G.R. No.
48327, August 21, 1991) held:
It is important to note that private respondents’ application for judicial confirmation of their imperfect title was filed in
1970 and that the land registration court rendered its decision confirming their long-continued possession of the
lands here involved in 1974, that is, during the time when Section 48(c) was in legal effect. Private respondents’
imperfect title was, in other words, perfected or vested by the completion of the required period of possession prior
to the issuance of P.D. No. 1073. Private respondents’ right in respect of the land they had possessed for thirty (30)
years could not be divested by P.D. No. 1073.
Even if Sec. 48(b) of C.A. 141 is applied in the present case in its textual form as amended by P.D. 1073, still the
present applicants are qualified thereunder to have their titles confirmed. They have already been in possession and
occupation of the lots subject of their application for confirmation of titles under bona fide claim of acquisition of
ownership for more than thirty (30) years since before the Second World War (or before June 12, 1945) considering
that the possession and occupation of x x x Antonio Pablo, the predecessor-in-interest of the present applicants,
should be tacked to their possession and occupation. Consequently, applicant Angeline Dayaoen had a vested right
over the lots subject of the present application when she conveyed, transferred and delivered Lots 6 and 7,
respectively, to her co-applicants.
Under Article 541 of the New Civil Code, which squarely applies to applicants’ present application, "A possessor in
the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be
obliged to show or prove it." Clearly, therefore, since the applicant Angeline Dayaoen and her predecessor, Antonio
Pablo, have been in continuous and uninterrupted possession of the land since before the Second World War and
have been exercising acts of ownership thereon, it is incumbent upon the State, and not the applicants, to show that
the land still forms part of the public domain. The State has utterly failed to overcome the presumption with the sole
testimony of Irene Leaño Caayas, which the Court does not even accord any weight and credence.
The tax declaration of applicant Angeline Dayaoen and religious payment of real property taxes lend strong
corroboration to the evidence of the applicants. It is the established jurisprudence that "While it is true that by
themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of
ownership they become strong evidence of ownership acquired by prescription when accompanied by proof of
actual possession of the property"(Republic vs. Court of Appeals, 131 SCRA 533). In the present application, it has
been concretely and [indisputably] established that applicant Angeline Dayaoen and her predecessor Antonio Pablo
have been in actual and continuous possession of the parcel of land embracing the lots subject of the present
application.
In fine, therefore, the present applicants are entitled to have their titles confirmed under Section 14(1) of Presidential
Decree No. 1529. The Court concludes that the applicants have indeed confirmable and registrable titles over the
lots subject of the instant application for confirmation of titles pursuant to either Sec. 48(b) of C.A. 141, as amended
by R.A. 1942, or Sec. 48(c) of C.A. 141, as amended by R.A.1942 and P.D. 1073.
WHEREFORE, in view of the foregoing, judgment is hereby rendered GRANTING the herein Application for
Registration of the parcels of land described as follows:
Lot 1, Psu-1-002413, in the name of ANGELINE L. DAYAOEN, particularly described as a parcel of land (Lot 1,
Psu-1-002413) situated at Brgy. of Tabangaoen, Mun. of La Trinidad, Prov. of Benguet, Island of Luzon. Bounded
on the NW., along line 1-2 by an alley (2.00m. wide); on the NE., along line 2-3 by Morris Leaño; on the SE., along
line 3-4 by lot 2 of the plan; on the SW., along line 4-1 by Mt. State Agricultural College, T.C.T. # 7179; Beginning at
a point marked "1" on plan being S. 63 deg. 59’E., 1391.52 m. from Tri. Sta, "TRINIDAD", La Trinidad, Benguet,
thence:
N. 45 deg. 18’E., 27.25m. to point 2;
S. 40 deg. 37’E., 33.18m. to point 3;
S. 54 deg. 05’W., 37.44m. to point 4;
N. 20 deg. 50’W., 29.94m. to point of beginning.
Containing an area of NINE HUNDRED NINETY FOUR (994) SQ. METERS, more or less.
Lot 6, Psu-1-002413, in the name of AGUSTINA TAULE, particularly described as a parcel of land (Lot 6, Psu-1-
002413) situated at Brgy. of Tabangaoen, Mun. of La Trinidad, Prov. of Benguet, Island of Luzon. Bounded on the
SW., along line 1-2 by Mt. State Agricultural College, T.C.T. # 7179; on the NE., along line 2-3 by Morris Leaño; on
the NE., along line 3-4 by Psu-1-000485; on the SE., along line 4-1 by lot 7 of the plan,. Beginning at a point marked
"1" on plan being S. 64 deg. 20’E. 1382.57m. from Tri. "TRINIDAD", La Trinidad, Benguet, thence:
N. 20 deg. 50’W., 47.27m. to point 2;

S. 45 deg. 15’E., 16.02m. to point 3;
S. 43 deg. 38’E., 24.91m. to point 4;
S. 38 deg. 20’W., 18.96m. to point of beginning.
Containing an area of THREE HUNDRED NINETY (390) SQ. METERS, more or less.
Lot 7, Psu-1-002413, in the name of LAWANA T. BATCAGAN, particularly described as a parcel of land (Lot 7, Psu-
1-002413) situated at Brgy. of Tabangaoen, Mun. of La Trinidad, Prov. of Benguet, Island of Luzon. Bounded on the
NW., along line 1-2 by Psu-1-000485; on the NE., along line 2-3 by Morris Leaño; on the SE., along line 3-4 by an
alley (2.00 m. wide); on the SW., along line 4-5 by Mt. State Agricultural College, T.C.T. # 7179; on the NW., along
line 5-1 by lot 6 of the plan. Beginning ata point marked "1" on plan being S. 65 deg. 02’E., 1385.03 m. from Tri.
"TRINIDAD", La Trinidad, Benguet, thence:
N. 62 deg. 02’E., 3.11m. to point 2;
S. 47 deg. 13’E., 10.58m. to point 3;
S. 44 deg. 47’W., 26.43m. to point 4;
N. 20 deg. 50’W., 10.29m. to point 5;
N. 38 deg. 20’E., 18.96m. to point of beginning.
Containing an area of TWO HUNDRED FIFTY (250) SQ. METERS, more or less.
The decree of registration shall be issued upon attainment by this judgment of its finality.
This Amended Decision supersedes the Decision earlier rendered by the Court.
SO ORDERED.11
Petitioner filed an appeal with the CA, which was docketed as CA-G.R. CV No. 92584. Petitioner essentially argued
that the La Trinidad RTC erred in granting respondents’ application for registration since they failed to prove that the
subject property constitutes alienable and disposable land; that the annotation on the survey plan that the subject
property is alienable and disposable is not sufficient; and that respondents failed to prove open, continuous,
exclusive and notorious possession and occupation of the subject property.
On February 23, 2012, the CA rendered the assailed Decision affirming the September 11, 2008 Amended Decision
of the La Trinidad RTC, pronouncing thus:
The Appeal bears no merit.
Appellant Republic asseverates that appellees12 failed to comply with the legal requirement of open, continuous,
exclusive and notorious possession and occupation of the lands applied for since 12 June 1945 or earlier as
required under Section 14(1) of Presidential Decree (PD) No. 1529.13
Appellant’s asseveration does not hold sway.
Section 14(1) of PD No. 1529 provides:
"Sec. 14. Who may apply. — The following persons may file in the proper Court of First Instance x x x an application
for registration of title to land, whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or earlier." By the same token, Section 48(b) of Commonwealth Act (CA)
No. 14114 which took effect [in] November 1936, amended by Section 4 PD No. 1073, provides:
"Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act are hereby amended
in the sense that these provisions shall apply only to alienable and disposable lands of the public domain which
have been in open, continuous, exclusive and notorious possession and occupation by the applicant himself or thru
his predecessor-in-interest, under a bona fide claim of acquisition of ownership, since June 12, 1945."
The proceedings under the Property Registration Decree (P.D. No. 1529), and Section 48 of the Public Land Act
(C.A. No. 141 as amended by P.D. No. 1073), are the same in that both are against the whole world, both take the
nature of judicial proceedings, and both the decree of registration issued is conclusive and final. Both proceedings
are likewise governed by the same court procedure and law of evidence.
There are three obvious requisites for the filing of an application for registration of title under Section 14 (1) – that
the property in question is alienable and disposable land of the public domain; that the applicants by themselves or
through their predecessors-in-interest have been in continuous, open, exclusive and notorious possession and
occupation, and; that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.
Withal, appellees must present specific acts of ownership to substantiate their claim and they cannot just offer
general statements which are mere conclusions of law than factual evidence of possession. Jurisprudence dictates
that a person who seeks confirmation of imperfect or incomplete title to a piece of land on the basis of possession
by himself and his predecessors-in-interest shoulders the burden of proving by clear and convincing evidence
compliance with the requirements of Section 48(b) of C.A. No. 141, as amended.
Parenthetically, case law teaches us that the determination of whether claimants were in open, continuous,
exclusive and notorious possession under a bona fide claim of ownership since 1945 as required by law, is a
question of fact. Here, We find no cogent reason to deviate from the conclusion of the court a quo that appellees
have the registrable rightowing to their and their predecessor-in-interest continuous possession of the subject
parcels of land. The foundation of such conclusion is primarily factual. Findings of fact of the trial court are
conclusive when supported by substantial evidence on record.
Contrary to appellant’s thesis, appellees were able to prove by convincing evidence that they and their predecessor-
in-interest have been in continuous, open, exclusive and notorious possession over the subject properties since 12
June 1945 or earlier. Appellee Angeline had personal knowledge that her predecessor-in-interest, Antonio, owned
and possessed them from pre-war time. She and her husband Dado, tilled and cultivated the lands in question since
1963 when it was given to them by Antonio as a wedding gift. This was corroborated by co-appellee Lawana who
was a co-employee of Antonio in 1961 at the Mountain State Agricultural College (MSAC), and witness Albert Dimas
(Albert), a resident of the adjoining lot (MSAC cottage), and witness Victor Alejandro, a neighbor of Antonio in Camp
Dangwa.
In the same vein, appellees declared the subject properties for taxation purposes. Although tax declarations and
realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of the
possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his
actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of property for taxation purposes manifests not only one’s sincere and
honest desire to obtain title to the property and announces his adverse claim against the State and all other
interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens
one’s bona fide claim of acquisition of ownership. Next, appellant’s postulations that the disputed lands were not yet
alienable and disposable and that appellees failed to overcome the presumption that all lands form part of the public
domain, carry no weight.
xxxx
In the case at bench, appellees were able to discharge such bounden duty. The subject properties are no longer
part of public domain. Their private character is declared in the annotation of the survey plan approved by the
Department of Environment and Natural Resources through the Bureau of Lands, Regional Office No. 1,San
Fernando, La Union, viz: "The survey is inside alienable and disposable areas per Proc. No. 209, Lot-A"; x x x The
land herein described is outside any military and civil reservations. x x x "The Supervising Geodetic Engineer of the
same Office likewise certified "x x x this survey is outside the Mountain State Agricultural College and it is within the
Proclamation No. 209, Lot-A."
We echo with approval the disquisition of the court a quo which thoroughly threshed out the issue on the alienable
and disposable character of the challenged parcels of land –
"In the case at bar, the tracing cloth (Diazo Polyester film) of the approved survey plan of the land embracing the
lots subject of the application x x x.
The Court takes judicial notice of Proclamation No. 209 issued by then President Ramon Magsaysay on October 20,
1955. x x x
Lot A, mentioned in the aforestated certifications in the tracing cloth of the approved survey plan (Exh. "H"), is one of
the three (3) lots described in the aforecited Presidential Proclamation No. 209 opened to "disposition under the
provisions of the Public Land Act."
The categorical statement of facts in the tracing cloth of the approved survey plan (Exh. "H"), in conjunction with the
aforecited Proclamation No. 209, support the certification that the land subject of the survey is alienable and
disposable. The certifications therein attesting that the land, which embraced Lots 1, 6 and 7 subject of the present
application, is outside the Mountain State Agricultural College reservation, that it is within the Proclamation No. 209,
Lot-A; that the land is alienable and disposable – pursuant to the Proclamation No. 209, Lot-A, and that it is outside
any military or civil reservations. [This] statement of facts in the certifications in the tracing cloth of the approved
survey plan sufficiently contain[s] all the essential factual and legal bases for any certification that may be issued by
the Department of Environment and Natural Resources that the lots subject of the present application are indeed
alienable and disposable. More importantly, the tracing cloth of the approved survey plan was approved by Regional
Director Sulpicio A. Taeza "For the Director of Lands." As such, the aforecited certifications in the tracing cloth of the
approved survey plan carry not only his imprimatur but also that of the Director of Lands for whom he was acting.
Thus, the approval of the survey plan was in effect the act of the Director of Lands. Necessarily, the certifications in
the approved survey plan were [those] of the Director of Lands, not only of the Supervising Geodetic Engineer I and
Regional Director Sulpicio A. Taeza.
The foregoing discourse is in congruity with the principle enunciated in Republic v. Serrano15 wherein the Supreme
Court explicitly pronounced, viz:
"While Cayetano failed to submit any certification which would formally attest to the alienable and disposable
character of the land applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as
annotated on the subdivision plan submitted in evidence by Paulita, constitutes substantial compliance with the legal
requirement. It clearly indicates that Lot 249 had been verified as belonging to the alienable and disposable area as
early as July 18, 1925.
The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that
no opposition was filed or registered by the Land Registration Authority or the DENR to contest respondents’
applications on the ground that their respective shares of the lot are inalienable. There being no substantive rights
which stand to be prejudiced, the benefit of the Certification may be equitably extended in favor of respondents.
In précis, We discern no reversible error committed by the court a quo.
WHEREFORE, the Appeal is hereby DENIED. The Amended Decision dated 11 September 2008 of the Regional
Trial Court, First Judicial Region, La Trinidad, Benguet, Branch 63, in LRC No. 03-LRC-0024, is AFFIRMED.
SO ORDERED.16
Hence, the present Petition.
Issues
In a November 25, 2013 Resolution,17 this Court resolved to give due course to the Petition, which contains the
following assignment of errors:
THE COURT OF APPEALS SERIOUSLY MISAPPRECIATED THE FACTS AS WELL AS MADE FINDINGS WHICH
ARE INCONSISTENT WITH, OR NOT SUPPORTED BY, THE EVIDENCE ON RECORD. LIKEWISE, IT GRAVELY
MISAPPLIEDTHE LAWS AND JURISPRUDENCE, AS FOLLOWS:
(a) The land registration court gravely erred in granting the application for registration of the three (3) subject lots
despite respondents’ utter failure to prove that the said lots are alienable and disposable, a mere annotation on the
survey plan that the said lots are alienable and disposable being insufficient to prove alienability;
(b) Respondents’ evidence is utterly insufficient to prove open, continuous, exclusive and notorious occupation and
possession by themselves and their predecessors-in-interest since June 12, 1945, or earlier.18
In its Petition and Reply19 seeking reversal of the assailed CA decision and the dismissal of respondents’ application
for registration in LRC Case No. 03-LRC-0024, petitioner argues that respondents failed to satisfy the legal
requirements relative to proof of the alienability of the subject land and continuous, open, exclusive and notorious
possession thereof. Particularly, petitioner claims that it was erroneous for the trial and appellate courts to consider
as substantial compliance the certification or annotation in the survey plan that the subject land is alienable and
disposable; that respondents did not present in court the public officials who issued the said certification/annotation
in order that they may authenticate the same; that respondents failed to establish the existence of a positive act of
government declaring that the subject land is alienable and disposable; that respondents failed to secure a
government certification that the subject land constitutes alienable and disposable land of the public domain; that
the trial court erred in taking judicial notice of Proclamation 209, as the exact boundaries of the lots covered by said
law, as well as that of the subject land, are not a matter of judicial knowledge; that respondents have not shown that
their predecessors-in-interest were in continuous, open, exclusive and notorious possession of the land for 30 years
or since June 12, 1945 or earlier; that respondents’ possession is not genuine; that the trial court erred in relying on
the testimonial evidence taken in LRC Case No. N-453 since the transcripts of stenographic notes in said case were
not submitted to the court; and that respondents’ tax declarations and receipts do not constitute proof of adverse
possession or ownership of the subject land.
Respondents’ Arguments
In their Comment,20 respondents contend that, as correctly found by the trial and appellate courts, the annotations
and certifications in the approved survey plan substantially comply with the legal requirement for a certification as to
the alienability of the subject land. They cite as follows:
Third. The approved survey plan (Exh. "H") of the respondents contain certifications attesting to the fact that the
three (3) lots, among others, which are the subject of their application for title, are within the parcel of land described
as Lot A in Presidential Proclamation 209 of the late President Ramon Magsaysay excluded from the Mountain
State Agricultural College (now Benguet State University) and released for disposition; x x x The certifications are
found at the foot of the approved survey plan (Exh. "H"), which, for ready reference, are here quoted:
Note:
All corners not otherwise described are P.S. cyl. Conc. Mons. 15x60 cm. This survey is for registration purposes and
should not be subject of a public land application unless declared public land by a competent court. This survey is
claimed by Irene L. Ca-aya – representing the Hrs. of M. Leaño. This survey is inside the alienable & disposable
area as per Proc. No. 209, Lot A. The land herein described is outside any military or civil registrations. Tax
declaration no. 4317 of real property has been submitted as part of the survey-returns.
- CERTIFICATION -
I hereby certify that this survey is outside the Mountain State Agricultural College and it is within the Proclamation
No. 209, Lot A.
(Signed)
GERONIMO B. FERNANDEZ
Superv. Geodetic Engineer - I
In recommending approval of the survey plan, Laurentino P. Baltazar, Regional Chief, Surveys Division, of the
Regional Lands Office No. 1, Bureau of Lands, then Department of Natural Resources (now Department of
Environment and Natural Resources), at San Fernando, La Union, certified:
I certify that the complete survey returns of the herein described survey, which are on file in this Office, were verified
and found to conform with pertinent laws of the Philippines and with applicable regulations of the Bureau of Lands.
In view thereof, approval of the plan is hereby recommended.
(Signed)
LAURENTINO P. BALTAZAR
Regional Chief, Survey Division
Sulpicio A. Taeza, Regional Director, Regional Lands Office No. 1, Bureau of Lands, then Department of Natural
Resources (now Department of Environment and Natural Resources), at San Fernando, La Union, approved the
survey and plan (Exh. "H") "For the Director of Lands." The survey plan (Exh. "H") was approved on April 10, 1976.
Subsequent thereto, or on August 18, 1977, the sketch plan of Mr. Edilberto Quiaoit (Exh. "P" and Exh. "Z" and
series) was prepared. It contains this certification of District Land Officer Amador Roxas of the Bureau of Lands at
the foot thereof, to wit:
CERTIFICATION
I hereby certify that this sketch plan is true and correct as plotted from the technical descriptions of Lot 954, GSS-
157, & Lots 1-7, PSU-1-002413 which are on file in this Office.
Issued upon request of Mr. Lawana Batcagan in connection with Administrative Case No. (N) Angeline Dayaoen et
al. vs. Morris Leaño et al.
… Bu. Of Lands, Baguio City August 18, 1977
(Signed)
AMADOR P. ROXAS
District Land Officer21
Respondents add that, as correctly held by the trial and appellate courts, they have satisfactorily proved their
continuous, open, exclusive and notorious possession of the subject land; that their predecessors-in-interest
occupied the land as early as during the Japanese occupation, or clearly prior to June 12, 1945; and that petitioner’s
evidence should not be believed for being biased.
Our Ruling
The trial and appellate courts seriously erred in declaring that the annotation in the tracing cloth of the approved
survey plan (Exh. "H") and the certifications therein constitute substantial compliance with the legal requirement on
presentation of a certificate of land classification status or any other proof that the subject land is alienable and
disposable. We cannot subscribe to such notion.
Under the Regalian doctrine, all lands of the public domain belong to the State. The classification and
reclassification of such lands are the prerogative of the Executive Department. The President may at any time
transfer these public lands from one class to another.22
While in 1955 the President – through Presidential Proclamation No. 209 – declared particular lands in Baguio City
as alienable and disposable, they may have been re-classified by the President thereafter. This is precisely the
reason why an applicant for registration of title based on an executive proclamation is required to present evidence
on the alienable and disposable character of the land applied for, such as a certificate of land classification status
from the Department of Environment and Natural Resources (DENR), which only the Community Environment and
Natural Resources Officer23 (CENRO) and the Provincial Environment and Natural Resources Officer24 (PENRO) are
authorized to issue under DENR Administrative Order No. 38,25 series of 1990 (DAO 38).
In Republic v. Cortez,26 the Court made the following pronouncement:
It must be stressed that incontrovertible evidence must be presented to establish that the land subject of the
application is alienable or disposable.
1âw phi 1
In the present case, the only evidence to prove the character of the subject lands as required by law is the notation
appearing in the Advance Plan stating in effect that the said properties are alienable and disposable. However, this
is hardly the kind of proof required by law. To prove that the land subject of an application for registration is
alienable, an applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order, an administrative action, investigation reports of Bureau of Lands investigators,
and a legislative actor statute. The applicant may also secure a certification from the Government that the lands
applied for are alienable and disposable. In the case at bar, while the Advance Plan bearing the notation was
certified by the Lands Management Services of the DENR, the certification refers only to the technical correctness of
the survey plotted in the said plan and has nothing to do whatsoever with the nature and character of the property
surveyed. Respondents failed to submit a certification from the proper government agency to prove that the lands
subject for registration are indeed alienable and disposable. (Emphasis in the original)
Similarly, in Republic v. Roche, the Court declared that:
Respecting the third requirement, the applicant bears the burden of proving the status of the land. In this connection,
the Court has held that he must present a certificate of land classification status issued by the Community
Environment and Natural Resources Office (CENRO) or the Provincial Environment and Natural Resources Office
(PENRO) of the DENR. He must also prove that the DENR Secretary had approved the land classification and
released the land as alienable and disposable, and that it is within the approved area per verification through survey
by the CENRO or PENRO. Further, the applicant must present a copy of the original classification approved by the
DENR Secretary and certified as true copy by the legal custodian of the official records. These facts must be
established by the applicant to prove that the land is alienable and disposable. (Emphasis in the original)
Here, Roche did not present evidence that the land she applied for has been classified as alienable or disposable
land of the public domain. She submitted only the survey map and technical description of the land which bears no
information regarding the land’s classification. She did not bother to establish the status of the land by any
certification from the appropriate government agency. Thus, it cannot be said that she complied with all requisites
for registration of title under Section 14(1) of P.D. 1529.
The annotation in the survey plan presented by Cortez is not the kind of evidence required bylaw as proof that the
subject property forms part of the alienable and disposable land of the public domain. Cortez failed to present a
certification from the proper government agency as to the classification of the subject property. Cortez likewise failed
to present any evidence showing that the DENR Secretary had indeed classified the subject property as alienable
and disposable. Having failed to present any incontrovertible evidence, Cortez’ claim that the subject property forms
part of the alienable and disposable lands of the public domain must fail. (Emphasis supplied)
Later, another pronouncement was made in Fortuna v. Republic,27 stating thus:
Under Section 6 of the PLA,28 the classification and the reclassification of public lands are the prerogative of the
Executive Department. The President, through a presidential proclamation or executive order, can classify or
reclassify a land to be included or excluded from the public domain. The Department of Environment and Natural
Resources (DENR) Secretary is likewise empowered by law to approve a land classification and declare such land
as alienable and disposable. Accordingly, jurisprudence has required that an applicant for registration of title
acquired through a public land grant must present incontrovertible evidence that the land subject of the application is
alienable or disposable by establishing the existence of a positive act of the government, such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators;
and a legislative act or a statute.
In this case, the CA declared that the alienable nature of the land was established by the notation in the survey plan,
which states:
This survey is inside alienable and disposable area as per Project No. 13 L.C. Map No. 1395 certified August 7,
1940. It is outside any civil or military reservation.
It also relied on the Certification dated July 19, 1999 from the DENR Community Environment and Natural
Resources Office (CENRO) that "there is, per record, neither any public land application filed nor title previously
issued for the subject parcel[.]" However, we find that neither of the above documents is evidence of a positive act
from the government reclassifying the lot as alienable and disposable agricultural land of the public domain.
Mere notations appearing in survey plans are inadequate proof of the covered properties’ alienable and disposable
character. These notations, at the very least, only establish that the land subject of the application for registration
falls within the approved alienable and disposable area per verification through survey by the proper government
office. The applicant, however, must also present a copy of the original classification of the land into alienable and
disposable land, as declared by the DENR Secretary or as proclaimed by the President. In Republic v. Heirs of Juan
Fabio, the Court ruled that
[t]he applicant for land registration must prove that the DENR Secretary had approved the land classification and
released the land of the public domain as alienable and disposable, and that the land subject of the application for
registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the
applicant must present a copy of the original classification of the land into alienable and disposable, as declared by
the DENR Secretary, or as proclaimed by the President.
The survey plan and the DENR-CENRO certification are not proof that the President or the DENR Secretary has
reclassified and released the public land as alienable and disposable. The offices that prepared these documents
are not the official repositories or legal custodian of the issuances of the President or the DENR Secretary declaring
the public land as alienable and disposable.
For failure to present incontrovertible evidence that Lot No. 4457 has been reclassified as alienable and disposable
land of the public domain though a positive act of the Executive Department, the spouses Fortuna’s claim of title
through a public land grant under the PLA should be denied. (Emphasis supplied and/or in the original)
Yet again, in another subsequent decision of this Court in Remman Enterprises, Inc. v. Republic,29 it was held that –
The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the
person applying for registration, who must prove that the properties subject of the application are alienable and
disposable. Even the notations on the survey plans submitted by the petitioner cannot be admitted as evidence of
the subject properties' alienability and disposability. Such notations do not constitute incontrovertible evidence to
overcome the presumption that the subject properties remain part of the inalienable public domain. (Emphasis
supplied)
Thus, while judicial notice of Presidential Proclamation No. 209 may be taken, the DENR certificate of land
classification status or any other proof of the alienable and disposable character of the land may not be dispensed
with, because it provides a more recent appraisal of the classification of the land as alienable and disposable, or that
the land has not been re-classified in the meantime. The applicable law – Section 14(1) of Presidential Decree No.
1529 – requires that the property sought to be registered is alienable and disposable at the time the application for
registration of title is filed;30 one way of establishing this material fact is through the DENR certificate of land
classification status which is presumed to be the most recent appraisal of the status and character of the property.
The ruling in Republic v. Serrano31 cannot be controlling. Instead, We must apply the pronouncements in Republic v.
Cortez, Fortuna v. Republic, and Remman Enterprises, Inc. v. Republic, as they are more recent and in point.
Besides, these cases accurately ratiocinate that such notations or certifications in approved survey plans refer only
to the technical correctness of the surveys plotted in these plans and have nothing to do whatsoever with the nature
and character of the properties surveyed, and that they only establish that the land subject of the application for
registration falls within the approved alienable and disposable area per verification through survey by the proper
government office; they do not indicate at all that the property sought to be registered is alienable and disposable at
the time the application for registration of title is filed.
On the issue of continuous, open, exclusive and notorious possession, however, there appears to be no reason to
deviate from the identical findings of fact of the trial court and the CA, which are rooted in the testimonies of the
respondents and their witnesses - categorical declarations which petitioner has failed to refute. We adopt the
findings of the trial court, to wit:
It has been well established that since pre-war Antonio Pablo had been in possession and occupation of the land
(TSN, Oct. 19, 2005), which is corroborated by evidence that when the land was verbally given to applicant Angeline
Dayaoen and Dado Dayaoen as a wedding gift, the old man Antonio Pablo had already an old hut thereon (TSN,
May 29, 1984, p. 14) where the spouses stayed after their marriage (TSN, Oct. 19, 2005, p. 9), and there were
already on the land some fruit trees, and some other plants, consisting of guavas and avocados already bearing
fruits, which he had planted thereon (TSN, May 29, 1984, pp. 12-14). The anterior possession and occupation of
Antonio Pablo of the land since pre-war should be tacked to the possession and occupation of applicant Angeline
Dayaoen, and the latter's possession and occupation, in turn, is tacked to the present possession and occupation of
her co-applicants, who acquired titles from her.32
Thus, while respondents have complied with most of the requirements in connection with their application for
registration, they have not sufficiently shown that the property applied for is alienable and disposable at the time
their application for registration was filed. The Court is left with no alternative but to deny their application for
registration. To be sure, the nation's interests will be best served by a strict adherence to the provisions of the land
registration laws.33 WHEREFORE, the Petition is GRANTED. The February 23, 2012 Decision of the Court of
Appeals in CA-G.R. CV No. 92584 and the September 11, 2008 Amended Decision of the Regional Trial Court of La
Trinidad, Benguet, Branch 63 in LRC Case No. 03-LRC-0024 are REVERSED and SET ASIDE. Respondents'
application for registration in LRC Case No. 03-LRC-0024 is ordered DISMISSED.
SO ORDERED.
G.R. No. 198096 July 8, 2015
CENTENNIAL TRANSMARINE, INC. and/or MR. EDUARDO R. JABLA, CENTENNIAL MARITIME SERVICES &
MN BONNIE SMITHWICK, Petitioners,
vs.
PASTOR M. QUIAMBAO, Respondent.
DECISION
DEL CASTILLO, J.:
"[T]he company-designated physician is expected to arrive at a definite assessment of the seafarer's fitness to work
or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarer's medical
condition remains unresolved, the seafarer shall be deemed totally and permanently disabled,"1 as in this case.
This is a Petition for Review on Certiorari2 assailing the February 28, 2011 Decision3 and August 9, 2011
Resolution4of the Court of Appeals (CA) in CAG.R. SP No. 104798, which affirmed the April 23, 20085 and May 30,
20086Resolutions of the National Labor Relations Commission (NLRC). The aforesaid NLRC Resolutions affirmed
the July 31, 2007 Decision7 of the Labor Arbiter which ordered petitioners Centennial Transmarine, Inc. and/or Mr.
Eduardo M. Jabla, Centennial Marine Services and M/V Bonnie Smithwick (petitioners) to pay respondent Pastor
Quiambao (Pastor) total and permanent disability benefits amounting to US$78,750.00 and attorney’s fees
equivalent to 10% thereof.
Antecedent Facts
Since 2004, Pastor was continuously employed by petitioner Centennial Transmarine, Inc. as a messman for and on
behalf of its foreign principal, petitioner Centennial Maritime Services. His last contract of employment8 of six months
on board the vessel MV Bonnie Smithwick was approved by the Philippine Overseas Employment Administration
(POEA)and was covered by the International Transport Workers’ Federation-Collective Bargaining Agreement (ITF-
CBA).9
Pursuant to the aforementioned contract, Pastor boarded MV Bonnie Smithwick on June 5, 2006. Shortly thereafter
or during the first week of August 2006, however, he figured in an accident while carrying heavy food provisions.
This caused him to suffer excruciating pain in his upper back. When he consulted the ship doctor, Pastor was
prescribed with oral pain killer, but the same only offered temporary relief. As his condition continued to worsen, he
was referred on September 5, 2006 to City Med Health Associates in Singapore for further evaluation and treatment.
The result of the x-ray examination conducted on him revealed that he has lumbar muscular spasm with disc
degeneration at L2/L3 and L5/S1 levels and thoracic spondylosis with disc degeneration from T4/T5 to T7/T8.10While
the attending physician declared him fit for light duties only,11 he was subsequently recommended for repatriation to
Manila for further treatment.12
Upon Pastor’s arrival in the Philippines on September 18, 2006, he was referred to the company-designated
physician, Dr. Leticia Abesamis (Dr. Abesamis). On October 2, 2006, Dr. Abesamis diagnosed him to have Thoraco
Lumbar spine nerve impingement, R/O herniated disc.13 She then referred Pastor for Magnetic Resonance Imaging
(MRI) at the Makati Medical Center and to Dr. Antonio Acosta, Jr., who later advised him not to carry heavy objects
as it might collapse his T-5 vertebral body.
While undergoing treatment, or on November 7, 2006, Pastor filed a Complaint14 against petitioners for permanent
disability compensation in the sum of US$78,750.00 pursuant to the Associated Marine Officers’ and Seamen’s
Union of the Philippines (AMOSUP)/ ITF TCCC CBA,15 sickness wages for 120 days, moral and exemplary
damages, attorney’s fees and other benefits as provided by law.
Parties’ Respective Positions
Pastor claimed that the lapse of 120 days from the time of his repatriation without any disability grading being issued
by the company-designated physician, coupled by his worsening lumbar pain despite continuous treatment,
rendered him permanently unfit for sea duties. In support of this, he presented a medical certificate dated April 17,
200716 issued by the Seamen’s Hospital attesting to his unfitness for sea service due to work-related total disability.
For their part, petitioners countered that except for his bare allegations, Pastor had not proffered sufficient evidence
to support his claim that his spinal disc degeneration or osteoarthritis is work-related or was aggravated by his
working conditions. While admitting that osteoarthritis is considered as a work-related disease under the provisions
of the POEA-Standard Employment Contract (SEC), they argued that Pastor has not satisfactorily established any
of the conditions for compensability. For one, his work as a messman does not entail heavy physical labor as to
have caused his illness. This only means that his ailment is a pre-existing disease.
Petitioners also asserted that Pastor cannot claim permanent disability compensation based on his mere inability to
work for more than120 days because a seafarer is only entitled to full disability benefits if he has been assessed
with Grade I disability. If no such assessment has been made, the seafarer is not entitled to disability compensation
even if he was unable to perform his job for more than 120 days. Petitioners further asserted that they are not liable
for sickness allowance, damages and attorney’s fees for they have already fulfilled their obligations in good faith by
providing Pastor with medical assistance.
In a Decision17 dated July 31, 2007,the Labor Arbiter ruled that when an ailment is not listed as an occupational
disease under the POEA-SEC or the conditions set forth therein for compensability have not been met, the ailment
is nevertheless disputably presumed as work-related. Hence, it was not for Pastor to prove that his illness is work-
related; rather, it behooved upon the petitioners to rebut such presumption. The Labor Arbiter, however, found that
petitioners failed to discharge their burden and, therefore, held that Pastor’s illness is work-related and
compensable. Anent the nature of Pastor’s disability, the Labor Arbiter considered the same as permanent and total
per the medical certificate issued by the Seamen’s Hospital. Thus:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the [petitioners]
to pay [Pastor] the sum of US$78,750.00 as disability benefits, plus ten percent (10%) thereof as and for attorney’s
fees.
SO ORDERED.18
Petitioners appealed to the NLRC.
In its Resolution19 of April 23, 2008, the NLRC sustained the Labor Arbiter’s finding that Pastor’s ailment is work-
related and compensable as, in fact, its proximate cause was the accident he figured in while on duty and his duties
as messman show direct connection with his illness. It likewise gave weight and credence to the medical certificate
issued by the Seamen’s Hospital attesting to Pastor’s disability as permanent since it observed that at the time the
said certificate was issued, Pastor had actually been incapable of working for more than 120 days already.
Moreover, aside from the fact that the findings contained in the said certificate appeared to be consistent with the
findings and prognosis of the company-designated physician, it can be gleaned therefrom that Pastor was already
under the care of the certifying doctor for a considerable length of time and his certification was not based on a mere
one-time consultation. Ultimately, the NLRC ruled, viz:
WHEREFORE, premises considered, we deny the appeal and AFFIRM the decision of the Labor Arbiter.
SO ORDERED.20
Petitioners moved for reconsideration,21 but the same was denied in the NLRC Resolution22 dated May 30, 2008.
Hence, petitioners filed a Petition for Certiorari23 before the CA.
On February 28, 2011, the CA rendered a Decision24 holding that Pastor is suffering from osteoarthritis, an ailment
listed as an occupational disease under the POEA-SEC. It concluded that the said ailment developed in the course
of Pastor’s employment and progressed due to the conditions of his job as a messman. Accordingly, the CA ruled
that Pastor’s illness is work-related. Moreover, it declared his disability as permanent and total given that his ailment
resulted in the impairment of his earning capacity. Hence:
IN VIEW OF THE FOREGOING, the petition is dismissed.
SO ORDERED.25
Petitioners filed a Motion for Reconsideration26 where they pointed out that the CA incorrectly declared Pastor as
suffering from osteoarthritis. They maintained that his ailment is actually spinal disc degeneration, an illness
completely different from osteoarthritis and is not listed as an occupational disease under the POEA-SEC.
Moreover, Pastor failed to sufficiently meet the conditions for compensability as set forth in the POEA-SEC.
In a Resolution27 dated August 9, 2011,the CA denied petitioners’ Motion for Reconsideration. Hence, this Petition
for Review on Certiorari.
Issues
1. What is the actual illness of the private respondent on board the vessel;
2. Whether the Court of Appeals decided in a way not in accord with law or with the applicable decisions of the
Supreme Court in affirming the Decision and Resolution of the NLRC despite the glaring fact that the actual illness
of the private respondent is not work-related;
Supreme Court in awarding US$78,750.00 despite the fact that the private respondent has failed to adduce
evidence that he is suffering from a Grade 1 disability;
Supreme Court in awarding attorney’s fees.28
In the main, petitioners argue that Pastor suffers not from osteoarthritis but from spinal disc degeneration, an illness
not listed under the POEA-SEC as occupational disease and is neither work-related nor compensable. They
likewise insist that without any medical or factual evidence of total and permanent disability, there is no sufficient
basis to award him Grade 1 disability compensation. Citing Vergara v. Hammonia Maritime Services, Inc.,29 they
aver that an illness which lasted for more than 120 days does not necessarily mean that a seafarer is entitled to full
disability benefits because a seafarer’s degree of disability is not measured by the length of time he is under
treatment, but by the assessment of the company-designated physician, who, in this case, found Pastor’s illness as
not work-related. Pastor, therefore, is not entitled to disability compensation.
Our Ruling
Pastor suffers from a work-related and compensable illness.
The Court notes that while petitioners impute error upon the CA in declaring Pastor’s illness as osteoarthritis, it is
extant on the records that they themselves, in the numerous pleadings they filed before the labor tribunals,
consistently referred to his diagnosed ailment as osteoarthritis. It was only after the CA rendered its assailed
Decision that petitioners contradicted this and now claim that Pastor’s illness is actually spinal disc degeneration
which, according to them, is a completely different illness from osteoarthritis. Suffice it to state, however, that
petitioners cannot now take a contrary view as to Pastor’s actual illness in view of their previous admission that he
was suffering from osteoarthritis. It is settled that statements made in the pleadings in the course of judicial
proceedings are considered judicial admissions.30 Judicial admissions cannot be controverted by the party making
the admissions.31 They are conclusive and legally binding as against the pleader who cannot subsequently take a
position contrary to or inconsistent with what was pleaded.32
At any rate, in medical parlance, spinal disc degeneration/desiccation and osteoarthritis can be taken as the same.
Degenerative disc disease is a spinal condition caused by the breakdown of the intervertebral discs which results in
the loss of flexibility and ability to cushion the spine.33 When discs degenerate, the vertebral bodies become closer
together and this increased bone on bone friction causes the wearing away of protective cartilage and results in the
condition known as osteoarthritis.34 The degenerating discs place excessive stress on the joints of the spine and the
supporting ligaments, which, overtime, can lead to the formation of osteoarthritis.35 Osteoarthritis is a stage of
degenerative disc disease.36
Here, as revealed by Pastor’s medical records, he was found suffering from acute thoracic and lumbar spondylosis
before he was repatriated for medical reasons.37 When he returned to the Philippines, he was then diagnosed with
thoraco lumbar spine nerve infringement, R/O herniated disc on October 2, 2006 by Dr. Abesamis, the company-
designated physician.38 When made to undergo MRI of the thoraco lumbar area a few days later, the result thereof
revealed that the said area has a slightly straightened lumbar lordosis. He was thus advised to undergo
physiotherapy. On November 6, 2006, Dr. Abesamis found Pastor positive for carpal tunnel syndrome.39 He was
then subjected to further medical evaluation and treatment for the recurrent pain that he was experiencing.40Through
all these, no medical assessment of his fitness to resume work or disability grading was ever issued by Dr.
Abesamis such that Pastor sought the opinion of an independent physician. He was then diagnosed to have chronic
back pain and impending vertebral collapse T5 with thoracic and lumbar spondylosis and was assessed to be
permanently unfit for sea duties due to a work-related total disability. This is evidenced by a medical certificate dated
April 17, 2007 issued by the Seamen’s Hospital. Notably, the above-mentioned findings on Pastor’s illness indicate
that he was suffering from lumbar spondylosis. Spondylosis is a term used to describe osteoarthritis of the
spine.41Clearly therefore, the CA’s declaration of Pastor’s actual illness as osteoarthritis is supported by the findings
of the company-designated physician, whose prognosis, as aptly observed by the NLRC, appear to be consistent
with the findings contained in the medical certificate issued by the Seamen’s Hospital.
Petitioners argue against the work-relatedness and compensability of Pastor’s illness. They harp on the alleged
finding of the company-designated physician that his ailment is not work-related and this, according to them, should
be given more weight than that of Pastor’s independent physician. The argument, however, is untenable. The Court
has gone over the records and found that the same is bereft of any evidence that Dr. Abesamis or any other doctor
designated by the company ever rendered an assessment categorically declaring Pastor to be suffering from an
illness which is not work-related.
Moreover, a seaman’s entitlement to disability benefits, is governed, not only by medical findings, but by law (the
Labor Code) and by contract (the POEA-SEC and the parties’ CBA).42 Here, the POEA-SEC, as provided under
Department Order No. 4, series of 2000 of the Department of Labor and Employment, which contains the Standard
Terms and Conditions Governing The Employment of Filipino Seafarers On-Board Ocean-Going Vessels, governs
the employment contract between Pastor and petitioners. Section 20(B), paragraph 6 thereof reads:
Section 20 (B) - COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract
are as follows:
xxxx
6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall
be compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract.
Computation of his benefits arising from an illness or disease shall be governed by the rates and rules of
compensation applicable at the time the illness or disease was contracted.
"Pursuant to the aforequoted provision, two elements must concur for an injury or illness to be compensable. First,
that the injury or illness must be work-related; and second, that the work-related injury or illness must have [arisen]
during the term of the seafarer’s employment contract."43 For disability to be compensable under Section 20(B) of the
2000 POEA-SEC, it must be the result of a work-related injury or a work-related illness, which are defined as
"injury(ies) resulting in disability or death arising out of and in the course of employment" and as "any sickness
resulting to disability or death as a result of an occupational disease listed under Section 32-A of this contract with
the conditions set therein satisfied."
The said Section 32-A provides:
Section 32-A. OCCUPATIONAL DISEASES
For an occupational disease and the resulting disability or death to be compensable, all of the following conditions
must be satisfied:
1. The seafarer’s work must involve the risks described herein;
2. The disease was contracted as a result of the seafarer’s exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors necessary to contract it;
4. There was no notorious negligence on the part of the seafarer.
As previously mentioned, Pastor was found to be suffering from osteoarthritis. Under Section 32-A(16) of the 2000
POEA-SEC, for osteoarthritis to be considered as an occupational disease, the same must have been contracted in
any occupation involving:
a) joint strain from carrying heavy loads, or unduly heavy physical labor, as among laborers and mechanics;
b) minor or major injuries to the joint;
c) excessive use or constant strenuous usage of a particular joint, as among sportsmen, particularly those who have
engaged in the more active sports activities;
d) extreme temperature changes (humidity, heat and cold exposures); and
e) faulty work posture or use of vibratory tools.

To recapitulate, the Labor Arbiter ruled that Pastor’s illness is work-related. The NLRC affirmed this finding by
holding that the accident he met while carrying heavy food provisions was the proximate cause of his injury. For its
part, the CA ultimately concluded that the illness was acquired by Pastor due to his work as a messman whose
primary duties and responsibilities include cleaning accommodations, galley, pantries, alleys, storerooms, salons
and messrooms, washing, cleaning and preparing tables, collecting and laundering dirty linen, serving food and
restocking supplies in pantries, engine room, bridge, etc. It further ruled that Pastor was able to prove the conditions
necessary for osteoarthritis to be considered as having arisen in the course of his employment either by direct
causation or aggravation due to the nature of his work. The Court is not inclined to depart from the aforementioned
findings of the Labor Arbiter, the NLRC and the CA. As it has been held, "where the factual findings of the labor
tribunals or agencies conform to, and are affirmed by the CA, the same are accorded respect and finality and are
binding upon this Court."44 Besides, that Pastor figured in an accident while performing his duties on board the
vessel was not at all disputed by petitioners. It is also plain from his duties and responsibilities as enumerated in the
Company Standing Instructions Manual45 that his work involved carrying heavy loads and the performance of other
strenuous activities such that it can reasonably be concluded that his work caused or at least aggravated his illness.
In view of these, the Court sustains the uniform findings of the Labor Arbiter, the NLRC and the CA that Pastor’s
ailment is work-related and compensable.
Pastor’s disability became permanent

and total as no declaration of fitness to
work was issued upon the expiration of
the maximum 240-day medical treatment
period.
Art. 192. Permanent total disability. – x x x
(c) The following disabilities shall be deemed total and permanent:
(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise
provided for in the Rules
xxxx
Meanwhile, Rule X, Section 2 of the Amended Rules on Employees Compensation provides: RULE X
Temporary Total Disability
xxxx
Sec. 2. Period of entitlement. – (a) The income benefit shall be paid beginning on the first day of such disability. If
caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or
sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in
which case benefit for temporary total disability shall be paid. However, the System may declare the total and
permanent status at anytime after 120 days of continuous temporary total disability as may be warranted by the
degree of actual loss or impairment of physical or mental functions as determined by the System.
Based on the foregoing provisions, the company-designated physician must arrive at a definite assessment of the
seafarer’s fitness to work or permanent disability within the period of 120 days, which was further extended to 240
days. The Court pronounced in Vergara v. Hammonia Maritime Services, Inc., et al.46 that a temporary total disability
becomes permanent when so declared by the company-designated physician within the period allowed, or upon
expiration of the maximum 240-day medical treatment period in case of absence of a declaration of fitness or
permanent disability.
In this case, Pastor was repatriated on September 18, 2006.He was given a specific diagnosis as to his ailment by
the company-designated physician, Dr. Abesamis, on October 6, 2006. Thereafter, he continuously received
medical treatment from Dr. Abesamis. However and as earlier mentioned, nowhere in the records does it show that
Dr. Abesamis arrived at a definite assessment of respondent’s fitness to work or a declaration of the existence of a
permanent disability before the expiration of the maximum 240-day medical treatment period. In fact, as of the date
of the Rejoinder47 they filed before the Labor Arbiter (June 25, 2007) or 281 days after Pastor’s repatriation,
petitioners themselves stated that no disability grading has yet been issued by Dr. Abesamis.48 Clearly at that time,
the period of 240 days had already lapsed without the company-designated physician issuing a declaration of
Pastor’s fitness to work or of the existence of his permanent disability. This only means that his condition remained
unresolved even after the lapse of the said period and, consequently, his disability is deemed permanent and
total.49No error, therefore, can be attributed to the Labor Arbiter, NLRC and CA in declaring Pastor’s disability as
permanent and total. In view of the foregoing, the Court sustains the CA in awarding Pastor disability compensation
in the amount of US$78,750.00 pursuant to the AMOSUP/ITF TCCC CBA that governed his contract of employment
with petitioners.
As to the award of 10% attorney’s fees, the same is justified pursuant to paragraphs 2 and 8 of Article 2208 of the
Civil Code which provide that:
Article 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:
xxxx
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
xxxx
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
xxxx
WHEREFORE, the Petition is DENIED. The February 28, 2011 Decision and August 9, 2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 104798 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 197731 July 6, 2015
HERMIE OLARTE y TARUG and RUBEN OLAV ARIO y MAUNAO, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Petitioners Hermie Olarte y Tarug (Olarte) and Ruben Olavario y Maunao (Olavario), together with Salvador
Pasquiny Marco (Pasquin), were charged with the crime of frustrated homicide in an Information that reads as
follows:
That on or about September 15, 2002 in Valenzuela City and within the jurisdiction of this Honorable Court, the
above-named accused, conspiring together and mutually helping one another, without any justifiable cause and with
deliberate intent to kill, did then and there willfully, unlawfully and feloniously stab one EUGENE VILLOSTAS y
MARTINEZ, thus performing all the acts of execution which would constitute the crime of Homicide as a
consequence but which nevertheless, did not produce it by reason or causes independent of the will of the herein
accused, that is, due to the timely, able and efficient medical attendance rendered to the victim. CONIRARYTO
LAW.1
All the three accused posted2 bail. But since Pasquin jumped bail, only petitioners were arraigned on June 25, 2003
where they pleaded not guilty to the crime charged.3 Trial thereafter ensued.
The prosecution averred that in the early morning of September 15, 2002, the victim Eugene M. Villostas (Villostas)
was fetched by his half-brother, Charlie Penilla (Penilla), from a drinking session. On their way home, Villostas
decided to buy cigarettes from a nearby videoke bar at Gen. T. de Leon, Valenzuela City. Inside the bar, however,
three men who belonged to a group then singing and drinking suddenly stabbed him on different parts of his body.
They only stopped when bystanders started throwing stones at them. This whole incident was witnessed by Penilla
who was then only seven to eight arms length away from the crime scene.
Barangay tanods immediately responded and brought the malefactors to the Barangay Hall where they were later
identified as petitioners and their co-accused Pasquin. Meanwhile, Villostas was rushed to the Valenzuela General
Hospital where he was treated by Dr. Jolou A. Pascual (Dr. Pascual).
During trial, Dr. Pascual testified that Villostas sustained multiple stab wounds described as follows:
Multiple Stab Wound
5cm 4th ICS anterior axillary, left 3.5 cm 5th ICS
5cm curvilinear subcostal mid axillary, right
2cm anterior shoulder, left
4cm anterior shoulder, left4
According to him, all these wounds could have caused Villostas’ death were it not for the timely medical attention
given him.5
The defense, on the other hand, alleged that at around 2:00 o’ clock in the morning of September 15, 2002, while
petitioners, Pasquin and some other companions were having a drinking spree inside a videoke bar on Gen. T. De
Leon, Valenzuela City, several persons threw stones at them hitting Olarte and another companion. Their group
thus disbanded. While most of them headed straight home, Olarte, together with a certain Joni, went to the
Barangay Hall to have the stoning incident entered in its blotter. Upon arrival thereat, however, they were surprised
that Olarte, Olavario and Pasquin were being implicated in a stabbing incident. The three were then brought to the
Valenzuela General Hospital where Villostas identified them as his assailants. Thereafter, they were arrested and
detained at the city jail.
On April 27, 2009, the Regional Trial Court (RTC) of Valenzuela City, Branch 172, rendered its Decision6 finding
petitioners guilty as charged, viz.:
WHEREFORE, judgment is hereby rendered finding Hermie Olarte y Tarug and Ruben Olavario y Maunao guilty
beyond reasonable doubt as PRINCIPALS [in] the crime of FRUSTRATED HOMICIDE and [are] hereby sentenced
x x x to suffer an imprisonment of two (2) years, 4 (four) months and one (1) day of prision correccional as minimum
to eight (8) years and one (1) day of prision mayor medium as maximum. They are also ordered to pay jointly and
solidarily the victim Eugene Villostas y Martinez the amount of Php22,462.05 for medical expenses as actual
damages, Php20,000.00 as moral damages and costs of suit.
Since x x x accused Salvador Pasquin y Marco has not yet been arrested and arraigned despite the issuance of
order of arrest on November 8, 2002, let an alias warrant of arrest be issued against said accused Salvador Pasquin
y Marco. Meantime, let the case against him be archived to be retrieved as soon as he is arrested.
SO ORDERED.7
Petitioners filed a Notice of Appeal8 which was granted by the RTC in its Order9 of May 13, 2009.
Before the Court of Appeals (CA),10 petitioners questioned the credibility of Villostas and Penilla as prosecution
witnesses. They pointed out inconsistencies in their testimonies respecting the victim’s degree of intoxication at the
1âwphi 1
time of the incident, the kind or brand of liquor that he imbibed, and the length of time that he had been drinking
immediately prior thereto. Petitioners argued that such inconsistencies rendered doubtful their identification as the
culprits by said prosecution witnesses.
The CA, in its February 9, 2011 Decision,11 debunked petitioners’ arguments as it found the inconsistencies pointed
out by them as relating to mere minor details. On the other hand, it found no cogent reason to deviate from the
findings of the trial court as regards petitioners’ culpability, thus:
WHEREFORE, premises considered, the April 27, 2009 Decision of the Regional Trial Court of Valenzuela City,
Branch 172, in Criminal Case No. 759-V-02, convicting the [petitioners] of the crime of Frustrated Homicide is
AFFIRMED.
SO ORDERED.12
Petitioners’ Motion for Reconsideration13 was likewise denied in a Resolution14 dated July 13, 2011.
Hence, this Petition for Review on Certiorari15 under Rule 45 of the Rules of Court where petitioners raise the
following errors:
THE TRIAL COURT ERRED IN NOT ACQUITTING PETITIONERS OF THE CRIME OF FRUSTRATED
HOMICIDE.
THE TRIAL COURT ERRED IN FAILING TO APPRECIATE THE EVIDENCE ON [RECORD] THAT NEITHER OF
THE PETITIONERS WAS THE AUTHOR OF THE CRIME.16
Petitioners insist that the testimonies of Villostas and Penilla are devoid of credibility as they contain several
inconsistencies. These inconsistencies rendered doubtful the said witnessess’ identification of petitioners as the
assailants. Petitioners also point out that they themselves went to the authorities to report the incident. This,
according to them, negates their involvement in the crime because had they been the real perpetrators, they would
not dare report the matter to the authorities. Moreover, they contend that the lower courts failed to properly
appreciate the testimony of one Rodel Roque who categorically stated on the witness stand that he saw Villostas
being stabbed by only one person and that person was neither of the petitioners. In view of these, petitioners pray
that the assailed CA Decision be reversed and set aside and that they be acquitted of the crime charged.
Our Ruling
The Petition must be denied.
Suffice it to state that the errors raised by the petitioners are all "appreciation of evidence" errors or factual errors
which are not within the province of a petition for review on certiorari under Rule 45. The Court had already
explained in Batistis v. People17 that:
Pursuant to Section 3, Rule 122, and Section 9, Rule 45, of the Rules of Court, the review on appeal of a decision in
a criminal case, wherein the CA imposes a penalty other than death, reclusion perpetua, or life imprisonment, is by
petition for review on certiorari.
A petition for review on certiorari raises only questions of law. Sec. 1, Rule 45, Rules of Court, explicitly so provides,
viz[.]:
Section 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment, final
order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court
or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on
certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies
and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same
provisional remedies by verified motion filed in the same action or proceeding at any time during its
pendency.18Here, the assigned errors, requiring as they do a re-appreciation and reexamination of the trial evidence,
are evidentiary and factual in nature.19 The petition must therefore be denied on this basis because "one, the petition
for review thereby violates the limitation of the issues to only legal questions, and, two, the Court, not being a trier of
facts, will not disturb the factual findings of the CA, unless they were mistaken, absurd, speculative, conflicting,
tainted with grave abuse of discretion, or contrary to the findings reached by the court of origin,"20 which was not
shown to be the case here.
At any rate, the Court observes that the CA correctly affirmed the RTC’s conviction of petitioners for frustrated
homicide. The elements of frustrated homicide are: (1) the accused intended to kill his victim, as manifested by his
use of a deadly weapon in his assault; (2) the victim sustained fatal or mortal wound/s but did not die because of
timely medical assistance; and (3) none of the qualifying circumstances for murder under Article 248 of the Revised
Penal Code exist.21 These elements were proved during trial. First, direct and positive testimonies of prosecution
witnesses established that Villostas sustained seven stab wounds on vital parts of his body caused by a pointed
sharp object. Plainly, the nature, location and number of wounds sustained by him demonstrate petitioners’ intent to
kill. Next, the injuries suffered by Villostas were all fatal. Particularly critical were the 5-centimeter wound below his
left armpit, the 3.5-centimeter wound on the mid-part of his left chest which required inserting a tube thereon to drain
blood so as not to impede his breathing, and the 5-centimeter stab wound on the right side of his abdomen which
also injured his liver.22 As testified to by Dr. Pascual, Villostas would have succumbed to death due to the said
injuries if not for the timely medical attention. Finally, no qualifying circumstance for murder was alleged in the
Information to have attended the commission of the crime.
The Court, however, notes that while the penalty imposed upon petitioners is also proper, there is a need to modify
the awards made in favor of Villostas. The actual damages awarded by the RTC was only ₱22,642.05. Hence, there
is a need to award ₱25,000.00 as temperate damages in lieu of actual damages in a lesser amount.23 Also, pursuant
to prevailing jurisprudence, the award of moral damages must be increased from ₱20,000.00 to ₱25,000.00.24 All
these awards shall earn interest at the legal rate of six percent (6%) per annum to commence from the date of
finality of this Resolution until fully paid.25
WHEREFORE, the petition is DENIED. The Decision dated February 9, 2011 of the Court of Appeals in CA-G.R. CR
No. 32640 which affirmed the April 27, 2009 Decision of the Regional Trial Court of Valenzuela City, Branch 172 in
Criminal Case No. 759-V-02 convicting petitioners Hermie Olarte y Tarug and Ruben Olavario y Maunao of the
crime of frustrated homicide is AFFIRMED with the MODIFICATIONS that the victim Eugene Villostas y Martinez is
awarded (1) temperate damages of ₱25,000.00 in lieu of actual damages; (2) moral damages in an increased
amount of ₱25,000.00; and that (3) the said awards shall be subject to interest at the legal rate of six percent (6%)
per annum from the date of finality of this Resolution until fully paid. SO ORDERED.
SECOND DIVISION
G.R. No. 201836, June 22, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ALLAN BRITANICO AND JOJO BRITANICO, Accused-Appellants.
RESOLUTION
DEL CASTILLO, J.:
Three brothers, namely Allan, Rolly and Jojo, and their father, Francisco, all surnamed Britanico, were charged with murder
for the death of Segundo Toralde y Belmonte (Segundo). The Information1 alleged that at around 5 o'clock in the afternoon
of August 23, 2003, in barangay Libtong, municipality of Libon, province of Albay, all four accused conspired to kill the
victim, and with the use of bladed weapons, with treachery and evident premeditation, hacked the victim several times
hitting him on different parts of his body, resulting in his instantaneous death. The case was raffled to the Regional Trial
Court (RTC) of Ligao, Albay, Branch 13 which issued a warrant of arrest2 against the four accused. However, only Allan and
Rolly were initially apprehended and eventually detained at the Polangui District Jail in Polangui, Albay. Both were arraigned
on. December 10, 2003 where they entered a plea of not guilty to the charge.3 ChanRobles Virtualawl ibra ry
A few days after, or on January 28, 2004, Francisco was apprehended4 and imprisoned with his sons, Rolly and Allan, in
detention at Polangui District Jail in Albay.5 As manifested by the Jail Warden, and based on the evaluation of the Municipal
Health Officer, Francisco was suffering from severe anemia when committed to the jail facility.6 Thus, the Jail Warden
requested the RTC to allow Francisco to be confined at a hospital. However, the court a quo did not permit Francisco's
confinement in a hospital; instead, he was allowed to undergo medical examination with a proviso that he be returned to the
City Jail after every consultation.7 On February 20, 2004, Francisco was arraigned where he entered a plea of not guilty.8 On
March 11, 2004, Francisco was brought to the Josefina Belmonte Duran Memorial District Hospital but was pronounced dead
on arrival.9 Consequently, the charge against Francisco was dismissed.10 ChanRobles Vi rtua lawlib rary
Jojo was the last accused to be apprehended.11 On October 27, 2004, he was ordered committed at the Polangui District Jail
together with Alan and Rolly.12 On December 8, 2004, he was arraigned where he entered a plea of not guilty.13 ChanRobles Virtualawl ibra ry
In the meantime, Rolly who was a minor at the time of the commission of the crime, was released on recognizance to the
custody of his mother.14 Thereafter, and in the course of the trial, the defense filed a Motion to Dismiss the Case Against
Minor Accused Rolly Britanico.15 Citing Republic Act No. 9344 or the Juvenile: Justice and Welfare Act of 2006 which raised
the minimum age of criminal responsibility from nine to 15 years, and considering that Rolly was only 14 years of age when
the crime was committed on August 23, 2003, having been born on October 29, 1988, the defense prayed that the charge
against Rolly be dismissed. Finding merit in the motion, the RTC granted the same in an Order16 dated April 16, 2009 and
accordingly dismissed the case against Rolly.
Consequently, only Allan and Jojo, hereinafter collectively referred to as appellants, remained out of the four accused.
On December 7, 2009, the RTC rendered its Judgment17 finding appellants guilty as charged. The court a quo lent credence
to the eyewitness account of Rolando Toralde (Rolando) who narrated that in the afternoon of August 23, 2003, he was on
his way to the house of his uncle, Segundo. However, when he was about to pass by the house of Francisco, he saw the
latter and his sons, Rolly, Allan, and Jojo, hack Segundo with the use of bladed weapons. Fearing for his life, he hid in the
grassy portion for about 10 minutes. Upon seeing his uncle fall to the ground, Rolando left and immediately informed his
cousin, Alma, about the misfortune that befell her father. When placed on the witness stand, Alma testified that it was
Rolando who informed her about the hacking incident. She claimed that Francisco is her uncle, being the brother of her
mother, while Jojo, Allan and Rolly are her cousins.
Appellants could only offer denial and alibi. Allan claimed that on August 23, 2003, he was at San Antonio, Iriga City
overseeing the fishpond of Flor Epres. For his part, Jojo averred that at around 5 o'clock in the afternoon of August 23, 2003,
he went to barangay Amuguis in Polangui to fetch his wife. Teresita Britanico (Teresita), the mother of appellants, also
testified. She alleged that in the afternoon of August 23, 2003, Segundo passed by their house and had an argument with
her husband, Francisco. The altercation became heated and both parties exchanged hacking blows. Teresita and her
daughter Maricel left in order to seek help. However, considering that the nearest house is 200 meters away, they decided to
return whereupon they saw Segundo running away and being chased by Francisco. When Francisco returned, his shirt was
stained with blood and in answer to her query, Francisco admitted having killed Segundo. Fearing retaliation from the family
of the deceased, Francisco and Teresita, together with their children Rolly and Ronald, left their house and proceeded to
Anilao, Libon, Albay.
The trial court did not lend credence to the denial and alibi of appellants in view of their positive identification by prosecution
eyewitness Rolando. Moreover, the trial court noted that both failed to show that it was physically impossible for them to be
at the scene of the crime at the time of its commission. Besides, the prosecution was able to refute the testimony of Allan by
presenting Emilio Toralde who saw Allan leave the fishpond on August 23, 2003. On the other hand, the trial court found
Jojo's alibi to be self-serving and uncorroborated.
Finding the qualifying circumstance of treachery to have attended the commission of the crime, the RTC found appellants
guilty of the crime of murder, viz:
WHEREFORE, the Court finds accused ALLAN BRITANICO and JOJO BRITANICO guilty beyond reasonable doubt of the crime
of Murder, defined and penalized under Article 248 of the Revised Penal Code, as amended by Section 6 of Republic Act No.
7659. Accordingly, said accused are hereby sentenced to suffer the penalty of reclusion perpetua.
On the civil liability of the accused, judgment is hereby rendered ordering accused Allan Britanico and Jojo Britanico to
indemnify the heirs of the deceased Segundo Toralde, jointly and severally, the following: (a) the sum of P75,000.00, as civil
indemnity; (b) the sum of P75,000.00 as moral damages; (c) P16,818.50 as actual damages and (d) P25,000.00 as
exemplary damages.
Costs against the accused.
SO ORDERED.18
Appellants appealed to the CA. In their Brief,19 they claimed that the trial court erred in lending credence to the narration of
Rolando as the same was fraught with inconsistencies and improbabilities. They contended that it was unnatural for Rolando
to simply watch for 10 minutes while his uncle was being hacked to death. They believed that when faced with such
situation, Rolando would naturally shout to distract his uncle's assailants or to seek help. Moreover, they insisted that
Rolando should have immediately reported the incident to the authorities, and not just to his cousin, Alma. Further, the
number of wounds sustained by the victim did not tally with the number of blows supposedly delivered by the assailants as
testified to by Rolando. For the defense, all these make Rolando's credibility highly suspect.
The CA found the appeal lacking in merit. In its November 17, 2011 Decision,20 it affirmed in full the ruling of the trial court.
Hence, this appeal.
Our Ruling
In a July 16, 2012 Resolution,21 we required the parties to file their respective supplemental briefs. Only the appellants
complied; the Office of the Solicitor General opted not to file its supplemental brief considering that all the issues were
already discussed in the brief it filed before the CA.
In their Supplemental Brief,22 appellants merely reiterated the arguments they raised before the CA. They maintain that
Rolando's testimony is unreliable and could not be used as basis for their conviction; that it was unnatural for Rolando to
watch for 10 minutes the hacking of his uncle and not seek for help; that it defies reason why Rolando did not immediately
report the incident to the authorities; and that the number of wounds sustained by the victim did not match the number of
blows supposedly received by the victim.
We dismiss the appeal for utter lack of merit.
At the outset, it must be emphasized that the issues raised by the appellants before this Court are the same arguments
brought on appeal, and already resolved, by the CA. In short, these are recycled and rehashed arguments. In any case, we
find that contrary to appellants' contention, we find no material inconsistencies or improbabilities in the testimony of
Rolando. We thus affirm both the RTC and the CA in finding Rolando's testimony to be credible.
It is a settled principle that people react differently when confronted with a startling and dangerous experience. For example,
a person who witnessed a hacking incident may faint, act with nonchalance, or may hide out of fear for his life; on the other
hand, he may also act with bravery by coming to the aid and succor of the victim, most especially if the latter is a relative;
or, he may act cautiously and seek the help of other people. The list is not all-encompassing because people do not act
similarly to a given situation. Hence, we do not find it unnatural, as the appellants claim, for Rolando to hide in the grassy
area upon witnessing the hacking of his uncle, Segundo, by the appellants. Rolando also admitted that he got scared which is
also a reasonable and logical reaction to such a startling event.
The failure of Rolando to immediately report the incident to the authorities did not diminish his credibility. According to
Rolando, upon seeing his uncle fall to the ground, he left his hiding place and proceeded directly to the house of his cousin,
Alma, the daughter of the deceased, and informed her of what happened to her father. Thereafter, he went home as it was
already nighttime. However, appellants assail this reaction on the part of Rolando; according to them, if Rolando indeed saw
the incident, then he should have lost no time in reporting the same to the authorities. We are not persuaded. Rolando's
actuations should not be measured against the expectations of appellants. It is possible that as far as Rolando is concerned,
he already did his share. And considering that he already divulged the incident to the family of the deceased, then it was up
to them to decide on the next possible course of action. Surprisingly, appellants did not question the failure of Alma (as well
as her mother and brother) to immediately inform the police authorities about the fate of her father. Records show that upon
being informed about the incident, Alma and her brother proceeded to the house of the Britanicos to avenge their father.
Upon their arrival thereat, nobody was around but they saw bloodstains in the yard. In fact, they even thought, and hoped,
that their father was able to escape and that he was still alive. Without reporting the incident yet to the police authorities,
they returned home. It was only upon the discovery of the decomposing body of their father that they decided to disclose the
incident to the police.
The credibility of the eyewitness account of Rolando was not diminished just because the number of wounds sustained by the
victim did not match the number of blows delivered to Segundo as surmised by Rolando. For one, this does not negate the
fact that appellants hacked the victim. In any event, Rolando testified that he did not consciously count the number of blows
delivered by the victim's assailants. He only surmised that the number of wounds sustained by Segundo is four because he
saw Francisco, Rolly, Allan and Jojo each deliver a hacking blow on the victim. The medico-legal officer found a gaping wound
on the victim's forehead; his neck was slashed and his head almost got detached from his body; and both his hands were cut
when he tried to parry the blows. It is also possible that the victim sustained other injuries but were no longer detected since
his body was already in a state of decomposition.
In fine, we find that the trial court and the CA properly found appellants guilty of the crime of murder qualified by treachery.
Appellants were thus properly sentenced to suffer the penalty of reclusion perpetua. However, they are not eligible for parole
pursuant to Section 3 of Republic Act No. 9346, An Act Prohibiting the Imposition of Death Penalty in the Philippines.
The RTC and the CA properly awarded the heirs of the victim civil indemnity in the amount of P75,000.00 and moral
damages in the amount of P75,000.00. However, the award of exemplary damages is increased to P30,000.00 in line with
prevailing jurisprudence. The award of actual damages in the sum of P16,818.50 is deleted and in lieu thereof, temperate
damages in the amount of P25,000.00 is awarded. This is pursuant to our ruling in People v. Villanueva23 which states that
"when actual damages proven by receipts during the trial amount to less than P25,000.00, as in this case, the award of
temperate damages of P25,000.00 is justified in lieu of actual damages of a lesser amount." Finally, all damages awarded
shall earn interest at the rate of 6% per annum from date of finality of this judgment until full payment.
WHEREFORE, the assailed November 17, 2011 Decision of the Court of Appeals in CA-G.R. CR HC No. 04267 finding
appellants, Allan Britanico and Jojo Britanico, guilty of the crime of murder and sentencing them to suffer the penalty
of reclusion perpetua, is AFFIRMED with MODIFICATIONS that appellants are not eligible for parole; the award of actual
damages is deleted and, in lieu thereof, temperate damages in the amount of P25,000.00 is awarded; the award of
exemplary damages is increased to P30,000.00; and all damages awarded shall earn interest at the rate of 6% per
annum from date of finality of this judgment until fully paid.
SECOND DIVISION
G.R. No. 197923 June 22, 2015
RUBY RUTH S. SERRANO MAHILUM, Petitioner,

vs.
SPOUSES EDILBERTO ILANO and LOURDES ILANO, Respondents.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are the following dispositions of the Court of Appeals: 1) February
2, 2011 Decision2 in CA-G.R. SP No. 113782 which granted herein respondents' Petition for Certiorari and
Prohibition and thus nullified and set aside the January 5, 20103 and February 24, 20104 Orders of the Regional Trial
Court of Las Pinas City, Branch 255 in Civil Case No. LP-07-0109; and 2) July 28, 2011 Resolution5denying the
herein petitioner's motion for reconsideration.
Factual Antecedents
Petitioner Ruby Ruth S. Serrano Mahilum is the registered owner of a parcel of land covered by Transfer Certificate
of Title No. 855336 (TCT 85533) of the Registry of Deeds of Las Pinas City.
In September 2003, she entrusted the original owner’s duplicate copy of TCT 85533 to Teresa Perez (Perez) – a
purported real estate broker – who claimed that she can assist petitioner in obtaining a loan, with TCT 85533
serving as collateral. After several months, petitioner demanded the return of the title, but Perez failed to produce
the same; after much prodding, Perez admitted that the title was lost. Thus, in June 2004, petitioner executed an
Affidavit of Loss and caused the same to be annotated upon the origin al registry copy of TCT 85533 as Entry No.
1668-247 on October 7, 2004.
In June 2006, petitioner received a letter from the Registry of Deeds of Las Piñas City informing her that the owner’s
duplicate copy of TCT 85533 was not lost, but that it was presented to the registry by respondents, spouses
Edilberto and Lourdes Ilano, who claimed that the property covered by the title was sold to them. In this connection,
respondents – instead of registering the supposed sale in their favor – executed an Affidavit of Non-Loss, which was
entered on TCT 85533 on June 28, 2006 as Entry No.1875-27.8
Petitioner confronted respondents, w ho showed her a notarized Agreement9 with right of repurchase dated
December 4, 2003 and a notarized and undated Deed of Absolute Sale,10 on which documents petitioner’s purported
signatures were affixed. These documents indicate that petitioner sold the property covered by TCT 85533 to
respondents for 250,000.00 with right to repurchase the same within a period of 90 days. Petitioner told respondents
that she did not execute these documents, and that her purported signatures therein were in fact falsified and
forged. She demanded the return of TCT85533, but respondents refused to surrender the title to her. They claimed
that the property was sold to them by Perez and "a companion."
All this time, title to the property remained in petitioner’s name, as respondents have not registered the unnotarized
and undated Deed of Absolute Sale.
Civil Case No. LP-07-0109

On June 20, 2007, petitioner and her husband Richard instituted against respondents and Perez Civil Case No. LP-
07-0109 with the Regional Trial Court of Las Piñas City. Her Complaint11 for "annulment of agreement and deed of
absolute sale, specific performance, with damages," which contained the foregoing statement of facts, likewise
contained the following allegations and prayer:
18. That by reason of the actuations of the defendants in facilitating the execution of the aforesaid falsified
documents, and adamant refusal to return to plaintiffs the duplicate original owner’s copy of their title, which were all
done with evident bad faith, the plaintiffs suffered and continue to suffer sleepless nights, wounded feelings,
besmirched reputation, serious anxiety and other similar feelings, which, when quantified, can reasonably be
compensated with the sum of Fifty Thousand (50,000.00) Pesos, as moral damages;
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court, that after due notice and hearing, judgment be
rendered in favor of the plaintiffs and against the defendants, as follows:
1. Ordering the annulment of the documents denominated as Agreement (Deed of Sale with Right to Repurchase) ,
dated December 4, 2003, and Deed of Absolute Sale and declaring the same as null and void;
2. Ordering defendants Ilano to surrender and return to plaintiffs the duplicate original owner’s copy of TCT No.
85533;
3. Ordering the defendants, jointly and severally, to pay the plaintiffs the sum of Fifty Thousand Pesos (50,000.00)
as moral damages;
[4.] Ordering the defendants, jointly and severally, to pay the plaintiffs the sum of Twenty Thousand Pesos (20,00
0.00) as attorney’s fees, and the additional amount of Two Thousand Pesos (2,000.00) for every court hearing; and
[5.] Ordering the defendants to pay the costs of this suit.
Other reliefs deemed just and equitable are also prayed for.12
Respondents’ Amended Answer with Compulsory Counterclaim13 alleged and admitted, among others, that
petitioner was the owner of the lot covered by TCT 85533; that said title was entrusted to Perez; that petitioner
executed an affidavit of loss which was annotated on TC T 85533; that they caused the annotation of an affidavit of
non-loss on TCT 85533, as Entry No. 1875-27; that petitioner confronted them ; that they showed petitioner the
Agreement and unnotarized Deed of Absolute Sale; that they are in possession of the owner’s copy of TCT 85533;
that sometime in October 2003, Perez – accompanied by one Corazon Tingson (Tingson) "and a female person
who introduced herself as Ruby Ruth Serrano" – offered to sell to them the property covered by TCT 85533; that "in
support of the identity of the said Ruby Ruth Serrano, the original owner’s copies of the title (T CT No. T-85533),
Declaration of Real Property, Tax Clearance, Barangay Clearance, Community Tax Certificate with picture of Ruby
Ruth Serrano attached therein" were presented to respondent Edilberto Ilano (Edilberto); that upon being satisfied
as to the "identity of the person who introduced herself as Ruby Ruth Serrano," Edilberto instructed his secretary to
verify the authenticity of the title with the Register of Deeds of Las Piñas City and conduct an ocular inspection of
the property; that "the person who introduced herself as Ruby Ruth Serrano" obtained a cash advance of 50,000.00;
that after verification confirmed that the property is indeed owned by and registered in the name of Ruby Ruth
Serrano, Edilberto – "believing in good faith that the person [with] whom he is dealing x x x is indeed the real Ruby
Ruth Serrano" – entered into the sale transaction; that on the same day, or October 30, 2004, petitioner received the
full consideration of 250,000.00 and signed the Agreement and Deed of Absolute Sale; that petitioner’s affidavit of
loss filed with the Registry of Deeds is false as TCT 85533 was never lost but was entrusted to Perez who, together
with Tingson "and another person he rein named as ‘Jane Doe’ whose identity is yet to be established who
introduced herself as Ruby Ruth Serrano," came to respondents’ office to obtain a loan because petitioner was in
dire need of money as she admitted in her complaint; that TCT 85533 was negotiated and/or sold by petitioner "or
by her duly authorized person, otherwise no one can present/deliver the original owner’s duplicate copy of the said
title x x x and the original copies of the documents x x x;" that "for failure of the registered owner, Ruby Ruth
Serrano, to exercise her right of repurchase within the agreed period, ownership of the subject property now lawfully
belongs to" respondents; that the complaint failed to allege that respondents were purchasers in bad faith or at least
with notice of the defect in the title, which leads to the conclusion that the complaint states no cause of action; and
that respondents filed a perjury case against petitioner with the Office of the City Prosecutor of Parañaque.
Respondents thus prayed for the dismissal of the complaint, and by way of counterclaim, sought indemnity for moral
damages in the amount of 300,000.00; 100,000.00 as nominal damages; 200,000.00 as exemplary damages;
100,000.00 for attorney’s fees; and costs of suit.
Pre-trial and presentation of petitioner’s evidence ensued. Thereafter, petitioner rested her case.
Respondents filed a Demurrer to Evidence,14arguing that the complaint failed to state a cause of action in that
petitioner failed to allege that respondents were purchasers in bad faith or with notice of a defect in the title; that in
the absence of such an allegation, the presumption that respondents are purchasers in good faith prevails.
Petitioner filed a Comment/ Opposition,15 contending essentially that her complaint contained an allegation that
respondents were purchasers in bad faith, which is found in paragraphs 13 to 15 of the complaint; and that the
issues raised in the demurrer may only be resolved after trial on the merits.
In a January 5, 2010 Order,16 the trial court denied respondents’ demurrer. It held that the question of whether
respondents are purchasers in bad faith can only be resolved after the parties present their respective evidence.
Thus, it stated:
The Court, after taking into account a ll the foregoing, does not find merit in the above demurrer. For one, the Court
already held in its Order dated 11 April 2008 that "during the pre-trial held last 11 February 2008 one of the issues
submitted for resolution by the Court is whether or not [sic] defendants Sps. Ilano are buyers in good faith and for
value of the property subject hereof". This being so, the same can only be resolved upon presentation of evidence
by the parties herein regarding their respective positions."Thus, the instant case cannot just be dismissed simply
because the defendants said so base on their own evaluation of the evidence presented by the plaintiff.
If only to stress, as far as the Court is concerned the assertions of the defendants are merely conclusions they
arrived at on their own that [run] counter to the position of the plaintiffs. As such, the defendants will have to present
their own evidence to substantiate their claims.
More importantly, the Court cannot just disregard the evidence and testimonies of the witnesses presented by the
plaintiffs. Further, in order to ferret out the truth and determine the veracity of the assertions being made by the
parties herein, it is best that the "other side" be heard. It is only in allowing the defendants to present their evidence
that this can be achieved so that the herein case against them can be resolved judiciously.
In the end, it is for the Court to evaluate the evidence to be presented by the parties herein. The conclusions being
forwarded by the parties will have to be reckoned with what have been presented and not on their respective self-
serving assertions.
Indeed, a demurrer to evidence is anchored on the claim that "upon the facts and the law the plaintiff has shown no
right to relief" (Sec. 1, Rule 33, Rules of Court). With respect to the herein case, there is no clear showing that
plaintiffs Sps. Mahilum have no right to the reliefs being sought by them. On the contrary, and if not opposed by
contravening evidence by the defendants, their causes of action may end up being supported by evidence that may
merit rulings in their favor.
WHEREFORE, premises considered, the "Demurrer to Evidence" dated 11 November 2009 filed by defendants
Sps. Edilberto and Lourdes Ilano is DENIED for lack of merit.
SO ORDERED.17
Respondents filed a Motion for Reconsideration,18but the trial court denied the same in a February 24, 2010 Order.19

Respondents went up to the Court of Appeals (CA) via an original Petition for Certiorari.20 Docketed as CA-G.R. SP
No. 113782, the petition essentially insisted that since petitioner’s complaint failed to include an allegation that
respondents were purchasers in bad faith, then her complaint for annulment of sale failed to state a cause of action,
which entitles them to a dismissal on demurrer; and that in denying their demurrer, the trial court disregarded
existing jurisprudence to the effect that where a complaint does not contain all the facts constituting the plaintiff’s
cause of action, it is subject to a motion to dismiss. In addition to seeking the reversal of the trial court’s January 5,
2010 and February 24, 2010 Orders, respondents prayed for injunctive relief as well.
On July 15, 2010, the CA issued a Resolution21 denying respondents’ application for a temporary restraining order.
Petitioner filed her Comment to the Petition.
On February 2, 2011, the CA issued the assailed Decision, which contained the following decretal portion:
WHEREFORE, the above premises considered, the instant petition is GRANTED. The Orders of public respondent
Regional Trial Court of Las Piñas City, Branch 255 dated 5 January 2010 and 24 February 2010, respectively, are
NULLIFIED and SET ASIDE. Private respondents’ complaint for Annulment of Agreement and Deed of Absolute
Sale, Specific Performance with Damages is DISMISSED for lack of cause of action.
SO ORDERED.22
The CA held that –
A careful reading of private respondents’23 complaint before public respondent would show that private respondents
indeed failed to allege that petitioners24 were in bad faith or at least aw are of the misrepresentation of the vendor of
the subject property at the time they purchased the same.
Thus, absent an allegation in the subject complaint that petitioners were in bad faith or with notice of the vendor’s
misrepresentation at the time of sale or prior thereto, they are presumed to be innocent purchasers for value of the
subject property.
Under the law, a title procured through fraud and misrepresentation can still be the source of a completely legal and
valid title if the same is in the hands of an innocent purchaser for value and in good faith. Again, how can public
respondent render a valid judgment when, based on the allegations in the complaint, petitioners are presumed to
have bought the subject lot in good faith? Stated differently, private respondents have no cause of action against
petitioners.
In their comment or opposition to petitioners’ demurrer to evidence, private respondents argued that it is not
accurate that they failed to allege bad faith because paragraphs 13, 14, and 15 of their complaint indicated the
evident bad faith of petitioners. However, a review of said averments would only prove that petitioners became
aware of the alleged fraud or misrepresentation after the execution of the assailed agreement and deed of sale
when private respondents confronted the former, and not before or during the execution of the same. The Supreme
Court held:
"A person is considered in law as an innocent purchaser for value when he buys the property of another, without
notice that some other person has a right or an interest in such property, and pays a full price for the same at the
time of such purchase, or before he has notice of the claims or interest of some other person in the property. A
person dealing with registered land may safely rely on the correctness of the certificate of title of the
vendor/transferor, and the law will in no way oblige him to go behind the certificate to determine the condition of the
property."25
When the complaint alleges that private respondents did not sell the subject property to petitioners but does not
allege that the latter were purchasers in bad faith or with notice of the defect in the title of their vendors, there is a
failure to state a cause of action.26 By reason of this failure, petitioners are presumed to be innocent purchasers for
value and in good faith, entitled to protection under the law.
"In Spouses Chu, Sr. v. Benelda Estate Development Corporation, this Court pronounced that it is crucial that a
complaint for annulment of title must allege that the purchaser was aware of the defect in the title, so that the cause
of action against him or her will be sufficient. Failure to do so, as in the case at bar, is fatal for the reason that the
court cannot render a valid judgment against the purchaser who is presumed to be in good faith in acquiring said
property."27
It was further held that a title issued to an innocent purchaser and for value cannot be revoked on the basis that the
deed of sale was falsified, if he or she had no knowledge of the fraud committed.28 Here, there is clearly no
imputation that petitioners had knowledge of the fraud committed during the execution of the assailed agreement
and deed of sale. Furthermore, in the formal offer of the testimony of private respondent Ruby Ruth, proving bad
faith was not even among the purposes for which her testimony was offered. Accordingly, the testimony itself did not
show bad faith on the part of petitioners.
It is significant to note that in the subject complaint, formal offer of evidence, and oral testimony, only two things
were established: (1) private respondents did not sell the subject property to petitioners and (2) Teresa Perez
breached the trust given to her by private respondents. These facts cannot constitute a cause of action or relief
against petitioners because, absent an allegation of bad faith in the complain t, they are presumed to be innocent
purchasers for value during the execution of the agreement and deed of sale.
There is the established rule that if the defendant permits evidence to be introduced, without objection, which supp
lies the necessary allegations of a defective complaint, this evidence has the effect of curing the defects of such
complaint, and a demurrer thereafter is inadmissible on the ground that the complaint does not state fact s sufficient
to constitute a cause of action. This rule, however, cannot be applied in the instant case. Granting that petitioners
did not object to the presentation of evidence of private respondents, the latter still failed to cure the defect in their
complaint since no evidence of bad faith on the part of petitioners was presented before the court. Proofs of bad
faith were all directed against Teresa Perez and her companion who introduced herself as Ruby Ruth Serrano.
Although this Court relied on the transcript of stenographic notes quoted by petitioners, as complete records of the
case are still with public respondent, private respondents did not question in their Comment on the petition, the
truthfulness of the statements quoted therein. Hence, private respondents are deemed to have admitted the veracity
of said transcript. Without an imputation [or] a showing that petitioners were in bad faith or aware of the fraud
perpetrated by Teresa Perez and her companion, no action can be maintained against them.
In view of the foregoing, public respondent RTC committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it denied the Demurrer to Evidence notwithstanding the complete absence of a cause of action
against petitioners. Public respondent RTC contravened and disregarded the settled and prevailing jurisprudence on
the matter.29
Petitioner filed her Motion for Reconsideration,30 which the CA denied in its assailed July 28, 2011Resolution.
Issues
ON QUESTION OF LAW, WHETHER x x x FAILURE TO ALLEGE BAD FAITH IN THE COMPLAINT IS A FATAL
DEFECT CONSIDERING THAT THE SUBJECT DOCUMENTS (AGREEMENT/DEED OF ABSOLUTE SALE WITH
RIGHT TO REPURCHASE, AND UNNOTARIZED DEED OF SALE) WERE MERELY SIMULATED, FICTITIOUS
AND FORGERY [sic], AND HENCE, NULL AND VOID FROM THE BEGINNING.
II
ON QUESTION OF LAW, WHETHER x x x THE PETITIONER WAS DEPRIVED OF HER PROPERTY WHEN THE
COURT OF APPEALS GRANTED THE DEMURRER TO EVIDENCE ON THE GROUND THAT THERE WAS NO
CAUSE OF ACTION WHEN ONE OF THE ISSUED[sic] AGREED UPON BY THE PARTIES DURING THE PRE-
TRIAL BEFORE THE RTC WAS WHETHER x x x PRIVATE RESPONDENTS WERE PURCHASERS IN GOOD
FAITH.
III
WHETHER x x x PETITIONER/S WERE PREVENTED FROM CONFRONTING THE PRIVATE RESPONDENTS

AND THEIR WITNESSES TO DETERMINE WHETHER x x x THEY REALLY DEALT WITH PETITIONER AND TO
DETERMINE WHO WAS THE IMPOSTOR WHO SIGNED THE SUBJECT AGREEMENT AND DEED OF
ABSOLUTE SALE AND HENCE, ALLOW THE RTC COURT TO DETERMINE WHETHER THE SUBJECT
AGREEMENT AND DEED OF ABSOLUTE SALE WERE SIMULATED, FICTITIOUS AND NULL AND VOID AND IF
PRIVATE RESPONDENTS WERE REALLY PURCHASERS FOR VALUE IN GOOD FAITH THAT WILL AF FECT
THE OUTCOME OF THE INSTANT CASE.31
In praying that the assailed CA dispositions be set aside and that in effect the January 5, 2010 and February 24,
2010 Orders of the trial court denying respondents’ demurrer to evidence be re instated, petitioner insists in her
Petition and Reply32 that during the pre-trial conference, one of the issues agreed upon by the parties to be resolved
was whether respondents were buyers in good faith, which was reflected in the trial court’s January 5, 2010
Order;33that since the issue of good or bad faith has been agreed upon by the parties as one of the matters to be
tackled during trial, then the failure to allege bad faith in the complaint is deemed cured, and the defense is deemed
waived by the respondents with their assent given during pre-trial; and that the agreement and deed of absolute
sale, being forgeries, are null and void and without force and effect.
Petitioner adds that although a complaint which does not contain all the facts constituting the plaintiff’s cause of
action is subject to a motion to dismiss, the defect is cured if the defendant permits the introduction of evidence
which supplies or remedies such defect;34 thus, respondents’ assent to the framing of the issues during pre-trial and
their failure to object to the presentation of evidence on the issue of good or bad faith cu red her defective complaint.
Finally, petitioner contends that the grant of respondents’ demurrer amounts to a deprivation of property without due
process of law, as she was prevented from defending her ownership over the same by duly confronting the
respondents and their witnesses and proving that the agreement and deed of absolute sale were mere forgeries.
Respondents, on the other hand, argue in their Comment35 that the CA was correct in declaring that petitioner’s
complaint in Civil Case No. LP-07-0109 failed to state a cause of action owing to her failure to allege that the
property in question was purchased in bad faith. They add that petitioner failed to present evidence during trial to the
effect that they bought the subject property in bad faith; that the scope of her evidence covered only her claim that
she did not execute the subject agreement and deed of absolute sale, and that these documents are fictitious and
forged – she did not present evidence to show that they were buyers in bad faith. Thus, they maintain that for failing
to allege and prove bad faith on their part, the CA was correct in ordering the dismissal of Civil Case No. LP-07-
0109.
Our Ruling
In granting demurrer, the CA failed to consider that title to the property remained in petitioner’s name; TCT 85533
was never cancelled and no new title was issued in respondents’ name. As a matter of fact, what they did when
petitioner annotated her affidavit of loss upon TCT 85533 was to cause the annotation of an "affidavit of non-loss"
afterward.
Since a new title was never issued in respondents’ favor and, instead, title remained in petitioner’s name, the former
never came within the coverage and protection of the Torrens system, where the issue of good or bad faith
becomes relevant. Since respondents never acquired a new certificate of title in their name, the issue of their good
or bad faith which is central in an annulment of title case is of no consequence; petitioner’s case is for annulment of
the Agreement and Deed of Absolute Sale , and not one to annul title since the certificate of title is still in her name.
The jurisprudential bases for the CA’s pronouncement that there is a failure to state a cause of action if the e is no
allegation in the complaint that respondents were purchasers in bad faith – Castillo v. Heirs of Vicente Madrigal36and
Heirs of Julian Tiro v. Philippine Estates Corporation37 – involved complaints for annulment of new titles issued to the
buyers ; they cannot apply to petitioner’s case where title remains in her name.
Petitioner’s case is to annul the agreement and deed of sale based on the allegation that they are forgeries, and that
respondents were parties to the fraud; since no new title was issued in respondents ’ favor, there is no new title to
annul. Indeed, if the agreement and deed of sale are forgeries, then they are a nullity and convey no title.38 The
underlying principle is that no one can give what one does not have. Nemo dat quod non habet .
In Sps. Solivel v. Judge Francisco, we held that:
x x x in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument
may be considered a holder in good faith for value, the instrument registered should not be forged. When the
instrument presented is forged, even if accompanied by the owner’s duplicate certificate of title, the registered owner
does not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the
property.
x x x The innocent purchaser for value protected by law is one who purchases a titled land by virtue of a deed
executed by the registered owner himself, not by a forged deed, as the law expressly states. x x x
In Instrade, Inc. v. Court of Appeals, we reiterated the said ruling maintaining that "[A]s early as Joaquin v. Madrid, x
x x, we said that in order that the holder of a certificate for value issued by virtue of the registration of a voluntary
instrument may be considered a holder in good faith and for value, the instrument registered should not be forged."
Indubitably, therefore, the questioned Deed of Absolute Sale did not convey any title to herein petitioners.
Consequently, they cannot take refuge in the protection accorded by the Torrens system on titled lands.
Thus, we hold that with the presentation of the forged deed, even if accompanied by the owner’s duplicate certificate
of title, the registered owner did not thereby lose his title, and neither does the assignee in the forged deed acquire
any right or title to the said property. x x x39
In this case, it is petitioner who must be protected under the Torrens system – as the registered owner of the subject
property. "A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor
of the person whose name appears therein. The real purpose of the Torrens system of land registration is to quiet
title to land and put a stop forever to any question as to the legality of the title."40
In Tenio-Obsequio v. Court of Appeals , we explained the purpose of the Torrens system and its legal implications to
third persons dealing with registered land, as follows:
The main purpose of the Torrens system is to avoid possible conflicts of title to real estate and to facilitate
transactions relative thereto by giving the public the right to rely upon the face of a Torrens certificate of title and to
dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and
circumstances that should impel a reasonably cautious man to make such further inquiry. Where innocent third
persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court
cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright
cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property
registered under the Torrens syst em would have to inquire in every instance as to whether the title has been
regularly or irregularly issued by the court . Every person dealing with registered land may safely rely on the
correctness of the certificate of title issued there for and the law will in no way oblige him to go beyond the certificate
to determine the condition of the property.
The Torrens system was adopted in this country because it was believed to be the most effective measure to
guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and
recognized. If a person purchases a piece of land on the assurance that the seller’s title thereto is valid, he should
not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him.
What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions
would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership.
The further consequence would be that land conflicts could be even more numerous and complex than they are now
and possibly also more abrasive, if not even violent. The Government, recognizing the worthy purposes of the
Torrens system, should be the first to accept the validity of titles issued there under once the conditions laid down by
the law are satisfied.
The Torrens system was intended to guarantee the integrity and conclusiveness of the certificate of registration, but
the system cannot be used for the perpetration of fraud against the real owner of the registered land. The system
merely confirms ownership and does not create it. It cannot be used to divest lawful owners of their title for the
purpose of transferring it to another one who has not acquired it by any of the modes allowed or recognized by law.
Thus, the Torrens system cannot be used to protect a usurper from the true owner or to shield the commission of
fraud or to enrich oneself at the expense of another.41
A cursory examination of the record will show that petitioner’s action does not appear to be groundless. There are
circumstances which lead one to believe that respondents are not exactly innocent of the charge. Their failure to
register the unnotarized and undated deed of absolute sale is at the very least unusual; it is contrary to experience.
It is uncharacteristic of a conscientious buyer of real estate not to cause the immediate registration of his deed of
sale as well as the issuance of a new certificate of title in his name. Having supposedly paid a considerable amount
(250,000.00) for the property, respondents certainly would have protected themselves by immediately registering
the sale and obtaining a new title in their name; but they did not. Even after petitioner caused the annotation of her
affidavit of loss, respondents did not register their supposed sale, but merely annotated an "affidavit of non-lo ss."
This, together with the fact that the deed of absolute sale is undated and unnotarized, places their claim that they
are purchasers in good faith seriously in doubt. The ruling in Rufloe v. Burgos42 comes to mind:
We cannot ascribe good faith to those who have not shown any diligence in protecting their rights, Respondents had
know ledge of facts that should have led them to inquire and investigate in order to acquaint themselves with
possible defects in the title of the seller of the property. However, they failed to do so. Thus, Leonarda, as well as
the Burgos siblings, cannot take cover under the protection the law accords to purchasers in good faith and for
value. They cannot claim valid tit le to the property.
Moreover, the defense of indefeasibility of a Torrens title does not extend to a transferee who takes it with notice of
a flaw in the title of his transferor. To be effective, the inscription in the regist ry must have been made in good faith.
1âw phi 1
A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the law cannot be used as a
shield for fraud.
We quote with approval the following findings of the trial court showing that the sale between the Burgos siblings
and Leonarda is simulated :
1. The sale was not registered, a circumstance which is inconceivable in a legitimate transfer. A true vendee would
not brook any delay in registering the sale in his favor. Not only because registration is the operative act that effects
property covered by the Torrens System, but also because registration and issuance of new title to the transferee,
enable this transferee to assume domiciliary and possessory rights over the property. These benefits of ownership
shall be denied him if the titles of the property shall remain in the name of vendor. Therefore, it is inconceivable as
contrary to behavioral pattern of a true buyer and the empirical knowledge of man to assume that a buyer who
invested on the property he bought would be uninvolved and not endeavor to register the property he bought. The
nonchalance of Leonarda amply demonstrates the pretended sale to her, and the evident scheme of her brother
Amado who invested on the property he bought.43
Most telling is respondents’ Amended Answer with Compulsory Counterclaim, which tends to admit and indicate that
when the December 4, 2003 Agreement with right of repurchase and unnotarized and undated Deed of Absolute
Sale were executed, an individual – who falsely represented herself to be petitioner – appeared and signed these
documents. Thus, respondents alleged in their amended answer that sometime in October 2003, Perez –
accompanied by one Corazon Tingson (Tingson) " and a female person who introduced herself as Ruby Ruth
Serrano" – offered to sell to them the property covered by TCT 85533; that "in support of the identity of the said
Ruby Ruth Serrano, the original owner’s copies of the title (TCT No. T-85533), Declaration of Real Property, Tax
Clearance, Barangay Clearance, Community Tax Certificate with picture of Ruby Ruth Serrano attached therein"
were presented to respondent Edilberto Ilano (Edilberto); that upon being satisfied as to the "identity of the person
who introduced herself as Ruby Ruth Serrano," Edilberto instructed his secretary to verify the authenticity of the title
from the Register of Deeds of Las Piñas City and conduct an ocular inspection of the property; that " the person who
introduced herself as Ruby Ruth Serrano " obtained a cash advance of 50,000.00; that after verification confirmed
that the property is indeed owned by and registered in the name of Ruby Ruth Serrano, Edilberto – " believing in
good faith that the person [with] whom he is dealing x x x is indeed the real Ruby Ruth Serrano" – entered into the
sale transaction; that petitioner’s affidavit of loss filed with the Registry of Deeds is false as TCT 85533 was never
lost but was entrusted to Perez who, together with Tingson "and another person herein named as ‘Jane Doe’ whose
identity is yet to be established who introduced herself as Ruby Ruth Serrano ," came to respondents’ office to
obtain a loan because petitioner was in dire need of money as she admitted in her complaint.
Even at the level of the CA, respondents admitted, in their petition for certiorari, that they bought the property not
from petitioner, but from their "co-defendants who had a defective title" – presumably Perez and the impostor. The
pertinent portion of their petition reads:
Bad faith cannot be presumed. It must be established by clear evidence. And it appearing that the subject complaint
is for recovery and possession of a parcel of land, and that defendants bought it from their co-defendants who had a
defective title, but does not allege in the complaint that the purchasers were buyers in bad faith or with notice of the
defect in the title of their vendors x x x44
The above allegations in respondents’ pleadings are certainly revealing. They already knew petitioner’s identity and
how she looked, having me t her even before the filing of the complaint – when petitioner confronted them and they
showed her the agreement and deed of sale. Thus, they should not have referred to the supposed seller as "
another person herein named as ‘Jane Doe’ whose identity is yet to be established who introduced herself as Ruby
Ruth Serrano" or "the person who introduced herself as Ruby Ruth Serrano" if indeed it was petitioner herself who
appeared and signed the agreement and deed of sale in question. They should have categorically alleged that they
bought the property from petitioner herself if indeed this was so. Their ambiguous allegations constitute a negative
pregnant, which is in effect an admission.
Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative pregnant,
that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not
squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative
pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind
favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the
pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so
qualified or modified are literally denied, it has been held that the qualifying circumstances alone are denied while
the fact itself is admitted.45
"If an allegation is not specifically denied or the denial is a negative pregnant, the allegation is deemed admitted."
"Where a fact is alleged with some qualifying or modifying language, and the denial is conjunctive, a 'negative
pregnant' exists, and only the qualification or modification is denied, while the fact itself is admitted." "A denial in the
form of a negative pregnant is an ambiguous pleading, since it cannot be ascertained whether it is the fact or only
the qualification that is intended to be denied." "Profession of ignorance about a fact which is patently and
necessarily within the pleader's knowledge, or means of knowing as ineffectual, is no denial at all.' 46
Finally, petitioner's complaint in Civil Case No. LP-07-0109 clearly states that in the execution of the agreement and
deed of absolute sale, respondents and Perez acted in bad faith and connived in the forgery. Specifically, paragraph
18 of her complaint states, as follows:
18. That by reason of the actuations of the defendants in facilitating the execution of the aforesaid falsified
documents, and adamant refusal to return to plaintiffs the duplicate original owner's copy of their title, which were all
done with evident bad faith, the plaintiffs suffered and continue to suffer sleepless nights, wounded feelings,
besmirched reputation, serious anxiety and other similar feelings, which, when quantified, can reasonably be
compensated with the sum of Fifty Thousand (₱50,000.00) Pesos, as moral damages;47
Thus, the CA' s pronouncement - that nowhere in the complaint is it alleged that respondents were purchasers in
bad faith - is patently erroneous. The primary ground for reversing the trial court's denial of respondents' demurrer is
therefore completely unfounded. Besides, the action itself, which is grounded on forgery, necessarily presupposes
the existence of bad faith.
With the foregoing pronouncement, the Court finds no need to tackle the other issues raised by petitioner. They are
rendered moot and irrelevant by the view taken and manner in which the case was resolved.
WHEREFORE, the Petition is GRANTED. The assailed February 2, 2011 Decision and July 28, 2011 Resolution of
the Court of Appeals in CA-G.R. SP No. 113782 are REVERSED and SET ASIDE. The case is remanded to the
Regional Trial Court of Las Pifias City, Branch 255 in Civil Case No. LP-07-0109 for proper disposition.
SO ORDERED.
SECOND DIVISION
G.R. No. 195513 June 22, 2015
MARLON BED UY A, ROSARIO DUMAS* ALEX LEONOZA, RAMILO FAJARDO, HARLAN LEONOZA, ALVIN
ABUYOT, DINDO URSABIA,** BERNIE BESONA, ROMEO ONANAD,*** ARMANDO LIPORADA,****
FRANKFER ODULIO, MARCELO MATA, ALEX COLOCADO, JOJO PACATANG, RANDY GENODIA and
ISABINO B. ALARMA, JR., Petitioners,******
vs.
ACE PROMOTION AND MARKETING CORPORATION and GLEN******** HERNANDEZ, Respondents.
DECISION
DEL CASTILLO, J.:
Procedural rules should be relaxed if only to serve the ends of justice.
This Petition for Review on Certiorari1 assails the November 30, 2010 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 111536 affirming the February 23, 2009 Decision3 and August 4, 2009 Resolution4 of the National
Labor Relations Commission (NLRC), which granted respondents’ appeal from the April 24, 2008 Decision5 of the
Labor Arbiter and ordered the dismissal of petitioners’ complaint for illegal dismissal. Likewise assailed is the
February 3, 2011 CA Resolution6 which denied petitioners’ Motion for Reconsideration of the said CA Decision.
Antecedent Facts
Respondent Ace Promotion and Marketing Corporation (APMC), with respondent Glen Hernandez as its President,
is a contractor engaged in the deployment of workers to various companies to promote the latters’ products through
promotional and merchandising services. In pursuance of its business, APMC entered into a Promotional
Contract7with Delfi Marketing, Inc.8 (Delfi) whereby the former undertook to conduct promotional activities for the
latter’s confectionery products. For this purpose, APMC employed workers, including petitioners Marlon Beduya,
Rosario Dumas, Alex Leonoza, Alvin Abuyot, Dindo Ursabia, Bernie Bosona, Romeo Onanad, Armando Liporada,
Frankfer Odulio, Marcelo Mata, Alex Colocado, Jojo Pacatang, Randy Genodia and Isabino B. Alarma, Jr.
(petitioners), as merchandisers and assigned them to various retail outlets and supermarkets under fixed-term
employment contracts. The last contracts of employment9 that petitioners signed were until January 30, 2007.
In a letter10 dated December 27, 2006, Delfi notified APMC that their Promotional Contract will expire effective
January 31, 2007. On January 29, 2007, APMC informed petitioners, among other workers, that their last day of
work would be on January 30, 2007.
Before the Labor Arbiter, three separate complaints11 for illegal dismissal and money claims against respondents
were filed by petitioners and by other employees (complainants) w hose employment was terminated allegedly by
reason of the expiration of APMC’s contract with Delfi. The said complaints, docketed as NLRC-NCR Case No s.
00-02-01022-07, 00-02-0185-07 and 00-03-02756-07, were consolidated.
In their Position Paper,12 complainants alleged that: they are regular employees of APMC, having continuously
worked in APMC since 1997; they are bona fide members of the Social Security System (SSS) and the company’s
Home Development Mutual Fund (HDMF); the expiration of the Promotional Contract between APMC and Delfi does
not automatically result in their dismissal; and, the said Promotional Contract is still subsisting as new workers were
hired as their replacements. All of the complainants asked for wage differentials, claiming that part of their wages
were unlawfully withheld unless they sign a waiver and quitclaim in favor of APMC, while 18 of them additionally
prayed for recovery of unpaid ECOLA.
Respondents, on the other hand, countered that AP MC is a legitimate job contractor that hires employees for a
specific job on a contractual basis. With respect to complainants, respondents claimed that they were duly apprised
of the contractual nature of their employment, its duration, working hours, basic salaries, and the basic work policies
as stipulated in their contracts of employment. And since complainants were hired as merchandisers for Delfi, their
employment automatically ended when APMC’s Promotional Contract with Delfi expired. On the complainants’
allegation of continuous employment, respondents explained that, indeed, complainants were previously engaged
as merchandisers for a client, Goya, Inc. (Goya). But when Goya’s business interest was sold to Delfi, complainants’
fixed-term employment contracts also accordingly expired. They were then rehired and reassigned to Delfi, again on
a fixed-term basis, which employment was necessarily terminated upon the end of the term. In view of this,
respondents denied liability over complainants’ money claims, damages, and attorney’s fees.
In a Decision13 dated April 24, 2008, the Labor Arbiter, after finding no credible evidence to prove that they were
employed on a contractual basis, declared complain ants to have been illegally dismissed. He found unconvincing
APMC’s allegation that complainants’ employment was terminated due to the expiration of its contract with Delfi
considering that it continued to hire new employees as replacements for complainants. This, the Labor Arbiter
opined, infringed upon complainants’ right to security of tenure. On the other hand, he viewed complainants’
continuous employment with APMC for a considerable length of time and the fact that they are SSS and HDMF
members, as indications of their being regular employees. Thus, he ordered complainants reinstatement or payment
of separation pay, payment of backwages, unpaid wages, ECOLA, moral and exemplary damages, and attorney’s
fees. The dispositive portion of the Labor Arbiter’s Decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered finding the dismissal illegal and ordering
respondents, as follows:
1. To reinstate complainants to their former position with full backwages to be reckoned from the date of their
dismissal up to the finality of this decision.
2. In the alternative, to pay them x x x their backwages plus separation pay equivalent to half month salary for every
year of service if employment is no longer tenable.
3. To pay the named eighteen (18) employees x x x their unpaid ECOLA for one (1) year.
4. To pay complainants x x x their unpaid wages for fifteen (15) days.
5. To pay moral damages in the amount of ₱10,000.00 each.
6. To pay exemplary damages [in] the [amount] of ₱5,000.00 each.
7. To pay attorney’s fees equivalent to 10% of the total monetary award.
The computation of the monetary award as computed by the Computation Division of this Office is attached hereto
and forms part of this decision.
SO ORDERED.14
Respondents filed a Memorandum of Appeal with Motion for Reduction of Bond15 with the NLRC. They maintained
that complainants were contractual employees. As such, their contracts of employment were terminated upon the
expiration of APMC’s Promotional Contract with Delfi. Anent their motion for reduction of appeal bond, respondents
contended that the awards granted to complainants amounting to 6,269,856.89 should be decreased considering
that:
(1) eight complainants did not sign the position paper submitted to the Labor Arbiter and therefore, the monetary
awards given in their favor should be excluded in the computation of the total award; (2) nine complainants already
withdrew their complaints as shown by their Affidavits of Desistance;16 (3) assuming that separation pay was
correctly awarded, the computation thereof should start from year 2003 when complainants started working for Goya
and not from year 1997 as computed by the Labor Arbiter; and (4) the backwages should be computed only up to
January 31, 2007 or up to the expiration of the Promotional Contract with Delfi and not until July 31, 2008.
Respondents attached a supersede as bond17 in the amount of 437,210.00 along with their appeal.
In their Opposition with Motion to Dismiss Appeal,18 complainants prayed for the dismissal of respondents’ appeal
based on insufficiency of the bond posted. This thus resulted in the non-perfection of the appeal, and consequently,
the Labor Arbiter’s Decision had become final and executory.
Without acting on respondents’ motion for reduction of bond and the complainants’ opposition thereto, the NLRC
rendered a Decision19 on February 23, 2009 finding complainants to be contractual employees hired for a specific
duration. The NLRC noted that complainants were duly informed at the commencement of their employment that
they were hired for a definite period and for a specific project, i.e., Delfi, and that they voluntarily agreed to these
and the other terms of their employment contracts. Hence, when the specific project or undertaking for which they
were hired cease d, their employment also ceased. They were therefore not illegally dismissed. In the ultimate, the
NLRC reversed the Labor Arbiter’s Decision and dismissed the complaints for illegal dismissal. It, however, affirmed
the awards of unpaid wages and ECOLA in favor of complainants. Thus:
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the instant appeal. The Decision of
the Labor Arbiter dated 24 April 2008 is hereby reversed and set aside, and a new one is issued dismissing the
complaint. Respondents-Appellants are, however, directed to cause the immediate satisfaction of complainants-
appellees’ unpaid wages for fifteen (15) days and ECOLA for one (1) year.
SO ORDERED.20
In their Motion for Reconsideration,21 complainants maintained that the
437,210.00 appeal bond is in sufficient and unreasonable in relation to the total monetary award of 6,269,856 .89,
which should have warranted the dismissal of respondents’ appeal. Complainants likewise pointed out that the
NLRC gravely abused its discretion when it did not re solve respondents’ motion to reduce bond and their opposition
thereto with motion to dismiss before rendering its decision granting the appeal. Complainants’ Motion for
Reconsideration was, however, denied by the NLRC in its Resolution22 dated August 4, 2009.
Some of the complainants, including petitioners, filed a Petition for Certiorari23 with the CA. They insisted that the
NLRC gravely abused its discretion in granting respondents’ appeal despite the latter’s failure to perfect the same
since the appeal bond filed was grossly insufficient and inadequate. Consequently, the Labor Arbiter’s Decision had
already become final and executory.
On November 30, 2010, the CA rendered a Decision24 dismissing the petition. It found respondents’ willingness and
good faith in complying with the requirements as sufficient justification to relax the rule on posting of an appeal
bond. Moreover, the CA agreed with the NLRC in finding that complainants were not illegally dismissed. The
termination of their employment was simply brought about by the expiration of the fixed period stipulated in their
contract s that they voluntarily signed after the terms thereof were fully explained to them.
Complainants’ Motion for Reconsideration25 was denied by the CA in its Resolution26 of February 3, 2011.
Thus, petitioners, from among all the complainants, are now before this Court through the present Petition.
Issues
(a)
WHETHER X X X THE FILING OF APPEAL WITH MOTION TO REDUCE APPEAL BOND WILL TOLL THE
RUNNING OF THE PERIOD TO PERFECT AN APPEAL
(b)
WHETHER X X X AN APPEAL BOND IN THE AMOUNT OF ₱473,210.00 IS REASONABLE IN RELATION TO [A

POSSIBLE] MONETARY AWARD OF 6,269,856.00
(c)
WHETHER X X X THE DECISION RENDERED BY THE LABOR ARBITER IS DEEMED FINAL AND EXECUTORY
AS THE APPEAL WAS NOT PERFECTED
(d)
WHETHER X X X IT IS PROCEDURALLY CORRECT TO PASS JUDGMENT ON A CASE WHEN THERE IS STILL

A PENDING MOTION TO BE RESOLVED27
For respondents’ alleged failure to comply with the jurisdictional requirements on appeal bonds, petitioners maintain
that the NLRC did not acquire jurisdiction over respondents’ appeal. Moreover, they claim that the NLRC erred in
resolving the merits of the appeal without first ruling on respondents’ motion to reduce appeal bond and their
opposition thereto with motion to dismiss.
Our Ruling
Article 223 of the Labor Code provides:
ART. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or
orders.
Such appeal may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the finding of facts are raised which would cause grave or irreparable damage or injury to the
appellant.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment appealed from.
While Sections 4(a) and 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC provide:
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. (a) The Appeal shall be: 1) filed within the
reglementary period as provided in Section 1 of this Rule; 2) verified by appellant himself in accordance with Section
4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the
appellant received the appealed decision, resolution or order; 4) in three (3) legibly written or printed copies; and 5)
accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash or surety bond as provided in
Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.
SECTION 6. BOND. In case the decision of the Labor Arbiter or the Regional Director involves a monetary award,
an appeal by the employer may be perfected only upon the posting of a bond which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney’s fees.
No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond
in a reasonable amount in relation to the monetary award.
The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall
not stop the running of the period to perfect an appeal.
It is thus clear from the foregoing that the filing of supersede as bond for the perfection of an appeal is mandatory
and jurisdictional and failure to comply with this requirement renders the decision of the Labor
Arbiter final and executory.28
However, this Court, in many cases,29 has relaxed this stringent requirement whenever justified. Thus, the rules,
specifically Section 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, allows the reduction of the
appeal bond subject to the conditions that: (1) the motion to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary award is posted by the appellant. Otherwise, the filing of a
motion to reduce bond shall not stop the running of the period to perfect an appeal. Still, the rule that the filing of a
motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute.30 The Court may
relax the rule under certain exceptional circumstances which include fundamental consideration of substantial
justice, prevention of miscarriage of justice or of unjust enrichment and special circumstances of the case combined
with its legal merits, and the amount and the issue involved.31 Indeed, in meritorious cases, the Court was propelled
to relax the requirements relating to appeal bonds such as when there are valid issues raised in the appeal32 and in
the absence of any valid claims against the employer.33
In the case at bench, the Court finds that respondents’ motion to reduce appeal bond was predicated on meritorious
and justifiable grounds. First, the fact that eight complainants failed to verify or affix their signatures on the position
paper filed before the Labor Arbiter merits the exclusion of the monetary awards adjudged to them. In Martos v. New
San Jose Builders, Inc.,34 it was held that the failure of some of the complainants therein to verify their position paper
submitted before the Labor Arbiter brought about the dismissal of the complaint as to them who did not verify. The
Court went on to say that their negligence and passive attitude towards the rule on verification amounted to their
refusal to further prosecute their claims. Second, the withdrawal of seven complainants35 in this case likewise
warrants the reduction of the monetary award rendered against respondents. Suffice it to say that the said seven
complainants are bound by the Affidavits of Desistance which are presumed to have been freely and voluntarily
executed by them. Accordingly, they no longer participated in the subsequent proceedings after having received
their last salaries and due benefits.
Petitioners, however, posit that the amount of the appeal bond posted, i.e.,
437,210.00, is unreasonable and inadequate vis-a-vis the total monetary award of 6,269,856.83. What they consider
as reasonable percentage of the total monetary award is at least 30% thereof.
In the recent case of Mcburnie v. Ganzon,36 the Court has set a provisional percentage of 10% of the monetary
award, exclusive of damages and attorney’s fees, as a reasonable amount of bond that an appellant should post
pending resolution by the NLRC of a motion to reduce bond. It is only after the posting of this bond that an
appellant’s period to perfect an appeal is suspended. Here, after deducting from the total monetary award the
amount of attorney’s fees and the amounts awarded to those complainants who did not verify their position papers
and those who had withdrawn their complaints, the total monetary award amounts to only more than 3
million.37Hence, the appeal bond of 437,210.00 posted by respondents is in fact even more than 10% of the said
total monetary award. Thus, applying the same parameter set in Mcburnie, the Court finds the amount of bond
posted by respondents in the present case to be reasonable.
In any event, the Court notes that in Mcburnie, it was held that the required 10% of the monetary award as appeal
bond is merely provisional given that the NLRC still retains the authority to exercise its full discretion to resolve a
motion for the reduction of bond and determine the final amount of bond that should be posted by an appellant in
accordance with the standards of meritorious grounds and reasonable amount.38
In consideration of the foregoing, the Court finds no merit in petitioners’ contention that the NLRC fa iled to establish
its jurisdictional authority over respondents’ appeal. Again, the filing of a motion to reduce bond predicated on
meritorious grounds coupled with the posting of a reasonable amount of cash or surety bond suffice to suspend the
running of the period within which to appeal. As discussed, respondents in this case have substantially complied
with these requirements and, on account thereof, their appeal from the Labor Arbiter’s Decision was timely filed.
Clearly, the NLRC was conferred with jurisdiction over respondents’ appeal thus placing the same within the power
of the said labor tribunal to review.
With respect to the NLRC’s failure to initially ac t upon respondents’ motion to reduce bond and petitioners’
opposition thereto with motion to dismiss, suffice it to say that the same did not divest the NLRC of its authority to
resolve the appeal on its substantive matters. After all, the NLRC is not bound by technical rules of procedure and is
allowed to be liberal in the application of its rules in deciding labor cases.39 Further, the NLRC is mandated to use
every and all reasonable means to ascertain the fact s in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process.40
Coming now to the substantive matters, the Court finds that the CA correctly affirmed the NLRC Decision which
granted respondents’ appeal and dismissed the illegal dismissal complaints. As aptly found by them, petitioners
were fixed-term employees whose respective contracts of employment had already expired. Therefore, there can be
no illegal dismissal to speak of. The following observations made by the CA were supported by substantial evidence
on record, viz:
We find and so rule that private respondents are independent contractors, and petitioners were deployed to Delfi
Foods to render various services. This was admitted by petitioners during the proceedings before the labor tribunal.
1âwphi 1
The relationship between the parties is governed by the Employment Contract which petitioners voluntarily signed
before being deployed at Delfi Foods.
The NLRC extensively quoted the aforesaid contract which primarily provided that petitioners’ employment was for a
fixed period, that is, from 1 December 2006 until 30 January 2007. Significantly, no allegations were made that
petitioners were forced or pressure d into affixing their signatures upon the contract. There is likewise no concrete
proof that private respondents prevailed upon petitioners, exercising moral dominance over the latter, to accept the
conditions set forth in the said contract. Having accepted the terms thereof, petitioners were bound by its
unequivocal stipulation that their employment was not permanent, but would expire at the end of the fixed period.41
WHEREFORE, the Petition is DENIED. The November 30, 2010 Decision and February 3, 2011 Resolution of the
Court of Appeals in CA-G.R. SP No. 111536 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 191787, June 22, 2015
MACARIO CATIPON, JR., Petitioner, v. JEROME JAPSON, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the December 11, 2009 Decision2 of the Court of Appeals (CA) in
CA-G.R. SP No. 94426 affirming the July 6, 2005 Decision3 of the Civil Service Commission-Cordillera Administrative Region
(CSC-CAR) in CAR-05-034DC, as well as its March 17, 2010 Resolution4 denying petitioner's Motion for Reconsideration.5
Factual Antecedents
The facts are as follows: chanrob lesvi rtua llawli bra ry
Petitioner Macario U. Catipon, Jr. is the holder of a Bachelor's Degree in Commerce from the Baguio Colleges Foundation.
When applying for graduation, he was allowed to join the graduation ceremonies despite a deficiency of 1.5 units in Military
Science, pursuant to a school policy allowing students with deficiencies of not more than 12 units to be included in the list of
graduates. However, a restriction came after, which is, that the deficiency must be cured before the student can be
considered a graduate.
ha 1985, petitioner found employment with the Social Security System (SSS) in Bangued, Abra.
Sometime in September 1993, the personnel head of the SSS in Bangued, Abra informed petitioner that the Civil Service
Commission was conducting a Career Service Professional Examination (CSPE) in October of the same year. Petitioner filed
an application to take the examination, believing that the CSC still allowed CSPE applicants to substitute the length of their
government service for any academic deficiency which they may have. However, the above-mentioned policy of the CSC had
been discontinued since January 1993 pursuant to Civil Service Commission Memorandum Circular No. 42, Series of 1991
and Office Memo. No. 63, Series of 1992.
Nevertheless, petitioner took the CSPE tests on October 17, 1993 and obtained a rating of 80.52%. Eventually, petitioner
was promoted to Senior Analyst and Officer-in-Charge Branch Head of the SSS at Bangued, Abra. hi October 1995, he finally
eliminated his deficiency of 1.5 units in Military Science.
On March 10, 2003, respondent Jerome Japson, a former Senior Member Services Representative of SSS Bangued, filed a
letter-complaint with the Civil Service Commission-CAR Regional Director, alleging that petitioner made deliberate false
entries in his CSPE application, specifically, that he obtained his college degree in 1993 when actually he graduated in 1995
only, after removing his deficiency of 1.5 units in Military Education. Also, that petitioner was not qualified to take the CSPE
examination in 1993 since he was not yet then a graduate of a four-year college course, contrary to the entry in his
application form.
After preliminary investigation, petitioner was charged with Dishonesty, Falsification of Official documents, Grave Misconduct
and Conduct Prejudicial to the Best Interest of the Service by the CSC-CAR.6 cralawlawlib rary
Respondent's Letter-Complaint7 against petitioner was docketed as CSC Disciplinary Administrative Case No. BB-03-006.
In his Answer,8 petitioner essentially pleaded good faith, lack of malice, and honest mistake. He maintained that at the time
of his application to take the CSPE, he was of the honest belief that the policy of the CSC - that any deficiency in the
applicant's educational requirement may be substituted by his length of service - was still subsisting.
On July 6, 2005, the CSC-CAR, through Director IV Atty. Lorenzo S. Danipog, rendered a Decision9containing the following
pronouncements: chanro blesvi rtua llawli bra ry
Clearly, respondent Catipon is not without any fault under the foregoing circumstances. The only issue now left is with
respect to the particular offense for which Catipon may be held responsible. Respondent Catipon is charged (with) four
offenses: Dishonesty, Falsification of Official Documents, Grave Misconduct and Conduct Prejudicial to the Best Interest of
the Service.
The key document allegedly falsified in this case is the Application Form x x x of respondent Catipon for the purpose of taking
the CS Professional Examination scheduled on October 17, 1993. Close and careful perusal of the said application form
reveals that most of the entries filled up by respondent are typewritten. The only entries handwritten by respondent are
those corresponding to "Year Graduated" and "School Where Graduated" which were answered by Macario with "1984" and
"BCF" respectively. Another handwritten entry is with respect to "Degree Finished", the handwritten "BSC entry, however,
was just superimposed on the typewritten "Commerce".
The fact that majority of the entries or data in the application form is typewritten suggests that the said application form was
consciously drafted and meticulously prepared before its actual submission to the CSC for processing. They are relevant and
material entries or data sought from respondent. It is worth emphasizing however that the pre-drafted application form,
considering the typewritten entries, shows respondent's confusion on how to make entries thereat. Respondent answered
both the IF YES column and IF NO column corresponding to the question "Are you a college graduate" in Item 8. x x x
xxxx
The manner that Item 8 was filled up by respondent Catipon shows lack of deliberate intent to defraud the government. He
manifested in his application his uncertainty on how to take the fact that he only lacks 1.5 units Military Science to be
conferred a graduate status, vis-a-vis the CSC policy on educational requirement. Though the entry "undergrad" was erased,
the CSC employee who processed the application would have doubted the truthfulness and authenticity of respondent's
entries in Item 8 of the Application Form, and thus the educational status of Macario. x x x
xxxx
Catipon had tried to show the real state of the matter regarding his educational attainment as can be deduced from the
manner he answered Item No. 8 in the application form. This may be taken as good faith, which will serve to mitigate any
liability incurred by respondent Catipon. The premeditated intent to deceive or willfully distort the facts in this case is not
present. The acts of Catipon do not even show blatant disregard of an established rule or a clear intent to violate the law if at
all, there was attempt to reveal the truth to the examination division processing the application.
xxxx
With [regard] to the eligibility earned by respondent Macario in view of his passing the October 17, 1993 Career Service
Professional Examination, the same needs to be revoked being the fruit of a poisonous tree, so to speak. Paragraph 2 of Sec.
6, Rule n, Omnibus Rules Implementing Book V of Executive Order No. 292 states: chanrob lesvi rtua llawlib ra ry
Provided that when an applica[nt] for examination is found to have xxx intentionally made any false statement of any
material fact in his application, x x x the Commission shall invalidate such examination xxx.
With the foregoing, respondent Macario U. Catipon, Jr., Senior Analyst and OIC Branch Head, Social Security System,
Bangued, Abra, is hereby exonerated of the charges Dishonesty, Falsification of Official Documents and Grave Misconduct.
However, respondent is found guilty of Conduct Prejudicial to the Best Interest of the Service.
Under the Uniform Rules on Administrative Cases in the Civil Service, the imposable penalty on the first offense of Conduct
Prejudicial to the Best Interest of the Service is suspension of six months and one day to one year.
Under Section 53 of the same Rules, good faith is enumerated as one mitigating circumstance. Thus, respondent Macario
Catipon, Jr. is hereby meted a penalty of six months and one day suspension, without pay, which is the minimum period of
the penalty attached to the offense committed. The Career Service Professional eligibility of respondent is also ordered
revoked, without prejudice however to retaking of the said examination. Thus, Catipon, after serving suspension herein
provided should not be allowed to go back to his current position without CS Professional eligibility. Consequently, in case
respondent Catipon fails to retake or pass CSPE, after serving his suspension, he may be demoted to any available position
that fits his subprofessional eligibility.10
c ralawlawl ibra ry
Petitioner moved for reconsideration,11 but the CSC-CAR sustained its judgment in a March 23, 2006 Decision,12 which
contained the following pronouncement: chanrob lesvi rtua llawli bra ry
Catipon also asserted that in view of his exoneration of Dishonesty, Falsification of Official Documents and Grave Misconduct,
there is no longer any basis to hold respondent guilty of Conduct Prejudicial to the Best Interest of the Service. This
contention is without legal basis. In the case of Philippine Retirement Authority vs. Rupa 363 SCRA 480, the Honorable
Supreme Court held as follows:
Under the Civil Service laws and rules, there is no description of what specific acts constitute the grave offense of Conduct
Prejudicial to the Best Interest of the Service.
As alluded to previously in Decision No. CAR-05-034DC, Catipon is not without fault under the circumstances. To completely
exonerate respondent would be inequitable and iniquitous considering the totality of events surrounding this case. Though
there was no deliberate intent to falsify or to make dishonest entry in the Application Form as deduced from the manner that
the said form was accomplished, the fact that there was indeed such dishonest or false entry in the CSPE Application Form is
undisputedly established. In view of such an established fact, the integrity of the Civil Service Examination, particularly the
CSPE has been blemished which is sufficient to constitute Conduct Prejudicial to the Interest of the Service.13 cralawlawl ibra ry
In a Petition for Review docketed with the CA as CA-G.R. SP No. 94426, petitioner prayed for injunctive relief and the
reversal of the above CSC-CAR decision. He argued that the CSC-CAR incorrectly found him guilty of conduct prejudicial to
the best interest of the service when he has been declared innocent of the charges of dishonesty, falsification of official
documents, and grave misconduct; that while the Supreme Court has held that making false entries in public documents may
be considered as conduct prejudicial to the best interest of the service, such act must be accompanied by deliberate intent or
a willful desire to defy or disregard established rules or norms in the service;14 and that with the finding that he merely
committed an innocent mistake in filling up the application form for the CSPE, he may not be found guilty of conduct
prejudicial to the best interest of the service.
On December 11, 2009, the CA rendered the assailed Decision denying the petition, decreeing thus: cha nro blesvi rtua llawli bra ry
WHEREFORE, in view of the foregoing, the instant petition is DENIED for lack of merit. The Decision [sic] of the Civil Service
Commission-Cordillera Administrative Region dated July 6, 2005 and March 23, 2006 is [sic] AFFIRMED.
The CA held that instead of filing a petition for review directly with it, petitioner should have interposed an appeal with the
Civil Service Commission (CSC), pursuant to Sections 5(A)(1), 43 and 49 of the CSC Uniform Rules on Administrative
Cases;16 that by filing a petition directly with it, petitioner violated the doctrine of exhaustion of administrative remedies;
that petitioner's case is not exceptional as would exempt it from the application of the doctrine; that per the ruling in Bayaca
v. Judge Ramos,17 the absence of deliberate intent or willful desire to defy or disregard established rules or norms in the
service does not preclude a finding of guilt for conduct prejudicial to the best interest of the service; and that petitioner did
not act with prudence and care, but instead was negligent, in the filling up of his CSPE application form and in failing to verify
beforehand the requirements for the examination.
Petitioner moved for reconsideration, but the CA stood its ground. Hence, the instant recourse. chanRoble svirtual Lawli bra ry
Issues
Petitioner raises the following issues for resolution: c han roblesv irt uallawl ibra ry
(A)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO REALIZE THAT GIVEN THE
IMMEDIATE EFFECT OF THE SUSPENSION IMPOSED BY THE CIVIL SERVICE COMMISSION-CORDILLERA ADMINISTRATIVE
REGION AGAINST THE PETITIONER, HE WAS JUSTIFIED IN SEEKING JUDICIAL RECOURSE BEFORE (THE COURT OF
APPEALS);
(B)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT MISAPPLIED IN THE ABOVE-ENTITLED
CASE THE RULE ON PRIOR EXHAUSTION OF ADMINISTRATIVE REMEDIES;
(C)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO CONSIDER THAT THE
PETITIONER ACTED IN GOOD FAITH AND THIS NEGATES GUILT FOR CONDUCT PREJUDICIAL TO THE BEST INTEREST OF
THE SERVICE.18 cralawlawlib ra ry
In his Petition and Reply19 seeking a reversal of the assailed CA dispositions and, consequently, exoneration from the charge
of conduct prejudicial to the best interest of the service, petitioner argues that he was constrained to file the petition for
review with the CA as his decreed six-month suspension was imminent as a consequence of the executory nature of the CSC-
CAR decision; that immediate judicial intervention was necessary to "prevent serious injury and damage" to him, which is
why his CA petition included a prayer for injunctive relief; that the doctrine of exhaustion of administrative remedies should
not have been applied strictly in his case, given the special circumstance that his suspension would mean loss of his only
source of income;20 that he should be completely exonerated from the charges against him, since conduct prejudicial to the
best interest of the service must be accompanied by deliberate intent or a willful desire to defy or disregard established rules
or norms in the service - which is absent in his case; and that his career service professional eligibility should not be revoked
in the interest of justice and in the spirit of the policy which promotes and preserves civil service eligibility.
In his Comment21 seeking denial of the petition, respondent counters that completion of all the academic requirements - and
not merely attendance at graduation rites - confers the necessary degree which qualifies a student to take the CSPE; that
petitioner's claim that he is a graduate as of 1984 is belied by his Transcript of Records22 and other pieces of evidence
submitted, which reflect the date of his graduation as October 1995 - or after completion of his 1.5-unit deficiency in Military
Science; that petitioner cannot claim to suffer irreparable injury or damage as a result of the CSC-CAR's Decision, which is
valid and binding; that the revocation of petitioner's eligibility is only proper, since he was then not qualified when he took
the CSPE; that the CSC-CAR was correct in finding that petitioner's act compromised the image and integrity of the civil
service, which justified the imposition of a corresponding penalty; that this Court in the Rupa case made it clear that the act
of making false entries in public documents constitutes conduct prejudicial to the best interest of the service, a grave offense
punishable by suspension for six months and one day to one year for the first offense, and dismissal for the second offense;
and that indeed, petitioner violated the doctrines of primary jurisdiction and exhaustion of administrative remedies when he
proceeded directly to the CA, instead of filing an appeal with the CSC. chanRoblesvirtual Lawlib ra ry
Our Ruling
Our fundamental law, particularly Sections 2 (1) and 3 of Article DC-B, state that -
Section 2. (1) The civil service embraces all branches, subdivisions, instrumentalities and agencies of the Government,
including government-owned or controlled corporations with original charters.
Section 3. The Civil Service Commission, as the central personnel agency of the Government, shall establish a career service
and adopt measures to promote morale, efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil
service. It shall strengthen the merit and rewards system, integrate all human resources development programs for all levels
and ranks, and institutionalize a management climate conducive to public accountability. It shall submit to the President and
the Congress an annual report on its personnel programs.
Thus, "the CSC, as the central personnel agency of the Government, has jurisdiction over disputes involving the removal and
separation of all employees of government branches, subdivisions, instrumentalities and agencies, including government-
owned or controlled corporations with original charters. Simply put, it is the sole arbiter of controversies relating to the civil
service."23
In line with the above provisions of the Constitution and its mandate as the central personnel agency of government and sole
arbiter of controversies relating to the civil service, the CSC adopted Memorandum Circular No. 19, series of 1999 (MC 19),
or the Revised Uniform Rules on Administrative Cases in the Civil Service, which the CA cited as the basis for its
pronouncement. Section 4 thereof provides: chan roble svirtual lawlib rary
Section 4. Jurisdiction of the Civil Service Commission. — The Civil Service Commission shall hear and decide administrative
cases instituted by, or brought before it, directly or on appeal, including contested appointments, and shall review decisions
and actions of its offices and of the agencies attached to it.
Except as otherwise provided by the Constitution or by law, the Civil Service Commission shall have the final authority to
pass upon the removal, separation and suspension of all officers and employees in the civil service and upon all matters
relating to the conduct, discipline and efficiency of such officers and employees.
As pointed out by the CA, pursuant to Section 5(A)(1) of MC 19, the Civil Service Commission Proper, or Commission Proper,
shall have jurisdiction over decisions of Civil Service Regional Offices brought before it on petition for review. And under
Section 43, "decisions of heads of departments, agencies, provinces, cities, municipalities and other instrumentalities
imposing a penalty exceeding thirty days suspension or fine in an amount exceeding thirty days salary, may be appealed to
the Commission Proper within a period of fifteen days from receipt thereof."24 "Commission Proper" refers to the Civil Service
Commission-Central Office.25
It is only the decision of the Commission Proper that may be brought to the CA on petition for review, under Section 50 of
MC 19, which provides thus: chanrob lesvi rtua llawlib ra ry
Section 50. Petition for Review with the Court of Appeals. - A party may elevate a decision of the Commission before the
Court of Appeals by way of a petition for review under Rule 43 of the 1997 Revised Rules of Court.26 cralawlawl ibra ry
Thus, we agree with the CA's conclusion that in filing his petition for review directly with it from the CSC-CAR Regional
Director, petitioner failed to observe the principle of exhaustion of administrative remedies. As correctly stated by the
appellate court, non-exhaustion of administrative remedies renders petitioner's CA petition premature and thus dismissible.
The doctrine of exhaustion of administrative remedies requires that "before a party is allowed to seek the intervention of the
court, he or she should have availed himself or herself of all the means of administrative processes afforded him or her.
Hence, if resort to a remedy within the administrative machinery can still be made by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such remedy should be
exhausted first before the court's judicial power can be sought. The premature invocation of the intervention of the court is
fatal to one's cause of action. The doctrine of exhaustion of administrative remedies is based on practical and legal reasons.
The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies.
Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until the system of
administrative redress has been completed and complied with, so as to give the administrative agency concerned every
opportunity to correct its error and dispose of the case."27 Indeed, the administrative agency concerned - in this case the
Commission Proper - is in the "best position to correct any previous error committed in its forum."28
The CA is further justified in refusing to take cognizance of the petition for review, as "[t]he doctrine of primary jurisdiction
does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially
lodged with an administrative body of special competence."29 When petitioner's recourse lies in an appeal to the Commission
Proper in accordance with the procedure prescribed in MC 19, the CA may not be faulted for refusing to acknowledge
petitioner before it.
We likewise affirm the CA's pronouncement that petitioner was negligent in filling up his CSPE application form and in failing
to verify beforehand the specific requirements for the CSPE examination. Petitioner's claim of good faith and absence of
deliberate intent or willful desire to defy or disregard the rules relative to the CSPE is not a defense as to exonerate him from
the charge of conduct prejudicial to the best interest of the service; under our legal system, ignorance of the law excuses no
one from compliance therewith.30 Moreover, petitioner - as mere applicant for acceptance into the professional service
through the CSPE - cannot expect to be served on a silver platter; the obligation to know what is required for the
examination falls on him, and not the CSC or his colleagues in office. As aptly ruled by the appellate court: chan roble svirtual lawlib rary
In Bacaya31v. Ramos, the Supreme Court found respondent judge guilty of both negligence and conduct prejudicial to the
best interest of the service when he issued an arrest warrant despite the deletion of the penalty of imprisonment imposed on
an accused in a particular criminal case. Respondent judge in the said case claimed that the issuance of the warrant was a
mistake, done in good faith and that it has been a practice in his office for the Clerk of Court to study motions and that he
would simply sign the prepared order. The Supreme Court rejected his defense and stated that negligence is the failure to
observe such care as a reasonably prudent and careful person would use under ordinary circumstances. An act of the will is
necessary&r deliberate intent to exist; such is not necessary in an act of negligence.
Here, petitioner failed to verify the requirements before filing his application to take the CSPE exam. He simply relied on his
prior knowledge of the rules, particularly, that he could substitute his deficiency in Military Science with the length of his
government service. He cannot lay blame on the personnel head of the SSS-Bangued, Abra, who allegedly did not inform him
of the pertinent rules contained in Civil Service Memorandum Circular No. 42, Series of 1991. For, [if] he were truly a
reasonably prudent and careful person, petitioner himself should have verified from the CSC the requirements imposed on
prospective examinees. In so doing, he would certainly have been informed of the new CSC policy disallowing substitution of
one's length of government service for academic deficiencies. Neither should petitioner have relied on an unnamed Civil
Service employee's advice since it was not shown that the latter was authorized to give information regarding the
examination nor that said employee was competent and capable of giving correct information. His failure to verify the actual
CSPE requirements which a reasonably prudent and careful person would have done constitutes negligence. Though his
failure was not a deliberate act of the will, such is not necessary in an act of negligence and, as in Bacaya, negligence is not
inconsistent with a finding of guilt for conduct prejudicial to the best interest of the service.32
c ralawlawl ibra ry
The corresponding penalty for conduct prejudicial to the best interest of the service may be imposed upon an erring public
officer as long as the questioned act or conduct taints the image and integrity of the office; and the act need not be related
to or connected with the public officer's official functions. Under our civil service laws, there is no concrete description of
what specific acts constitute conduct prejudicial to the best interest of the service, but the following acts or omissions have
been treated as such: misappropriation of public funds; abandonment of office; failure to report back to work without prior
notice; failure to safekeep public records and property; making false entries in public documents; falsification of court orders;
a judge's act of brandishing a gun, and threatening the complainants during a traffic altercation; a court interpreter's
participation in the execution of a document conveying complainant's property which resulted in a quarrel in the latter's
family; selling fake Unified Vehicular Volume Program exemption cards to his officemates during office hours; a CA
employee's forging of receipts to avoid her private contractual obligations; a Government Service Insurance System (GSIS)
employee's act of repeatedly changing his IP address, which caused network problems within his office and allowed him to
gain access to the entire GSIS network, thus putting the system in a vulnerable state of security;33 a public prosecutor's act
of signing a motion to dismiss that was not prepared by him, but by a judge;34 and a teacher's act of directly selling a book
to her students in violation of the Code of Ethics for Professional Teachers.35 In petitioner's case, his act of making false
entries in his CSPE application undoubtedly constitutes conduct prejudicial to the best interest of the service; the absence of
a willful or deliberate intent to falsify or make dishonest entries in his application is immaterial, for conduct grossly prejudicial
to the best interest of the service "may or may not be characterized by corruption or a willful intent to violate the law or to
disregard established rules."36
Finally, the Court cannot consider petitioner's plea that "in the interest of justice and in the spirit of the policy which
promotes and preserves civil service eligibility," his career service professional eligibility should not be revoked. The act of
using a fake or spurious civil service eligibility for one's benefit not only amounts to violation of the civil service examinations
or CSPE; it also results in prejudice to the government and the public in general. It is a transgression of the law which has no
place in the public service.37 "Assumption of public office is impressed with the paramount public interest that requires the
highest standards of ethical conduct. A person aspiring for public office must observe honesty, candor, and faithful
compliance with the law. Nothing less is expected."38
WHEREFORE, the Petition is DENIED. The December 11, 2009 Decision and March 17, 2010 Resolution of the Court of
SO ORDERED. chanr
SECOND DIVISION
G.R. No. 199568 June 17, 2015
DOHLE-PIDLMAN MANNING AGENCY, INC., DOHLE (IOM) LIMITED and/or CAPT. MANOLO T.
GACUTAN,Petitioners,
vs.
HEIRS OF ANDRES G. GAZZINGAN, represented by LENIE L. GAZZINGAN, Respondents.
DECISION
DEL CASTILLO, J.:
Under the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), an illness
suffered by a seafarer during the term of his contract is presumed to be work-related and compensable. This rule is
in consonance with the POEA's mandate to secure the best terms and conditions of employment of Filipino contract
workers and to promote and protect their well-being.
By this Petition for Review on Certiorari,1 Doble-Philman Manning Agency, Inc., Doble (IOM) Limited and/or Capt.
Manolo T. Gacutan (petitioners) assail the May 26, 2011 Decision2 and November 25, 2011 Resolution3 of the Court
of Appeals (CA) in CA-G.R. SP No. 103580, which nullified the January 31, 2008 Decision4 and March 12, 2008
Resolution5 of the National Labor Relations Commission (NLRC) and ordered petitioners to pay respondents, as
legal heirs of Andres G. Gazzingan (Gazzingan), total permanent disability) benefits in the amount of US$50,000.00
and sickness allowance of US$1,300.00 plus 10% thereof as attorney’s fees.
Antecedent Facts
On October 14, 2005, petitioners hired Gazzingan as a messman for a period of nine month son board the vessel
M/V Gloria with a basic monthly salary of US$325.00.6 Prior to his engagement, Gazzingan underwent a pre-
employment medical examination (PEME) which yielded normal results except for a finding of left ventricular
hypertrophy in his electrocardiogram test (ECG). Gazzingan was thus pronounced fit for sea duty7 and on November
4, 2005,he boarded the vessel M/V Gloria.
In May 2006, while M/V Gloria was docked at the port of Cartagena, Colombia, Gazzingan experienced chest pains.
On July 16, 2006, he was confined at the Cartagena de Indias Hospital due to chest pain, shortness of breath and
back pain. The hospital’s cardiovascular and thoracic surgeon, Dr. Hernan Fernandez Cuartas, diagnosed him to
have Acute Type-B Dissection.8
On August 3, 2006, Gazzingan was medically repatriated.
Upon arrival in Manilaon August 5, 2006, Gazzingan was brought directly to Manila Doctors Hospital for further
medical evaluation under the care of Dr. Justo Cammayo (Dr. Cammayo). On August 8, 2006, petitioners received a
letter from its company-designated physician, Dr. Raymond C. Banaga (Dr.Banaga), stating that Gazzingan is
suffering from a non-work-related illness. Thus:
DATE: AUGUST 08, 2006
TO: DOHLE PHILMAN MANNING AGENCY, INC.
ATTN: Ms. Estrella R. Aguilar

GM-Finance Admin
FROM: PHYSICIANS DIAGNOSTIC SERVICES CENTER, INC.
RE: Mr. Andres Gazzingan
Dear Ms. Aguilar,
This is with [regard] to your request for our opinion if the subject seafarer’s illness is work-related or not.
Mr. Gazzingan is presently confined at Manila Doctors Hospital because of Aortic Dissection. Aortic Dissection
results from [a] tear in the inner walls lining this great artery. This condition has potential for rupture or tamponade.
Based on his pre-employment medical examination dated August 30, 2005 he was not found to be hypertensive with
normal blood pressure at 110/70. The other risk factors associated with this condition like Marfans Syndrome,
Coarctation of the
Aorta, Aortic valve abnormalities are congenital in nature and are not work related in this case (for a ship messman).
Truly yours,
(Signed)
RAYMOND C. BANAGA, M.D.
Noted by,
(Signed)
PEDRO S. DE GUZMAN, M.D., FPCOM
Medical Director9
At the Manila Doctors Hospital, Gazzingan underwent numerous diagnostic tests and treatment. 10However, his
confinement thereat lasted only until September 9, 2006 as Gazzingan had no financial capacity to defray his
hospital expenses since petitioners refused to further shoulder the same in view of Dr. Banaga’s declaration that his
illness is not work-related. He was discharged from the hospital over the objection of his physician. In a medical
certificate dated October 7, 2006,11 Dr. Cammayo’s final diagnosis of Gazzingan’s illness was Dissecting Aneurysm.
On August 25, 2006, Gazzingan filed a Complaint12 for non-payment or under payment of salaries/wages, sickness
allowance, disability benefits and reimbursement of medical expenses and attorney’s fees.
Petitioners disclaimed Gazzingan’s entitlement to his claims by arguing that his medical condition ispre-existing for
which no compensation is warranted under the POEA-SEC. They alleged that the ECG test conducted during his
PEME confirmed that his illness was brought about by a physiological abnormality from birth. This, coupled with
Gazzingan’s admission of being a smoker,13 proved that his illness is not work-related. Besides, Gazzingan’s work
could not have in any way contributed to the development of his condition because his work as a messman created
no risk to produce such. Petitioners further pointed out that they shouldered Gazzingan’s medical expenses;
however, when Dr. Banaga declared his condition as not work-related and therefore not compensable, their
obligation to provide medical assistance ceased. Petitioners explained that under the POEA-SEC, the company-
designated physician is the one mandated to assess the medical condition of a seafarer upon medical repatriation.
Gazzingan, on the other hand, disputed Dr. Banaga’s declaration for being self-serving and for lack of basis. He
asseverated that his illness is not congenital but was caused by hypertension which was not immediately detected
for being asymptomatic. He emphasized that during the previous deployments abroad, he was declared fit for sea
duties therefore, his illness could not be pre-existing. Gazzingan attributed his sickness to his work as a messman
which entailed waking up very early in the morning, lifting heavy stocks/supplies and serving the crew members on
board, and being on-call for the arrival of supplies. Thus, Gazzingan invoked his right to compensation for his
ailment which he claimed to be work-connected.
In a Decision14 dated September 18,2007, the Labor Arbiter opined that although the cause of or the risk of
contracting aortic dissection is uncertain, this uncertainty does not, however, eliminate the probability that such
illness is work-connected. And since actual proof of causation is not necessary to justify compensability and it is
enough that the nature of the seafarer’s work had contributed even in a small degree to the development of the
disease, as in this case, the Labor Arbiter granted Gazzingan’s claims, thus:
WHEREFORE, premises considered, judgment is hereby rendered ordering the [petitioners] to pay jointly and
solidarily, [Gazzingan] his total permanent disability benefits in the amount of US$50,000.00 and his sickness
allowance of US$1,300.00, in Philippine currency, at the rate of exchange prevailing at the time of payment.
[Petitioners] are likewise ordered to pay [Gazzingan] attorney’s fees equivalent to 10% of the total monetary awards.
All other claims are dismissed.
SO ORDERED.15
In their appeal to the NLRC, petitioners claimed that the Labor Arbiter erred (1) in declaring Gazzingan’s illness as
work-related despite the contrary opinion of the company-designated physician who is the one mandated by law to
determine and assess a seaman’s disability; (2) in disregarding Gazzingan’s failure to challenge Dr. Banaga’s
declaration by not seeking the opinion of another doctor in accordance with the procedure laid down in the POEA-
SEC; (3) in awarding US$50,000.00 to Gazzingan as permanent total disability benefits since the POEA-SEC
provides for the grant of such amount only for death benefits; (4) in awarding sickness allowance when the same
has already been paid by petitioners to Gazzingan; and, (5) in awarding attorney’s fees.
On January 30, 2008, Gazzingan died of hemorrhagic shock secondary to dissecting aortic aneurysm.16
In a Decision17 dated January 31, 2008, the NLRC gave weight to the opinion of the company-designated physician
that Gazzingan’s illness is not work-related. It ruled that the Labor Arbiter’s Decision is not rooted on legal and
factual basis. It explained that as Gazzingan did not seek and present a second opinion from another physician, he
left the NLRC with no option but to consider the certification issued by Dr. Banaga as an accurate assessment of his
medical condition. The NLRC took note that Gazzingan is a smoker and has a prior surgery for the excision of
lipoma, a hereditary disease. Thus, it concluded that his aortic dissection developed due to hereditary susceptibility,
is not work-related and, consequently, not compensable. The NLRC disposed of the appeal as follows:
WHEREFORE, on the basis of the foregoing, the decision appealed from is hereby reversed and set aside. A new
one is entered dismissing the complaint for lack of merit.
SO ORDERED.18
Gazzingan’s counsel filed a motion for reconsideration which was denied for lack of merit in the NLRC Resolution 19of
March 12, 2008.
Proceedings before the Court of Appeals Respondents, as heirs of Gazzingan, filed a Petition for Certiorari20 with the
CA. They imputed grave abuse of discretion amounting to lack of jurisdiction on the NLRC in ruling that Gazzingan’s
illness is congenital and not compensable; and in giving credence to Dr. Banaga’s assessment, which was not
based on a thorough, exhaustive and complete examination of Gazzingan but is merely an opinion on the nature of
the illness. Respondents further argued that compensability of disability claims is presumed and this presumption
cannot be defeated by an opinion plucked out of thin air just to favor the employer. On May 26, 2011, the CA
rendered a Decision21 granting the Petition, setting aside the NLRC ruling, and reinstating the Labor Arbiter’s
Decision. It found no substantial evidence to prove that the illness of Gazzingan is congenital. It noted that
Gazzingan, who had previously worked abroad for a similar job, had no record of having suffered from, or was
treated for, dissecting aneurysm or any other heart ailment. The CA thus concluded that his illness is presumed to
have been acquired or aggravated by his strenuous job on board M/V Gloria. In view of the same, it upheld the
Labor Arbiter’s awards of permanent disability benefits, sickness allowance and attorney’s fees in favor of
respondents.
Petitioners sought reconsideration of the CA Decision. They argued that Gazzingan’s smoking habits and history of
a congenital condition of lipoma, as both revealed in his PEME, and the unchallenged expert opinion of Dr. Banaga
constitute more than enough substantial evidence to conclude that his ailment is not work-related.
In a Resolution22 dated November 25, 2011, the CA denied petitioners’ Motion for Reconsideration. It noted that
Gazzingan’s lipoma has no relation or causal connection to the ailment that caused his death. Anent Dr. Banaga’s
assessment, the CA ruled that it cannot be relied upon because it was a mere opinion based solely on the PEME
results. Dr. Banaga did not perform any prior assessment of Gazzingan’s health condition while he was confined at
Manila Doctors Hospital or any exhaustive post-employment medical examination on him. The CA reiterated that the
physical stress that Gazzingan suffered while he performed a strenuous job on board the vessel exposed him to
injuries caused by dissecting aneurysm.
Issues
Hence, the present Petition raising the following issues:
A. WHETHER THE DECEASED’S ILLNESS IS WORK-RELATED.
B. WHETHER THE COMPANY-DESIGNATED PHYSICIAN, TO WHICH GROUP DRS. BANAGA AND CAMMAYO
ARE PART OF, HAS THE AUTHORITY TO ESTABLISH IF THE ILLNESS ISNOT WORK[-]RELATED.
C. WHETHER RESPONDENTS HAVE THE BURDEN OF PROOF TO PROVE WORK RELATION.
D. WHETHER RESPONDENTS COULD RELY ON THE DISPUTABLE PRESUMPTION OF WORK RELATION TO

SUPPORT THEIR CASE WITHOUT ANY MEDICAL EVIDENCE TO CONTRADICT THE COMPANY DOCTOR’S
OPINION.
E. WHETHER PAYMENT OF SICKNESS ALLOWANCE UNTIL SUCH TIME THAT THE NATURE OFTHE
ILLNESS HAS BEEN ESTABLISHED AS NOT WORK CONNECTED EXTINGUISHED PETITIONERS’
OBLIGATIONS AS REGARDS THE PAYMENT THEREOF.
F. WHETHER RESPONDENTS ARE ENTITLED TO 10% ATTORNEY’S FEES IN THE ABSENCE OF BAD FAITH
ON THE PART OF THE PETITIONERS.23
Petitioners maintain that there is substantial evidence to support their contention that Gazzingan’s ailment has no
work-connection. They contend that Gazzingan’s condition was caused, not by hypertension, but by atherosclerosis,
a congenital disease, the development of which was hastened by Gazzingan’s smoking habits. The congenital
nature of Gazzingan’s ailment is further buttressed by the result of his PEME indicating a history of lipoma excision
and a finding of left ventricular hypertrophy. Petitioners aver that respondents cannot simply rely on the presumption
of work-relation; they have to present adequate evidence to overcome Dr. Banaga’s declaration that Gazzingan’s
ailment is congenital. However, they failed to present evidence to prove that Gazzingan’s work caused or
contributed to the development of his ailment.
Our Ruling
The core issue to be resolved is whether Gazzingan’s illness is work-related and therefore compensable.
Deemed written in the contract of employment between Gazzingan and petitioners is the 2000 POEA-SEC,24 which
was issued pursuant to Department Order No. 4 of the Department of Labor and Employment and POEA
Memorandum Circular No. 09, both series of 2000. Section 20(B) thereof provides:
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract
are as follows:
xxxx
6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall
be compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract.
Computation of his benefits arising from an illness or disease shall be governed by the rates and rules of
compensation applicable at the time the illness or disease was contracted.
"Pursuant to the aforequoted provision, two elements must concur for an injury or illness of a seafarer to be
compensable. First, the injury or illness must be work-related; and second, x x x the work-related injury or illness
must have existed during the term of the seafarer’s employment contract."25 The 2000 POEA-SEC defines work-
related injury and work-related illness as – "‘injuries resulting in disability or death arising out of and in the course of
employment" and as "any sickness resulting to disability or death as a result of an occupational disease listed under
Section 32-A of this contract with the conditions set therein satisfied.’
Section 32-A. OCCUPATIONAL DISEASES
For an occupational disease and the resulting disability or death to be compensable, all of the following conditions
must be satisfied:
1. The seafarer’s work must involve the risks described herein;
2. The disease was contracted as a result of the seafarer’s exposure to the described risks;
and
4. There was no notorious negligence on the part of the seafarer."26
Here, it was shown that Gazzingan suffered recurring and intense chest and back pains associated with acute type-
B aortic dissection during the term of his employment contract that led to his immediate medical repatriation to the
Philippines. Upon arrival on August 5, 2006 and after medical evaluation at the Manila Doctor’s Hospital, Gazzingan
was diagnosed by Dr. Cammayo to have dissecting aneurysm. Records also bear that he sought consultation and
treatment at St. Paul Hospital in Tuguegarao City from September 13 to14, 2006, whereby he was also found to be
suffering from aortic aneurysm by Dr. George Ramos.27 He then finally succumbed to death on January 30, 2008
because of ruptured dissecting aortic aneurysm. Aortic dissection, also called dissecting aneurysm,28 is a potentially
life threatening condition in which there is bleeding into and along the wall of the aorta, the major artery leaving the
heart.29 The condition starts with a tear in the wall of the major artery carrying blood out of the heart and as the tear
extends along the wall of the aorta, blood enters the aortic wall and "dissects" or separates the layers of the aorta
from one another which leads to aortic rupture or decreased blood flow to the organs.30 This can then result in heart
attacks, strokes, paralysis, and renal failure among other medical conditions.31 The ailment’s risk factors, which
include but are not limited to aging, connective tissue and rare genetic disorders, atherosclerosis, inflammation,
trauma, high blood pressure, heart surgery/procedures, and pregnancy,32 do not seem to be direct causes of the
disease, such that having one makes the chances of getting the condition higher but does not always lead to aortic
dissection.[[33] Thus, the exact cause of aortic dissection is still unknown and remains under
investigation.34Nonetheless, the progression of this ailment is oftentimes caused by the increased stress in the aortic
wall attributed to strenuous physical activities.35 Patients are strongly advised to refrain from strenuous physical
exertion and are often required to undertake lifestyle modification, such as change of occupation to sedentary jobs,
in order to reduce the risk of enlargement of an already weakened aorta that might eventually lead to rupture, a fatal
condition.36
Gazzingan averred that his duties as a messman entailed work of an assistant chef steward which aggravated his
health condition. Concomitantly, the Labor Arbiter opined that although the cause of the illness is unknown, there is
probability that Gazzingan’s illness was brought about by the nature of his work as a messman, which included
lifting heavy objects compounded by lack of sleep and the pressure of serving the entire crew with efficiency. While
the NLRC found doubtful the connection between Gazzingan’s illness and his work, the CA affirmed the findings of
the Labor Arbiter and ruled that Gazzingan’s activites while on board the vessel caused physical stress and exposed
him to injuries.
Indeed, the causal connection between the illness contracted and the nature of work of a seaman is a factual
question, which is not a proper subject of this Court’s review.37 Nonetheless, considering the conflicting findings of
the tribunals below, this Court is constrained to dwell on factual matters involved in this case and reassess the
evidence on record.38 Gazzingan’s work as a messman is not confined mainly to serving food and beverages to all
officers and crew; he was likewise tasked to assist the chief cook/chef steward, and thus performed most if not all
the duties in the ship’s steward department. In the performance of his duties, he is bound to suffer chest and back
pains, which could have caused or aggravated his illness. As aptly observed by the CA, Gazzingan’s strenuous
duties caused him to suffer physical stress which exposed him to injuries. It is therefore reasonable to conclude that
Gazzingan’s employment has contributed to some degree to the development of his disease.
It must also be pointed out that Gazzingan was in good health and fit to work when he was engaged by petitioners
to work on board the vessel M/V Gloria. His PEME showed essentially normal findings with no hypertension and
without any heart problems. It was only while rendering duty that he experienced symptoms. This is supported by a
medical report issued by Cartagena de Indias Hospital in Colombia stating that Gazzingan suffered intense chest
and back pains, shortness of breath and a slightly elevated blood pressure while performing his duties. Therefore,
even assuming that Gazzingan had a pre-existing condition, as alleged by petitioners, this does not totally negate
the probability and the possibility that his aortic dissection was aggravated by his work conditions. The stress
caused by his job actively contributed to the progression and aggravation of his illness. In compensation cases, "[i]t
is sufficient that there is a reasonable linkage between the disease suffered by the employee and his work to lead a
rational mind to conclude that his work may have contributed to the establishment or, at the very least, aggravation
of any pre-existing condition he might have had."39
More importantly, the 2000 POEA-SEC has created a presumption of compensability for those illnesses which are
not listed as an occupational disease. Section 20 (B), paragraph (4) states that "those illnesses not listed in Section
32 of this Contract are disputably presumed as work-related." Concomitant with this presumption is the burden
placed upon the claimant to present substantial evidence that his work conditions caused or at least increased the
risk of contracting the disease and only a reasonable proof of work-connection, not direct causal relation is required
to establish compensability of illnesses not included in the list of occupational diseases.40 As discussed above, a
causal link was established between Gazzingan’s employment and his ailment. In view thereof, the presumption
now operates in favor of respondents and the burden is shifted to the petitioners to overcome the statutory
presumption. However, in the case at bench, petitioners failed to discharge such burden as will be discussed below.
First, petitioners insist that Gazzingan’s genetic predisposition has caused his ailment and that his smoking habits
hastened its development. We are not persuaded. As stated earlier, the specific cause of aortic dissection is still
unknown and the risk factors may only seem to be associated in some way with the disease. Thus, petitioners’
theory cannot be completely correct. Besides, no medical certification was presented by petitioners to substantiate
their bare allegation that Gazzingan’s left ventricular hypertrophy and lipoma excision found in his PEME had a
causal relation with the disease that caused his death. As aptly held by the CA, there was no evidence to prove the
causal connection between Gazzingan’s lipoma, which was already removed, and his dissecting aneurysm. With
respect to left ventricular hypertrophy, the same does not automatically suggest the presence of a pre-existing
congenital disease. It is not an illness but a mere condition that involves the thickening of the muscle wall of the
heart’s left pumping chamber that can be well-managed and usually only develops overtime.41 Also, smoking, by
itself, can neither be a factor that bars compensation for the illness.42 While smoking may contribute to the
development of the disease, it is not the only possible cause. Other factors such as working and living under
stressful conditions also contribute to its development.
Next, petitioners strongly rely on Dr. Banaga’s opinion that Gazzingan’s condition is not work-related. They insist
that Dr. Banaga’s assessment is conclusive in the absence of a contrary opinion rendered by a separate physician.
The Court, however, agrees with the CA that such opinion is inconclusive for purposes of determining the
compensability of Gazzingan’s illness. Section 20(B)(3) of the POEA-SEC provides:
Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his
basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-
designated physician but in no case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-
designated physician within three working days upon his return except when he is physically incapacitated to do so,
in which case, a written notice to the agency within the same period is deemed compliance. Failure of the seafarer
to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above
benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between
the employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.
"It is beyond cavil that it is the company-designated physician who is entrusted with the task of assessing the
seaman’s disability."43 It is the company-designated physician’s findings which should form the basis of any disability
claim of the seafarer. Such assessment is arrived at after the seafarer submits himself to the company-designated
physician for a post employment medical examination within three days from his repatriation. It is significant to note,
however, that courts are not bound by the assessment of the company-designated physician.44 While the company-
designated physician must declare the nature of a seafarer’s disability, the former’s declaration is not conclusive and
final upon the latter or the court.45 Its inherent merit will still be weighed and duly considered.
In Racelis v. United Philippine Lines, Inc.,46 the medical opinion presented by the employer stating that the seafarer’s
ailment is congenital in origin was discarded by the Court because the opinion came from a physician who did not
personally attend to the seafarer in the course of the latter’s medical treatment and for being unsubstantiated by any
medical findings. The ailment which caused the seafarer’s death was held by the Court to be work-related for failure
of the employer to overcome the statutory presumption of work-relatedness. Similarly, in Jebsens Maritime, Inc. v.
Babol,47 the Court did not give probative weight on the company doctor’s opinion that the seafarer’s condition is not
work-related as the wordings used in the doctor’s report did not make a categorical statement confirming the total
absence of work relation but only a mere probability. Again, the Court upheld the presumption of work-relation. In
Magsaysay Mitsui Osk Marine, Inc. v. Bengson,48 the Court disregarded the company-designated physician’s
categorical declaration that the seafarer’s illness is not work-related for being self-serving. As the facts of the case
clearly showed the contributory factor of the seafarer’s daily working conditions to the illness suffered, even in the
absence of a contrary opinion of other doctors, the Court sustained the illness’ work-connection. Also, in Teekay
Shipping Philippines, Inc. v. Jarin,49 the Court ruled that it was unnecessary for the seafarer therein to consult and
provide a contrary opinion from his own doctors since the causal connection between the illness and the work for
which he had been contracted was clearly detailed and convincingly established by him.
Here, while petitioners were quick to point out that Dr. Banaga is a company-designated physician, the latter,
however, could not have possibly arrived at a reliable diagnosis of Gazzingan’s condition. His assessment, based
merely on Gazzingan’s PEME, did not reflect the true state of health of the seafarer. As the Court has previously
ruled, a PEME is not exploratory in nature and cannot be relied upon to arrive at a seafarer’s true state of
health.50The NLRC erred in stating that this opinion can be relied upon as an accurate assessment of Gazzingan’s
illness on the sole reason that no contrary opinion was rendered. The fact that there was no contrary opinion of
another physician is of no moment. To repeat, Dr. Banaga’s opinion is not an accurate appraisal of the extent of
Gazzingan’s disability. It was not based on the post-employment medical examination conducted on Gazzingan
after his medical repatriation. In the absence of reasonable findings, diagnostic tests and procedures to support the
assessment, the same cannot be simply taken at face value. Moreover, Dr. Banaga hastily concluded that aortic
dissection is hereditary without necessarily considering other varied factors that can contribute to the development
of the disease. Consequently, his medical opinion cannot be given credence or serve as basis to deny Gazzingan’s
disability claims.
In view of the above, the Court holds that the CA correctly found the NLRC to have gravely abused its discretion
amounting to lack or in excess of jurisdiction in declaring that the illness suffered by Gazzingan is not work-related.
Anent the nature of disability caused by his work-related illness, the Court notes that Gazzingan was no longer
provided work after being diagnosed with aortic dissection/dissecting aneurysm. He was constrained to seek further
medical attention at his own expense and was continuously unable to work until his death. Thus, the Court is
inclined to rule that Gazzingan suffered from a permanent total disability as he was unable to return to his regular
job for more than one hundred twenty days.51 Accordingly, his permanent total disability benefits should be
US$60,000.00 or 120% of US$50,000.00, pursuant to the Schedule of Disability Allowances under the POEA-SEC.
The Labor Arbiter thus erred in fixing his disability benefits at US$50,000.00. As regards sickness allowance, the
award of US$1,300.00 for his incapacity to work for 120 days was proper. The grant of attorney’s fees is likewise
affirmed for being justified in accordance with Article 2208(2)52 of the Civil Code since respondents were compelled
to litigate to satisfy their claims for Gazzingan’s disability benefits.53
WHEREFORE, the Petition is DENIED. The May 26, 2011 Decision and November 25, 2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 103580 are AFFIRMED with the MODIFICATION that petitioners are ordered to
jointly and solidarily pay respondents total and permanent disability benefits in the amount of US$60,000.00 or its
equivalent amount in Philippine currency at the time of payment.
SO ORDERED.
SECOND DIVISION
G.R. No. 196707 June 17, 2015
SPOUSES NILO and ERLINDA MERCADO, Petitioners,

vs.
LAND BANK OF THE PHILIPPINES, Respondent.
DECISION
DEL CASTILLO, J.:
In eminent domain, the determination of just compensation is principally a judicial function of the Regional Trial
Court (RTC) acting as a Special Agrarian Court (SAC). In the exercise of such judicial function, however, the RTC
must consider both Section 17 of Republic Act No. 6657 (RA 6657 or Comprehensive Land Reform Law of 1988)
and the valuation formula under applicable Administrative Order (A.O.) of the Department of Agrarian Reform
(DAR).1
This Petition for Review on Certiorari2 seeks to reverse and set aside the April 20, 2011 Decision3 of the Court of
Appeals (CA) in CA-G.R. SP No. 02981-MIN that granted the Petition for Review4 of respondent Land Bank of the
Philippines (respondent) and, concomitantly, reversed and set aside the December 28, 2006 Decision5 of the RTC of
Davao City, Branch 15 in Civil Case No. 30,373-04.
Factual Antecedents
Petitioners spouses Nilo and Erlinda Mercado (petitioners) were the registered owners of 9.8940 hectares of
agricultural land in Kilate, Toril, Davao City covered by Transfer Certificate of Title (TCT) No. T-44107. Respondent,
on the other hand, is a government financial institution organized and existing by virtue of RA 3844,6 and is the
financial intermediary for the Comprehensive Agrarian Reform Program (CARP).
Thru a Notice of Land Valuation and Acquisition,7 the Provincial Agrarian Reform Office (PARO) of Davao City
informed petitioners that 5.2624 hectares of their aforesaid property (subject portion) shall be placed under the
CARP coverage, for which petitioners were offered 287,227.16 as just compensation.8 In his letter9 dated October
27, 2002, petitioner Nilo A. Mercado (Nilo) rejected respondent’s valuation. He claimed that the fair market value of
their property is ₱250,000.00 per hectare; that they sold the remaining 4.6316-hectare portion, which is hilly and
uncultivated, compared to the subject portion which is flat, suited for agriculture and has improvements, for such
price; and, that said property is adjacent to "Eden," an eco-tourism area, and likewise suitable for housing and other
uses.
In view of petitioners’ rejection of said valuation, summary administrative proceedings were conducted to determine
just compensation.10 In a Resolution11 dated June 9, 2003, the Regional Agrarian Reform Adjudicator (RARAD)
sustained the valuation made by respondent. Nilo appealed to the Department of Agrarian Reform Adjudication
Board (DARAB).12 However, in an Order13 dated September 5, 2003, the DARAB held that pursuant to the DARAB
New Rules of Procedure of 1994, a decision of the Adjudicator on land valuation and on preliminary determination
and payment of just compensation shall not be appealable to the DARAB but must be brought directly to the proper
SAC.
Thus, on May 21, 2004, petitioners filed a Complaint14 for payment of just compensation before the RTC acting as
SAC which was docketed as Civil Case No. 30,373-04. Petitioners prayed that the DAR and respondent be ordered
to pay them ₱250,000.00 per hectare as just compensation for the subject portion. In addition, they prayed that the
farmer-beneficiaries of the subject portion who had been enjoying the fruits of the property be made to pay
₱200,000.00 as rentals.
The farmer-beneficiaries, namely, Daisy Monilla (Monilla) and Rosario Cadotdot, and the DAR filed their respective
Answers.15 They averred that the farmer-beneficiaries are no longer tenants of the subject portion but are now the
qualified beneficiaries thereof; that the sale of a portion of the landholding, as claimed by petitioners, was not
recorded in the PARO; that the farmer beneficiaries had been religiously paying their rentals amounting to 30% of
the proceeds of their harvest; and, that the issue of non-payment of rentals is vested with the DARAB and not with
the SAC.
On its end, respondent maintained in its Answer16 that it made a proper valuation of the subject portion in
accordance with the DAR A.O. No. 5 and Section 17 of RA 6657.
Evidence for Petitioners
During the proceedings before the RTC, Perla M. Borja,Revenue Officer of the Bureau of Internal Revenue, testified
that as of December 22, 2002, the zonal value of the properties in Kilate, Davao City was ₱40.00 per square meter.
Such zonal value was based on the data from the Department of Finance and on the capital gains tax of the
properties in the area.17
Petitioners also presented James Paul Enriquez (Enriquez), Records Custodian of Apo Land Corporation. Enriquez
averred that he kept a copy of the contract of lease of the subject portion entered into by and between Apo Land
Corporation (Apo Land) and the farmer-beneficiaries.18
Christopher Bangalando also testified that his house was previously situated in the property of petitioners in Kilate,
Toril, Davao City,19 and that when the subject portion was placed under the CARP, there were coconut, coffee and
banana trees planted thereon.20
Nilo, for his part, testified that sometime in 1999, the subject portion was planted with coconut, mango, banana and
coffee and that there was also a farmhouse built in the premises.21 He added that there were improvements and
plants on the property which were, however, removed when it was leased and converted into a banana farm.22Anent
the lease of the subject portion to Apo Land, Nilo claimed that the former paid advance rentals for five years in favor
of the farmer-beneficiaries. In disparity, however, the government bought from him the subject portion at the measly
price of 5.40 per square meter23 based on respondent’s valuation, which payment was received under protest.24 In
addition, he had to pay the real estate tax on the subject portion until 2002.25
Evidence for Respondent
Respondent presented its Agrarian Affairs Specialist, Engr. Marilyn Rojo (Engr. Rojo), who testified that there was
no comparable sales information on the property of petitioners or on the adjoining properties in the area.26 Engr.
Orlando Arceo (Engr. Arceo), respondent’s Property Appraiser, also testified. He recalled that in 2002, he inspected
the property of petitioners and found the subject portion as flat land and planted with coconuts.27 In appraising the
same, he used the formula under DAR A.O. No. 5.28 After validating the data he gathered with the Philippine
Coconut Authority (PCA) production,29 he arrived at the price of ₱9.00 per kilo of copra;30 and finally, he narrated that
a property placed under the coverage of CARP is valued based on its production and not on its per square meter
value.31
On December 28, 2006,32 the RTC observed that petitioners sold 4.6316-hectare portion of their property, which is
less productive and with uneven terrain, for ₱1,020,000.00. In contrast, the subject portion is flat, easier to cultivate
and suitable for agriculture; moreover, as of 2005, the adjacent properties were valued at more than ₱40.00 per
square meter due to the fully productive pineapple and banana plantations of Apo Land in the area. Taking all these
into consideration, and asserting that the factors under Section 17 of RA 6657 and the formula used by the DAR in
computing just compensation are mere guide posts and could not substitute the judgment of the court in determining
just compensation, the RTC fixed the just compensation of the subject portion at ₱25.00 per square meter.
Respondent moved for a reconsideration33 but it was denied in an Order34 dated May 11, 2009.
Aggrieved, respondent filed a Petition for Review35 before the CA arguing that the RTC did not show how it arrived at
its valuation of 25.00 per square meter; that it erred in lending credence to petitioners’ allegation that they were able
to sell 4.6316 hectares at 25.00 per square meter as no evidence was presented to prove the same; and, that the
RTC should have applied the formula under DAR A.O. No. 5 and considered the factors under Section 17of RA
6657 in determining just compensation.
In its April 20, 2011 Decision,36 the CA emphasized the mandatory nature of complying with the formula, as set forth
under DAR A.O. No. 5, series of 1998, in computing just compensation. It held that the RTC not only disregarded
the formula but it likewise failed to show how it arrived at the 25.00 per square meter valuation. It noted that while
petitioners claimed that respondent’s valuation for the subject portion was "ridiculously low," they, however, did not
present evidence to rebut the figures proffered by respondent. Finally, by applying the formula under DAR A.O. No.
5 and using the same data used by respondent in its computation, the CA came up with the same valuation as that
of respondent.
WHEREFORE, premises foregoing, the petition is hereby GRANTED. The Decision of the court a quo dated
December 28, 2006 is hereby REVERSED and SET ASIDE and the Decision of the DAR Regional Adjudicator is
REINSTATED.
SO ORDERED.37
Petitioners thus filed the instant Petition.
Issues
THE QUESTIONED DECISION IS CONTRARY TO THE RULINGS IN LANDBANK OF THE PHILIPPINES V.

WYCOCO and APO FRUITS CORPORATION V. CA.
NO ERROR WAS COMMITTED BY THE SPECIAL AGRARIAN COURT IN FIXING THE JUST COMPENSATION
AT 25.00 PER SQ. M. BECAUSE, CONTRARY TO THE CONCLUSIONS OF THE COURT OF APPEALS, IT
CONSIDERED ALL FACTORS ENUMERATED IN SEC. 17 OF R.A. NO. 6657 BEFORE ARRIVING AT ITS
COMPUTED JUST COMPENSATION.38
The Parties’ Argument

Petitioners assert that the determination of just compensation is not within the power of administrative agencies but
is a judicial function vested in the RTC acting as SAC. And, the RTC-SAC in performing its function, must make its
independent determination of just compensation. Petitioners insist that the RTC properly evaluated the following
factors and correctly arrived at the amount of ₱25.00 per square meter as just compensation, viz: (1) the zonal value
of said property in 2002 which was 40.00 per square meter; (2) before the subject portion was taken, it was planted
with crops; (3) the subject portion is within city limits and near an eco-tourism area; and, (4) petitioners were able to
sell in 2001 the remaining 4.6316 hectares of their land for ₱1,020,000.00.
Petitioners argue that respondent’s valuation was arrived at using only one factor - production. Moreover, the data
was gathered during a one-day field investigation conducted by respondent’s property appraiser, Engr. Arceo, on
the more than five-hectare subject portion, who, admittedly, just counted the trees therein.
On the other hand, respondent contends that the CA correctly adopted its valuation of the subject portion at the total
amount of ₱287,227.16 pursuant to the formula under DAR A.O. No. 5 which the RTC-SAC is mandated to observe
and follow. And while respondent acknowledges that the determination of just compensation involves the exercise of
judicial discretion, it nevertheless stresses that such discretion must be discharged within the bounds of law. Hence,
it avers that it is the factors under Section 17 of RA 6657 which must be considered in determining just
compensation and not those relied upon by the RTC-SAC in this case.
Our Ruling
The Petition is partly meritorious.
Eminent domain refers to the inherent power of the State to take private property for public use. This power has two
basic limitations: (1) the taking must be for public use; and (2) just compensation must be given to the owner of the
property taken.39 Notably, in agrarian reform cases, the taking of private property for distribution to landless farmers
is considered to be one for public use.40 Anent just compensation, the same is defined as the full and fair equivalent
of the property expropriated. The term "just" qualifies the word "compensation" because the return deserved by the
owner of the property must be real, substantial, full and ample.41
In the recent cases of Land Bank of the Philippines v. Yatco Agricultural Enterprises,42 Land Bank of the Philippines
v. Peralta,43 and Department of Agrarian Reform v. Spouses Diosdado Sta. Romana and Resurreccion O.
Ramos,44the Court has made declarations as to the determination of just compensation.
In Yatco, the Court stated that the determination of just compensation is a judicial function and the RTC, acting as
SAC, has the original and exclusive power to determine just compensation. It was also emphasized therein that in
the exercise of its function, the RTC must be guided by the valuation factors under Section 17 of RA 6657,
translated into a basic formula embodied in DAR A.O. No. 5. The factors under RA 6657 and the formula under DAR
A.O No. 5 serve as guarantees that the compensation arrived at would not be absurd, baseless, arbitrary or
contradictory to the objectives of the agrarian reform laws. However, the Court clarified that the RTC may relax the
application of the DAR formula, if warranted by the circumstances of the case and provided the RTC explains its
deviation from the factors or formula above-mentioned.
In Peralta, the Court confirmed the mandatory character of the guidelines under Section 17 of RA 6657 and restated
that the valuation factors under RA 6657 had been translated by the DAR into a basic formula as outlined in DAR
A.O. No. 5.
In Sta. Romana, it was held that the RTC is not strictly bound by the formula created by the DAR, if the situations
before it do not warrant its application. The RTC cannot be arbitrarily restricted by the formula outlined by the DAR.
While the DAR provides a formula, "it could not have been its
intention to shackle the courts into applying the formula in every instance."45
Summarizing the pronouncements in the above-cited cases, the rule is that the RTC must consider the guidelines
set forth in Section 17 of RA 6657 and as translated into a formula embodied in DAR A.O.No. 5. However, it may
deviate from these factors/formula if the circumstances warrant or, as stated in Sta. Romana, "if the situations
before it do not warrant its application." In such a case, the RTC, as held in Yatco, must clearly explain the reason
for deviating from the aforesaid factors or formula.
Going now to the afore-mentioned Section 17 of RA 6657, the same provides as follows:
SECTION 17. Determination of Just Compensation. – In determining just compensation, the cost of acquisition of
the land, the current value of the like properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government assessors shall be considered. The social
and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as
well as the non-payment of taxes or loans secured from any government financing institution on the said land shall
be considered as additional factors to determine its valuation.
On the other hand, the formula under DAR A.O No. 5 reads:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value

CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant, and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2
In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within the same
estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one
(1) year from receipt of claimfolder.
Essentially in this case, the RTC in determining just compensation, considered the alleged value of land in Kilate,
Davao City in 2002 at ₱40.00 per square meter and the supposed sale made by Nilo of the remaining 4.6316
hectares of his land at ₱25.00 per square meter in 2001. Thus, it explained in its Order46 dated May 11, 2009 that in
arriving at the just compensation of ₱25.00 per square meter, it considered the comparative values of the adjacent
properties, the topography of the property, its accessibility by land transportation and the income derived from
existing agricultural improvement.
Vis-à-vis the above-quoted Section 17 of RA 6657, it is clear that the RTC did not strictly conform with the guidelines
set forth under the said provision. Not all the factors enumerated under Section 17 were considered and no reason
for deviating from the same was given. In its December 28, 2006 Decision, the RTC merely stated in general terms
that it exercised its judicial prerogative and considered all the facts of the case, including the evidence and
applicable laws, to conclude that the amount of ₱25.00 per square meter is reasonable just compensation for the
subject portion.
In addition, we find the considerations used by the RTC in determining just compensation as not fully supported by
evidence on record. It also did not explain how the aforesaid factors were used to come up with the foregoing
1âw phi 1
amount of just compensation. While it stated that it appointed commissioners who appraised the subject portion and
filed reports, no such Commissioner’s Reports were attached to the records of this case.
Be that as it may, the Court likewise finds error on the part of the CA when it adopted the valuation made by
respondent. It must be noted that the data used in coming up with respondent’s valuation were gathered during the
one-day inspection undertaken by Engr. Arceo on the subject portion, who admitted to have simply counted the
trees thereon and interviewed just one farmer-beneficiary. It therefore appears that the data used was unreliable
and unverified. Furthermore, respondent did not gather comparative sales information on the adjoining or nearby
properties in the area despite petitioners’ allegation that they sold the remaining 4.6316-hectare portion of their
property in 2001 at ₱25.00 per square meter. Under the circumstances, it behooves upon respondent to take the
initiative to verify the records and determine any comparative sales information involving the subject portion. What is
notable instead is that respondent used only a single factor in coming up with its valuation, i.e., the production of the
subject portion. To restate, the valuation factors to be considered in determining just compensation pursuant to
Section 17 of RA 6657 include the acquisition cost of the property, current value of like properties, the nature, actual
use and income thereof, the sworn valuation of the owner, tax declarations and assessment of government
assessors. Clearly, here, respondent likewise failed to consider all the foregoing factors in its valuation of the subject
portion. Neither did it explain why such other relevant factors were not taken into account.
On petitioners’ end, the Court observes that while they insist that they sold a similar and adjacent property for a
price way higher than respondent’s valuation for the subject portion, they did not present proof of the same. Neither
did they provide the acquisition cost of the subject portion nor the income generated by it at the time of its taking.
They also only described in general terms that the subject portion was flat and suitable for agriculture.
Given all these, the Court finds that both parties failed to adduce satisfactory evidence of the property’s value at the
time of its taking. Thus, it is premature to make a final determination of the just compensation due to petitioners. And
as the Court cannot receive new evidence from the parties for the prompt resolution of this case,47 its remand to the
RTC is deemed proper. Suffice it to state that "[w]hile remand is frowned upon for obviating the speedy dispensation
of justice, it becomes necessary to ensure compliance with the law and to give everyone – the landowner, the
farmers, and the State – their due."48
As a final note, we remind the RTC to observe the following guidelines for the proper determination of just
compensation: (1) just compensation must be valued at the time of taking of the property expropriated, or the time
when the owner was deprived of the use and benefit of his property;49 (2) interest may be awarded as may be
warranted by the circumstances of the case;50 and, (3) just compensation must be arrived at pursuant to the
guidelines set forth in Section 17 of RA 6657 and outlined in a formula provided in DAR A.O. No. 5. If the RTC finds
these guidelines inapplicable, it must clearly explain the reasons for deviating therefrom and for using other factors
or formula in arriving at the reasonable just compensation for the property expropriated.51
WHEREFORE, the instant Petition is PARTLY GRANTED. The assailed April 20, 2011 Decision of the Court of
Appeals in CA-G.R. SP No. 02981-MIN is REVERSED and SET ASIDE. Accordingly, this case is ORDERED
REMANDED to the Regional Trial Court of Davao City, Branch 15 for the proper determination of just compensation.
SO ORDERED.
SECOND DIVISION
G.R. No. 196278 June 17, 2015
CE CASECNAN WATER and ENERGY COMPANY, INC., Petitioner,

vs.
THE PROVINCE OF NUEVA ECIJA, THEOFFICEOFTHEPROVINCIAL ASSESSOR OF NUEVA ECIJA, and
THEOFFICEOFTHEPROVINCIAL TREASURER OF NUEVA ECIJA, as represented by HON. AURELIO UMALI,
HON. FLORANTE FAJARDO and HON. EDILBERTO PANCHO, respectively, or their lawful
successors,Respondents,
NATIONAL IRRIGATION ADMINISTRATION and DEPARTMENT OF FINANCE, As Necessary Parties.
DECISION
DEL CASTILLO, J.:
The Court of Tax Appeals (CTA) has exclusive jurisdiction over a special civil action for certiorari assailing an
interlocutory order issued by the Regional Trial Court (RTC) in a local tax case.
GR SP No. 108441 which dismissed for lack of jurisdiction the Petition for Certiorari of petitioner CE Casecnan
Water and Energy Company, Inc.(petitioner) against the Province of Nueva Ecija, the Office of the Provincial
Assessor of Nueva Ecija (Office of the Provincial Assessor) and the Office of the Provincial Treasurer of Nueva Ecija
(Office of the Provincial Treasurer) (respondents). Also assailed is the March 24, 2011 Resolution3 of the CA
denying petitioner’s Motion for Reconsideration.4
Factual Antecedents
On June 26, 1995, petitioner and the National Irrigation Administration (NIA) entered into a build-operate-transfer
(BOT) contract known as the "Amended and Restated Casecnan Project Agreement"5 (Casecnan Contract) relative
to the construction and development of the Casecnan Multi-Purpose Irrigation and Power Project (Casecnan
Project) in Pantabangan, Nueva Ecija and Alfonso Castaneda, Nueva Vizcaya. The Casecnan Project is a combined
irrigation and hydroelectric power generation facility using the Pantabangan Dam in Nueva Ecija. On September 29,
2003, petitioner and NIA executed a Supplemental Agreement6 amending Article II of the Casecnan Contract which
pertains to payment of taxes. Article 2.2 thereof states that NIA must reimburse petitioner for real property taxes
(RPT) provided the same was paid upon NIA’s directive and with the concurrence of the Department of Finance.
On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of Assessment of
Real Property dated August 2, 2005, which indicates that for the years 2002 to 2005, its RPT due was
248,676,349.60. Petitioner assailed the assessment with the Nueva Ecija Local Board of Assessment Appeals
(Nueva Ecija LBAA) which dismissed it on January 26, 2006. Undeterred, petitioner filed a Notice of Appeal with the
Nueva Ecija Central Board of Assessment Appeals (Nueva Ecija CBAA). During the pendency thereof, respondents
collected from petitioner the RPT due under the said assessment as well as those pertaining to the years 2006 up to
the second quarter of 2008, totalling ₱363,703,606.88. Petitioner paid the assessed RPT under protest; it also
initiated proceedings questioning the validity of the collection with respect to the years 2006 up to the second
quarter of 2008. Thereafter, petitioner received a letter7 dated July 9, 2008 from the Office of the Provincial
Treasurer stating that it has RPT in arrears for the years 2002 up to the second quarter of 2008 amounting to
₱1,277,474,342.10. Petitioner received another letter8 dated August 29, 2008 from the same office clarifying that its
arrearages in RPT actually amounted to ₱1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner
questioned this assessment through an appeal before the Nueva Ecija LBAA. While the same was pending,
petitioner received from respondents a letter dated September 10, 2008 demanding payment for its alleged RPT
arrearages.
Hence, on September 23, 2008, petitioner filed with the RTC of San Jose City, Nueva Ecija a Complaint9 for
injunction and damages with application for temporary restraining order (TRO) and preliminary injunction10 praying to
restrain the collection of the 2008 RPT Reassessment. Petitioner emphasized, among others, that it was not the one
which should pay the taxes but NIA.
On September 24, 2008, the RTC denied petitioner’s application for a 72-hour TRO.11 Meanwhile, petitioner received
from the Office of the Provincial Treasurer a letter dated September 22, 2008 further demanding payment for RPT
covering the third quarter of 2008 (2008-3Q Assessment). Thus, petitioner filed on September 29, 2008 an
Amended Complaint12 asking the RTC to likewise enjoin respondents from collecting RPT based on the 2008-3Q
Assessment in the amount of ₱53,346,755.18.
On October 2, 2008, the RTC issued a 20-day TRO13 enjoining respondents from collecting from petitioner the RPT
covered by the 2008 RPT Reassessment amounting to ₱1,279,997,722.70, including surcharges and penalties.
Subsequently, however, the RTC denied petitioner’s application for writ of preliminary injunction in its Order14 of
October 24, 2008.It also denied petitioner’s Motion for Reconsideration thereof in an Order15 dated January 30,
2009.
On April 24, 2009, petitioner filed with the CA a Petition for Certiorari16 under Rule 65 of the Rules of Court seeking
to annul and set aside the aforementioned October 24, 2008 and January 30, 2009 RTC Orders.
In its November 2, 2010 Decision,17 the CA observed that the Petition for Certiorari before it was actually an offshoot
of the 2008 RPT Reassessment. And since in resolving the issue of whether the RTC committed grave abuse of
discretion in denying petitioner’s application for a writ of preliminary injunction, the issue of the validity of the
assessment and the collection of the RPT against petitioner must also be resolved, thus jurisdiction over the case
lies within the Court of Tax Appeals (CTA).Hence, the CA ruled:
WHEREFORE, premises considered, the Petition for Certiorari is hereby DENIED DUE COURSE and accordingly,
DISMISSED for lack of jurisdiction.
SO ORDERED.18
Petitioner sought reconsideration; however, it was denied in a Resolution19 dated March 24, 2011.
Undaunted, petitioner filed this Petition imputing upon the CA grave error in:
x x x ruling that it is the Court of Tax Appeals (and not the Court of Appeals) which has jurisdiction over the CA
Injunction Case.20
In its Petition21 and Reply,22 petitioner argues that it is the CA, not the CTA, which has jurisdiction over the subject
matter of its Petition for Certiorari. Petitioner maintains that its petition relates to an ordinary civil action for injunction
and not to a local tax case. It insists that in both the RTC injunction case and the Petition for Certiorari before the
CA, petitioner was not protesting respondents’ assessment of RPT against it; what it was seeking was respondents’
enjoinment from committing or continuing to commit acts that would probably violate its right. In particular, petitioner
points out that the RTC injunction case was intended to enjoin respondents from collecting payment during the
pendency of the case with the LBAA challenging the validity of the 2008 RPT Reassessment. Petitioner explains
that the said injunction case was filed with the RTC because the LBAA has no injunctive power.
In their Comment,23 respondents argue that in resolving the issue on the propriety of issuing a writ of injunction, the
CA will have to inevitably pass upon the propriety of the assessment of RPT on the Casecnan Project, a local tax
matter which is within the jurisdiction of the CTA. Respondents also echo the CA pronouncement that petitioner
failed to exhaust administrative remedies with respect to the assessment and collection of RPT.
Our Ruling
There is no merit in the Petition.
It is the CTA which has the power to rule

on a Petition for Certiorari assailing an
interlocutory order of the RTC relating
to a local tax case.
Jurisdiction over the subject matter is required for a court to act on any controversy. It is conferred by law and not by
the consent or waiver upon a court. As such, if a court lacks jurisdiction over an action, it cannot decide the case on
the merits and must dismiss it.24
With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with special
jurisdiction by virtue of Republic Act No. 9282.25 This expanded jurisdiction of the CTA includes its exclusive
appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local tax cases originally
decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.26
In the recent case of City of Manila v. Grecia-Cuerdo,27 the Court ruled that the CTA likewise has the jurisdiction to
issue writs of certiorari or to determine whether there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the CTA’s
exclusive appellate jurisdiction, thus:
The foregoing notwithstanding, while there is no express grant of such power, with respect to the CTA, Section 1,
Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law and that judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.
On the strength of the above constitutional provisions, it can be fairly interpreted that the power of the CTA includes
that of determining whether or not there has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the exclusive appellate
jurisdiction of the tax court. It, thus, follows that the CTA, by constitutional mandate, is vested with jurisdiction to
issue writs of certiorari in these cases.28 (Citations omitted and emphasis supplied)
Further, the Court in City of Manila, citing J. M. Tuason & Co., Inc. v. Jaramillo,29 De Jesus v. Court of Appeals,30 as
well as the more recent cases of Galang, Jr. v. Hon. Judge Geronimo31 and Bulilis v. Nuez,32 held that:
Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason & Co., Inc. v.
Jaramillo, et al. that ‘if a case may be appealed to a particular court or judicial tribunal or body, then said court or
judicial tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction.’
This principle was affirmed in De Jesus v. Court of Appeals, where the Court stated that ‘a court may issue a writ of
certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final
orders or decisions of the lower court.’ The rulings in J.M. Tuason and De Jesus were reiterated in the more recent
cases of Galang, Jr. v. Geronimo and Bulilis v. Nuez.
Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law, jurisdiction is conferred
on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be
employed by such court or officer.33 (Citations omitted)
Anent petitioner’s contention that it is the CA which has jurisdiction over a certiorari petition assailing an interlocutory
order issued by the RTC in a local tax case, the Court had this to say: If this Court were to sustain petitioners’
contention that jurisdiction over their certiorari petition lies with the CA, this Court would be confirming the exercise
by two judicial bodies, the CA and the CTA, of jurisdiction over basically the same subject matter – precisely the
split-jurisdiction situation which is anathema to the orderly administration of justice. The Court cannot accept that
such was the legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with
the specialized competence over tax and tariff matters, the role of judicial review over local tax cases without
mention of any other court that may exercise such power. Thus, the Court agrees with the ruling of the CA that since
appellate jurisdiction over private respondents’ complaint for tax refund is vested in the CTA, it follows that a petition
for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the
same court. To rule otherwise would lead to an absurd situation where one court decides an appeal in the main
case while another court rules on an incident in the very same case.
xxxx
A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it effectively, to
make all orders that will preserve the subject of the action, and to give effect to the final determination of the appeal.
It carries with it the power to protect that jurisdiction and to make the decisions of the court thereunder effective. The
court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental matters necessary to the
efficient and proper exercise of that jurisdiction. For this purpose, it may, when necessary, prohibit or restrain the
performance of any act which might interfere with the proper exercise of its rightful jurisdiction in cases pending
before it.34 (Citations omitted and emphasis supplied) Given these, it is settled that it is the CTA which has exclusive
jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax
case.
The RTC injunction case is a local tax >case.
In maintaining that it is the CA that has jurisdiction over petitioner’s certiorari petition, the latter argues that the
injunction case it filed with the RTC is not a local tax case but an ordinary civil action. It insists that it is not
protesting the assessment of RPT against it but only prays that respondents be enjoined from collecting the same.
The Court finds, however, that in praying to restrain the collection of RPT, petitioner also implicitly questions the
propriety of the assessment of such RPT. This is because in ruling as to whether to restrain the collection, the RTC
1awp++i1
must first necessarily rule on the propriety of the assessment. In other words, in filing an action for injunction to
restrain collection, petitioner was in effect also challenging the validity of the RPT assessment. As aptly discussed
by the CA:
x x x [T]he original action filed with the RTC is one for Injunction, with an application for Temporary Restraining
Order and a Writ of Preliminary Injunction to enjoin the province of Nueva Ecija from further collecting the alleged
real property tax liability assessed against it. Simply because the action is an application for injunctive relief does not
necessarily mean that it may no longer be considered as a local tax case. The subject matter and the issues, not the
name or designation of the remedy, should control. While an ancillary action for injunction may not be a main case,
the court [still has] to determine, even in a preliminary matter, the applicable tax laws, rules and jurisprudence. x x
x35
Moreover, in National Power Corporation v. Municipal Government of Navotas,36 as well as in City of Lapu-Lapu v.
Philippine Economic Zone Authority,37 this Court already held that local tax cases include RPT.
No doubt, the injunction case before the RTC is a local tax case. And as earlier discussed, a certiorari petition
questioning an interlocutory order issued in a local tax case falls under the jurisdiction of the CT A. Thus, the CA
correctly dismissed the Petition for Certiorari before it for lack of jurisdiction.
WHEREFORE, the Petition is DENIED. The November 2, 2010 Decision and March 24, 2011 Resolution of the
Court of Appeals in CA-G.R. SP No.108441 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
A.C. No. 720 June 17, 2015
FRANCISCO CAOILE, Complainant,

vs.
ATTY. MARCELINO MACARAEG, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Alleging that his lawyer's neglect and dereliction of duty caused the dismissal of his appeal, complainant Francisco
Caoile (Francisco) filed on August 16, 1966 a Complaint1 for disbarment against Atty. Marcelino Macaraeg (Atty.
Macaraeg).
Factual Antecedents
Francisco, and four others, engaged the services of Atty. Macaraeg to represent them in Civil Case No. 11119, an
action for recovery of ownership filed before the Court of First Instance (CFI) of Lingayen, Pangasinan. After the CFI
rendered judgment against them, Francisco and his co-defendants decided to appeal their case before the Court of
Appeals (CA).
Accordingly, Atty. Macaraeg filed a notice of appeal. Thrice he moved for extension of time to file appellants' brief. In
his last motion for extension,2 he alleged that he was already in the process of doing the finishing touches on the
brief and just needed to have it printed. Yet, the extended period expired without Atty. Macaraeg filing any brief.
Hence, upon motion of the opposing party, the CA dismissed the appeal.3 The dismissal became final and executory
on December 13, 1963.4
Francisco averred that they were unaware of the dismissal of their appeal until they were served with the CFI’s writ
of execution5 and a notice of sale at public auction6 of their property in 1965. After confirming with the CA that they
indeed lost the case, Francisco confronted Atty. Macaraeg who informed him that they lost the case because they
failed to pay him in full.7 Hence, this administrative complaint against Atty. Macaraeg for neglect and dereliction of
duty. In his Answer,8 Atty. Macaraeg averred that Francisco and his codefendants did not pay in full for his services
in filing the appeal. Anent the pacto de retro sale which Francisco and his wife executed in his favor supposedly to
cover the balance of his professional fees, Atty. Macaraeg claimed that it was Francisco who insisted on its
execution, and that, contrary to Francisco’s claim, it was intended as payment for his services while representing
Francisco before the CFI, and not as payment for his services in filing the appeal. Atty. Macaraeg also claimed that,
in any case, Francisco did not honor the said pacto de retro sale as the possession of the lot was never turned over
to him.9
Atty. Macaraeg denied Francisco’s accusation that he neglected their case. He pointed out that to push through with
the appeal he even advanced some of the appeal expenses. While he admitted that he failed to submit an
appellants’ brief, he averred that the same was actually the fault of his clients who failed to provide the necessary
funds to file said brief. According to him, he constantly reminded Francisco to give him the amount necessary to
cover the costs of the transcript and printing of the appeal brief. He even filed three motions for extension of time to
file brief to give Francisco more time to come up with the said payment. Still, Francisco was unable to pay.
Moreover, Atty. Macaraeg was not reimbursed for the amount he advanced for appeal expenses.
On September 22, 1966, this Court referred the Complaint to the Solicitor General for investigation, report and
recommendation.10
Proceedings before the Solicitor General
From March to November1967, the Solicitor General conducted several hearings.11 Thereafter, the parties were
required to submit their respective memoranda.12 Atty. Macaraeg submitted his Memorandum on January 18,
1968,13 while Francisco submitted his Memorandum on March 25, 1968.14
In November 1972, the Office of the Solicitor General again summoned the parties to appear before it.15 Notably, the
return of the subpoena served upon Atty. Macaraeg contained a notation, viz:
Atty. Marcelino Macaraeg is now deceased.
(illegible)
Signature
wife16
Subsequently, this case was transferred to the Integrated Bar of the Philippines (IBP).
Report and Recommendation of the Integrated Bar of the Philippines
In an Order17 dated May 8, 1990, the IBP notified the parties to manifest whether they are still interested in
prosecuting the case, or whether supervening events have transpired rendering the case moot and academic. The
IBP received no response. On November 17, 1997, the IBP again sent notices to the parties to appear,18 but the
notices were unclaimed. Subsequently, the IBP, through an Order19 dated November 27, 2001, directed the heirs of
Atty. Macaraeg to submit a certified true copy of his death certificate to no avail as the copy thereof sent to the said
heirs was returned to sender.
Finally on October 19, 2011, Commissioner Oliver A. Cachapero (Commissioner Cachapero) of the Commission on
Bar Discipline of the IBP came up with a Report and Recommendation.20 Noting the long period of time that the
Complaint has been pending, he stated:
For unknown reasons, this case x x x lingered [quite some time] in the Commission. It was filed on August 16, 1966
in the Supreme Court and x x x subsequently found its way [to] the Commission where it was initially assigned to a
Commissioner. In the first week of October 2011, the undersigned, who was tasked to prepare the resolution,
received the folder and the records of the case.
Records show that on May 8, 1990, then Commissioner Ernesto L. Pineda wrote the parties asking them to manifest
within x x x (10) days from notice whether x x x they are still interested in prosecuting this case, and whether
supervening events have transpired which rendered the resolution moot or academic. The Commission received no
response from either litigant, hence this resolution.21
Anent the merits of the Complaint, Commissioner Cachapero ruled that Atty. Macaraeg neglected the cause of his
clients when he thrice moved for extension of time within which to file his brief. However, he did not file any,
reasoning out that the non-filing was due to his clients’ failure to give him the necessary funds. Commissioner
Cachapero opined that the said excuse cannot stand. He thus found Atty. Macaraeg to have violated Rule 12.03 of
Canon 12 of the Code of Professional Responsibility, viz.:
A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse
without submitting the same or offering an explanation for his failure to do so. Accordingly, Commissioner
Cachapero recommended that Atty. Macaraeg be suspended from the practice of law for a period of two years.
In Resolution No. XX-2013-17422 dated February 13, 2013, the IBP Board of Governors adopted and approved the
findings of Commissioner Cachapero with the modification that the penalty be reduced to a suspension of one year.
The Court's Ruling
Rule 18.03 of the Code of Professional Responsibility provides:
A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render
him liable.1âwphi1
A considerable length of time had elapsed from the time Atty. Macaraeg filed the notice of appeal on August 30,
1962 up to the time he filed the third motion for extension of time to file brief on October 5, 1963. Despite the
passage of such time, however, Atty. Macaraeg still failed to file the brief, which resulted in the dismissal of his
clients’ appeal. Suffice it to state that a motion for extension to file an appellant’s brief carries with it the presumption
that the applicant-lawyer will file the pleading within the requested extended period. Failure to do so without any
reasonable excuse violates the Code of Professional Responsibility.23
While Atty. Macaraeg attributed the non-filing of the brief to his clients’ failure to give the amount necessary for filing
the same, he should have, as aptly stated by Commissioner Cachapero, shown a more mindful and caring attitude
towards the cause of his clients by advancing the payment. Besides, the facts of this case show that his clients were
making partial payments in their efforts to comply with their obligation to him and were not deliberately refusing to
pay him. In fact, as claimed by Atty. Macaraeg himself, Francisco even insisted that they enter into a pacto de retro
sale in order for them to fully pay him for the services he rendered in connection with their civil case in the CFI. In
fact, if Atty. Macaraeg truly believed that the necessary funds from his clients were not forthcoming, he could have
excused himself from the case. The Code of Professional Responsibility allows a counsel to withdraw his services
for a good cause, including the client’s failure to comply with the retainer agreement.24 Indeed, Atty. Macaraeg
violated Rule 12.03.
Nevertheless, while the actuation of Atty. Macaraeg warrants the imposition of a penalty, supervening
circumstances call for the dismissal of this administrative case.
The Supreme Court Law List shows that Atty. Macaraeg was admitted to the Bar on November 6, 1933.25 Records
reveal that he was already 60 years old when the hearings in this disbarment case were held in 1967. Hence, he
would have been 108 years old by this time. It is also noteworthy that the subpoena issued by the Solicitor General
in 1972 contains a handwritten note that Atty. Macaraeg had already died. Thereafter, nothing more was heard from
either party despite notice. Under these circumstances, it is safe to assume that the complainant had already lost
interest in pursuing this disbarment case against Atty. Macaraeg and that there is truth in the handwritten notation in
the return of the subpoena that Atty. Macaraeg had already passed away. In Apiag v. Cantero,26 the Court dismissed
the administrative case against therein respondent and no longer imposed any sanction against him in view of his
death during the pendency of said case.
WHEREFORE, premises considered, this Complaint for Disbarment against Atty. Marcelino Macaraeg is hereby
DISMISSED.
SO ORDERED.
EN BANC
G.R. No. 201042 June 16, 2015
DARAGA PRESS, INC., Petitioner,

vs.
COMMISSION ON AUDIT and DEPARTMENT OF EDUCATIONAUTONOMOUS REGION IN MUSLIM
MINDANAO, Respondents.
DECISION
DEL CASTILLO, J.:
Absent a clear showing of grave abuse of discretion, the factual findings of the Commission on Audit (COA) must be
accorded great respect and finality.1
This Petition for Certiorari2 assails the Decision3 dated September 29, 2010 of the respondent COA, which denied
petitioner Daraga Press, Inc.’s (DPI) money claim in the amount of 63,638,032.00. Likewise assailed is the
Resolution4 dated December 29, 2011 of the respondent COA, denying petitioner DPI’s Motion for Reconsideration.5
Factual Antecedents
On November 15, 2007, pursuant to Section 196 of Republic Act No. 9401,7 then Department of Budget and
Management (DBM) Secretary Rolando G. Andaya, Jr. requested the respondent COA to validate and evaluate the
request of then Regional Governor of the Autonomous Region in Muslim Mindanao (ARMM) Nur Misuari for the
release of funds to cover the region’s alleged unpaid obligation to petitioner DPI for textbooks delivered in 1998.8
In response to the request, the respondent COA issued Local Government Sector (LGS) Office Order No. 2007-058
dated December 7, 2007, creating a team of auditors to validate and evaluate the alleged unpaid obligation.9
On April 29, 2008, Assistant Commissioner Gloria S. Cornejo of the LGS issued a Memorandum10 expressing
serious doubts on the validity of the obligation as the actual receipt of the subject textbooks could not be
ascertained.11
On September 22, 2008, petitioner DPI filed with the respondent COA a money claim12 for the payment of textbooks
it allegedly delivered on July 3, 1998 to the respondent Department of Education (DepEd)-ARMM, formerly the
Department of Education, Culture and Sports (DECS)-ARMM.13
Pursuant to a directive of the Commission Proper, the Fraud Audit and Investigation Office (FAIO), Legal Services
Sector(LSS) conducted further validation of petitioner DPI’s money claim, which yielded the same result.14 The
findings of the FAIO complemented and corroborated the initial observations/ findings of the audit team created
under LGS Office Order No. 2007-058 dated December 7, 2007.15
Ruling of the Commission on Audit

Based on the Memorandum dated April 29, 2008 and the LSS-FAIO Report No. 2010-001,16 the respondent COA
rendered the assailed Decision dated September 29, 2010. It denied the money claim because it found no
convincing proof that the subject textbooks were delivered.17 It noted that there was no showing that the Supply
Officer actually inspected and received the said delivery;18 that there was a violation of the rules on internal control
on segregation of duties and responsibilities as the receipt/acceptance/inspection of the alleged deliveries was done
by the DECS-ARMM Regional Secretary, who was also the one who approved the Requisition and Issue Voucher
(RIV)19 and recommended the approval of the Purchase Order (PO);20 and that the audited Final Trial Balances21 of
DECS-ARMM and the audited Financial Statements22 of petitioner DPI did not reflect any transaction in the amount
of ₱63,638,032.00.23 The respondent COA also pointed out discrepancies, inconsistencies, and inaccuracies in the
documents submitted, to wit:
1. There were three (3) copies of [Purchase Orders] PO No. 075-PTB issued, which were all dated June 15, 1998
addressed to [petitioner] DPI. The first one with the amount of ₱63,638,750.00 was received undated by White
Orchids Printing and Publishing with an unidentified signature, while the other two (2) POs, which bear the amount
of ₱63,638,975.00 and ₱63,638,032.00, were received undated by [petitioner] DPI. The POs did not indicate the
mode of procurement and the place and date of delivery;
2. There were two (2) sets of [Sales Invoice] SI Nos. 5806 and 5808 and two (2) sets of [Delivery Receipt] (DR)Nos.
5206 and 5207, all dated July 3, 1998, bearing similar serial numbers but with different signatories on the received
portion thereof, which indicates possible falsification of public documents;
3. Two (2) Certifications, which were purportedly issued by Sulpicio Lines, differed as to the date of delivery and
receipt, casting doubt on the authenticity of the delivery of textbooks;
4. Five (5) contradicting reports on receipt and acceptance of deliveries and three (3) sets of Inspection Reports by
the Regional Secretary of ARMM, indicate doubtful invoices and [DRs]; and
5. The figures in the PO, DR, Memorandum Receipts, and Certification and Affidavit of Supply Officer differ.24
These discrepancies, inconsistencies and inaccuracies, as well as the lack of appropriation for the purchase of the
subject textbooks considering that the Special Allotment Release Order (SARO)25 for the amount of
₱63,638,750.00,26 upon which petitioner DPI anchored its claim, pertained to the payment of personal services
(payment of salaries of teachers), not for the purchase of textbooks,27 led the respondent COA to conclude that there
was no substantial evidence to grant the money claim.28 And since the actual delivery of the subject textbooks was
not established, the respondent COA likewise ruled that the equitable principle of quantum meruit could not be
applied.29
Aggrieved, petitioner DPI moved for reconsideration but the respondent COA denied the same in its Resolution
dated December 29, 2011.
Issue
Hence, petitioner DPI filed the instant Petition raising the issue of whether the respondent COA committed grave
abuse of discretion in denying the money claim.30
Petitioner DPI’s Arguments
Petitioner DPI ascribes grave abuse of discretion on the part of the respondent COA in denying the money claim
solely on sheer doubt.31 Petitioner DPI claims there were funds available for the procurement of the subject
textbooks but were inadvertently reverted to the National Treasury because the said amount was twice obligated
under Personal Service.32 And although there were typographical errors and minor inconsistencies in the documents
submitted, petitioner DPI contends that it was still able to prove its entitlement to the money claim. It insists that the
letters and certifications33 from former ARMM Governors and high-ranking officials of the DepEd Central Office, as
well as the Certification34 issued by COA Auditor Dagaranao Saripada, all validate its money claim.35 And if ever
there was a breach on standard government procedure, petitioner DPI asserts that it could still recover the
reasonable value of the subject textbooks conformably with the principle of quantum meruit.36
The respondents, through the Office of the Solicitor General, argue that the respondent COA committed no grave
abuse of discretion in denying the money claim as the denial is supported by the evidence on record.37 They
maintain that there is no credible evidence to show that the subject textbooks were delivered and that without any
proof of delivery, there is no basis for petitioner DPI to recover even under the principle of quantum meruit.38
Our Ruling
Decisions and resolutions of the respondent COA may be reviewed and nullified only on the ground of grave abuse
of discretion amounting to lack or excess of jurisdiction.39 Grave abuse of discretion exists when there is an evasion
of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law as when the
judgment rendered is not based on law and evidence but on caprice, whim, and despotism.40
The respondent COA committed no

grave abuse of discretion in denying the
money claim.
In this case, petitioner DPI imputes grave abuse of discretion on the part of the respondent COA in doubting and
disregarding petitioner DPI’s documentary evidence and in adopting the findings and recommendations contained in
the Memorandum dated April 29, 2008 and the LSS-FAIO Report No. 2010-001. A careful reading of the assailed
decision and resolution, however, negates any capriciousness or arbitrariness in the exercise of judgment of the
respondent COA as the denial of petitioner DPI’s money claim is supported by the evidence on record.
There are inconsistencies, discrepancies,

and inaccuracies in the dates and figures
stated in the documents.
Contrary to the claim of petitioner DPI, there is sufficient reason for the respondent COA to doubt and disregard the
documentary evidence presented by petitioner DPI as the FAIO found inconsistencies, discrepancies, and
inaccuracies in the dates and figures stated in the POs, DRs, SIs, and other documents. Pertinent portions of the
LSS-FAIO Report No. 2010-001 are quoted below:
2) Various inconsistencies/inaccuracies were noted in the verification of documents submitted/attached to the claim
showing different dates, amounts, and signatories, casting doubt on the authenticity of the documents and the
transaction.
a) Three (3) copies of POs were issued with the same number but with three different amounts, received undated by
[petitioner] DPI and White Orchids Printing, indicating the absence of safeguards against irregularities in the
handling or substitution of vital documents like PO.
There were three copies of PO No. 075-PTB issued, all dated June 15, 1998 addressed to [petitioner DPI], one with
a total amount of ₱63,638,750x x x was received undated by White Orchids Printing and Publishing with an
unidentified signature while the other two copies with two different amounts of ₱63,638,975 x x x and ₱63,638,032 x
x x were received also undated by the [petitioner DPI]. The PO did not indicate the mode of procurement and the
place and date of delivery;
b) There were two sets of [SI] Nos. 5806 and 5808 and two (2) sets of [DRs] Nos. 5206 and 5207, all dated July 3,
1998, bearing similar serial numbers but with different signatories on the received portion thereof, indicating possible
falsification of public documents.
x x x The first set of SIs x x x and DRs x x x was signed on the received portion by DECS-ARMM [Regional]
Secretary x x x while the second set of SIs and DRs x x x was signed by x x x, Supply Officer I.
The owner of [petitioner] DPI, x x x sought to explain the two sets of SIs and DRs in his letter dated November 26,
2009 x x x in response to our letter dated November 9, 2009 x x x; that this came about when the then DECS-
ARMM informed his Office that the SIs and DRs signed by DECS-ARMM [Regional] Secretary x x x [were] not in
accordance with their practice that it is the Supply Officer who is supposed to sign these documents; that to rectify
this, another set was signed by x x x, Supply Officer I, thus resulting in two different signatories in the same set of
SIs and DRs.
The said explanation is untenable. To give due course to the explanation is tantamount to allowing the substitution
of facts that did not actually happen and can be considered falsification of public documents.
c) Two Certifications purportedly issued by Sulpicio Lines differed in dates of delivery and receipt, casting doubt on
the authenticity of the delivery of textbooks.
There were two Certifications with no official logo on the [letterhead] purportedly issued by Sulpicio Lines, Inc.,
Cotabato City Branch upon the request of [petitioner] DPI both dated 8th day of September 1999 but bearing
different delivery and receipt dates as follows:
Date of Certification Date delivered by Sulpicio Lines and Annex

received by [the Regional Secretary of
ARMM]
September 8, 1999 June 23, 1998 24
September 8, 1999 July 2, 1998 25
Moreover, the dates of delivery and receipt in the said Certifications do not agree with the dates of the two copies of
Bill of Lading (BOL) of June 25, 1998 and June 29, 1998 x x x. The BOL states that the books are supplementary
books and reference materials and not textbooks as alleged;
d) Five contradicting reports on receipt and acceptance of deliveries and three sets of Inspection Reports by the
Regional Secretary of ARMM, indicate doubtful invoices and [DRs].
Four (4) sets of Reports on Receipt and Acceptance of the books by Regional Secretary x x x, DECS-ARMM, dated
July 5, 1998 and July 7, 1998, contained contradictory/conflicting facts and dates, as follows:
Date of Report Delivery Date of DR Sales Invoice Date of SI Annex

on Receipt and Receipt (DR) (SI) No.
Acceptance No.
July 5, 1998 5206-5207 June 30, 1998 5808-5806 July 2, 1998 28
July 7, 1998 5098-5099 June 30, 1998 5508-3509 July 2, 1998 29
July 7, 1998 [5208]-5209 July 3, 1998 5809-5810 July 3, 1998 30
July 7, 1998 5206-5207 July 3, 1998 5806-5808 July 3, 1998 31
In addition, his Affidavit dated July 1998 still states another date of receipt/inspection/ acceptance of the subject
deliveries to be July 21, 1998. x x x
Also noted is a Certification dated December 15, 1998 x x x that [petitioner] DPI has fully delivered assorted
elementary books amounting to 63,638,032.00 on July 3, 1998 under [DR] No. 5206 and on July 5, 1998 under DR
No. 5207, and that the deliveries were duly received and accepted by DECS-ARMM Regional Secretary x x x. The
Certification is under the letterhead of [the DepEd], which was renamed only in 2001 instead of [DECS], which was
its designated name in 1998 when the transaction reportedly occurred, indicating that it was antedated, casting
doubt on the documents and the transaction.
Moreover, DECS Regional Secretary x x x issued three Inspection Reports bearing different serial numbers of [SI]
and dates, as follows:
Date of Inspection
Sales Invoice No. Date of Sales Invoice Annex
Report
July 5, 1998 5508-5509 July 2, 1998 34
July 7, 1998 5806-5808 July 3, 1998 35
July 7, 1998 5809-5810 July 3, 1998 36
e) Four different quantities of books ordered and delivered in PO, MRs, and Certification/ Affidavit of receipt by
Supply Officer II, none of which were witnessed by COA Auditor/TAS, casting doubt on the alleged delivery.
Examination of documents shows that there were different quantities or copies of books received per documents
submitted, as follows:
Per Document PO DR MRs/IRs Certification Affidavit of

of SO II SO II
Quantity 543,030/ 543,022 542,722 542,822 593,022
(in copies) 543,022
The figures on the PO and DRs x x x do not agree with the figures on the totals of Memorandum Receipt (MRs) x x
x for Equipment, Semi-expendable, and Non-expendable Property and Invoice Receipts (IRs) x x x signed by the
respective Supply Officers of Maguindanao, Sulu I and II, Tawi-Tawi, and Lanao Sur I and II. Neither do these
figures agree with the figures certified to have been allegedly received on July 2, 1998 by x x x, Supply Officer II, in
his Certification dated July 24, 1998 and Affidavit of August 28, 2008, respectively x x x.
Moreover, the volume of the books allegedly delivered notwithstanding, all the foregoing receipt and acceptance of
deliveries by DECS-ARMM x x x were not witnessed by any of the Auditors or Technical Audit Specialists of COA
assigned in the DECS-ARMM Division Schools concerned. 3) Review supporting documents on requisition,
purchase order, receipt and acceptance and invoice of property shows an unwarranted override of functions and
responsibility by an approving official, violating internal control on segregation of duties and responsibilities.
Examination shows that despite the substantial amount of ₱63,638,032.60, the RIV x x x was certified by x x x
Supply Officer I, instead of by x x x Supply Officer II, and approved by DECSARMM Secretary x x x. The PO was
recommended for approval by Regional Secretary x x x and approved by the ARMM Governor, x x x.
On the alleged delivery of books, examination of invoices and receipts revealed that it was DECS Regional
Secretary x x x and not the Supply Officer II who received the books as shown by his signature on the [SI] Nos.
5806 and 5808 x x x and [DR] Nos. 5206 and 5207 x x x all dated July 3, 1998. Thereafter, he issued five reports on
receipt and acceptance of deliveries, and upon inspection, three Inspection Reports, as discussed in Finding #2.d
hereof.
Also, the undated and unnumbered MRs and IRs x x x signed by the respective Supply Officers of Maguindanao,
Sulu I and II, Tawi-Tawi, and Lanao Sur I and II, state that the alleged textbooks have all been received by them
from DECS-ARMM Secretary x x x, indicating that it was really [the] Secretary x x x who received the books. The
[IRs] x x x however are under the letterhead of the Department of Science and Technology (DOST) instead of
DECS-ARMM and are not signed by the secretary who transferred the books to the respective Supply Officers.
It is significant to note that receipt/acceptance of deliveries in government is normally a responsibility of the

Administrative/ Supply/Property Officer. The receipt/acceptance and inspection of alleged deliveries by the DECS-
ARMM Secretary who also approved the RIV and recommended the approval of the purchase order, [are] not in
accordance with standard government procurement procedure as [they violate] internal control on segregation of
duties an functions. The involvement of senior [officials] at almost all stages of the transaction is not in order, and
signifies override of function and responsibility which belong to the Supply/Property Officer.
4) Copies of excerpts of audited Balance Sheet of DECS-ARMM as of December 31, 1999 and 2000 show no
Inventory of Books amounting to ₱63,638,032, belying the MRs/IRs for books issued by the Supply Officers of six
division schools. x x x
Verification of the copies of the excerpts of the audited Final Trial Balance of DECS-ARMM, Cotabato City as of
December 31, 1999 and 2000 furnished by the COA ARMM x x x showed the balance of the account Fixed Assets-
Furniture, Fixtures, Equipment and Books to be only ₱4,624,023.46 and 4,705,693.46, respectively, indicating that
no books costing ₱63,638,032 were purchased/delivered in 1998.
xxxx
5) Certified copies of the audited Financial Statements of the [petitioner] DPI for 1997-1998 and 2000-2001,
furnished by the SEC to the FAIO do not show that the ₱63,638,032 transaction transpired in 1998, casting doubt on
the veracity of the money claim.41
We believe that these inconsistencies, discrepancies, and inaccuracies are enough reasons for the respondent COA
to deny the money claim.
It bears stressing that petitioner DPI has the burden to show, by substantial evidence, that it is entitled to the money
claim. Corollarily, it has to prove the actual delivery of the subject textbooks by presenting substantial evidence or
"evidence [that] a reasonable mind might accept as adequate to support [such] conclusion."42 However, petitioner
DPI’s documentary evidence could hardly be considered substantial evidence as these contain so many
inconsistencies, discrepancies, and inaccuracies, which would cause a reasonable person to doubt the veracity and
authenticity of the money claim.
It is significant that in the LSS-FAIO Report No. 2010-001,the explanation given by the owner as to why there are
two sets of DRs and SIs is not consistent with the one offered by petitioner DPI in the instant Petition. In the LSS-
FAIO Report No. 2010-001, the owner explained:
x x x that this came about when the then DECS-ARMM informed his Office that the SIs and DRs signed by DECS-
ARMM [Regional] Secretary xxx was not in accordance with their practice that it is the Supply Officer who is
supposed to sign these documents; that to rectify this, another set was signed by x x x, Supply Officer I, thus
resulting in two different signatories in the same set of SIs and DRs.43
However, in the instant Petition, the counsel for petitioner DPI reasoned that:
x x x Considering the volume of the textbooks delivered, it is not difficult to appreciate that there were two
representatives or responsible officers of the agency who worked together to receive the textbooks. It is not difficult
to appreciate either that one officer signed the first copy of the [DR] while the other signed the second copy of the
receipt. x x x44
If, indeed, there was an actual delivery of the subject textbooks, we cannot understand why petitioner DPI would
have two versions of the story. Clearly, this is another reason to doubt the truthfulness of petitioner DPI’s money
1âw phi1
claim.
There was no appropriation for the

purchase of the subject textbooks.
Aside from these inconsistencies, discrepancies, and inaccuracies, there was also no appropriation for the purchase
of the subject textbooks as the SARO in the amount of ₱63,638,750.00, upon which petitioner DPI anchors its claim,
pertains to the payment of personal services or salaries of the teachers, not for the purchase of textbooks.45
Anent petitioner DPI’s claim that there were funds available for the procurement of the subject textbooks but the
funds were inadvertently reverted to the National Treasury because the said amount was twice obligated under
Personal Service, this has been addressed by the Assistant Commissioner Gloria S. Cornejo of the LGS in the
Memorandum dated April 29, 2008, to wit:
a. There are no records to show that the funds were available when DECSARMM entered into contract with
[petitioner DPI] because SARO No. B-98-03383 dated October 10, 1998 was released by DBM for payment of
salaries and compensation benefits of 490 positions for Teacher I, but without the corresponding Notice of Cash
Allocation thus the allotment obligated became a prior year’s accounts payable of the Department;
b. The DBM issued two (2) Notices of Cash Allocation (NCA) for the SARO cited in (a) above. NCA No. 091427
dated May 5, 1999 was transferred to DECS-ARMM under ADA No. 99-7-049 for payment of salaries, while NCA
No. 091094 dated April 22, 1999 was reverted to the Bureau of Treasury on December 31, 1999. As stated by the
DepEd Secretary, only one accounts payable was recorded in the OSEC books chargeable against the SARO to
cover payment of personal services only.46
Since there was no appropriation for the purchase of the subject textbooks, the respondent COA had reason to deny
the money claim as Section 29(1), Article VI of the 1987 Constitution provides that: "No money shall be paid out of
the Treasury except in pursuance of an appropriation made by law."
The letters and certifications issued by

high-ranking officials do not prove the
actual delivery of the subject textbooks.
To dispute the findings of the respondent COA, petitioner DPI attached to the instant Petition copies of letters and
certifications issued by high-ranking officials attesting to the validity of the money claim. Said letters and
certifications, however, are not sufficient to prove that there was an actual delivery of the subject textbooks as the
persons who signed these letters and certifications were not present during the delivery nor were they privy to the
transaction. In fact, COA Auditor Dagaranao Saripada in a letter47 dated August 15, 2011 denied executing the
undated Certification. According to him, at the time the transaction transpired in 1998, he was not yet the Unit Head
of the said Department.
Moreover, these letters and certifications cannot outweigh the findings and recommendations contained in the
Memorandum dated April 29, 2008 issued by Assistant Commissioner Gloria S. Cornejo of the LGS and in the LSS-
FAIO Report No. 2010-001 prepared by the State Auditor IV Filomena D. Ilagan, reviewed by Director III Nelia C.
Villeza, and approved by Leonor F. Boado, as the findings and recommendations in the memorandum and in the
report were arrived at as a result of an exhaustive and extensive investigation conducted by the auditors.
The principle of quantum meruit does

not apply.
Petitioner DPI’s invocation of the equitable principle of quantum meruit must also fail. The principle of quantum
meruit allows a party to recover "as much as he reasonably deserves."48 However, as aptly explained by the
respondent COA, the principle of quantum meruit presupposes that an actual delivery of the goods has been made.
In this case, petitioner DPI failed to present any convincing evidence to prove the actual delivery of the subject
textbooks. Thus, the principle of quantum meruit invoked by petitioner DPI cannot be applied.
All told, we find no grave abuse of discretion on the part of the respondent COA in denying petitioner DPI’s money
claim for failure to present substantial evidence to prove the actual delivery of the subject textbooks. Without a
doubt, the inconsistencies and discrepancies in the documents submitted by petitioner DPI and the lack of
appropriation for purchase of the subject textbooks lead only to one inescapable conclusion: that there was no
actual delivery of the subject textbooks.
The factual findings of the respondent

COA must be accorded great respect
and finality.
In the absence of grave abuse of discretion, the factual findings of the respondent COA, which are undoubtedly
supported by the evidence on record, must be accorded great respect and finality. The respondent COA, as the duly
authorized agency to adjudicate money claims against government agencies and instrumentalities, pursuant to
Section 2649 of Presidential Decree No. 1445,50 has acquired special knowledge and expertise in handling matters
falling under its specialized jurisdiction. And as we have often said:
[I]t is the general policy of the Court to sustain the decisions of administrative authorities, especially one that was
constitutionally created like herein respondent COA, not only on the basis of the doctrine of separation of powers,
but also of their presumed expertise in the laws they are entrusted to enforce. It is, in fact, an oft-repeated rule that
:findings of administrative agencies are accorded not only respect but also :finality when the decision and order are
not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. x x x51
Such is the situation in the instant case.
WHEREFORE, the Petition is hereby DISMISSED for lack of merit. The assailed Decision dated September 29,
2010 and the Resolution dated December 29, 2011 of the respondent COA are hereby AFFIRMED.
SO ORDERED.
EN BANC
G.R. No. 200942 June 16, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
JORIE WAHIMAN y RAYOS, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Jorie Wahiman y Rayos (appellant) was charged with the crime of murder for the death of Jose
Buensuceso (Buensuceso). During his arraignment, appellant pleaded not guilty.1 Trial on the merits ensued.
The prosecution established that on April 2, 2003, at around 10 o'clock in the evening, Buensuceso, the manager of
Stanfilco-Dole, Phils. in Malaybalay City, was on his way back to the company staff house on board his Isuzu pick-
up after attending a despedida for one of his employees.
While he was about to enter the gate of the staff house, he was gunned down by persons riding in tandem on a
black motorcycle. The guard on duty, David Azucena (Azucena), who was then opening the gate, identified one of
the assailants as herein appellant.
During trial, the prosecution submitted in evidence the extrajudicial confession of appellant taken during the
preliminary investigation of the case, admitting to the killing of Buensuceso. However, when it was appellant’s turn to
testify, he narrated that at the time of the killing, he was at Landing Casisang, Malaybalay City attending the birthday
celebration of his brother-in-law. Ruling of the Regional Trial Court (RTC)
On February 16, 2009, the RTC rendered its Decision2 finding appellant guilty as charged, viz.:
WHEREFORE, Judgment is issued finding the accused Jorie Wahiman y Rayos guilty beyond reasonable doubt of
the crime of murder and imposes upon him the penalty of Reclusion Perpetua and directing him to pay the heirs of
the victim the sum of ₱75,000.00 as moral damages, ₱75,000.00 [as] civil indemnity and actual damages as follows:
₱59,280,000.00 lost earning capacity of the deceased;
[P]25,000.00 actual damages; no receipt was presented for ₱220,000[;]
₱1,500.00 Appearance fee; and
₱50,000.00 Attorney’s fee.
He shall serve his penalty in the National Penitentiary of Davao Penal [C]olony.
SO ORDERED.3
In his appeal, appellant argued that when his supposed extrajudicial confession was being taken, Atty. Michael
Florentino Dumlao (Atty. Dumlao), the lawyer who supposedly assisted him, was not around. He arrived only when
appellant was about to sign the extrajudicial confession.
Appellant also insisted that Azucena, the prosecution’s alleged eyewitness, did not actually see him shooting the
victim.
Appellant’s contentions were, however, disregarded by the CA.
In its Decision4 dated October 13, 2011, the CA found no reason to depart from the trial court’s findings. It held that
appellant’s contention that he lacked legal intervention and assistance during the taking of his extrajudicial
confession was totally belied by the testimony of Atty. Dumlao that he rendered assistance to the appellant
throughout the entire proceedings and carefully explained to the latter the consequences of his admission. Besides,
the voluntariness of the execution of the extrajudicial confession was apparent considering that it is replete with
details that only appellant would know. The appellate court brushed aside appellant’s assertion of torture, the same
being unsupported by medical certificate or marks of physical abuse. In any case, he never bothered to narrate how
he was tortured or to identify his alleged tormentors. Moreover, the ballistic examination proved that the slugs used
in killing Buensuceso were fired from the firearm earlier confiscated from appellant. The CA also found no merit in
appellant’s claim that Azucena did not actually see him shoot the victim. The CA opined that although Azucena did
not see appellant actually shoot the victim, he nonetheless saw appellant within seconds from hearing the gunshots
fleeing from the immediate vicinity of the crime scene aboard a motorcycle with a gun in hand. Based on the
foregoing, the appellate court found appellant’s denial and alibi undeserving of credence.
The dispositive portion of the CA’s Decision reads:
WHEREFORE, premises considered, the February 16, [2009] decision rendered by Branch [8], Regional Trial Court,
9th Judicial Region, Malaybalay City, is hereby AFFIRMED in toto.
SO ORDERED.5
Hence, this appeal.
Our Ruling
We totally agree with the RTC and the CA in finding that the guilt of appellant for the crime of murder was proved
beyond reasonable doubt. There is no doubt that on April 2, 2003, at around 10 o’clock in the evening, appellant
shot Buensuceso while the latter was about to enter the gate of the staff house of Stanfilco-Dole in Malaybalay City,
Bukidnon. Moreover, we agree with the findings of the RTC and the CA that appellant’s extrajudicial confession6 was
voluntarily and duly executed and replete with details that only appellant could supply, viz.:
x x x But before proceeding in questioning you, I am informing you that under our new constitution, you have the
right to the following:
A. You have the right to remain silent and not answer x x x my questions; it might be that I might use your answers
as evidence against you or favorable to you.
01. QUESTION: Do you understand your right?
ANSWER: Yes[,] Sir.
02. QUESTION: Are you going to use your right?

ANSWER: I would rather not[,] sir[,] because I would tell the truth as to what had happened.
B. You have the right to avail [of] the services of a counsel of your choice to help you in this investigation, and if you
can’t afford to hire the services of a lawyer, the government will provide you with free legal services of a lawyer from
the Integrated Bar of the Philippines (IBP).
03. QUESTION: Do you understand your right?
ANSWER: Yes[,] sir.
04: QUESTION: Are you going to use your right?
ANSWER: I have my own lawyer, he is Atty. Michael Florentino Dumlao III, we already had a talk and he made me
understand x x x my rights, and he also made me understand about this investigation where I will voluntarily narrate
what I x x x [know].
05. QUESTION: Did anybody give you money or promised to give you a reward, or did anybody intimidate you in
giving this affidavit?
ANSWER: Nobody[,] sir.
06. QUESTION: Did you understand your rights that I told you?
ANSWER: Yes[,] sir.7
Appellant then proceeded to narrate that he was hired by Alex Laranjo (Laranjo) and Kid Canadilla (Canadilla), for
and in behalf of a certain Alonzo who owns a quarry in San Isidro, Valencia, to kill the victim for a fee. According to
appellant, Alonzo wanted the victim killed because the latter withheld the release of his collectibles from Stanfilco-
Dole. Appellant then narrated how he met with Laranjo, Canadilla and Alonzo; how he received payments and
instructions; how he planned the killing; and how he executed the plan. Appellant signed his extrajudicial confession,
with the assistance of Atty. Dumlao, and subscribed the same before Atty. Dennis B. Caayupan at the Office of the
Clerk of Court.8
Moreover, Atty. Dumlao testified that he ably provided legal assistance to appellant all throughout the proceedings
and carefully explained to him the ramifications of his admission. He informed appellant of his rights and that
anything he says may be used in evidence against him. Notwithstanding, appellant insisted on giving his
extrajudicial confession.9
In any event, it must be stressed that appellant’s conviction was not based solely on his extrajudicial confession.
The prosecution likewise presented the eyewitness account of Azucena who testified that immediately after hearing
gunshots, he saw appellant about 5 meters away from the Isuzu pick-up of the victim. Appellant was riding in
tandem aboard a black motorcycle and was holding a gun. The ballistic report also confirmed that the slugs found at
the crime scene were fired from the firearm earlier confiscated from the appellant. Moreover, appellant was not able
to establish that it was physically impossible for him to be present at the crime scene at the time of its commission.
The RTC and the CA thus properly found appellant guilty of murder and sentenced him to suffer the penalty of
reclusion perpetua. However, it must be stated that appellant is not eligible for parole pursuant to Section 3 of
Republic Act No. 9346 or the Act Prohibiting the Imposition of Death Penalty in the Philippines.
Anent the damages awarded, we find that modification is in order. 1âwphi1
Regarding the award for lost earnings, the general rule is that there must be documentary proof to support indemnity
for loss of earning capacity. Admittedly, there are exceptions to this rule, viz.:
By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary
evidence when (1) the deceased is self-employed earning less than the minimum wage under current labor laws,
and judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under
current labor laws.10 Notably, this case does not fall under any of the exceptions. The deceased victim could not be
considered as a self-employed earning less than the minimum wage; neither could he be considered employed as a
daily wage worker. However, we are inclined to award lost earnings considering that the deceased, as testified by
his widow, was the manager of Stanfilco-Dole, Phils. in Malaybalay City and was receiving a monthly salary of
₱95,000.00. He was 54 years of age when gunned down by appellant. This testimony was not objected to by
appellant or questioned during cross-examination or on appeal. Clearly, the existence of factual basis of the award
has been satisfactorily established. However, the amount of the award for lost earnings must be modified following
the formula [2/3 x 80 – age] x [gross annual income - necessary expenses equivalent to 50% of the gross annual
income]. Thus: [2/3 x (80-54)] [(₱95,000 x 12) – 50% (₱95,000 x 12)] = ₱9,878,100.00.
In addition, the awards of actual damages in the amount of ₱25,000.00 must be deleted for lack of proof; in lieu
thereof, temperate damages in the amount of ₱25,000.00 is awarded. The awards of civil indemnity in the amount of
₱75,000.00, and moral damages in the amount of ₱75,000.00, are in line with prevailing jurisprudence. In addition,
the heirs of the victim are entitled to exemplary damages in the amount of ₱30,000.00. Finally, all damages awarded
shall earn interest at the rate of 6% per annum from date of finality of this resolution until full payment.
WHEREFORE, the assailed October 13, 2011 Decision of the Court of Appeals in CA-G.R. CR H.C. No. 00830-MIN
finding appellant Jorie Wahiman y Rayos guilty beyond reasonable doubt of the crime of murder is AFFIRMED with
MODIFICATIONS in that appellant is not eligible for parole; the award for lost earnings is reduced to ₱9,878,100.00;
the award of actual damages is deleted; in lieu thereof, appellant is ordered to pay the heirs of the victim ₱25,000.00
as temperate damages; he is likewise ordered to pay the heirs of the victim exemplary damages in the amount of
₱30,000.00; and all damages awarded shall earn interest at the rate of 6% per annum from date of finality of this
resolution until full payment.
SO ORDERED.
SECOND DIVISION
G.R. No. 198515 June 15, 2015
DOMINADOR MALABUNGA,* JR., Petitioner,

vs.
CATHAY PACIFIC STEEL CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
An employer may not blame its employees for losses caused by its own disorganized system and inept personnel.
This Petition for Review on Certiorari1 assails: 1) the March 16, 2011 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 111296 nullifying and setting aside the February 27, 2009 Decision3 of the National Labor Relations
Commission (NLRC) in NLRC CA Case No. 050647-06 and reinstating the July 31, 2006 Decision4 of the Labor
Arbiter, NLRC NCR, Quezon City in NLRC NCR Case No. 03-02096-05; and 2) the CA's September 5, 2011
Resolution5 denying petitioner's Motion for Reconsideration6 of the herein assailed Decision.
Factual Antecedents
Respondent Cathay Pacific Steel Corporation is a duly registered domestic corporation engaged in the business of
manufacturing steel products. It hired petitioner Dominador Malabunga, Jr. on April 10, 1996 as one of its
machinists.
On July 9, 2004, an inventory of respondent’s tools and items at the company warehouse was made, and it was
found that one aluminum level7 was issued to respondent’s Fabrication Unit, and another to petitioner.8
On July 11, 2004, petitioner returned an aluminum level to the warehouse.9

On July 24, 2004, respondent served a written Notice10 upon petitioner, charging the latter with theft of the aluminum
level issued to its Fabrication Unit and requiring him to submit a written explanation. Respondent claimed that
petitioner stole the aluminum level issued to the Fabrication Unit and returned the same to cover up the loss of the
one issued to him. In other words, respondent accused petitioner of stealing the aluminum level issued to the
Fabrication Unit and returning the same on July 11, 2004, passing it off as the one that was issued to him
previously; by doing this, petitioner would then cover up the loss of or failure to return the one that was previously
issued to him.11
Attached to the July 24, 2004 Notice were handwritten statements of respondent’s warehouse foreman Salvador
Narvasa (Narvasa) and warehouseman Reymundo Manuel Baetiong (Baetiong), both executed on July 23, 2004. In
his statement,12 Narvasa claimed that on July 13, 2004, he discovered an untarnished ("malinis") aluminum level
which petitioner apparently returned on July 11, 2004, but which was issued to the Fabrication Unit; that upon
checking his records, it was confirmed that it was petitioner who returned the said tool; that on July 22, 2004, he
called petitioner and Nonito Tercero (Tercero) – one of respondent’s workers assigned to the Fabrication
Unit/Machine Shop who apparently discovered that what petitioner returned on July 11, 2004 was the missing
aluminum level issued to the Fabrication Unit – to a meeting and told them that what petitioner returned was the
aluminum level issued to the Fabrication Unit; and that petitioner remarked that if the aluminum level was lost or he
stole it, the Fabrication Unit crew should be charged for the loss of the tool which was issued to them because they
were negligent in its handling ("x x x ang sagot ni Malabunga wala daw namang problema doon dahil kung naka
issue yon sa Fabrication kahit ninakaw niya ay [sic] at nawala sa kanila dapat daw ay ipakaltas ko sa Fabrication
crews dahil naging pabaya ang mga ito."13).
On the other hand, Baetiong claimed in his statement14 that he was on duty on July 11, 2004 – or when petitioner
returned the aluminum level; that he was then with Rudolfo Zapanta, another warehouseman; that petitioner
returned an aluminum level; that days after, he learned that what petitioner returned was the aluminum level issued
to the Fabrication Unit; that it was Tercero who told him that the level returned by petitioner was the one issued to
the Fabrication Unit; that Tercero came to know of this when he came to the warehouse to borrow an aluminum
level; that from an inspection of the warehouse records, it was discovered that there were only two individuals who
borrowed tools from the warehouse – petitioner and one Carlo Alocino; that of the two, only petitioner was able to
return an aluminum level.
In his written explanation,15 petitioner insisted that the accusation against him was false, baseless and unfair; that
the aluminum level he borrowed on June 28, 2004 was the very same tool which he returned on July 11, 2004; that
when he returned the aluminum level he borrowed, the warehousemen readily accepted the same and they did not
complain about the condition thereof, nor did they notice anything unusual – for example, that the markings thereon
were erased or defaced, or that there was any defect in the tool; that respondent’s tools should be permanently
marked or security coded in order to prevent confusion and to forestall baseless accusations such as those being
leveled against him; and that the Fabrication Unit placed a mark on the aluminum level which it claims to belong to it
only several days after the occurrence of the unfortunate incident. Thus, petitioner wrote in part:
July 23, 2004 – inirequest kong pag-usapan na ito sa mataas na kapulungan dahil hindi kami magkaintindihan.
Sinisisi ko ang bodegero dahil ang alam ko may mga palatandaan yan bawat isa, kesyo nabubura daw ang inilagay
nilang palatandaan paliwanag ni Ginoong Narvasa na kaharap din si Sir STU. May paraan yan para lagyan nang
palatandaan na di agad-agad nabubura maliban na lang kung ito ay sadyang burahin at kung sadyain man itong
burahin kapag hiniram yan na may seguridad na palatandaan. Halimbawa aluminum level #3 ang hiniram ko, nang
isauli ko ito ay kapansinpansin na ito ay sinadyang burahin. Kuwestiyonabol yon bakit ito binura, ang ibig kong
sabihin hindi basta makakalusot ang isinoling aluminum level kung ito ay may seguridad na palatandaan.Nang isauli
ko ang aluminum level kong hiniram, walang alinlangan itong tinanggap ni Raymond16 at nakita man ni Sir STU ang
hitsura nang aluminum level na may diperensya, pwedeng sabihin ni Raymond sa akin na bakit ganyan ang hitsura
niyan dati na ba yan noong ipahiram sa yo? Pwede ng sabihin na i-check mo dyan sa borrower slip kung may
nakalagay na damageang kabilang parte. Sir, kung may naganap na ganyang pag-uusap kami ni Raymund hindi
sana humantong sa ganito. Kung may sapat na seguridad na palatandaan sa aluminum level at masigasig nila itong
sinisiyasat bago ito tanggapin at ipahiram sa amin walang magaganap na ganitong problema.
Papano ko sasang-ayunan na ang isinauli kong aluminum level ay hindi akin samantalang aminado kayo kaharap si
Sir STU na walang identity o seguridad na palatandaan ang inisyu ninyong aluminum level sa Fabrication. Nilagyan
nila ito ng pangalan kaya nila nasabi na sa kanila nga ito. Samantalang kung may identity ito o seguridad na
palatandaan nang inisyu ninyo ito sa kanila kahit lagyan nilaito ng pangalan walang magaganap na ganitong usapin.
Kulang si Raymund sa pagsisiyasat at walang sapat na seguridad na palatandaan nang tanggapin niya ang isinauli
kong aluminum level at makalipas ng 3 araw humiram siTercero nang aluminum level. Nang mapasakamay niya ito
nagtanong siya "Bakit nasa iyo ang aluminum level nilang nawawala, naang ginamit niyang basehan ay may
pangalan ito na Fabrication. Ako ngayon ang binalingan ninyo dahil ako lamang ang huling nagsauli nang aluminum
level at wala nang iba o kasunod na nagsauli nito. Sa personal kong opinion hindi yata ito
MAKATARUNGAN.17During the course of the investigation, hearings were conducted. The written statements of
several employees were likewise taken, thus:
1. Rodolfo Mangahas (Mangahas), of respondent’s Fabrication Unit/Machine Shop, declared in his sworn
statement18 that sometime in June 2004, he learned that their aluminum level was missing; that on July 13, 2004, he
was called to the warehouse to identify an aluminum level; that after examining said tool, he concluded that it was
the Fabrication Unit’s missing tool; and that he knew this because the missing aluminum level had a dent at the
edge thereof, and the tool which he was asked to identify had the same dent.
2. In his sworn declaration,19 Tercero said that sometime in June 2004, he learned that their aluminum level was
missing; that on July 13, 2004, he went to the warehouse to borrow an aluminum level; that he was given one; that
what was given to him turned out to be the Fabrication Unit’s missing aluminum level; and that he knew this
because the word "Fabrication" was engraved thereon; and that thereafter he informed Dennis Zapanta, another
warehouseman, of his discovery.
3. Antonio Nagales (Nagales), welder/fabricator at the Fabrication Unit, declared in his sworn statement20 that
sometime in June 2004, he noticed that the unit’s aluminum level was missing; that on July 13, 2004, he was called
to the warehouse to identify an aluminum level; and that he examined the said tool that was shown to him, and he
concluded that it was the Fabrication Unit’s missing aluminum level as it had a dent at the edge which he knew was
caused by its having fallen when he used the same in the past.
On December 2, 2004, respondent issued its Decision21 suspending petitioner for a period of 30 days and requiring
him to return the value of the lost aluminum level, or ₱280.00, through salary deductions. The decision stated that
petitioner was charged with theft of the Fabrication Unit’s aluminum level; that on July 11, 2004, petitioner returned
to the warehouse an aluminum level upon which was engraved the word "FABRICATION" and which had a dent on
the edge thereof; that Tercero discovered the theft when he borrowed the aluminum level from the warehouse; that
upon investigation, it was learned that petitioner stole the Fabrication Unit’s aluminum level in order to pass it off as
the one which he borrowed previously; that petitioner’s written explanation was insufficient to subvert the
circumstantial evidence which points to him as the perpetrator of the theft; that petitioner is guilty of serious
misconduct under Article 282 of the Labor Code22 and "Patakaran Bilang 26"23 of the company rules and regulations
relative to theft of company property or employee/visitor belongings; and that on account of petitioner’s years of
service and the small amount involved, the company decided to impose the penalty of suspension and not
dismissal.
On January 13, 2005, petitioner – through the company union (CAPASCO) – filed a Motion for Review24 seeking a
reconsideration of the above Decision, arguing that there is no convincing evidence to link petitioner to the theft of
the Fabrication Unit’s aluminum level except for Narvasa’s statement that what petitioner returned was the
aluminum level issued to the Fabrication Unit.
Respondent conducted a hearing on the motion for review, and on February 18, 2005, it issued through its Human
Resource Manager LeonardoA. Visorro, Jr. a resolution on petitioner’s motion for review.25 It held:
At its core, you questioned the findings of guilt declared in the decision of Mr. Rolando Valerio, Administrative
Officer – WRM. It is your contention that guilt could not be established for lack of witness to the commission of the
act of theft. The event by itself precludes the presence or existence of witness. But the decision of Mr. Valerio used
the sequence of events and circumstantial evidence in coming up with a finding of guilt. The finding was premised
on the testimonies of witnesses who shed light on the following sequence of events:
1. June 2004 – discovery of loss of aluminum level issued to the "Fabrication Unit". Discovery made by Antonio
Nagales, Welder/Fabricator, but not reported to Warehouse.
2. July 9, 2004 – Warehouse made paper inventory of aluminum levels and other items. Record stood that one (1)
aluminum level was issued to "Fabrication" unit and one (1) to Dominador Malabonga[,] Jr.
3. July 11, 2004 – Malabonga Jr. returned one (1) aluminum level to Warehouse.
4. July 13, 2004 – Jose Tercero, Welder/Fabricator, noticed the presence of one (1) aluminum level at the
Warehouse marked with the engraving "Fabrication", and a small dent showing that the said item was hit by a hard
object.
5. Thereafter – investigation on the issue proceeded.
Investigation conducted clearly showed that the aluminum level with marking of "Fabrication" was not returned by
personnel of the Fabrication. There is no record of such transaction. In the immediate time-frame from its discovery,
only you had physically approached the Warehouse (on July 11, 2004) to return an aluminum level. It appeared that
only you could have done so.
In the argument given by Mr. Jovito Octobre, Union President, he asked what if the aluminum level in question was
borrowed by Malabonga Jr. after the discovery of its loss in June 2004 by Nagales. We find the reasoning
argumentative and speculative. Malabonga Jr. made it appear that he borrowed the aluminum [level] for his
individual use sometime in June 2004.
In response to this Mr. Salvador Narvasa, Warehouse Section Head showed a document dated March 23, 2004. It
was an inventory of items issued earlier than March 23, 2004 which were due for return to the Warehouse. It
instructed employees concerned to return to the Warehouse items issued to them within seven (7) days, otherwise
deductions will be made on their wages corresponding to the value of the items. Dominador Malabonga[,] Jr. was
included in the list and the document alleged that the aluminum level issued to him was number 11.
At this instance, it is recalled that Malabonga Jr. averred that he borrowed the aluminum level issued to him in the
middle of June 2004. But this was not so. The one issued to him was borrowed by him in early March 2004 or
earlier, and this was merely re[-]issued to him after the release of the notice dated March 23, 2004. Mr. Narvasa
vouched for the authenticity of the document and Malabonga Jr. himself did not contest it. So then Malabonga Jr.
was not forthright in his testimony in the investigation when he averred that he borrowed the aluminum level issued
to him personally in June 2004. Was this a lapse of memory or intended to obscure a fact and mislead the
investigating panel in the proper evaluation of the case? Mr. Narvasa, the Warehouse Section Head, averred to all
present in the investigation that there is no aluminum level marked 11 (eleven) in the custody of the Warehouse.
With the above, we find that the decision was based on established evidence both testimonial and documentary.
Hence, the decision of Mr. Valerio is affirmed as to suspending Malabonga Jr. for 30 days and requiring him to pay
Php280.00 for the acquisition price of the aluminum level through payroll deduction. No further appeal will be
entertained by this Office.26
Thus, petitioner was suspended without pay from January 10, 2005 up to February 13, 2005. Thereafter, he
returned to work.
On March 2, 2005, petitioner filed a Complaint for illegal suspension before the NLRC NCR, Quezon City, docketed
as NLRC NCR Case No. 03-02096-05. In his Position Paper,27 petitioner argued that he should not be blamed for
the alleged loss of the Fabrication Unit’s aluminum level; that respondent’s warehousemen were to blame for their
failure to maintain a system that would clearly indicate the identity of borrowed tools and items from the warehouse;
that in order to conceal their negligence and lack of a system of checking and verifying tools and items in the
warehouse, the warehousemen instead passed the blame on to petitioner; that if he was being charged with the
alleged theft of the Fabrication Unit’s aluminum level – which was recovered anyway – then he should not have
been suspended and made to pay for the value of the recovered item; that the aluminum level he returned was not
the Fabrication Unit’s issued tool; that when he returned the tool on July 11, 2004, the tool had no markings or
defects which would indicate that it was the allegedly lost aluminum level issued to the Fabrication Unit; and that the
word "Fabrication" was engraved on the tool only later on, or after he returned the same on July 11, 2004. Thus,
petitioner prayed that his suspension without pay from January 10, 2005 up to February 13, 2005 be declared illegal
and that respondent be made to pay his salary during the period, based on his daily rate of ₱357.85. He likewise
prayed for the recovery of attorney’s fees equivalent to 10 per cent(10%) of the total award.
In its Position Paper,28 respondent claimed that petitioner’s suspension was valid; that based on the written
statements of the employees and other evidence, petitioner was found guilty of theft of company property, for
returning an aluminum level "which was issued to the Fabrication unit and not the one issued to him;" that petitioner
was the one who returned the missing aluminum level to the warehouse; and that the aluminum level returned by
petitioner was "positively identified by three employees as the particular level issued to the Fabrication unit which
was reported missing as of June 2004." Respondent concluded that the evidence against the petitioner was
sufficient to satisfy the requirement of substantial evidence and warrant his suspension, and thus it prayed for the
dismissal of the complaint for illegal suspension.
In a Reply29 to respondent’s Position Paper, petitioner contended that the warehousemen and the Fabrication Unit
workers conspired against him to cover up the loss of the unit’s aluminum level sometime in June2004, which was
not reported at all to the warehouse; that the warehousemen were negligent in not adopting a system that would
enable the proper identification of tools and items borrowed; that as a result of the lack of such a system, he was
falsely accused of theft; that in fact, there was no evidence to prove that he stole the unit’s aluminum level; and that
on the other hand, there could be no theft of the unit’s aluminum level since, as far as everyone is concerned, it was
never lost at all since it was never reported missing by the unit.
In a Rejoinder30 to petitioner’s Reply, respondent argued that evidence existed in the form of inventory reports and
the written statements of witnesses which point to petitioner as the culprit who took the Fabrication Unit’s aluminum
level; that the aluminum level issued to petitioner had not been accounted for either; and that since he violated
company policy against the unlawful taking of company property, he should be punished, except that instead of
dismissal as stated in the company rules, he was merely suspended.
In a Rejoinder,31 petitioner claimed that respondent’s Position Paper did not comply with the requirement of
certification against forum-shopping and that it did not contain the required board resolution or certification
authorizing respondent’s counsel to sign for and in behalf of respondent.
On July 31, 2006, the Labor Arbiter issued his Decision dismissing petitioner’s complaint for illegal suspension. The
Labor Arbiter held that substantial evidence – in the form of written statements of respondent’s witnesses positively
identifying petitioner as returning the Fabrication Unit’s aluminum level and not the one issued to him – warranted
the imposition of the penalty of suspension. Thus, the Labor Arbiter decreed:
WHEREFORE, premises considered, the complaint is hereby DISMISSED for lack of merit.
SO ORDERED.32
Petitioner appealed to the NLRC, where the case was docketed as NLRC CA Case No. 050647-06. On February
27, 2009, the NLRC issued its Decision, declaring as follows:
We find merit in the appeal.
Anent the first ground for appeal, complainant claims that the Labor Arbiter erred in giving probative weight to the
affidavits submitted by respondent supporting the charge of theft against him. Complainant asserts that the said
affidavits are self-serving evidence having been executed by the employees who are always submissive to the
wishes of the respondent. We agree. Indeed, aside from the admitted fact that they are all employees of respondent,
a perusal of the affidavits of Rodolfo Mangahas, NonitoTercero and Antonio Nagales (Annexes "H", "I" and "J",
Respondent’s Position Paper) disclose[s] that they are seriously inadequate to support a conclusion that it was the
complainant who took the lost aluminum level. All of them merely reinforce the fact that an aluminum level had been
lost and that the same was discovered to have been in the warehouse when Nonito Tercero borrowed an aluminum
level and was given by the warehouseman Dennis Zapanta, by chance, the lost aluminum level. Nothing therein
states that the said aluminum level was taken by complainant.
Apparently, respondent relied heavily on the statement of the warehouseman pointing to the complainant as the one
who returned to him the lost aluminum level. But there is nothing on record, except for such statement, that the item
returned by complainant is the same aluminum level that was lost. Even assuming that it was the complainant who
returned the aluminum level 24" that was discovered subsequently as the very aluminum level 24" that had been
lost in the fabrication unit, said fact alone does not create a presumption that it was also the complainant who had
stolen the same. For it is highly inconceivable if not completely absurd, for complainant, if he was indeed guilty of
the crime of theft, to return the very object of the crime. Clearly, this theory defies logic and ordinary human
experience.
What is clear from the records is the admitted fact that the warehouseman, as correctly pointed out by complainant,
failed to immediately call the attention of the latter upon the receipt of his borrowed item if there was indeed a
discrepancy between the level he borrowed, and [the one] he returned. It took the warehouseman a few days to
declare the item returned by complainant as different from [the one] he borrowed. Thus, we quote with approval
complainant’s argumenton this score:
"21. If the Warehouseman was only doing his duty well by recording the true identity of the item borrowed by the
complainant, it could have been easily determined whether or not the aluminum level 24" borrowed by the
complainant on June 28, 2004 was the same aluminum level that was previously missing from the fabrication
department. Unfortunately, someone is passing the blame to the complainant for [him] to avoid complication arising
from [his] own serious negligence." (Memorandum of Appeal)
Further, We also find equally unacceptable the Labor Arbiter’s explanation in giving the statements of the
warehouseman credence and weight on the presumption that he was not impelled with malice or ill-motive in
declaring so. This finding further defies logic. It should be noted that the lost aluminum level 24" was found in the
possession of the warehouseman three days after complainant returned his borrowed item. To be sure, the
warehouseman, as a matter of self-preservation, would do anything to pass the blame to somebody else as pointed
out by the complainant. Otherwise, he would be held answerable by the company for having been caught in
possession of the lost item. To our mind, this fact invariably renders his statement highly suspicious.
Thus, the foregoing doubts in the evidence submitted by respondent should be resolved against [it]. After all, it is a
cardinal rule in labor cases, that in case of doubts in the evidence presented by the parties, the doubts should be
resolved in favor of labor.
WHEREFORE, judgment is hereby rendered, REVERSING and SETTING ASIDE the assailed Decision, and a new
one issued finding the penalty of suspension imposed upon the complainant without factual basis. Hence,
respondent Cathay is hereby ordered to pay complainant his salary commensurate to his one month suspension.
SO ORDERED.33
Respondent moved for reconsideration,34 but in a July 28, 2009 Resolution,35 the NLRC denied the motion.
In a Petition for Certiorari36 filed with the CA and docketed as CA-G.R. SP No. 111296, respondent sought a reversal
of the NLRC Decision, arguing that the latter committed grave abuse of discretion and gross error in exonerating
petitioner from the charge of theft and in nullifying his suspension. It insisted that petitioner "took the aluminum level
issued to the fabrication unit to make it appear that he has already returned the same aluminum level 11 issued to
him in order to escape liability for the level issued to him."
On March 16, 2011, the CA issued the assailed Decision containing the following decretal portion:
WHEREFORE, the petition is GRANTED. The February 27, 2009 decision of the public respondent NLRC in NLRC
CA CASE No. 050647-06 is NULLIFIED and SET ASIDE. The July 31, 2006 decision of the Labor Arbiter in NLRC
NCR CASE No. 03-02096-05 is REINSTATED. SO ORDERED.37
The CA held that there was reasonable ground to believe that petitioner was responsible for the theft of the
aluminum level assigned to the respondent’s Fabrication Unit. It sustained the Labor Arbiter’s findings that based on
the statements of Mangahas, Tercero and Nagales – workers at the Fabrication Unit – and the written explanations
of Narvasa and Baetiong, it was established that what petitioner returned to the warehouse on July 11, 2004 was
the Fabrication Unit’s aluminum level and not the one issued to him; that the aluminum level he returned contained
the engraving "Fabrication" and a dent which was familiar to the Fabrication Unit’s workers; and that the inventory
records would show that at the time, petitioner was the only one who returned an aluminum level to the warehouse.
The CA added that petitioner’s defense of alibi and denial could not be given weight, in the face of positive
identification by the other witnesses that what he returned on July 11, 2004 was the Fabrication Unit’s aluminum
level, since it was engraved with "Fabrication" and had the familiar dent.
The appellate court further declared:
Evident from the record is the NLRC’s strained attempt at ratiocination when it concluded that the warehouseman,
as a matter of self-preservation, would do anything to pass the blame to somebody else or risk being held
answerable by the company for having been caught in possession of the lost item. Being the custodian of all the
tools and equipment of Cathay, it is the warehouseman’s duty to issue and receive the tools/equipments requested
and returned by the workers. If a worker returns a tool, it would logically be in [the] possession of the warehouse
section. The NLRC thus erred in holding the warehouse section liable just because it was in possession of the
aluminum level when it was clearly its responsibility to have custody and possession thereof.
The NLRC likewise manifestly erred in ruling that "it is highly inconceivable if not completely absurd for Malabonga,
if he was indeed guilty of the crime of theft, to return the very object of the crime." In so ruling, it disregarded
Cathay’s finding that the "Fabrication" mark on the aluminum level was small and the dent thereon was hardly
noticeable such that a person who was unfamiliar with them would not know that the level was the one issued to the
Fabrication Unit. x x x38
Petitioner filed a motion for reconsideration, but the CA denied the same in its September 5, 2011 Resolution.
Issue
Petitioner submits that –
THE COURT OF APPEALS ERRED IN VACATING THE DECISION AND RESOLUTION OF THE NATIONAL
LABOR RELATIONS COMMISSION FINDING RESPONDENT CORPORATION GUILTY OF ILLEGAL
SUSPENSION.39
Praying that the assailed CA dispositions be set aside and that the NLRC’s February 27, 2009 Decision in NLRC CA
Case No. 050647-06 be reinstated instead, petitioner essentially maintains in the Petition and Reply40 that the
evidence does not support respondent’s claim that he is guilty of theft and that what he returned was the Fabrication
Unit’s aluminum level; that the witnesses’ statements are biased, self-serving and intended to exonerate the
declarants from liability for their negligence and failure to secure the Fabrication Unit’s aluminum level both in the
warehouse and in the Fabrication Unit, thus making him a mere scapegoat; and that the witnesses’ statements are
doubtful, as they are uniform and were executed on the same date and notarized by the same notary public.
In its Comment,41 respondent maintains that petitioner raises issues of fact which are beyond the purview of a
petition for review on certiorari; that what petitioner seeks is a review of the whole evidence and the credibility of the
witnesses against him, which are clearly issues of fact and not law; that there is no reason to disturb the CA
Decision since there is nothing wrong therewith, and a finding of grave abuse of discretion against the NLRC was
justified; and that substantial evidence exists to warrant a finding that petitioner is guilty of theft.
Our Ruling

In labor cases, issues of fact are for the labor tribunals to resolve, as this Court is not a trier of facts. However, in
exceptional cases, this Court may be urged to resolve factual issues: "[1] where there is insufficient or insubstantial
evidence to support the findings of the tribunal or the court below; or[2] when too much is concluded, inferred or
deduced from the bare or incomplete facts submitted by the parties[;] or, [3] where the [Labor Arbiter] and the NLRC
came up with conflicting positions.42 "When there is a divergence between the findings of facts of the labor tribunals
and the CA, there is a need to refer to the record."43
The instant Petition presents not only a situation where the Labor Arbiter, the NLRC and the CA differ in their
assessment of petitioner’s case, but also one where the evidence miserably fails to support a finding that petitioner
committed theft. The Labor Arbiter and the CA – and the NLRC as well – ignored one material piece of evidence
which should have exonerated petitioner from the theft charge.
Respondent claims that what petitioner returned to its warehouse on July 11, 2004 was the Fabrication Unit’s
aluminum level. This is based on the identical claim of Fabrication Unit workers – Mangahas, Tercero, and Nagales
– that they discovered their lost aluminum level upon which was engraved the word "Fabrication" and had the
familiar dent which, based on warehouse records, turned out to be that which was returned by petitioner.
However, the warehousemen who are in custody of the respondent’s tools and items tell a different story. Thus, in
his written statement, Narvasa declared among others that –
Nais ko pong ipabatid sa inyongkaalaman ang pangyayari ukol sa nawawalang aluminum level na naka-issue (sa)
Fabrication. Martes po ng umaga July 13, 2004 tinawag ako ni Dennis Zapanta para kausapin si N. Tercero. Nakita
daw ni N. Tercero ang nawawala nilang a. level sa bodega. Nang aking alamin kung alin sa mga level ang kanyang
tinutukoy ay walang duda na sa kanila nga naka-issue. Tinanong ko si Dennis kung saan nanggaling ang level na
iyon dahil yong araw lang na yon ko nakita sa loob ng bodega. Malinis ang level at ibang-iba sa mga pinahihiram ng
bodega. Ang sagot niya si Malabonga daw ang nagsauli sa kanila nang araw ng Linggo July 11, 2004. Tinignan ko
ang record kung sino ang mga posibleng nagsauli nito at napatunayan na si Malabonga lang ang nagsauli
niyon.44(Emphasis and word in parentheses supplied)
In other words, Narvasa positively declared that what petitioner returned, and what he and co-warehouseman
Dennis Zapanta actually received from petitioner, was an untarnished (malinis) and unique aluminum level. In other
words, it did not contain any engraving nor bear any dent, damage or scratch. This directly contradicted the claims
of the Fabrication Unit workers.
An examination of the statement of another warehouseman, Baetiong,45 revealed that he had no personal
knowledge at all that what petitioner returned was the Fabrication Unit’s aluminum level; he claimed to have learned
of this fact only from Tercero, who came to borrow an aluminum level on July 13, 2004. Upon being given one,
Tercero apparently noticed that it was the Fabrication Unit’s aluminum level, and he told the warehousemen of this
fact. Based on Tercero’s unilateral claim, the warehousemen concluded that what petitioner returned was indeed the
Fabrication Unit’s aluminum level.
If it is true that the Fabrication Unit’s aluminum level was supposedly lost sometime in June 2004 which loss was
never reported, and subsequently discovered by Tercero to be in the warehouse all along when he went there to
borrow one on July 13,2004, then it could not be the case that said aluminum level – which contained an engraving
of the word "Fabrication" and had a dent – was the one petitioner returned on July 11, 2004. The declaration of
warehouseman Narvasa was categorical; he and his colleague Dennis Zapanta received from petitioner an
untarnished aluminum level which had no dent or damage whatsoever. This can only mean that petitioner returned
the aluminum level that was originally issued to him as stated in the warehouse records, and not the Fabrication
Unit’s aluminum level, since it did not contain an engraving, and had no dent.
With the foregoing finding, the only logical conclusion that may be arrived at is that petitioner did not commit theft of
the Fabrication Unit’s aluminum level.
Even if it were to be assumed for the sake of argument that what petitioner returned was indeed the Fabrication
Unit’s aluminum level, still there could be no valid basis to charge him with theft. As respondent and its witnesses
themselves admitted, there was no official report of loss of the Fabrication Unit’s aluminum level; the workers at said
unit concealed the loss, and declared it so and admitted it only when Tercero supposedly discovered that what he
had borrowed on July 13, 2004 was the very same aluminum level which was purportedly missing since June 2004.
In other words, the aluminum level was declared lost at the same time it was found, in which case– using common
sense and logic – there could be no loss at all. As far as respondent is concerned, the Fabrication Unit’s aluminum
level was never lost. More to the point, we cannot rely on the statements of the Fabrication Unit workers Mangahas,
Tercero, and Nagales; their failure to report the loss of their unit’s aluminum level makes their statements not only
highly doubtful and self-serving, but unnecessary and uncalled for – an afterthought not worth considering.
There are many ways to secure company property from pilferage and theft. As petitioner himself suggested,
1âw phi 1
security features could be incorporated in each item or property of the employer. An effective and efficient system of
property identification, recording and monitoring may be adopted; more efficient and responsible personnel may be
hired. In respondent’s case, it is quite clear that its warehousemen do not have an efficient system of monitoring and
recording the items or tools being brought in or out of its warehouse. No codes or identifying marks were assigned
to the items and tools to facilitate their easy identification; respondent’s warehousemen cannot identify the tools and
items within the warehouse, and they readily believe the declarations and statements of the workers – thus giving
out the impression that the warehousemen are not even familiar with the tools in their custody. These are just a few
observations, but they nonetheless indicate that respondent adopts a poor system of recording, monitoring and
accountability within its warehouse, and its warehousemen cannot be relied upon.
Faced with the limitations in respondent’s system, this Court cannot sustain its view that petitioner is guilty of theft of
company property. It could simply be that due to the ineffective system within the warehouse and its inefficient
personnel, there was a mix-up of records; worse, it could be that tools and items within the warehouse were
misplaced or lost due to its irresponsible personnel. If any, respondent is alone responsible; it cannot conveniently
put the blame on its employees in order to make up for or cover its losses caused by its own disorganized system
and inept personnel.
From the foregoing, there are serious doubts in the evidence on record as to the factual basis of the charges against
petitioner. These doubts shall be resolved in (his) favor in line with the policy under the Labor Code to afford
protection to labor and construe doubts in favor of labor. The consistent rule is that if doubts exist between the
evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the
latter.46(Word in parentheses supplied)
WHEREFORE, the Petition is GRANTED. The assailed March 16, 2011 Decision and September 5, 2011
Resolution of the Court of Appeals in CAG.R. SP No. 111296 are REVERSED and SET ASIDE, and the February
27, 2009 Decision of the National Labor Relations Commission in NLRC CA Case No. 050647-06 is REINSTATED
and AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 182255 June 15, 2015
PETRON CORPORATION, Petitioner,

vs.
ARMZ CABERTE, ANTONIO CABERTE, JR., MICHAEL SERVICIO,* ARIEL DEVELOS, ADOLFO GESTUPA,
ARCHIE PONTERAS, ARNOLD BLANCO, DANTE MARIANO,* VIRGILIO GALOROSA, and CAMILO
TE,*Respondents.
DECISION
DEL CASTILLO, J.:
G.R SP No. 82356 which reversed the May 14, 2003 Decision3 and November 27, 2003 Resolution4 of the National
Labor Relations Commission (NLRC) in NLRC Case No. V-000329-2002. The NLRC affirmed the March 7, 2002
Decision5 of the Labor Arbiter dismissing the Complaints for illegal dismissal and payment of monetary claims filed
by respondents Armz Caberte (Caberte), Antonio Caberte, Jr. (Caberte Jr.), Michael Servicio (Servicio), Ariel
Develos (Develos), Adolfo Gestupa (Gestupa), Archie Ponteras (Ponteras), Arnold Blanco (Blanco), Dante Mariano
(Mariano), Virgilio Galorosa (Galorosa) and Camilo Te (Te) against petitioner Petron Corporation (Petron), ABC
Contracting Services (ABC), and its owner Antonio B. Caberte, Sr. (Caberte Sr.). Likewise assailed is the CA
Resolution6 dated March 4, 2008 which denied Petron’s Motion for Reconsideration.
Factual Antecedents
Petron is a domestic corporation engaged in the manufacture and distribution to the general public of various
petroleum products. In pursuance of its business, Petron owns and operates several bulk plants in the country for
receiving, storing and distributing its products.
On various dates from 1979 to 1998, respondents were hired to work at Petron’s Bacolod Bulk Plant in San Patricio,
Bacolod City, Negros Occidental as LPG/Gasul fillers, maintenance crew, warehousemen, utility workers and tanker
receiving crew.
For the periods from March 1, 1996 to February 28, 1999 and November 1, 1996 to June 30, 1999, Petron and
ABC, a labor contracting business owned and operated by Caberte Sr., entered into a Contract for Services7 and a
Contract for LPG Assistance Services.8 Under both service contracts, ABC undertook to provide utility and
maintenance services to Petron in its Bacolod Bulk Plant.
On July 2, 1999, respondents Caberte,Caberte Jr., Servicio, Develos, Gestupa, Ponteras, Blanco and Mariano filed
before the Labor Arbiter a Complaint9 for illegal dismissal, underpayment of wages and non-payment of allowances,
13th month pay, overtime pay, holiday pay, service incentive leave pay, moral and exemplary damages and
attorney’s fees against Petron, ABC and Caberte Sr., docketed as NLRC RAB VI Case No. 06-07-10588-99.
Subsequently, respondents Galorosa and Te separately filed similar Complaints10 docketed as NLRC RAB VI Case
No. 06-07-10675-99 and RAB Case No. 06-09-10785-99, respectively. The three Complaints were consolidated in
an Order11 dated October 25, 1999 of the Labor Arbiter.
Respondents averred that even before Petron engaged ABC as contractor in 1996, most of them had already been
working for Petron for years. However, every time Petron engages a new contractor, it would designate such new
contractor as their employer. Despite such arrangement, Petron exercised control and supervision over their work,
the performance of which is necessary and desirable in its usual trade and business. Respondents added that ABC
is a mere labor-only contractor which had no substantial capital and investment, and had no control over the manner
and method on how they accomplished their work. Thus, Petron is their true employer. On July 1, 1999, however,
Petron no longer allowed them to enter and work in the premises of its Bacolod Bulk Plant. Hence, the complaints
for illegal dismissal.
On the other hand, Petron asserted that ABC is an independent contractor which supplied the needed manpower for
the maintenance of its bulk handling premises and offices, as well as for tanker assistance in the receiving and re-
filling of its LPG products; that among the workers supplied by ABC were respondents, except Caberte Jr., who
does not appear to be one of those assigned by ABC to work for it; that it has no direct control and supervision over
respondents who were tasked to perform work required by the service contracts it entered into with ABC; and, that it
cannot allow the continuous employment of respondents beyond the expiration of the contracts with ABC. To prove
the legitimacy and capacity of ABC as an independent contractor, Petron submitted the following documents: (1)
Contractor’s Pre-Qualification Statement;12 (2) Petron’s Conflict of Interest Policy signed by Caberte Sr., as
proprietor of ABC;13 (3) ABC’s Certificate of Registration issued by the Bureau of Internal Revenue (BIR);14 (4) Value-
Added Tax Return for the year 1995;15 (5) BIR Confirmation Receipt;16 (6) Caberte Sr.’s Tax Identification Number
(TIN) issued by the BIR;17 (7) Caberte Sr.’s Individual Income Tax Return for the years 199318 and 1994;19(8) ABC’s
Audited Financial Statements for the years 1992,20 199321 and 1994;22 (9) ABC’s Mayor’s Permit for the year
1995;23 and, (10) ABC’s Certificate of Registration of Business Name issued by the Department of Trade and
Industry (DTI).24 In addition, it averred that ABC, as a contractor, had duly posted a performance bond25 and took out
insurance policies26 against liabilities. Petron likewise presented affidavits27 of two Petron employees stating that
respondents do not perform activities related to Petron’s business operation but only tasks which are intermittent
and which can be contracted out. Also submitted were affidavits28 of three former employees of ABC attesting to the
fact that during their stint in Petron, they used materials such as floor polisher, floor wax, broom, dustpan, cleaning
rags and other equipment owned by ABC to accomplish their tasks and that they worked under the supervision of
Caberte Sr., through the latter’s designated overall supervisor, respondent Caberte. Petron further revealed that
ABC/Caberte Sr. has the power to hire and fire respondents and was the one paying their wages.
In a Decision29 dated March 7, 2002,Executive Labor Arbiter Danilo C. Acosta (LA Acosta) held that ABC is an
independent contractor that has substantial capital and that respondents were its employees. He likewise ruled that
ABC’s cessation of operation is a force majeure that justifies respondents’ dismissal. Nonetheless, LA Acosta
awarded respondents separation pay based on the applicable minimum wage rate at the time of expiration of the
contracts of service. He, however, denied the claims for overtime pay and night shift differential pay for lack of merit.
The dispositive portion of the Decision reads:
Conformably with the foregoing, respondent ABC is hereby ORDERED TO PAY EACH COMPLAINANT, namely,
complainants Antonio Caberte, Jr., Armz M. Caberte, Michael Servicio, Ariel Develos, Adolfo Gestupa, Archie
Ponteras, Arnold Blanco, Dante Mirano, Virgilio Galorosa and Camilo Te, separation pay of one month for every
year of service.
All other claims and the claims against respondent PETRON are hereby ORDERED DISMISSED for lack of merit.
SO ORDERED.30
Respondents appealed to the NLRC where they insisted that they are regular employees of Petron since ABC is a
labor-only contractor.
In a Decision31 dated May 14, 2003,the NLRC affirmed the ruling of the Labor Arbiter after it found that ABC is not a
mere labor contractor but a legitimate independent contractor. In so ruling, the NLRC took into account the following:
(1) ABC/Caberte Sr. has the power of control over respondents as Caberte Sr. was the one controlling and
supervising respondents in their work. While Petron intervened at times, the same was limited to safety precautions
due to the hazardous nature of the products the workers were dealing with; (2) ABC possessed sufficient capital and
equipment per the various documents that Petron submitted showing the former’s financial capability to maintain its
status as an accredited contractor of the latter. In fact, Caberte Sr. was even able to establish ABC’s Bacolod City
Office; and, (3) ABC/Caberte Sr. has the power to hire and dismiss respondents. Hence, the dispositive portion of
the Decision, viz: WHEREFORE, premises considered, this appeal is DISMISSED and the decision of the Executive
Labor Arbiter is AFFIRMED.
SO ORDERED.32
Respondents filed a Motion for Reconsideration which was, however, denied in the NLRC Resolution33 dated
November 27, 2003.
Aggrieved, respondents filed a Petition for Certiorari34 before the CA ascribing upon the NLRC grave abuse of
discretion amounting to lack or in excess of jurisdiction in holding that they are not employees of Petron.
The CA, in a Decision35 dated November 14,2007, found merit in respondents’ Petition. It ruled that ABC is
engaged in labor-only contracting because: first, it did not have substantial capital or investment in the form of tools,
equipment, implements, machineries and work premises, actually and directly used in the performance or
completion of the job it contracted out from Petron; second, the work assigned to respondents were directly related
to Petron’s business; and, third, the nature of Petron’s business requires it to exercise control over the performance
of respondents’ work. Consequently, the CA declared respondents as Petron’s regular employees. And since Petron
did not comply with the requirements under the Labor Code when it terminated their employment, respondents were
illegally dismissed and therefore entitled to reinstatement without loss of seniority rights and other privileges, with
the alternative relief of separation pay in lieu of reinstatement, and to full backwages, inclusive of allowances, and to
other benefits or their monetary equivalent computed from the time compensation was withheld up to the time of
actual reinstatement. The CA, however, denied respondents’ claims for moral and exemplary damages in the
absence of bad faith in Petron’s act of dismissing them but awarded respondents 10% attorney’s fees for having to
litigate to protect their interests. The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, the decision of the National Labor Relations Commission dated May 14,
2003, in NLRC Case No. V-000329-2002, affirming the March 7, 2002 Decision of Executive Labor Arbiter Danilo C.
Acosta of the Sub-Regional Arbitration Branch VI, Bacolod City, is hereby REVERSED.
Respondent Petron Corporation is ordered to reinstate Armz Caberte, Antonio Caberte, Jr., Michael Servicio, Ariel
Develos, Adolfo Gestupa, Archie Ponteras, Arnold Blanco, Dante Mirano, Virgilio Galorosa and Camilo Te to their
former positions with the same rights and benefits and the same salary rates as its regular employees.
Respondent Petron Corporation is likewise ordered to pay petitioner’s attorney’s fees equivalent to ten percent
(10%) of the monetary award.
All other claims are dismissed for lack of merit.
Costs against private respondent Petron.
SO ORDERED.36
Petron’s Motion for Reconsideration37 was denied by the CA in its Resolution38 dated March 4, 2008. Hence, this
present recourse.
Issues
Petron presents the following grounds for review:
X X X THE COURT OF APPEALS SERIOUSLY ERRED AND DECIDED A QUESTION OF SUBSTANCE IN A

MANNER NOT IN ACCORD WITH LAW AND WITH APPLICABLE JURISPRUDENCE IN FINDING THAT ABC
CONTRACTING SERVICESIS A MERE LABOR-ONLY CONTRACTOR AND IN HOLDING THAT RESPONDENTS
ARE THUS REGULAR EMPLOYEES OF THE COMPANY CONSIDERING THAT:
A. THERE IS A LEGITIMATE SERVICE CONTRACTING AGREEMENT BETWEEN THE COMPANY AND ABC
CONTRACTING SERVICES;
B. THE CONTRACTED SERVICES THAT RESPONDENTS PERFORMED ARE NOT DIRECTLY RELATED AND
NECESSARY OR DESIRABLE TO THE COMPANY’S PRINCIPAL BUSINESS;
C. ABC CONTRACTING SERVICES CARRIES ON AN INDEPENDENT BUSINESS AND POSSESSES

SUBSTANTIAL CAPITAL AND INVESTMENT; AND
D. RESPONDENTS ARE EMPLOYEES OF ABC CONTRACTING SERVICES.39
Petron asserts that ABC, as an independent contractor, rendered janitorial, utility and LPG assistance services by
virtue of legitimate contracts entered into by and between them. As such, the services rendered by respondents
were purely maintenance and utility works which are not directly related, necessary and desirable to Petron’s main
business.
Petron likewise insists that ABC is not a labor-only contractor as it carries on an independent business and uses its
own equipment, tools, materials and supplies in the performance of its contracted services. Further, it asserts that
ABC wielded and exercised the power of selection or engagement, payment of wages, discipline or dismissal, and
of control over respondents.
Our Ruling

Labor-only contracting and permissible
job contracting, defined; a contractor is
presumed by law to be a labor-only
contractor; anyone claiming the
supposed status of an independent
contractor bears the burden of proving
the same.
As defined under Article 106 of the Labor Code, labor-only contracting, a prohibited act, is an arrangement where
the contractor, who does not have substantial capital or investment in the form of tools, equipment, machineries,
work premises, among others, supplies workers to an employer and the workers recruited are performing activities
which are directly related to the principal business of such employer.
Permissible or legitimate job contracting or subcontracting, on the other hand, "refers to an arrangement whereby a
principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a
specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or
service is to be performed or completed within or outside the premises of the principal. A person is considered
engaged in legitimate job contracting or subcontracting if the following conditions concur: (a) the contractor carries
on a distinct and independent business and partakes the contract work on his account under his own responsibility
according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of his work except as to the results thereof; (b) the contractor has
substantial capital or investment; and (c) the agreement between the principal and the contractor or subcontractor
assures the contractual employees’ entitlement to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure, and social welfare benefits."40
To determine whether a contractor is engaged in labor-only contracting or permissible job contracting, "the totality of
the facts and the surrounding circumstances of the case are to be considered."41
Petron contends that the CA erred in ruling that ABC is a labor-only contractor since respondents failed to prove that
ABC is not an independent contractor. The contention, however, is incorrect. The law presumes a contractor to be a
labor-only contractor and the employees are not expected to prove the negative fact that the contractor is a labor-
only contractor.42 Thus, it is not respondents but Petron which bears the burden of establishing that ABC is not a
labor-only contractor but a legitimate independent contractor. As held in Alilin v. Petron Corporation,43 "where the
principal is the one claiming that the contractor is a legitimate contractor, the burden of proving the supposed status
of the contractor rests on the principal."
Petron failed to overcome the

presumption that ABC is a labor-only
contractor.
Foremost, Petron banks on the contracts of services it entered into with ABC. It contends that the said contracts
were legitimate business transactions and were not only for the purpose of ABC providing manpower or labor-only
to Petron, but rather for specific services pertaining to janitorial, utility and LPG assistance.
Suffice it to state, however, that Petron cannot place reliance on the contracts it entered into with ABC since these
are not determinative of the true nature of the parties’ relationship. As held in Babas v. Lorenzo Shipping
Corporation,44 the character of the business, whether as labor-only contractor or as a job contractor, should be
determined by the criteria set by statute and the parties cannot dictate by the mere expedience of a unilateral
declaration in a contract the character of their business.
Next, Petron endeavours to prove that ABC is a legitimate independent contractor.
To restate, a contractor is deemed to be a labor-only contractor if the following elements are present: (i) the
contractor does not have substantial capital or investment to actually perform the job, work or service under its own
account and responsibility; and (ii) the employees recruited, supplied or placed by such contractor are performing
activities which are directly related to the main business of the principal.45 Conversely, in proving that ABC is not a
labor-only contractor, it is incumbent upon Petron to show that ABC has substantial capital or investment and that
respondents were performing activities which were not directly related to Petron’s principal business.
To show that ABC has substantial capital or investment, Petron submitted, among others, ABC’s BIR Certificate of
Registration, VAT Return, BIR Confirmation Receipt, TIN, Individual Income Tax Return, Mayor’s Permit and DTI
Certificate of Registration. However, the Court observes that these documents are not conclusive evidence of ABC’s
financial capability. At most, they merely show that ABC is engaged in business and licensed by the appropriate
government agencies.
As for the financial statements presented, it appears that only the audited financial statements of ABC for the years
1992, 1993 and 1994 were submitted. As aptly observed by the CA, these documents cannot be given much
credence considering that the service contracts between Petron and ABC commenced in 1996 and ended in 1999.
However, no audited financial statements for the years material to this case (1996, 1997, 1998 and 1999) were
submitted. Also, as per record, ABC was obligated to submit to Petron at least once every two years its latest
audited financial statements, among others, as a requirement for the retention of its status as an accredited
contractor of Petron.46 If it is true that ABC continued to possess its financial qualification after 1994, Petron should
have presented ABC’s financial statements for the said years which are presumed to be in Petron’s possession
considering that they are part of the requirements that it itself set for its accredited contractors.
Neither does the performance bond taken out by ABC serve as significant evidence of its substantial capital. As
aptly explained by the CA:
The performance bond posted by ABC Contracting Services likewise fails to convince us that the former has
substantial capital or investment inasmuch as it was not shown that the performance bond in the amount of
₱596,799.51 was enough to cover not only payrolls, rentals and equipment but also possible damages to the
equipment and to third parties and other contingent liabilities. Moreover, this Court takes judicial notice that bonds of
this nature are issued upon payment of a small percentage as premium without necessarily requiring any guarantee.
If at all, the bond was a convenient smoke screen to disguise the real nature of ABC’s employment as an agent of
Petron.47
Anent substantial investment in the form of equipment, tools, implements, machineries and work premises, Petron
likewise failed to show that ABC possessed the same. Instead, what is evident in the records was that ABC had
1âw phi1
been renting a forklift from Petron in order to carry out the job of respondents.48 This only shows that ABC does not
own basic equipment needed in the performance of respondents’ job. Similarly and again as correctly held by the
CA, the fact that ABC leased a property for the establishment of its Bacolod office is immaterial since it was not
shown that it was used in the performance or completion of the job contracted out. "Substantial capital or
investment," under Section 5, Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code
(Implementing Rules), as amended by Department Order No. 18-02,49 does not include those which are not actually
and directly used in the performance of the job contracted out.
Going now to the activities performed by respondents, Petron avers that the same were not necessary or desirable
to its principal business. In fact, the service contracts it entered into with ABC clearly referred to respondents’
functions as maintenance and utility works only which are remote to its principal business of manufacturing and
distributing petroleum products.
The Court finds otherwise. Gestupa, Ponteras, Develos, Blanco and Mariano were LPG fillers and maintenance
crew; Caberte was an LPG operator supervisor; Te was a warehouseman and utility worker; and Servicio and
Galorosa were tanker receiving crew and utility workers. Undoubtedly, the work they rendered were directly related
to Petron’s main business, vital as they are in the manufacture and distribution of petroleum products. Besides,
some of the respondents were already working for Petron even before it engaged ABC as a contractor in 1996.
Albeit it was made to appear that they were under the different contractors that Petron engaged over the years,
respondents have been regularly performing the same tasks within the premises of Petron. This "the repeated and
continuing need for the performance of the job is sufficient evidence of the necessity, if not indispensability of the
activity to the business."50 What further militates against Petron’s claim that ABC, as an alleged independent
contractor, is the true employer of respondents, is the fact that Petron has the power of control over respondents in
the performance of their work. It bears stressing that the power of control merely calls for the existence of the right
to control and not necessarily the exercise thereof.51 Here, Petron admitted in its Position Paper that the supervision
of a Petron employee is required over LPG and tanker assistance jobs for inventory control and safety checking
purposes. It explained that due to the hazardous nature of its products, constant checking of the procedures in their
handling is essential considering the high possibility of fatal accidents. It also admitted that it was the one supplying
the needed materials and equipment in discharging these functions to better insure the integrity, quality and safety
of its products.
From the foregoing, it is clear that Petron failed to discharge its burden of proving that ABC is not a labor-only
contractor. Consequently, and as warranted by the facts, the Court declares ABC as a mere labor-only contractor.
"A finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there is an employer-employee
relationship between the principal and the employees of the supposed contractor, and the ‘labor-only’ contractor is
considered as a mere agent of the principal, the real employer."52 Accordingly in this case, Petron is declared to be
the true employer of respondents who are considered regular employees in view of the fact that they have been
regularly performing activities which are necessary and desirable to the usual business of Petron for a number of
years.
Respondents, except Antonio Caberte, Jr., were illegally dismissed.
With respect to respondents’ dismissal, Petron claimed that the same sprang from the termination or conclusion of
the service contracts it entered into with ABC. As earlier held, respondents are considered regular employees. In
cases of regular employment, an employer may only terminate the services of an employee for just or authorized
causes under the law.53 As the reason given by Petron for dismissing respondents does not constitute a just or
authorized cause for termination,54 the latter are declared to have been illegally dismissed. Respondents are thus
entitled to all the remedies of an illegally dismissed employee, i.e., backwages and reinstatement, or if no longer
feasible, separation pay. The CA is thus correct in ruling that respondents are entitled to reinstatement without loss
of seniority rights and other privileges. However, if reinstatement is no longer feasible, respondents are entitled to
receive separation pay equivalent to one month salary for every year of service. In addition, respondents are entitled
to full backwages from the time they were not allowed to work on July 1, 1999 up to actual reinstatement or finality
of this Decision as the case may be.
An exception must be taken, however, with respect to Caberte Jr. From the beginning, Petron disputes the fact he
ever worked for Petron. Therefore, before his case against Petron can prosper, Caberte Jr. must first establish that
an employer-employee relationship existed between them since it is basic that the issue of illegal dismissal is
premised on the existence of such relationship between the parties.55 Unfortunately, nowhere in the records does it
show that he indeed worked for Petron. Consequently, his complaint should be dismissed. WHEREFORE, the
petition is DENIED. The November 14, 2007 Decision and the March 4, 2008 Resolution of the Court of Appeals in
CA-G.R. SP No. 82356 are MODIFIED in that: (1) the Complaint of respondent Antonio Caberte, Jr. against
petitioner Petron Corporation is dismissed; and (2) petitioner Petron Corporation is ordered to reinstate all of the
respondents, except for Antonio Caberte, Jr., to their former positions with the same rights and benefits and the
same salary rates as its regular employees, or if reinstatement is no longer feasible, to separation pay equivalent to
one month salary for every year of service and to pay them their full backwages from July 1, 1999 until actual
reinstatement or upon finality of this Decision as the case may be, as well as attorney's fees equivalent to 10% of
the monetary award, with costs against Petron Corporation.
SO ORDERED.
SECOND DIVISION
G.R. No. 198465, April 22, 2015
LITEX GLASS AND ALUMINUM SUPPLY AND/OR RONALD ONG-SITCO, Petitioners, v.DOMINADOR B.
SANCHEZ, Respondent.
DECISION
DEL CASTILLO, J.:
Before us is a Petition for Review on Certiorari1 seeking to set aside the May 11, 2011 Decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 113840, which dismissed the petition for certiorari filed therewith and affirmed the October 30, 20093 and
February 18, 20104 Resolutions of the National Labor Relations Commission (NLRC), which in turn, affirmed in toto the June
18, 2009 Decision5 of the Labor Arbiter declaring respondent Dominador B. Sanchez (Sanchez) to have been illegally
dismissed from employment by petitioners Litex Glass and Aluminum Supply (Litex) and Ronald Ong-Sitco (Ong-Sitco).
Likewise assailed is the August 31, 2011, Resolution6 of the CA denying petitioners' Motion for Reconsideration.7
Antecedent Facts
This case arose from a Complaint8 for illegal dismissal and non-payment of holiday pay, premium for holiday pay, service
incentive leave pay and attorney's fees filed by Sanchez against petitioners on February 18, 2009 before the Labor Arbiter,
docketed as NLRC NCR Case No. 02-02975-09.
Sanchez alleged that since 1994, he was employed as driver and aluminum installer in several companies owned and
managed by Ong-Sitco, the last of which was with Litex. Since February 1996, Ong-Sitco had been remitting his Social
Security System (SSS) monthly contributions.9 Sanchez averred that he has no record of any work related offense for which
he has been reprimanded, suspended or warned and that for the past 15 years, he has been diligently serving his employer.
He was thus surprised when on December 23,2008, Ong-Sitco and his wife scolded and threw insulting words and invectives
upon him and then ordered him to go on indefinite leave. Due to the incident, he decided to just leave the work premises
with the hope that the animosity between him and his employer would eventually subside. On December 28, 2008, he went
back to the office to talk to Ong-Sitco, but the latter just ignored him. He again returned on January 2, 2009 to purportedly
discuss his employment status, but Ong-Sitco was again unwilling to talk to him. The same thing happened after he went
back a week later. These, thus, led Sanchez to file a case for illegal dismissal and non-payment of benefits against
petitioners.
Subsequent to the filing of the said complaint, Sanchez received two memorandum-letters from petitioners. The first one was
dated January 7, 200910 but mailed on February 23, 2009,11 and received by Sanchez on February 26, 2009. It contained a
directive for Sanchez to report for work and to explain his continued absence from December 22, 2008 to January 7, 2009,
after he was allegedly given verbal warning for committing the following infractions: 1) going home early without justification
on December 3, 2008; 2) exhibiting erratic behavior and threatening to file a case against petitioners after being summoned
to explain his unjustified leave from work on December 9, 2008; and, 3) unauthorized use of company vehicle for personal
benefit on December 20, 2008. The second memorandum-letter12 dated January 22, 2009 which was sent on March 10,
2009,13 and received by Sanchez on March 22, 2009, contained a warning that his refusal to follow the earlier directive to
report and explain his continued absence within 24 hours would constitute abandonment of work on his part.
Sanchez's legal counsel, Atty. Osias M. Merioles, Jr., on the other hand, wrote petitioners a letter14 dated March 20, 2009
informing them that his client would not report for work as the first memorandum-letter was a mere afterthought to cover up
their act of illegal termination.
Petitioners, on the other hand, negated all of Sanchez's claims. They denied having employed him in 1994 since, according to
them, Litex was only registered on April 5, 2002.15 Petitioners also denied having dismissed Sanchez. They averred that it
was Sanchez who abandoned his job by not reporting for work.
Petitioners then presented their own version of the facts. They averred that based on company records, the January 7, 2009
memorandum-letter was sent on January 8, 2009 and not on February 23, 2009 to Sanchez's last known address. The same,
however, was returned to sender. On the other hand, the January 22, 2009 memorandum-letter was sent to Sanchez on
January 23, 2009 and not on March 10,2009. These memorandum-letters are not termination letters as claimed by Sanchez,
but notices for him to report for work and to explain several infractions that he committed on December 3, 9 and 20, 2009.
But instead of complying, Sanchez refused to go to work as evidenced by his counsel's letter. To petitioners, this intimated
Sanchez's lack of interest to work. Petitioners further averred that they have no reason to terminate Sanchez especially since
the latter has pending obligations with the company consisting of P39,449.20 worth of materials and money amounting to
P6,500.00.
hi a Decision16 dated June 18,2009, the Labor Arbiter declared Sanchez to have been illegally dismissed by petitioners. This
was after he found Sanchez's version of facts more credible. He observed that the original copies of the registry receipts
which were attached to the envelopes of the January 7 and January 22, 2009 memorandum-letters show that they were
mailed only on February 23, 2009 and March 10, 2009, respectively, or after the filing of the complaint for illegal dismissal
on February 18, 2009. Thus, said memorandum-letters were made and sent by petitioners "to evade the consequences of
illegal termination by showing seeming compliance with the notice requirement and likewise to demonstrate the absence of
dismissal."17 Moreover, the Labor Arbiter pointed out that the alleged infractions imputed against Sanchez are not sufficient
grounds to warrant his dismissal.
For having been illegally dismissed, Sanchez was awarded separation pay computed from the date of hiring in 1994 up to the
finality of the Decision, and foil backwages computed from the date of dismissal also up to the finality of the Decision.18 He
was also granted his claims for holiday pay, service incentive leave pay and attorney's fees. Thus:
WHEREFORE, premises considered, judgment is hereby rendered finding Complainant to have been illegally dismissed and, in
conformity therewith, holding Respondents jointly and severally liable to pay Complainant his separation pay and full
backwages counted from date of dismissal until finality of this Decision, including the awards [for] holiday pay and service
incentive leave pay, as currently contained in Computation and Examination Unit's schedule of computation herein adopted
and marked as Annex "A", plus attorney's fee equivalent to 10% of the judgment award.

SO ORDERED.19
On appeal with the NLRC, petitioners averred that the Labor Arbiter erred in: (1) not ruling that Sanchez abandoned his
work; (2) awarding separation pay even if not sought in the complaint and despite the absence of strained relations; (3)
computing separation pay based on Sanchez's length of service of 15 years despite the fact that he was only hired in 2002;
(4) not ruling on Sanchez' indebtedness to petitioners in the total sum of P45,494.20; and, (5) awarding attorney's fees
despite the absence of bad faith on their part.
In a Resolution20 dated October 30, 2009, the NLRC dismissed the appeal and affirmed the Labor Arbiter's judgment. It: (1)
ruled that Sanchez cannot be said to have abandoned his job as there is no showing of an intention to resign or forego with
his employment; (2) upheld the grant of separation pay and other monetary awards; and, (3) sustained the Labor Arbiter in
not deducting from Sanchez's monetary awards his alleged obligations to petitioners on the ground that the said liabilities
were not fully substantiated and that they arose from a different contractual relation.
Petitioners filed a motion for reconsideration reiterating their previous arguments and adding that the award of backwages
should be computed only until March 20, 2009 when Sanchez manifested his refusal to report for work. This motion was,
however, denied in the NLRC Resolution21 of February 18, 2010.
Petitioners' next recourse was a Petition for Certiorari22 with the CA.
In a Decision23 dated May 11, 2011, the CA dismissed the Petition for Certiorari and affirmed the afore-mentioned NLRC
Resolutions. It agreed with the findings of the labor tribunals that: (1) Sanchez was dismissed without valid grounds; (2) he
is not guilty of abandonment of work as he immediately filed a case after his efforts to return to work proved futile; (3) the
memorandum-letters were mere afterthought as to give semblance of validity to the dismissal, they having been sent after
the complaint was filed; (4) there was already antagonism between the parties that warranted the award of separation pay;
(5) Sanchez was under the employ of Ong-Sitco's several companies for the past 15 years; (6) the alleged accountabilities of
Sanchez were not fully substantiated and cannot be offset against his monetary awards since they sprung from a different
contractual relation; (7) Sanchez is entitled to attorney's fees since he was constrained to litigate and incur expenses to
protect his interests; and, (8) the award of backwages should be computed from the date of dismissal on December 23, 2008
until finality of the judgment and not only until March 20, 2009 because Sanchez's refusal to return to work was justified, it
being predicated on the reasonable belief that compliance with petitioners' memorandum-letters would only serve the latter's
apparent purpose of evading their responsibility in illegally terminating him.
Petitioners filed a Motion for Reconsideration which was likewise denied in the CA Resolution24 of August 31, 2011.
Issues
WHETHER X X X IT IS MISLEADING ON THE PART OF THE PRIVATE RESPONDENT TO PRAY FOR REINSTATEMENT WHEN IN
FACT IT IS HIS POSITION THAT HE WILL NOT REPORT FOR WORK ANYMORE.
WHETHER XXX THE AWARD OF SEPARATION PAY MAY BE SUSTAINED DESPITE THE FACT THAT THE SAME IS NEITHER
PRAYED FOR BY THE PRIVATE RESPONDENT [NOR] SUPPORTED BY ALLEGATIONS OF STRAINED RELATIONSHIP IN THE
PLEADINGS SUBMITTED BY THE PARTIES NOR WAS THERE ANY ALLEGATION THERETO IN THE QUESTIONED DECISION
ITSELF.
WHETHER XXX MERE SELF-SERVING ALLEGATIONS OF THE PRIVATE RESPONDENT [ARE] SUFFICIENT TO PROVE THE
ALLEGED DISMISSAL.
WHETHER XXX PRIVATE RESPONDENT IS ENTITLED TO THE PAYMENT OF HIS MONEY CLAIMS.25
Petitioners maintain that Sanchez is not entitled to the monetary awards as no dismissal, in fact, took place. In particular,
they question the award of separation pay since it was not prayed for in the complaint, never discussed or raised in the
proceedings before the Labor Arbiter, and no strained relations exists between them and Sanchez. Besides, even assuming
that Sanchez is entitled to separation pay, petitioners contend that the computation thereof should only be from 2002 when
Sanchez commenced working for them and not in 1994. Moreover, the award of attorney's fees is improper since there is no
bad faith on their part.
Our Ruling

Sanchez did riot abandon his work
but was illegally dismissed.
Seeking to absolve themselves from the charge of illegal dismissal by denying the fact of dismissal, petitioners contend that
Sanchez abandoned his job. To support this, they highlighted the fact that they sent him "show-cause" letters which were
made in good faith, in order to give him an opportunity to answer the infractions imputed against him and to likewise give
notice for him to return to work. They insist that the two memorandum-letters were mailed on January 8 and 23, 2009,
respectively, or before the filing of the complaint, and that said letters were presumed to have been received by Sanchez in
the regular course of mail absent any proof to the contrary.
Suffice it to say, however, that the issue of whether Sanchez was dismissed from employment is essentially a question of
fact26 which cannot be raised in this petition for review on certiorari. Besides, we see no compelling reason to deviate from
the finding of fact of the CA, which is in absolute agreement with those of the NLRC and the Labor Arbiter, that Sanchez was
dismissed from employment. "[FJactual findings of agencies exercising quasi-judicial functions are accorded not only respect
but even finality"27by this Court when supported by substantial evidence and especially when affirmed by the CA.28 Here, the
Labor Arbiter, the NLRC and the CA were unanimous in finding Sanchez's narration of the circumstances surrounding his
illegal dismissal credible.
Moreover, this Court is not inclined to disturb findings which conform to evidentiary facts. Aside from the fact that Ong-Sitco
did not dispute Sanchez's claim that the two of them had an altercation on December 23, 2008, the former also admitted
that the latter subsequently went back to his office to clear his employment status but was ignored by him. After two similar
attempts from Sanchez, Ong-Sitco still refused to entertain Sanchez's requests and queries regarding his employment status.
It was only in the two memorandum-letters dated January 7 and January 22, 2009, which were likewise unanimously found
by the labor tribunals and the CA to have been sent to Sanchez after the filing of the complaint, that petitioners warned
Sanchez of his continued absence and directed him to report for work to explain said absences and answer the infractions he
allegedly committed.
From the above factual scenario, the Court is not convinced that Sanchez abandoned his work. To constitute abandonment, it
is essential that an employee failed to report for work without any valid and justifiable reason and that he had a clear
intention to sever the employment relationship by some overt act.29 Mere failure to report for work after notice to return
does not constitute abandonment.30 As mentioned, Sanchez reported back to Ong-Sitco several times to ask about his
employment status but was not entertained. Oddly, while Ong-Sitco did not deny this, he never bothered to explain why
during these instances, he did not warn Sanchez about his continued absence or ask him to return to work, if only to bolster
the claim that he was not dismissed. Instead, Ong-Sitco just ignored him and this, under the circumstances, only shows his
intention not to retain him. This is further bolstered by the fact, as shown by the records, that the two memorandum-letters
were sent to Sanchez after he filed a complaint against petitioners. Clearly, Sanchez cannot be said to have unjustifiably
refused to return to work. He cannot be faulted from reasonably concluding that the memorandum-letters were merely made
in order to give semblance of validity to his termination. In addition and as aptly observed by the CA, Sanchez's immediate
filing of the complaint is proof of his desire to return to work. It has been held that the filing of a complaint negates any
intention of abandoning foregoing employment.31
Anent Sanchez' dismissal, the Court finds that there is no valid ground for the same. No substantial evidence but only mere
allegations were proffered in support of the claim that Sanchez committed infractions, to wit: 1) going home early without
presenting any justification on December 3, 2008; 2) exhibiting erratic behavior and threatening to file a case against
petitioners after being summoned to explain his unjustifiable leave from work on December 9, 2008; and 3) unauthorized
use of company vehicle for personal benefit on December 20, 2008.
In view of the above discussion, the Court affirms the CA's finding that Sanchez was illegally dismissed. As such, he is
entitled to reinstatement without loss of seniority rights, full backwages inclusive of allowances, and other benefits or their
monetary equivalent, computed from the time compensation was withheld up to the time of actual reinstatement pursuant to
Article 27932 of the Labor Code, as amended by Republic Act No. 6715.
The award of separation pay is proper.

However, the computation of the same
should be reckoned from April 2002.
As stated, "an illegally dismissed employee is entitled to reinstatement as a matter of right."33 But when an atmosphere of
antipathy and antagonism has already strained the relations between the employer and employee, separation pay is to be
awarded as reinstatement can no longer be equitably effected.34
We agree with the CA when it held that the Labor Arbiter's award of separation pay is an equitable disposition. Although
petitioners correctly pointed out that separation pay was not prayed for in the complaint, Sanchez is deemed to have
accepted the separation pay awarded by the Labor Arbiter since he never questioned the same. The Court has ruled that
separation pay may be awarded if the employee decides not to be reinstated.35 Besides, the altercation that transpired
between Sanchez and Ong-Sitco is enough basis to conclude that there exists an apparent strained relationship between
them. This strained relationship is also very evident from petitioners' refusal to retain Sanchez under their employ.36 While
petitioners contend that their act of sending Sanchez memorandum-letters directing him to report for work exhibits their
willingness to retain him, the same hardly convinces. We have already concluded earlier that the said memorandum-letters
were mere afterthought made only to cover-up petitioners' act of illegally dismissing Sanchez. For obvious reasons, they
cannot be viewed as a sign of petitioners' sincere willingness to reinstate Sanchez. Further, even if the issue of strained
relations was not raised in the proceedings before the Labor Arbiter, it was nonetheless discussed and argued by the parties
in their respective pleadings submitted to the NLRC when the case was brought on appeal. Clearly, there is sufficient basis
for the grant of separation pay in lieu of reinstatement in this case.
We, however, hold that the labor tribunals and the CA erred in reckoning the employment of Sanchez from 1994 for the
purpose of computing his separation pay. In affirming the decision of the NLRC and the Labor Arbiter, the CA relied on the
SSS Certification37 and gave weight to Sanchez's claim that Ong-Sitco has been remitting his SSS contributions since 1996.
In L.C. Ordoñez Construction v. Nicdao,38 the Court reiterated the basic rule on evidence that the burden of proof lies on the
party who makes the allegation and must prove his claim by competent evidence. There, respondent Nicdao was claiming
entitlement to separation pay and other employee benefits computed from 1985, the date of her alleged employment. The
Court, however, denied her claim as she made inconsistent statements in her pleadings concerning her date of employment.
In this case, it is incumbent upon Sanchez to prove that he was in the employ of petitioners since 1994. Unfortunately, he
failed to discharge this onus. The SSS Certification submitted merely states that his coverage under the SSS started in 1996
and that his latest employer as of the date of the issuance of the certification is Ong-Sitco. As correctly argued by petitioners,
there is nothing in the said certification which shows that Sanchez was in the employ of petitioners since 1994 or even since
1996. Neither is there any other competent evidence presented to substantiate the claim that he worked in several
companies owned and managed by Ong-Sitco since 1994.
Since the only persuasive evidence on record regarding Sanchez's date of employment with petitioners is the latter's
admission that they employed him in April 2002, the date Litex was registered with the Department of Trade and Industry,
Sanchez is deemed employed by petitioners beginning on such date. Hence, the reckoning point for the computation of the
separation pay in lieu of reinstatement awarded to Sanchez shall be the year 2002 and not 1994.
Attorney's fees was correctly awarded.
We affirm the CA's award as well as its basis in granting attorney's fees in favor of Sanchez. "An award of attorney's fees is
proper if one was forced to litigate and incur expenses to protect one's rights and interest by reason of an unjustified act or
omission on the part of the party from whom the award is sought."39 This is clearly obtaining in this case.
WHEREFORE, the Petition is PARTLY GRANTED. The assailed May 11, 2011 Decision and August 31, 2011 Resolution of
the Court of Appeals in CA-G.R. SP No. 113840, are AFFIRMED with the modification that petitioners Litex Glass and
Aluminum Supply and/or Ronald Ong-Sitco are ordered to pay respondent Dominador B. Sanchez's separation pay computed
at one-month pay for every year of service, with years of service reckoned from April 2002 until the finality of this Decision.
SO ORDERED.
SECOND DIVISION
G.R. No. 198012, April 22, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ANGEL MATEO Y JACINTO AND VICENTA

LAPIZ Y MEDINA, Accused-Appellants.
DECISION
DEL CASTILLO, J.:
This is an appeal from the February 17, 2011 Decision1 of the Court of Appeals (CA) in CA-G.R. CR HC No. 02366, which
denied the appeal brought therewith and affirmed the May 31, 2006 Decision2 of the Regional Trial Court (RTC) of Manila,
Branch 40 in Criminal Cases Nos. 99-176598 and 99-176599 to 603. The RTC convicted Angel Mateo y Jacinto (Mateo) and
Vicenta Lapiz y Medina (Lapiz) a.k.a. "Vicky Mateo" (appellants) of the crime of illegal recruitment in large scale under
Republic Act No. 8042 (RA 8042), otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, and of five
counts of estafa.
Factual Antecedents
Sometime during the period from January to March 1998, the five private complainants, namely, Abe] E. Balane (Abel),
Emilio A. Cariaga (Emilio), Victorio D. Flordeliza (Victorio), Manuel Oledan (Manuel) and Virgiiio N. Concepcion (Virgiiio), met
appellants on separate occasions at Plaza Ferguzon, Malate, Manila to apply for overseas employment. Appellant Mateo,
representing himself to have a tie-up with some Japanese firms, promised them employment in Japan as conversion
mechanics, welders, or fitters for a fee. Appellants also promised that they could facilitate private complainants' employment
as direct hires and assured their departure within three weeks. However, after the private complainants paid the required
fees ranging from P18,555.00 to P25,000.00, appellants failed to secure any overseas employment for them. Appellants
likewise failed to return private complainants' money. This prompted Manuel to go to the Philippine Overseas Employment
Administration (POEA) where he was issued a Certification3 stating that appellants are not licensed to recruit applicants for
overseas employment. Thereupon, the private complainants filed their Complaint and executed their respective affidavits
with the National Bureau of Investigation (NBI). The NBI referred the charges to the Department of Justice which
subsequently found probable cause against appellants for large scale illegal recruitment and estafa4 and accordingly filed the
corresponding Informations5 for the same before the RTC of Manila.
For their defense, appellants proffered denials. Mateo claimed that he is a legitimate car importer and not a recruiter. Lapiz,
on the other hand, denied knowing any of the private complainants whom she claimed to have met for the first time at the
Prosecutor's Office.
The RTC disposed of the cases in its Decision6 rendered on May 31, 2006 as follows:
WHEREFORE, in Criminal Case No. 99-176598 for Illegal Recruitment, this Court finds both accused ANGEL MATEO y
JACINTO and VICENTA LAPIZ y MADINA a.k.a. "VICKY MATEO" GUILTY beyond reasonable doubt of illegal recruitment in
large scale and hereby sentences each of them to life imprisonment and to pay P500,000.00 fine each as well as to indemnify
private complainants (1) Manuel Oledan the sum of P25,000.00, and (2) Emilio A. Cariaga, (3) Abel E. Balane, (4) Virgilio N.
Concepcion and (5) Victorio D. Flordelizathe sum of PI 8,555.00 each.
This Court finds both accused also GUILTY beyond reasonable doubt in Criminal Cases Nos. 99-176599, 99-176600, 99-
176601, 99-176602 and 99-176603 for five (5) counts of Estafa and each accused is hereby sentenced in each case to an
indeterminate penalty of from four (4) years and two (2) months of prision correccional, as minimum, to six (6) years, eight
(8) months and twenty one (21) days of prision mayor, as maximum.
The [Philippine] Overseas and Employment Administration (POEA) shall be furnished with certified copy of this Decision.
SO ORDERED.7
In their appeal before the CA, appellants essentially claimed that the prosecution failed to prove the elements of the crimes
for which they were charged. They contended that Abel has not shown any receipt to prove that they received money from
him; that there is likewise no proof that Virgilio borrowed money from a friend of his aunt which money he, in turn, gave to
them; that the testimony of Emilio that appellants were holding office inside the van of Abel cannot be easily accepted; and
that their transactions with Manuel and Victorio were limited to the processing of their travel documents.
The CA, however, denied appellants' appeal in its Decision8 dated February 17, 2011, viz:
WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of merit. Accordingly, the assailed Decision
of the Regional Trial Court of Manila, Branch 40, dated May 31, 2006 is AFFIRMED.
SO ORDERED.9
Hence, the present appeal.
Per Resolution10 dated September 19, 2011, the Court required both parties to file their respective supplemental briefs.
Appellants filed their Supplemental Brief,11 while appellee People of the Philippines, through the Office of the Solicitor
General, opted not to file any and just adopted the appellee's brief it filed before the CA.12
The Court's Ruling
The appeal utterly lacks merit.
The offense of illegal recruitment in large scale has the following elements: (1) the person charged undertook any
recruitment activity as defined under Section 6 of RA 8042; (2) accused did not have the license or the authority to lawfully
engage in the recruitment of workers; and, (3) accused committed the same against three or more persons individually or as
a group.13 These elements are obtaining in this case. First, the RTC found appellants to have undertaken a recruitment
activity when they promised private complainants employment in Japan for a fee. This factual finding was affirmed by the
CA. "The time-tested doctrine is that the matter of assigning values to declarations on the witness stand is best and most
competently performed by the trial judge."14 And when his findings have been affirmed by the Court of Appeals, these are
generally binding and conclusive upon the Supreme Court.15 Second, the Certification issued by the POEA unmistakably
reveals that appellants neither have a license nor authority to recruit workers for overseas employment. Notably, appellants
never assailed this Certification. Third, it was established that there were five complainants. Clearly, the existence of the
offense of illegal recruitment in large scale was duly proved by the prosecution.
Appellants' argument that there was no proof that they received money from the private complainants deserves no credence.
Suffice it to say that money is not material to a prosecution for illegal recruitment considering that the definition of "illegal
recruitment" under the law includes the phrase "whether for profit or not." Besides, even if there is no receipt for the money
given by the private complainants to appellants, the former's respective testimonies and affidavits clearly narrate the latter's
involvement in the prohibited recruitment.16
Anent the charge for estafa, "[w]ell-settled is the rule that a person convicted for illegal recruitment under the [law] may, for
the same acts, be separately convicted for estafa under Article 315, par. 2(a) of the [Revised Penal Code]. The elements of
estafa are: (1) the accused defrauded another by abuse of confidence or by means of deceit; and (2) the offended party or a
third party suffered damage or prejudice capable of pecuniary estimation."17 All these elements are likewise present in this
case. As aptly held by the CA:
Here, the appellants Mateo and Lapiz committed deceit against the private complainants by making it appear as though they
had the authority and resources to send them to Japan for employment; that there were available jobs for them in Japan for
which they would be hired although, in truth, there were none; and, that by reason or on the strength of such assurance, the
private complainants parted with their money in payment of the placement fee, documentation and hotel accommodations.
All these representations were actually false and fraudulent and thus, the appellants must be made liable under par 2(a), Art.
315 of the Revised Penal Code.18
With this ratiocination, Lapiz's defense of not knowing any of the complainants must necessarily fail. As noted by the RTC
and the CA, she was present in all of the transactions, serving as runner of Mateo and was even the one keeping the money
entrusted by the private complainants to appellants. She would also often pacify the private complainants' uneasiness about
the absence of receipts for each of the amounts given and repeatedly assure them they would be deployed to Japan. In
short, she was an indispensable participant and effective collaborator of Mateo in the illegal recruitment of the private
complaintants.
In view of the foregoing, the Court sustains the lower courts' conviction of appellants for the crimes charged.
It must be noted, however, that both the RTC and the CA failed to award interest on the money judgment in Criminal Case
No. 99-176598 for Illegal Recruitment in Large Scale. Following prevailing jurisprudence, the Court, therefore, imposes
interest at the rate of 6% per annum on each of the amounts awarded from the date of finality of this Decision until fully
paid.
WHEREFORE, the appeal is DISMISSED. The Decision dated February 17, 2011 of the Court of Appeals in CA-G.R. CR-H.C.
No. 02366 is AFFIRMED with the MODIFICATION that the amounts ordered restituted in Criminal Case No. 99-176598
shall each earn an interest of 6% per annum from the finality of this Decision until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 196357, April 20, 2015
THE HEIRS OF THE LATE DELFIN DELA CRUZ, REPRESENTED BY HIS SPOUSE, CARMELITA DELA
CRUZ, Petitioners, v. PHILIPPINE TRANSMARINE CARRIERS, INC., REPRESENTED BY MR. CARLOS C. SALINAS
AND/OR TECTO BELGIUM N.V., Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the June 18, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
105930 dismissing the petition for certiorari filed therewith and affirming the January 23, 2007 Decision3 of the National
Labor Relations Commission (NLRC) in OFW (M) 03-12-3155-00 (CA No. 046453-05). Said NLRC Decision reversed and set
aside the Labor Arbiter's May 30, 2005 Decision4which, in turn, granted the late Delfin Dela Cruz's (Delfin) claims for sickness
allowance and disability benefits filed against respondents Philippine Transmarine Carriers, Inc. and/or Tecto Belgium N.V.
(respondents). Also assailed in this petition is the CA's March 29, 2011 Resolution5 denying the Motion for
Reconsideration6 filed by the heirs of Delfin (petitioners).
Factual Antecedents
The facts, as summarized by the CA in its assailed Decision, are as follows:
The late Delfin Dela Cruz was contracted for the position of [Oiler] by x xx Philippine Transmarine Carriers[,] Inc., a local
manning agent for and in behalf of the latter's principal, Tecto Belgium N.V.[,] under the following terms and conditions as
provided for in the Contract of Employment:
Duration of contract - 9 months

Position - OILER
Basic Monthly Salary - $535.00 per month
Hours of Work - 44 hours per week
Overtime - $298/month fixed overtime -
US$3.50/hour after 85 hours
Vacation Leave w/ - 8 days/month with Seniority Bonus
Pay US$7.50/month
Point of Hire - Manila, Philippines
As required by law and by the employment contract, [Delfin] underwent a Pre-Employment Medical Examination (PEME) and
was declared Fit for Sea Service. [His] work includes observing routine watch, taking records of pressure of temperature of
all working apparatus, obeying all orders and commands of the engineers, and maintaining cleanliness of machinery and
engine room.
[Delfin] left the Philippines on 16 August 2000 and immediately embarked the vessel "Lady Hilde" on 17 August 2000. While
on board, he felt gradual chest pains and pain [in] his upper abdominal region. On 26 [June] 2001, while performing his
regular duties, he was hit by a metal board on his back. He, thereafter, requested medical attention and was given
medications and advised to be given light duties for the rest of the week. Upon the vessel's arrival at a convenient port on 16
August 2001, his contract expired and [he] was signed off from the vessel. He xxx reported to xxx [respondents] as
required. He also sought medical assistance but was not [extended] such.
On 13 November 2003, [Delfin] went to De Los Santos Medical Center for proper medical attention[.] [There,] he underwent
X-Ray and MRI of the [Thoracic] Spine. Afterwards, he was not employed by xxx [respondents] because he was already
incapacitated to engage in his customary work. He filed his claim for sickness allowance from the same manning agency but
the same was not [granted].
His [condition] deteriorated[.] [Thereafter, he was] admitted at St. Luke's Medical Center, where he was diagnosed to be
suffering from [malignant] peripheral nerve sheath tumor [MPNST]. He shouldered his medical expenses x x x.
On 4 December 2003, he filed a complaint before the NLRC to, claim payment for sickness allowance and disability
compensation. x x x
[Respondents] filed [a] Motion to Dismiss on the ground of prescription, the claim having [been] filed beyond one year from
the date of the termination of the contract. [Delfin] countered x x x that the applicable prescription period is 3 years,
according to the POEA Standard Employment Contract. The parties, thereafter, submitted their position papers. [Delfin]
claimed [for] medical reimbursement and sickness allowance, permanent disability compensation, and damages and
attorney's fees.
[Delfin], on one hand, asseverated in his complaint that he is entitled to sickness allowance because of the incident when he
was hit by a metal board on his back, which required medical attention. Furthermore, [Delfin] averred that he is entitled [to]
sickness allowance because his inability to work and perform his usual occupation after he acquired the sickness while on
board, lasted for more than 120 days. This is also the basis of his claim for permanent disability compensation. [Delfin] also
claimed that attorney's fees should be paid for the expenses he incurred due to the filing of the suit and that moral damages
may be paid as well for injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation.
[Respondents], on the other hand, averred that the medical condition of [Delfin] was not acquired or suffered during the
term of his employment, that said medical condition is not work-related, and[,] therefore, the said illness is not compensable
under the POEA Standard Employment Contract. Furthermore, [respondents] asseverated that more than two years had
elapsed from the time of the tennination of [Delfin's] employment in August 2001 up to the time the claim was filed in
November 2003, and thus the illness was not acquired during the period of employment. [Respondents] also argued that the
company[-]designated physician neither issued any certification as regards the medical condition of [Delfin] nor conducted a
post[-] employment medical examination, after he was discharged from the vessel in August 2001.
On 6 May 2005, Pelfin] passed away, x x x7
Ruling of the Labor Arbiter (LA)
Ultimately, the LA rendered a Decision8 dated May 30, 2005 in favor of Delfin. The LA opined that Delfin contracted his illness
during the period of his employment with respondents and that such illness is a compensable occupational disease. Hence,
Delfin is entitled to his claims. The dispositive portion of the Decision reads:
WHEREFORE, judgment is hereby rendered ordering respondents, jointly and severally, to pay complainant DELFIN C. DELA
CRUZ, SIXTY THOUSAND US DOLLARS (US$60,000.00) representing total permanent disability compensation, sickness
allowance of US$2,140.00 or its equivalent in local currency at the time of actual payment plus ten percent (10%) of the
total monetary award by way of attorney's fees.
SO ORDERED.9
On appeal, the NLRC, in a Decision10 handed down on January 23, 2007, reversed the Decision of the LA. It found Delfrn's
claims to be barred by prescription for having been filed beyond the reglementary period of one year from the termination of
the employment contract. The NLRC also found no evidence that would establish a causal connection between Delfrn's
ailment and his working conditions.
Petitioners moved for reconsideration but the same was denied in the NLRC's March 30,2007 Resolution.11
Aggrieved yet undeterred, petitioners filed a Petition for Certiorari12 with theCA.
In its June 18, 2010 Decision,13 the CA held that Delfrn's Complaint was filed well within the reglementary period of three
years from the date the cause of action arose, as provided for in Section 30 of the Philippine Overseas Employment
Administration Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going
Vessels (POEA SEC). Nonetheless, the CA sustained the NLRC's pronouncement that petitioners are not entitled to disability
compensation as they failed to establish that Delfrn's illness was work-related. According to the CA, Delfrn's illness, which is
known as Malignant Peripheral Nerve Sheath Tumor (MPNST), is a type of soft tissue sarcoma that develops in cells that form
a protective sheath (covering) around peripheral nerves. Peripheral nerves are those that radiate from the brain and spinal
cord and stimulate the muscles. However, aside from the June 26, 2001 incident where Delfin was hit by a metal board on
his back, there was no other reported incident that would reasonably connect Delfrn's ailment to his working condition.
Petitioners could only offer their allegations that Delfin experienced chest pains without, however, presenting proofs in
support thereof. The CA also found notable that it was only on November 13, 2003 or two years after the termination of his
contract and repatriation when Delfin went to Delos Santos Medical Center for medical check-up and underwent chest x-ray
and MRI of the thoracic spine. The findings of said hospital conformed to the diagnosis of St. Luke's Medical Center that
Delfrn has MPNST.
With regard to petitioners' claim for sickness allowance, the CA denied the same considering that Delfin's contract with
respondents had long expired. It likewise denied petitioners' claim for attorney's fees, moral damages and exemplary
damages as there is no proof that respondents committed bad faith in denying Delfin's claims.
The CA's assailed Decision bears the following dispositive portion:
WHEREFORE, the petition is DISMISSED. The Decision dated 23 January 2007 by the NLRC is AFFIRMED.
SO ORDERED.14
Petitioners filed a Motion for Reconsideration.15 This was denied by the CA in its March 29,2011 Resolution.16
Thus, the present Petition for Review on Certiorari.
Issues
Whether xxx [petitioners are] entitled to permanent disability benefits and sickness allowance;
Whether xxx [petitioners are] entitled to attorney's fees and damages.17
Our Ruling
The petition lacks merit.
A Petition filed under Rule 45

shall raise only questions of
law. But when the findings of
the labor tribunals and the CA
are in conflict with each other,
the Court may make its own
examination of the evidence on
record
The issues petitioners brought before this Court pertain to questions of fact since they basically seek to determine if the
illness responsible for Delfrn's disability was acquired by him during the course of his employment as to entitle petitioners to
permanent disability benefits, sickness allowance, attorney's fees and damages.
As a general rule, this Court does not review questions of facts in a petition filed under Rule 45 of the Rules of Court as only
questions of law can be raised in such petition. However, this rule is not absolute and without exceptions. In case the factual
findings of the tribunals or courts below are in conflict with each oilier, this Court may make its own examination and
evaluation of the evidence on record.19 Here, the LA found that petitioners ought to be awarded permanent disability
benefits, sickness allowance, attorney's fees and damages; the NLRC and the CA, on the other hand, ruled otherwise. Hence,
the Court is constrained to examine the evidence on record.
The 1996 POEA SEC concerning

permanent disability claims and
sickness allowance applies to
this case.
The Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels as
contained in Department Order No. 04 and Memorandum Circular No. 09, both Series of 2000,20 initially took effect on June
25, 2000. This, at first blush, must be strictly and faithfully observed in this case. However, the POEA had likewise issued
Memorandum Circular No. 11, series of 2000 (Memorandum Circular 11-00), concerning, among others, compensation and
benefits for injury and illness, viz:
In view of the Temporary Restraining Order [TRO] issued by the Supreme Court in a Resolution dated 11
September 2000 on the implementation of certain amendments of the Revised Terms and Conditions Governing
the Employment of Filipino Seafarers on board Ocean-Going Vessels as contained in DOLE Department Order No.
04 and POEA Memorandum Circular No. 09, both Series of 2000, please be advised of the following:
1. Section 20, Paragraphs (A), (B) and (D) of the former Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on board Ocean-Going Vessels, as provided in DOLE Department Order No. 33, and POEA
Memorandum Circular No. 55, both Series of 1996 shall apply in lieu of Section 20 (A), (B) and (D) of the
Revised Version; (Emphasis supplied)
It must be noted that: 1) the above TRO was lifted only on June 5, 2002; 2) Delfin's contract with respondents was entered
into on August 8, 2000; 3) he embarked on Lady Hilde on August 17, 2000; and 4) was repatriated on August 16, 2001.
Thus, as the TRO was in effect at the time of Delfin's employment with respondents, it follows that it is the 1996 POEA SEC
provisions concerning permanent disability claims and sickness allowance which should apply, and not those of the 2000
POEA SEC.21
Petitioners are not entitled to

permanent disability benefits and
sickness allowance.
Section 20 (B) of the 1996 POEA SEC reads as follows:
SECTION 20. COMPENSATION AND BENEFITS
xxxx
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS:
The liabilities of the employer when the seafarer suffers injury or illness during the term of his contract are as
follows:
1. The employer shall continue to pay the seafarer his wages during the time he is on board the vessel;
2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full
cost of such medical, serious dental, surgical and hospital treatment as well as board and lodging until the seafarer is
declared fit to work or to be repatriated.
However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so
provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the
company-designated physician.
physician, but in no case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated
physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.
4. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall bear the full cost of repatriation in
the event that the seafarer is declared (1) fit for repatriation; or (2) fit to work but the employer is unable to find
employment for the seafarer on board his former vessel or another vessel of the employer despite earnest efforts.
5. In case of permanent total or partial disability of the seafarer during the term of employment caused by either injury or
illness, the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 30 of his
Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of
compensation applicable at the time the illness or disease was contracted. (Emphasis supplied)
The above provision demonstrates that the 1996 POEA SEC covers all injuries or illnesses occurring in the lifetime of the
employment contract.22 The seafarer only has to prove that his injury or illness was acquired during the term of employment
to support his claim for disability benefits and sickness allowance.23 Verily, his injury or illness need not be shown to be
work-related to be compensable under said employment contract.24
However, the Court also reiterates the rule that "whoever claims entitlement to the benefits provided by law should establish
his right to the benefits by substantial evidence"25 or "such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise."26 Absent a showing
thereof, any decision set forth will only be based on unsubstantiated allegations. Accordingly, the Court cannot grant a claim
for disability benefits without adequate substantiation for to do so will offend due process.27 The foregoing jurisprudential
principle effectively shows that the burden of proving entitlement to disability benefits lies on petitioners.28 Thus, they must
establish that Delfin suffered or contracted his injury or illness which resulted in his disability during the term of the
employment contract. An examination of the records, however, shows that petitioners failed to discharge such burden.
The 1996 POEA SEC clearly provides that a seafarer must submit himself to a post-employment medical examination within
three days from his arrival in the Philippines (mandatory reporting requirement) so that his claim for disability and sickness
allowance can prosper.29 The only exception to this rule is when the seafarer is physically incapacitated to do so, but there
must be a written notice to the agency within the same period of three days for the seaman to be considered to have
complied with the requirement.30Otherwise, he forfeits his right to claim his disability benefits and sickness
allowance.31 In Manota v. Avantgarde Shipping Corporation.32 the Court explained the rationale behind the three-day period
requirement, thus:
The 3-day mandatory reporting requirement must be strictly observed since within 3 days from repatriation, it would be fairly
manageable for the physician to identity whether the disease x xx was contracted during the term of his employment or that
his working conditions increased the risk of contracting the ailment.
xxxx
x x x Moreover, the post-employment medical examination within 3 days from x xx arrival is required in order to ascertain
[the seafarer's] physical condition, since to ignore the rule would set a precedent with negative repercussions because it
would open the floodgates to a limitless number of seafarers claiming disability benefits. It would certainly be unfair to the
employer who would have difficulty determining the cause of a claimant's illness considering the passage of time. In such a
case, the employers would have no protection against unrelated disability claims.
Here, petitioners claim that Delfin went to respondents to comply with the mandatory reporting requirement and to seek
medical assistance but his request for medical evaluation was unheeded. Petitioners, however, failed to support
this.33 In Career Philippines Shipmanagement, Inc. v. Serna,34the Court upheld the seafarer's claim that he complied with
the mandatory reporting requirement and sought medical assistance from his agency, thus:
We see no reason to disturb the lower tribunals' finding. While Serna's verified claim with respect to his July 14, 1999
visit to the petitioner's office may be seen by some as a bare allegation, we note that the petitioners'
corresponding denial is itself also a bare allegation that, worse, is unsupported by other evidence on record. In
contrast, the events that transpired after the July 14, 1999 visit, as extensively discussed by the CA above,
effectively served to corroborate Serna's claim on the visit's purpose, i.e., to seek medical assistance. Under
these circumstances, we find no grave abuse of discretion on the part of the NLRC when it affirmed the labor arbiter ruling
and gave credence to Serna on this point. Under the evidentiary rules, a positive assertion is generally entitled to more
weight than a plain denial. (Emphasis supplied)
There, Serna (the seafarer) claimed that he reported to his employer's office on July 14, 1999, or two days after his
repatriation, to submit himself to the mandatory reporting requirement. The Court found his allegation credible in light of the
fact that despite the nonchalant instruction given to him by his agency to wait for a referral to the company-designated
physicians, Serna took it upon himself to seek medical assistance and submit to a check-up with his personal physician to
find out what was wrong with him. Indeed, about two weeks from the time he reported for the mandatory reporting
requirement and was told to wait for a referral, Serna's check-up with his private physician revealed that he was suffering
from toxic goiter. Several days later, he submitted to a medical examination conducted by the company-designated physician
who diagnosed him with atrial fibrillation and declared him unfit to work. Still, Serna did not stop there. He continued with
his medical treatment with his personal physician and even asked for a second opinion from another doctor who concurred
with the toxic goiter diagnosis of his first personal physician. Further, he was examined by a third doctor who found that he
had a history of goiter with throtoxicos since 1999. He was also diagnosed with thyrotoxic heart disease, chronic atrial
fibrillation and hypertensive cardiovascular disease. Ultimately, Serna was given a disability rating of Grade 3 classified as
permanent medical unfitness which entitled him to 100% compensation as provided for under the collective bargaining
agreement. Verily, the above steps taken by Serna helped establish his claim that he complied with the mandatory reporting
requirement and that he sought medical assistance from his employer, and further, that he did so within the period required
by law. His having been vigilant in asserting his rights to medical assistance tended to show the same.
Unfortunately in this case, petitioners failed to show the steps supposedly undertaken by Delfin to comply with the
mandatory reporting requirement. To the Court's mind, this lapse on petitioners' part only demonstrates that Delfin did not
comply with what was incumbent upon him. The reasonable conclusion, therefore, is that at the time of his repatriation,
Delfin was not suffering from any physical disability requiring immediate medical attendance. Otherwise, and even if his
request for medical assistance went unheeded, he would have submitted himself for check-up with his personal physician.
After all, the injury complained of by Delfin was a serious one and it would seem illogical for him to just suffer in silence and
bear the pain for a considerable length of time. Moreover, while the rule on mandatory reporting requirement is not absolute
as a seafarer may show that he was physically incapable to comply with the same by submitting a written notice to the
agency within the same three-day period, nowhere in the records does it show that Delfin submitted any such notice. Clearly,
petitioners failed to show that Delfin complied with the mandatory reporting requirement. Thus, he is deemed to have
forfeited his right to claim disability benefits and sickness allowance.
Even assuming that there was compliance with the mandatory reporting requirement, other factors that strongly militate
against the granting of petitioners' claims exist in this case.
First, while petitioners did present a medical certificate dated June 26, 2001 which was issued while Delfin was still employed
with respondents, nothing therein shows that the incident subject thereof has something to do or is related to MPNST - the
injury or illness which caused Delfin's disability. Specifically, said certificate pertains to a blow on Delfin's back caused by a
metal board and for which he complained of "persistent pain in the chest and upper abdominal region." For this, Delfin was
advised to undertake only "light duties for [the] rest of [the] week" and that "if not settled[,] will need reassessment]." On
the other hand, the injury that showed up in his chest x-ray and MRI for which he claimed compensation pertains to a
different portion of his body, i.e., a fracture in one of his ribs.35 Besides, if indeed there is truth to petitioners' assertion
that Delfin continued to experience pain after he was hit by a metal board on his back, then why did he not request for
reassessment as advised or submit himself to the mandatory reporting requirement after he was repatriated? What is glaring
instead is that against all these, petitioners only offered their bare allegation that Delfin's medical condition did not improve
thereafter.
Second, while Delfin averred that he experienced on-and-off pain even prior to the June 26, 2001 incident, there exists no
record thereof. On the contrary, Delfin himself claimed that despite the pain, he "remained calm and unbothered by the
same."36
Third, it is also interesting to note that although petitioners did submit Delfin's chest x-ray and MRI results37 revealing a
fracture in one of his ribs, it must be emphasized that these findings were issued more than two years after his repatriation.
Worse still, the Clinical Abstract submitted by petitioner was undated38 such that it cannot be determined when the said
document was released. Be that as it may, it can be safely concluded that the said clinical abstract was issued in or after
2004 since it contained a detailed history of Delfin's illness starting from his having been diagnosed with MPNST in 2003, and
an enumeration of his documented episodes of pathologic fractures occurring in May 2002, December 2003 and April 2004.
These only highlight the fact that a considerable period of time had passed from Delfin's repatriation in August 2001 up to
the time that he started to suffer pathologic fractures in May 2002. Thus, it cannot be said that Delfin's rib fracture subject of
the above-mentioned chest x-ray and MRI was caused by the blow on his back of the metal sheet that fell on him as
petitioners would want to impress upon this Court. On the other hand, what is more likely under the circumstances is that
the fracture came about after his repatriation. For one, the report contained in Delfin's clinical abstract is telling, viz:
Patient is a diagnosed case of Malignant Peripheral Nerve Sheath Tumor. (2003 SLMC)[.] He also had several
episodes of pathologic fractures: x x x
Sixteen hours prior to admission, while in bed, trying to change position, patient suddenly heard a cracking
[sound], which was followed by shooting pain on the left thigh, intermittent, localized, aggravated by movement, with
no alleviating factors, x x x (Emphases supplied)39
Notably, MPNST, of which Delfin was diagnosed with more than two years after his repatriation, causes pathologic
fractures.40 And since Delfin is prone to pathologic fractures because of MPNST, it is quite possible that any wrong movement
of his body may cause fracture similar to what happened to him as narrated in the clinical report. As to the cause of MPNST,
again, it bears stating at this point that petitioners failed to show that the same has any connection with the accident figured
in by Delfin while he was on board the vessel.
Fourth, the Court notes that Delfm's Position Paper filed with the Labor Arbiter contained vague and ambiguous allegations of
two purported compensable illnesses, viz:
The record of the case will reveal that complainant is suffering from two (2) compensable sicknesses, one (1) affecting his
abdomen and two (2) affecting his back down to his legs.41
However, in the Rejoinder later filed by him with the same tribunal, he drastically changed such theory by claiming that he
instead suffers from MPNST.42 "It has been held that a party will not be allowed to make a mockery of justice by taking
inconsistent positions which, if allowed, would result in brazen deception."43
Lastly, this Court deems it proper to reiterate its ruling in Quizora v. Denholm Crew Management (Philippines), Inc. 44on the
relevance of the seafarer's passing his PEME vis-a-vis the probability of his having acquired his injury or illness during the
period of employment, thus:
The fact that respondent passed the company's PEME is of no moment. We have ruled that in the past the PEME is not
exploratory in nature. It was not intended to be a totally in-depth and thorough examination of an applicant's medical
condition. The PEME merely determines whether one is "fit to work" at sea or "fit for sea service," it does not state the real
state of health of an applicant. In short, the "fit to work" declaration in the respondent's PEME cannot be a
conclusive proof to show that he was free from any ailment prior to his deployment. Thus we held in NYK-FIL Ship
Management, Inc. v. NLRC:
While a PEME may reveal enough for the petitioner (vessel) to decide whether a seafarer is fit for overseas
employment, it may not be relied upon to inform petitioners of a seafarer's true state of health. The PEME could
not have divulged respondent's illness considering that the examinations were not exploratory. (Emphases
supplied)
Hence, the fact that Delfin passed his PEME is of no moment in this case.
Based on the foregoing, the Court holds that the NLRC and the CA correctly disallowed petitioners' claim for permanent
disability benefits and sickness allowance.
Petitioner is neither entitled to

attorney 's fees and damages.
The claim for attorney's fees cannot, likewise, be allowed. The Court has consistently held that attorney's fees cannot be
recovered as part of damages based on the policy that no premium should be placed on the right to litigate. Suffice it to say
that the authority of the court to award attorney's fees under Article 2208 of the Civil Code requires factual, legal, and
equitable grounds. They cannot be awarded absent a showing of bad faith in a party's tenacity in pursuing his case even if
his belief in his stance is specious. Verily, being compelled to litigate with third persons or to incur expenses to protect one's
rights is not a sufficient reason for granting attorney's fees.45 As can be seen from our discussions above, petitioners were
not able to prove that respondents acted in bad faith in refusing to acknowledge their claims. This Court, thus, deems it
inappropriate to award attorney's fees.
As a final note, it must be mentioned that the Court respects and upholds the principle of liberality in construing the POEA-
SEC in favor of the seafarer. Nonetheless, it cannot grant claims for compensation based on mere conjectures. Indeed, liberal
construction neither warrants the blithe disregard of the evidence on record nor the misapplication of our laws.46
WHEREFORE, the Petition is hereby DENIED. The June 18, 2010 Decision and March 29, 2011 Resolution of the Court of
SO ORDERED.
SECOND DIVISION
G.R. No. 198543, April 15, 2015
REPUBLIC OF THE PHILIPPINES, Petitioner, v. CESAR C. PASICOLAN AND GREGORIO C. PASICOLAN, Respondent.
DECISION
DEL CASTILLO, J.:
Time and again, trial courts are reminded of their duty to carefully scrutinize the records of the case in determining
compliance with the requirements concerning Petitions for Reconstitution of a lost or destroyed Original Certificate of Title
(OCT). Extra precaution must be taken “lest they become unwitting accomplices in the reconstitution of questionable titles
instead of being instruments in promoting the stability of our land registration system.”1
This Petition for Review on Certiorari2 seeks to reverse the September 6, 2011 Decision3 of the Court of Appeals (CA) in CA-
G.R. CV No. 84120. The CA’s assailed Decision affirmed the October 8, 2004 Decision4 of the Regional Trial Court (RTC),
Branch 3, Tuguegarao City, Cagayan which, in turn, granted respondents’ Petition for Reconstitution of OCT No. 8450.
Factual Antecedents
Respondents Cesar C. Pasicolan (Cesar) and Gregorio C. Pasicolan (Gregorio) filed a Petition for Reconstitution5 of OCT No.
8450 in the name of Pedro Callueng (Pedro) before the RTC of Tuguegarao City. Respondents claimed to be the legal and
forced heirs of the late Pedro.
In support of their Petition for Reconstitution, respondents submitted the following evidence:
Exhibit Description
A Decree No. 339880
B Technical Description
C Sepia Film Plan
D Certification issued by the Registry of Deeds
E Certification issued by the Land Registration Authority, Quezon
City
F Report issued by the Land Registration Authority
G Certificate of Publication issued by the National Printing Office
H Official Gazette Vol. 99 No. 39
I Official Gazette Vol. 99 No. 40
J Certification issued by the City Secretary, Tuguegarao City
K Certification issued by the Sangguniang Panlalawigan
L Notice of Appearance of the Solicitor General
M Declaration of Real Property dated August 28, 1935
N Declaration of Real Property dated October 24, 1947
O Official Receipt No. 4854586
P Official Receipt No. 6096680
Q Official Receipt No. 34107
The RTC granted the Petition in a Decision6 dated October 8, 2004, disposing thus:
WHEREFORE, finding this petition to be sufficient in form and substance and pursuant to the report of the LRA[,] this petition
is hereby granted. The Register of Deeds of the Province of Cagayan is hereby directed to reconstitute the original copy of
Original Certificate of Title No. 8450 in the name of Pedro Callueng in exactly the same words and figures as the destroyed
original copy based on the certified copy of the Decree upon payment of the petitioners of the lawful fees and charges,
subject to the encumbrances mentioned in Decree No. 339880 in the absence of evidence showing that the same has already
been cancelled, and provided that no certificate of title covering the same parcel of land exists in the office of the Register of
Deeds of Cagayan.
Furnish copies of this Decision to the petitioners, the Register of Deeds of the Province of Cagayan, the Land Registration
Authority, Quezon City, the Office of the Provincial Prosecutor and the Solicitor General.
The Register of Deeds of the Province of Cagayan is hereby directed to issue a new owner’s duplicate copy of Original
Certificate of Title No. 8450 in the name of Pedro Callueng in lieu of the lost/destroyed one upon payment of the lawful fees
and charges.
SO ORDERED.7
Believing that the RTC erred in granting the Petition for Reconstitution, petitioner Republic of the Philippines (petitioner),
through the Office of the Solicitor General (OSG), appealed to the CA ascribing upon the court a quo the following error:
THE TRIAL COURT ERRED IN NOT FINDING THAT [RESPONDENTS] FAILED TO PRESENT COMPETENT EVIDENCE TO SHOW
THAT THE ALLEGED LOST CERTIFICATE OF TITLE WAS VALID AND SUBSISTING AT THE TIME OF ITS ALLEGED LOSS AND
THAT A MERE COPY OF DECREE NO. 339880 IS NOT A SUFFICIENT BASIS FOR RECONSTITUTING ORIGINAL CERTIFICATE
OF TITLE NO. 8450.8
After both parties filed their respective Briefs, the CA rendered the assailed Decision dismissing the appeal. It gave credence
to the pieces of documentary evidence presented by the respondents and the report of the LRA which provides in part and
quoted by the CA as follows:
2. From Book No. 52 of the ‘Record Book of Cadastral Lots’ on file at the Cadastral Decree Section, this Authority, it appears
that Decree No. 339880 was issued for Lot 1921, Tuguegarao Cadastre on September 12, 1928, in Cadastral Case No. 4,
GLRO Cad. Record No. 415. However, copy of said decree is no longer available in this Authority;9
It thus ratiocinated as follows:
We find no reason not to give the LRA’s determination full faith and credit. The OSG ought to remember that: the LRA exists
for the sole purpose of implementing and protecting the Torrens system of land titling and registration; it is the central
repository of all land records involving registered or titled lands; it keeps the title history or records of transaction
involving titled or registered lands x x x and; it is specifically called upon to extend assistance to courts in ordinary and
cadastral land registration proceedings. x x x
Moreover, We constantly adhere to the established rule that ‘factual findings of administrative officials and agencies that
have acquired expertise in the performance of their official duties and the exercise of their primary jurisdiction are generally
accorded not only respect but, at times, even finality if such findings are supported by substantial evidence. x x x
What made the case stronger for the appellees was the lower court’s granting of the prayer for the reconstitution and
issuance of certificates of title. After a thorough examination of the presented evidence and testimony, pursuant as well on
the report made by the LRA, the lower court concluded that the petition was sufficient in substance.
Findings of fact made by a trial court are accorded the highest degree of respect by an appellate tribunal and, absent a clear
disregard of the evidence before it that can otherwise [a]ffect the results of the case, those findings should not be
ignored. In this case, We give great weight on the lower court’s findings of fact as the latter was in a better position to
examine the real evidence, and observed whether the witness was telling the truth or not. x x x
Upon the foregoing, We are persuaded to believe and so hold that sufficient basis thus exists to allow the reconstitution and
issuance of certificates of title in favor of the appellees. For failure of the OSG to prove otherwise, the Court has no recourse
but to deny its appeal.10
Issue
The OSG interposed the present recourse anchored on the ground that:
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURT’S FINDING THAT RECONSTITUTION IS JUSTIFIED ON THE
BASIS OF A COPY OF AN UNAUTHENTICATED DECREE AND THE EVIDENCE ON RECORD.11
The OSG’s Arguments
The OSG contends that the CA erred in affirming the Decision of the trial court granting respondents’ Petition for
Reconstitution considering that “the decree which [the LRA] certified as a true copy did not previously form part of its
records.” In refuting the lower court’s finding of authenticity of the decree of registration, the OSG argues, thus:
x x x The machine copy of the decree that was attached to the petition for reconstitution itself became the source of a
document that was forwarded to the LRA, which document was, in turn, made the basis of a decree that was released by LRA
as a certified true copy of its records. Indeed, there is no authentic decree to speak of in the instant case. At best, the
certification made by LRA on the decree submitted as Exhibit A merely proves the subsequent appearance thereof in the
records of the LRA. But it can never serve to prove its authenticity for purposes of reconstitution under Section 2 (d) of
Republic Act No. 26.12
The OSG also insists that respondents failed to present competent proof of the loss of OCT No. 8450. It maintains that the
non-execution of an affidavit of loss before the Register of Deeds in accordance with Section 1213 of Republic Act No. 26 (RA
26),14 as well as the absence of any “testimony on record setting forth the circumstances that led to such loss”15 cast doubt
on respondents’ claim that the owner’s duplicate of OCT No. 8450 is indeed lost.
For their part, respondents assert that petitioner never questioned the recommendation of the LRA, “especially that portion
of the report that the Honorable Court may use the authenticated decree as a source of the desired reconstitution.”16 This
thus renders the OSG’s objection to the same as “already late in the day.”17
Our Ruling
The absence of opposition from the

government does not bar it from
assailing the decision granting the
Petition for Reconstitution.
Before we delve into the merits of the Petition, it would be best to address respondents’ argument that “no person came
forward to contest the reconstitution of the subject title even after the requirements of posting and publication have been
complied with,” in light with our ruling in Macawadib v. Philippine National Police Directorate for Personnel and Records
Management,18 thus:
On the question of whether or not respondent is estopped from assailing the decision of the RTC for failure of the OSG, as
government representative, to participate in the proceedings before the trial court or to file an opposition to petitioner’s
petition for correction of entries in his service records, this Court rules that such an apparent oversight has no bearing on the
validity of the appeal which the petitioner filed before the CA. Neither can the State, as represented by the government, be
considered in estoppel due to the petitioner’s seeming acquiescence to the judgment of the RTC when it initially made
corrections to some of petitioner’s records with the PNP. This Court has reiterated time and again that the absence of
opposition from government agencies is of no controlling significance, because the State cannot be estopped by
the omission, mistake or error of its officials or agents. Nor is the Republic barred from assailing the decision
granting the petition for correction of entries if, on the basis of the law and the evidence on record, such
petition has no merit.19
That having been said, we now discuss the merits of this Petition.
The instant Petition falls under the

exceptions to the general rule that
factual findings of the appellate court
are binding on this Court.
“Ordinarily, this Court will not review, much less reverse, the factual findings of the CA, especially where such findings
coincide with those of the trial court. The findings of facts of the CA are, as a general rule, conclusive and
binding upon this Court, since this Court is not a trier of facts and does not routinely undertake the re-examination of the
evidence presented by the contending parties during the trial of the case.”20
“The above rule, however, is subject to a number of exceptions, such as (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of discretion; (3) when the finding is grounded entirely on speculations,
surmises, or conjectures; (4) when the judgment of the CA is based on a misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when the CA, in making its findings, went beyond the issues of the case and the same is contrary to
the admissions of both parties; (7) when the findings of the CA are contrary to those of the trial court; (8) when the findings
of fact are conclusions without citation of specific evidence on which they are based; (9) when the CA 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 CA are premised on the absence of evidence and are contradicted by the evidence on
record.”21
This case falls under the ninth exception; hence, we opt to take cognizance of the question brought to us by the OSG.
Respondents failed to present a

competent source of reconstitution.
Section 2 of RA 26 enumerates the sources from which reconstitution of lost or destroyed original certificates of title may be
based:
SEC. 2. Original certificates of title shall be reconstituted from (such of) the sources hereunder enumerated as may be
available in the following order:
(a) The owner’s duplicate of the certificate of title;
(b) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof;
(d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the original
certificate of title was issued;
(e) A document, on file in the registry of deeds by which the property, the description of which is given in said document, is
mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered;
and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or
destroyed certificate of title.
Respondents predicate their Petition for Reconstitution on a decree of registration under Section 2(d) of RA 26. As both the
original and the owner’s duplicate of OCT No. 8450 are lost or destroyed, it is only proper, no doubt, that we scrutinize the
authenticity of Decree No. 339880.
A review of the records of this case shows that the CA did not directly address the issue of the decree’s authenticity. In fact,
it merely stated that the pieces of evidence presented before the trial court “were further sustained by the unmistakable and
reliable findings of the Land Registration Authority (LRA).”22
However, a cursory reading of the LRA’s report would reveal that the LRA made an admission only as to the existence of
Decree No. 339880. Then, it went on to state that “[h]owever, [a] copy of said decree is no longer available in this
Authority.”23 The Court cannot therefore help but wonder how can a decree that is undisputedly unavailable with the LRA –
the “central repository of all land records involving registered or titled lands [which] keeps the title history or records of
transaction involving titled or registered lands.”24 – be suddenly presented before the trial court and accepted by it as
authentic?
As if this was not disconcerting enough, what is more mind boggling would be the LRA’s recommendation that “if the
Honorable Court, after notice and hearing, finds justification pursuant to Section 15 of Republic Act No. 26 to grant the same,
an authenticated copy of Decree No. 339880 may be used as a source of the desired reconstitution pursuant to Section 2(d)
of said Act”25despite its admission of the decree’s absence in its records.
Now, the underlying question is: Where did respondents really secure Decree No. 339880 which they presented before the
trial court? As testified by Cesar, he was allegedly able to secure Decree No. 339880 from the LRA, to wit:
ATTY. AGUSTIN:
q When you discovered x x x the loss of said title[,] what did you do next?
a I tried to secure a copy of the Decree of this title, sir.
q Were you able to secure one?
a Yes, sir.
q I am showing to you a copy of this Decree No. 339880 of lot 1921[,] will you
please go over it and tell if this is the one?
a That is the same certified xerox copy I have taken from the Land Registration
Authority[,] which was already marked as Exhibit A, Sir.26
Clearly, this contradicts the LRA’s admission that a copy of the decree is no longer available on its file.
Further, on the strength of the claim that the decree came from the LRA, respondents argue that it need not be
authenticated since it is in the nature of a public document.
While respondents may have raised a valid point, this Court, given the fact that the source of the subject decree is
questionable, finds the necessity of applying the requirements for authenticating a private document to dispel or confirm any
doubts on the decree’s genuineness.
Section 20, Rule 132 of the Rules of Court states:
Section 20. Proof of private document. – Before any private document offered as authentic is received in evidence, its due
execution and authenticity must be proved either:
(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.
Any other private document need only be identified as that which it is claimed to be.
Therefore, presentation of either the testimony of “anyone who saw the document executed or written” or of “evidence of the
genuineness of the signature or handwriting of the maker” would have addressed the issue before the Court. However, none
was presented. Instead, what is glaring from the decree itself is that it was not signed by the Chief of the General Land
Registration Office (GLRO) – who, by law,27 is tasked to issue decrees of registration. It only bears the signature of the
Deputy Chief of the GLRO who merely signed to certify that the document is a true copy. Even then, the genuineness of the
said signature was not ascertained. Further, the decree is without the signature of the witness – Honorable Catalino Sevilla,
the Judge of First Instance of Cagayan who supposedly ordered its issuance.28 The lack of evidence of its authenticity, the
above-mentioned flaws in the decree, the admission of the LRA that the said document is not available in their records and,
the conflicting testimony of Cesar as to the source thereof, all cast serious doubts as to the genuineness of Decree No.
339880. In view of the same, respondents would then have to present evidence under Section 2(f) of RA 26, i.e., any other
document which, in the judgment of the court, is sufficient and proper basis for reconstituting the loss or destroyed OCT.
The next question, thus, is: Do the pieces of evidence presented by respondents constitute “[a]ny other document which, in
the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title?”29
We find that they do not.
Respondents’ other documentary evidence

such as the technical description, sepia film
and tax declarations are not sufficient pieces
of evidence to grant a Petition for
Reconstitution under Section 2(f) of RA 26.
This Court finds that the other pieces of documentary evidence submitted by respondents do not warrant the reconstitution
of their alleged lost title. The Court has pronounced in Republic v. Heirs of Julio Ramos,30
Respondents predicate their Petition for Reconstitution on Section 2(f) of RA 26. And to avail of its benefits, respondents
presented survey plan, technical description, Certification issued by the Land Registration Authority, Lot Data Computation,
and tax declarations. Unfortunately, these pieces of documentary evidence are not similar to those mentioned in
subparagraphs (a) to (e) of Section 2 of RA 26, which all pertain to documents issued or are on file with the Registry of
Deeds. Hence, respondents’ documentary evidence cannot be considered to fall under subparagraph (f). Under the principle
of ejusdem generis, where general words follow an enumeration of persons or things by words of a particular and specific
meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or
things of the same kind or class as those specifically mentioned. Thus, in Republic of the Philippines v. Santua, we held that
when Section 2(f) of RA 26 speaks of “any other document,” the same must refer to similar documents previously
enumerated therein, that is, those mentioned in Sections 2(a), (b), (c), (d), and (e).
Also, the survey plan and technical description are not competent and sufficient sources of reconstitution when
the petition is based on Section 2(f) of RA 26. They are mere additional documentary requirements. This is the
clear import of the last sentence of Section 12, RA 26 earlier quoted. Thus, in Lee v. Republic of the
Philippines, where the trial court ordered reconstitution on the basis of the survey plan and technical
description, we declared the order of reconstitution void for want of factual support.31
Furthermore, the Certification32 issued by the LRA stating that Decree No. 339880 was issued for Lot No. 1921 would not
serve to help respondents’ Petition for Reconstitution any better. Again, as we have already discussed in Republic v. Heirs of
Julio Ramos,33 a vague Certification by the LRA without stating the nature of the decree, as well as the claimant in such case
cannot be considered as a sufficient and proper basis for reconstituting a lost or destroyed certificate of title.34 To reiterate
our ruling there, we quote:
Moreover, the Certification issued by the LRA stating that Decree No. 190622 was issued for Lot 54 means nothing. The
Land Registration Act expressly recognizes two classes of decrees in land registration proceedings, namely, (i)
decrees dismissing the application and (ii) decrees of confirmation and registration. In the case at bench, we
cannot ascertain from said Certification whether the decree alluded to by the respondents granted or denied
Julio Ramos’ claim. Moreover, the LRA’s Certification did not state to whom Lot 54 was decreed. Thus, assuming
that Decree No. 190622 is a decree of confirmation, it would be too presumptuous to further assume that the
same was issued in the name and in favor of Julio Ramos. Furthermore, said Certification did not indicate the number
of the original certificate of title and the date said title was issued. In Tahanan Development Corporation v. Court of
Appeals, we held that the absence of any document, private or official, mentioning the number of the certificate of title and
date when the certificate of title was issued, does not warrant the granting of such petition. 35
Neither do the tax declarations submitted support respondents’ cause. As held in Republic of the Philippines v. Santua,36 a
tax declaration can only be prima facie evidence of claim of ownership, which, however, is not the issue in a reconstitution
proceeding. A reconstitution of title does not pass upon the ownership of land covered by the lost or destroyed title but
merely determines whether a re-issuance of such title is proper. Besides, the tax declaration submitted by respondents only
serve to bolster the OSG’s claim that no such decree exists as to serve as basis of the alleged OCT of Pedro. This is
considering that the tax declarations submitted cover only the years 1974 to 2000.37 Notably,
no tax declarations for the years 1928 to 1973 were presented. Needless to state, the submission of tax declarations for the
year 1928 and the years immediately following could have supported respondents’ allegation that Pedro was issued a decree
in 1928 and eventually an OCT. However, no such documents were submitted. On the other hand, the tax declarations
submitted pertaining to years 1974 to 2000 were paid only on March 30, 2000 or just shortly before the filing of the petition
for reconstitution. One can only reasonably conclude that the same was made in anticipation of the filing of the petition.
We also share the OSG’s observation that the non-submission of an affidavit of loss by the person who was allegedly in
actual possession of OCT No. 8450 at the time of its loss casts doubt on respondents’ claim that OCT No. 8450 once existed
and subsequently got lost. Under Section 10938 of Presidential Decree No. 1529,39 the owner must file with the proper
Registry of Deeds a notice of loss executed under oath. In this case, the presentation of such affidavit becomes even more
important considering the doubtful testimony of Cesar that OCT No. 8450 was lost, viz:
q Where is the owner’s copy of this original certificate of title?

a It was lost, sir.
q Will you plese explain how that owner’s copy of OCT No. 8450 was lost?
a The title was in our possession and later on it was lost in our possession.
q What happened when you discovered the loss of said title?
a We exerted efforts to locate but we were not able to locate the same.40
As can be gleaned from the above, Cesar’s testimony was very vague. It utterly lacks details as to how the title got lost and
fails to specify the efforts they supposedly undertook in searching for the title’s whereabouts. Indeed, his testimony is highly
suspect and cannot be given the expected probative weight. An affidavit of loss, in a way, could have helped explain the
loss. But as mentioned, none was submitted.
At this point, it is imperative to remind trial courts that granting Petitions for Reconstitution is not a ministerial task. It
involves diligent and circumspect evaluation of the authenticity and relevance of all the evidence presented, lest the chilling
consequences of mistakenly issuing a reconstituted title when in fact the original is not truly lost or destroyed.
Here, the CA should have been more cautious in deliberating on the appeal taken by the OSG. It should not have hastily
denied the same merely because of the LRA’s report recommending the reconstitution of OCT No. 8450 and the trial court’s
approval of such recommendation. It should have taken note that the same report contains a crucial admission on the part of
the LRA that the decree of registration which was the main evidence used for respondents’ petition was not available in their
records.
In fine, we are not convinced that respondents adduced competent evidence to warrant reconstitution of the allegedly lost
OCT.
WHEREFORE, the instant Petition is GRANTED. The September 6, 2011 Decision of the Court of Appeals in CA-G.R. CV No.
84120 is REVERSED and SET ASIDE and a new one is entered DISMISSINGrespondents’ Petition for Reconstitution.
SO ORDERED.
SECOND DIVISION
G.R. No. 202708, April 13, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. VICTORIANO VILLAR @ BOY, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
In an Information dated September 21, 1987, Wilson Suitos (Wilson Vic Suitos (Vic), Alvaro Suitos (Alvaro) and appellant
Victoriano Villar @ Boy (appellant), were charged with the murder of Jesus Ylarde. The case was docketed as Criminal Case
No. T-846.
Among the accused, Alvaro was the first to be apprehended and tried. In a Decision1 dated August 12, 1988, the Regional
Trial Court (RTC) of Lingayen, Pangasinan, Branch 38, found Alvaro guilty of murder.2Alvaro appealed all the way to this
Court docketed as G.R. No. 95951. On March 24, 1993, this Court rendered its Decision3 affirming his conviction, thus:
From the foregoing, the conviction of appellant must be upheld.
After reviewing the records of the case, We find that a modification in the indemnity awarded is in order. Actual damages
were proved in the amount of P11,575 and not P20,000.00 as found by the trial court. In determining the loss of earning
capacity of 49[-]year old Ylarde, We use the formula for life expectancy adopted in Davila v. CA: 2/3 x (80-49) = life
expectancy of 20 years. This figure is multiplied by the annual net income of the deceased (P16,000) equivalent to P320,000
to fix the amount of loss of earning capacity. Death indemnity in the amount of P50,000.00 is also awarded.
The award of indemnity to the heirs of Jesus Ylarde is modified and accused is hereby ordered to pay: actual damages in the
amount of P11,575; death indemnity in the amount of P50,000.00; loss of earning capacity in the amount of P320,000.00;
and moral damages in the amount of P20,000.00 without subsidiary imprisonment in case of insolvency.
WHEREFORE, the decision appealed from is hereby AFFIRMED subject to the modifications stated above. Costs against the
accused-appellant.
SO ORDERED.4
Apprehended next was Wilson who pleaded not guilty during his arraignment.5 On January 30, 1996, the RTC rendered its
Decision6 likewise finding him guilty of murder.7 Wilson appealed his conviction. On March 31, 2000, this Court, in G.R. No.
125280 rendered its Decision,8 disposing thus:
WHEREFORE, the assailed Decision of the trial court of Lingayen, Pangasinan, finding accused-appellant WILSON SUITOS
GUILTY of MURDER and ordering him to indemnify, jointly and severally with his co-accused Alvaro Suitos, the heirs of the
deceased the sum of P11,575.00 for actual damages, P320,000.00 for loss of earnings of the victim and P50,000.00 for
death indemnity is AFFIRMED with the MODIFICATION that the amount of moral damages is increased to P50,000.00. Costs
against accused-appellant.
SO ORDERED.9
Next to be. apprehended and tried was appellant.
On arraignment, appellant entered a plea of not guilty.10 Trial on the merits thereafter ensued. In a Decision11 dated August
8, 2008, the RTC convicted appellant of murder based on the eyewitness accounts of the victim's daughters. Juvy Ylarde
(Juvy) testified that at around 6 o'clock in the evening of September 5, 1987, she and her father were sitting in front of their
store in Umingan, Pangasinan, when Alvaro, Wilson and appellant suddenly emerged from the ice cream parlor located in
front of their store. Alvaro shot her father first hitting the latter on his forehead and causing him to fall down. Although the
first shot proved fatal, Wilson and appellant still fired shots at the victim. Thereafter, the trio fled from the crime scene
followed by Vic who was driving a tricycle. Vivian Ylarde corroborated her sister's testimony. She claimed that at the time of
the shooting, she was studying inside their store when several shots rang out.
The RTC did not believe appellant's alibi that he was in Cubao, Quezon City at the time of the incident for being
uncorroborated and self-serving, and especially in view of his positive identification by the deceased's daughters. The RTC
also considered appellant's flight. It noted that although he knew of the charge against him as early as 1987, appellant did
not surrender; instead, he went into hiding and was apprehended only after almost 18 years. Finally, the RTC held that the
killing was qualified by treachery.
The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, accused VICTORIANO VILLAR @ Boy is hereby found GUILTY beyond reasonable doubt of
murder qualified by treachery under Art. 248 of the Revised Penal Code. He is hereby sentenced to suffer the penalty
of reclusion perpetua,and is ordered to indemnify, jointly and severally with his co-accused Alvaro Suitos and Wilson Suitos,
the heirs of the deceased Jesus Ylarde the sum of P11,575.00 as actual damages, P320,000.00 for loss of earnings of the
victim, P50,000.00 for death indemnity and P50,000.00 for moral damages. Costs against the accused.
SO ORDERED.12
In his brief filed before the CA, appellant contended that the prosecution failed to prove that he conspired with Alvaro and
Wilson. He argued that based on the testimony of Juvy, appellant pointed his gun at her (Juvy) not at the victim; however,
when he fired, it was the victim who was hit.
The CA however found appellant's contentions without merit. In its January 31, 2012 Decision,13 the CA affirmed the RTC's
judgment in full. It concurred in the findings of the RTC that there was conspiracy among the assailants, i.e., - they
simultaneously emerged from the ice cream store; successively shot the victim; and fled from the crime scene together. The
CA also disregarded appellant's alibi that he was in Quezon City at the time of the shooting for being uncorroborated and
self-serving, and in view of his positive identification by the deceased's daughters. Moreover, his unexplained flight (and
hiding for 18 years) was considered an indication of guilt. The CA also found the qualifying circumstance of treachery to have
attended the killing.
The dispositive portion of the assailed CA Decision reads as follows:
WHEREFORE, in view of the foregoing premises, the instant appeal is hereby DENIED. The assailed Decision dated August 8,
2008 of the Regional Trial Court (RTC), Lingayen, Pangasinan, Branch 38, is hereby AFFIRMED in toto.
SO ORDERED.14
Hence, this appeal. In a Resolution15 dated October 10, 2012, we required the parties to submit their Supplemental Briefs.
However, both parties opted not to file their briefs.
The appeal lacks merit.
The courts below correctly found appellant guilty of murder. It has been sufficiently established that appellant, in conspiracy
with his co-accused, treacherously shot and killed the victim, Jesus Ylarde. The Court, in G.R. No. 95951 and G.R. No.
125280 had already found his co-accused -Alvaro and Wilson - guilty of murder. Appellant was thus properly sentenced to
suffer the penalty of reclusion perpetua.Moreover, appellant is not eligible for parole pursuant to Section 3 of Republic Act
No. 9346, An Act Prohibiting the Imposition of Death Penalty in the Philippines.
Anent the damages awarded, we find the award of moral damages in the amount of P50,000.00 correct. However, the award
of civil indemnity must be increased from P50,000.00 to P75,000.00 in line with prevailing jurisprudence. Moreover, the heirs
of the deceased are entitled to an award of exemplary damages in the amount of P30,000.00. As regards the award of actual
damages in the amount of P11,575.00, the same must be modified. As we held in People vs. Villanueva,16 "when actual
damages proven by receipts during the trial amount to less than P25,000.00, as in this case, the award of temperate
damages of P25,000.00 is justified in lieu of actual damages of a lesser amount." Thus, we delete the award of P11,575.00
as actual damages; in lieu thereof, we grant temperate damages in the amount of P25,000.00. In addition, all damages
awarded shall earn interest at the rate of 6% per annumfrom date of finality of this judgment until fully paid.
However, the RTC and the CA erred in the award of loss of earning capacity. Records show that the widow of the deceased
testified that her husband "has a net income of P16,000.00 a year as farmer, sari-sari store owner, driver and operator of
two tricycles and caretaker of Hacienda Bancod."17 Thus, lost earnings in the amount of P320,000.00 was awarded computed
as follows: "2/3 x (80-49)=life expectancy of 20 years . . . multiplied by the annual net income of the deceased (PI
6,000.00), equivalent to P320,000.00."18 However, it is also on record that the widow of the deceased subsequently testified
that "before his death, her husband earns P50.00 a day as tricycle driver and P150.00 from their sari-sari store and had a
net income of P4,000.00 a month. As a farmer her husband produces 270 cavans of palay a year with a price of P135.00 a
cavan weighing 50 kilos."19
Preliminarily, we note that the indemnity for lost earnings was erroneously computed. It is already settled jurisprudence that
"the formula that has gained acceptance over time has limited recovery to net earning capacity; x x x [meaning], less the
necessary expense for his own living."20 Here, the computation for lost income of P16,000.00 did not take into consideration
the deceased's necessary expenses.
Moreover, it was explained in Da Jose v. Angeles21 that -
Under Article 2206 of the Civil Code, the heirs of the victim are entitled to indemnity for loss of earning capacity.
Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn. The indemnification for loss
of earning capacity partakes of the nature of actual damages which must be duly proven by competent proof and the best
obtainable evidence thereof. Thus, as a rule, documentary evidence should be presented to substantiate the claim for
damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the
absence of documentary evidence when (1) the deceased is self-employed and earning less than the minimum wage under
current labor laws, in which case, judicial notice may be taken of the fact that in the deceased's line of work no documentary
evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under
current labor laws.
Corollarily, we also held in OMC Carriers, Inc. v. Nabua22 that -
For one to be entitled to actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of
certainty, premised upon competent proof and the best evidence obtainable by the injured party. Actual damages are such
compensation or damages for an injury that will put the injured party in the position in which he had been before he was
injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. To justify an
award for actual damages, there must be competent proof of the actual amount of loss. Credence can be given only to claims
which are duly supported by receipts.
Finally, in People v. Gonza,23 we declared that -
Finally, the trial court was correct in not awarding damages for lost earnings. The prosecution merely relied on Zenaida
Mortega's self-serving statement, that her husband was earning P5,000 per month as a farmhand. Compensation for lost
income is in the nature of damages and requires due proof of the amount of the damages suffered. For loss of income due to
death, there must be unbiased proof of the deceased's average income. Also, the award for lost income refers to the net
income of the deceased, that is, his total income less average expenses. In this case, Zenaida merely gave a self-serving
testimony of her husband's income. No proof of the victim's expenses was adduced; thus, there can be no reliable estimate
of his lost income.
In fine, it is settled that the indemnity for loss of earning capacity is in the form of actual damages; as such, it must be
proved by competent proof, "not merely by the self-serving testimony of the widow."24By way of exception, damages for loss
of earning capacity may be awarded in two instances: 1) the victim was self-employed and receiving less than the minimum
wage under the current laws25 and no documentary evidence available in the decedent's line of business; and, 2) the
deceased was employed as a daily wage worker and receiving less than the minimum wage.26 Here, the award for loss of
earning capacity lacks basis. For one, the widow of the deceased gave conflicting testimonies. At first, she testified that her
husband "has a net income of P16,000.00 a year as farmer, sari-sari store owner, driver and operator of two tricycles and
caretaker of Hacienda Bancod."27 Next, she claimed that "before his death, her husband earns P50.00 a day as tricycle driver
and P150.00 from their sari-sari store and had a net income of P4,000.00 a month. As a farmer her husband produces 270
cavans of palay a year with a price of P135.00 a cavan weighing 50 kilos."28 Aside from giving inconsistent statements, the
amounts mentioned were arbitrary and were not proved to be below the prescribed minimum wage. Plainly, this case does
not fall under any of the exceptions exempting the submission of documentary proof. To reiterate, "[ajctual damages, to be
recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. Courts
cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages. To justify an
award of actual damages, there must be competent proof of the actual amount of loss, credence can be given only to claims
which are duly supported by receipts."29 In fine, the award of loss of earning capacity must be deleted for lack of basis.
ACCORDINGLY, we ADOPT the findings of the trial court as affirmed by the Court of Appeals. The assailed January 31,
2012 Decision of the Court of Appeals in CA-G.R. CR H.C. No. 03517 finding appellant Victoriano Villar @
Boy GUILTY beyond reasonable doubt of the crime of murder is AFFIRMEDwith MODIFICATIONS that appellant is not
eligible for parole pursuant to Section 3 of Republic Act No. 9346, An Act Prohibiting the Imposition of Death Penalty in the
Philippines; the award for loss of earning capacity is deleted for lack of basis; the award of civil indemnity is increased to
P75,000.00; appellant is ordered to pay exemplary damages in the amount of P30,000.00; the award of actual damages is
deleted; in lieu thereof, temperate damages in the amount of P25,000.00 is awarded; and all damages awarded shall earn
interest at the rate of 6% per annum from date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
A.C. No. 5116 April 13, 2015
DAVAO IMPORT DISTRIBUTORS, INC., Complainant,

vs.
ATTY. JOHNNY LANDERO, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a Complaint1 for Disbarment filed against Atty. Johnny P. Landero (respondent) on the grounds of
professional misconduct and violation of Canon 12 of the Code of Professional Responsibility (CPR).
Factual Antecedents
Sometime in August 1997, complainant Davao Import Distributors, Inc. (complainant),. through its representative
and branch manager, Jimmy Pandili (Pandili), engaged the services of respondent to file a Complaint2 against
Angelita Librando and Juanito Du (Librando and Du, respectively) for the recovery of one split type air-conditioner
with replevin and damages. This case was docketed as Civil Case No. 3854 (civil case) before Branch 3 of the
Municipal Trial Court in Cities (MTCC) of General Santos City.
Apparently, Librando purchased on installment basis a split-type floor-mounted air-conditioner from complainant in
the amount of ₱86,740.00 which the former installed in her beauty salon located in a commercial building owned by
Du. When Librando failed to pay, Pandili went to her salon only to find out that the same had already closed down.
Left in the premises, however, was the air-conditioning unit Librando purchased from complainant. Claiming that Du
refused to release the unit to complainant as he allegedly intended to retain the same as a lien for Librando's unpaid
rentals, complainant filed the said case.
On the scheduled date of pre-trial on November 10, 1997, respondent failed to appear. And since he also failed to
inform complainant or Pandili of the scheduled pre-trial, they too were unable to attend. As a result, the case was
dismissed for non-suit through an Order3 of even date and Du was allowed to present his evidence ex-parte in
support of his counterclaim. On December 9, 1997, the MTCC issued a Decision4 ordering complainant to pay Du
the amounts of ₱70,000.00 as moral damages, ₱15,000.00 as attorney's fees and ₱5,000.00 as litigation expenses.
Without filing a Motion for Reconsideration, complainant appealed the MTCC Decision to the Regional Trial Court
(RTC). On July 31, 1998, the RTC issued its Decision5 affirming the MTCC Decision.
Complainant then disbursed to respondent the amount of ₱1,900.00 so that he may file a petition for review before
the Court of Appeals (CA). Initially, respondent filed a motion for extension of time to file said petition. However, he
failed to file the same such that on January 22, 1999 the CA issued a Resolution6 dismissing the appeal.
Hence, this Complaint for Disbarment where complainant asserts that respondent's actuations of (1) not appearing
in the pre-trial of the case, (2) not availing of the legal remedies against the dismissal of the Complaint due to non-
suit, and (3) failing to file a petition for review, constitute unprofessional behavior or misconduct and violations of
Canon 12 of the CPR, which merit disciplinary action, if not, disbarment.
Respondent's Defense
In response to the allegations hurled against him, respondent explained that upon receiving Du's Answer with
Counterclaims, he was alarmed to find out that the property in question was already in the custody of the sheriff.
This was allegedly by reason of an attachment in an another civil action filed by a different person against Librando.
Respondent thus conferred with the counsel of Du and requested him to withdraw the counterclaim but was turned
down as Du wanted to pursue his claim for damages. He then informed Pandili of the seizure of the property by the
sheriff and of Du's decision not to withdraw the counterclaim. The two of them allegedly thereafter agreed to just
abandon the case. But when he discussed to Pandili that it is possible that complainant may be assessed for
damages, Pandili allegedly panicked and requested him to delay the execution of the judgment on the counterclaim
for fear that he would be terminated from his job. Acceding, respondent appealed the judgment on Du's
counterclaim but the RTC dismissed the appeal and affirmed the MTCC Decision. When informed about this, Pandili
allegedly took from respondent the case folder despite the latter's warning that they only have 15 days to file a
Petition for Review with the CA. It was only after 30 days that Pandili returned to him and begged that he file an
appeal, again, for fear that he would be terminated by complainant. Out of pity, and despite knowledge of the
expiration of the period for filing an appeal, respondent still filed a Motion for Extension of Time to File Petition for
Review. Du's counsel opposed the motion pointing out that respondent misled the CA as to the date of his receipt of
the assailed RTC Decision so as to make it appear that the said motion was timely filed. The CA thus ordered
respondent to explain. It was at this juncture that respondent opted not to file the intended petition anymore
allegedly because he would not want to waste the time of the court in resolving a petition which is baseless and
admittedly filed out of time. Proceedings before the Integrated Bar of the Philippines
On May 24, 2008, the Investigating Commissioner, Commission on Bar Discipline of the Integrated Bar of the
Philippines (IBP) Commissioner Rebecca Villanueva-Maala (Commissioner Villanueva-Maala) recommended that
respondent be suspended from the practice of law for three months.7 This was after she found respondent negligent
in the performance of his duty as counsel for complainant and as an officer of the Court. As counsel for complainant,
it was respondent's duty to attend the pre-trial, justify the filing of the complaint, and oppose Du's counterclaim.
Respondent, however, was remiss in his duty by deliberately failing to attend the pre-trial, which caused prejudice to
complainant in that it was declared in default and was assessed for damages. Moreover, while respondent claimed
that he did not proceed with the filing of the petition for review with the CA because it was already out of time, the
records, on the contrary, show that he was actually granted by the CA an extension of 15 days to file the intended
petition. Only that he did not file the same on purpose notwithstanding his receipt from complainant of the amount of
₱1,900.00 as payment for docket fees.
In a Resolution8 dated July 17, 2008, the IBP Board of Governors adopted and approved the recommendation of
Commissioner Villanueva-Maala but modified the period of suspension by increasing it from three months to six
months. Respondent then filed a Motion for Reconsideration,9 which the IBP Board of Governors denied in a
Resolution10 dated March 21, 2014.
Hence, the transmission of the whole record of the case to this Court for its final action.
Our Ruling
We agree with complainant that respondent displayed unprofessional behavior and misconduct and violated the
CPR.
Respondent himself admitted that he deliberately did not appear at the scheduled pre-trial conference in Civil Case
No. 3854 despite notice and that he did not file a petition for review after receiving from his client the payment for
docket fees and after being granted by the CA an extension of time to file the same. From these facts alone, it
cannot be denied that respondent's acts constitute misconduct which at the same time amount to violations of the
CPR.
The Court has already held in People v. Sevilleno11 and reiterated in Consolidated Farms, Inc. v. Atty. Alpon, Jr.12that
Canon 1813 of the CPR requires every lawyer to serve his client with utmost dedication, competence and diligence.
He must not neglect a legal matter entrusted to him and his negligence in this regard renders him administratively
liable.
As complainant's counsel in Civil Case No. 3854, respondent is duty-bound to handle the same with zeal and all due
diligence. Hence, even assuming that there is truth to his allegation that he and Pandili already agreed to abandon
1âw phi 1
the case, he should have still attended the scheduled pre-trial to formally move for its withdrawal. However, despite
his awareness that his absence in the pre-trial would result to a dismissal of the case with prejudice and to a
declaration of his client's default with respect to Du's counterclaim, respondent still deliberately did not appear
thereat. It is worth noting that at that time, Du had already filed an Answer with Counterclaim. If respondent was
indeed concerned about his client's cause, he should have, under the circumstances, observed the mandate of
Section 2, Rule 17 of the Rules of Court. It provides:
RULE 17
Dismissal of Actions
Section 2. Dismissal upon motion of plaintiff. - Except as provided in the preceding section, a complaint shall not be
dismissed at the plaintiffs instance save upon approval of the court and upon such terms and conditions as the court
deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff's
motion for dismissal, the dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the
right of the defendant to prosecute his counterclaim in a separate action unless within fifteen (15) days from notice
of the motion he manifests his preference to have his counterclaim resolved in the same action. Unless otherwise
specified in the order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be
dismissed or compromised without the approval of the court. (Emphasis supplied)
Had respondent moved for dismissal under the above-quoted rule, the case filed by complainant would have been
dismissed without prejudice thereby giving it the alternative of re-filing the case should there be a change in
circumstances. But due to respondent's absence and also his failure to inform complainant of the scheduled pre-
trial, the Complaint was dismissed based on Section 314 of the same Rule. This has. the effect of an adjudication on
the merits which, needless to state, curtailed the right of the complainant to refile the case. Moreover, had
respondent been present at the pre-trial and had informed complainant of the same, the latter would not have been
declared in default and, therefore, would have had the opportunity to present evidence to refute Du's claim for
damages against it. To stress, an attorney is bound to protect his client's interest to the best of his ability and with
utmost diligence.15 This, respondent failed to do in utter disregard of Canon 18 of the CPR.
Anent respondent's failure to file the Petition for Review despite being granted an extension of time to do so, his
explanation is as follows:
o) That because of pity I filed an extension of time to file a petition for review alleging that the plaintiff had just
received a decision and the filing is within the reglementary period copy furnished the counsel of Juanito Du[.] This
was opposed by his counsel alleging [I misled] the court [as] to the correctness of the date of receipt . of said
decision. So the court issued an order directing the undersigned respondent to explain. x x x Because of said
opposition the herein counsel decided not to proceed [with] the filing of [a] petition for review considering it was
already filed out of time and it will only waste the golden time of the court in reviewing a baseless appeal, so the
herein respondent advised the manager to be man enough to accept the truth, otherwise the herein respondent
would be dragged deeper in helping him;16
The Court finds respondent's reason to be unacceptable if not downright disrespectful to the courts. The same only
underscores his blatant violation of Rule 12.03, Canon 12 of the CPR, which states:
CANON 12 - A LA WYER SHALL EXERT EVERY EFFORT AND CONSIDER IT HIS DUTY TO ASSIST IN THE
SPEEDY AND EFFICIENT ADMINISTRATION OF JUSTICE.
xxxx
Rule 12.03 -A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the
period lapse without submitting the same or offering an explanation for his failure to do so.
Respondent needs lecturing that sympathy towards a client does not justify his act of stating in his motion for
extension that he received the RTC Decision at a later date to make it appear that the filing of the said motion is
well-within the period for filing an appeal. Given his years of experience in the legal profession, respondent should
be well aware that "[a] lawyer is first and foremost an officer of the court. Thus, while he owes his entire devotion to
the interest and causes of his client, he must ensure that he acts within the bounds of reason and common sense,
always aware that he is an instrument of truth and justice. More importantly, as an officer of the court and its
indispensable partner in the sacred task of administering justice, graver _responsibility is imposed upon a lawyer
than any other to uphold the integrity of the courts and to show respect to its processes. Thus, any act on his part
which tends visibly to obstruct, pervert or impede and degrade the administration of justice constitutes professional
misconduct calling for the exercise of disciplinary action against him."17
All told, the Court finds respondent to have committed acts violative of Canons 12and18 of the CPR.
WHEREFORE, the Court ADOPTS the July 17, 2008 Resolution of the Board of Governors of the Integrated Bar of
the Philippines. Atty. Johnny P. Landero is ordered SUSPENDED from the practice of law for six (6) months
effective immediately. He is directed to report the date of his receipt of this Resolution to enable this Court to
determine when his suspension shall take effect Let a copy of this Resolution be entered in the personal records of
respondent as a member of the Bar, and copies furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all courts in the country.
SO ORDERED.
SECOND DIVISION
G.R. No. 193169, April 06, 2015
ROGELIO ROQUE, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Petitioner Rogelio Roque (petitioner) was charged with the crime of frustrated homicide in an Information that reads as
follows:
That on or about the 22nd day of November, 2001, in the municipality of Pandi, province of Bulacan, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused did then and there willfully, unlawfully, and feloniously,
with intent to kill[,] attack, assault and shoot with a gun complain[an]t Reynaldo Marquez, hitting the latter on his right ear
and nape, and kick[ing] him on the face and back, causing serious physical injuries which ordinarily would have caused the
death of the said Reynaldo Marquez, thus, performing all the acts of execution which should have produced the crime of
homicide as a consequence, but nevertheless did not produce it by reason of causes independent of his will, that is[,] by the
timely and able medical attendance rendered to said Reynaldo Marquez which prevented his death.
CONTRARY TO LAW. 1
When arraigned on March 23, 2003, petitioner pleaded “not guilty.” During the pre-trial conference, the defense admitted
the identity of petitioner; that he is a Kagawad of Barangay Masagana, Pandi, Bulacan; and that the day of the incident,
November 22, 2001 was the Thanksgiving Day of the said barangay. Trial thereafter ensued where the parties presented
their respective versions of the incident.
The prosecution averred that on November 22, 2001, while brothers Reynaldo Marquez (Reynaldo) and Rodolfo Marquez
(Rodolfo) were in the house of Bella Salvador-Santos (Bella) in Pandi, Bulacan, Rodolfo spotted Rogelio dela Cruz (dela Cruz)
and shouted to him to join them. At that instant, petitioner and his wife were passing-by on board a tricycle. Believing that
Rodolfo’s shout was directed at him, petitioner stopped the vehicle and cursed the former. Reynaldo apologized for the
misunderstanding but petitioner was unyielding. Before leaving, he warned the Marquez brothers that something bad would
happen to them if they continue to perturb him.
Bothered, Rodolfo went to the house of Barangay Chairman Pablo Tayao (Tayao) to ask for assistance in settling the
misunderstanding. Because of this, Reynaldo, who had already gone home, was fetched by dela Cruz and brought to the
house of Tayao. But since Tayao was then no longer around, Reynaldo just proceeded to petitioner’s house to follow Tayao
and Rodolfo who had already gone ahead. Upon arriving at petitioner’s residence, Reynaldo again apologized to petitioner
but the latter did not reply. Instead, petitioner entered the house and when he came out, he was already holding a gun
which he suddenly fired at Reynaldo who was hit in his right ear. Petitioner then shot Reynaldo who fell to the ground after
being hit in the nape. Unsatisfied, petitioner kicked Reynaldo on the face and back. Reynaldo pleaded Tayao for help but to
no avail since petitioner warned those around not to get involved. Fortunately, Reynaldo’s parents arrived and took him to a
local hospital for emergency medical treatment. He was later transferred to Jose Reyes Memorial Hospital in Manila where he
was operated on and confined for three weeks. Dr. Renato Raymundo attended to him and issued a medical certificate
stating that a bullet entered the base of Reynaldo’s skull and exited at the back of his right ear.
Presenting a totally different version, the defense claimed that on November 22, 2001, petitioner went to the house of Bella
on board a tricycle to fetch his child. While driving, he was cursed by brothers Reynaldo and Rodolfo who were visibly
intoxicated. Petitioner ignored the two and just went home. Later, however, the brothers appeared in front of his house still
shouting invectives against him. Petitioner’s brother tried to pacify Rodolfo and Reynaldo who agreed to leave but not
without threatening that they would return to kill him. Petitioner thus asked someone to call Tayao. Not long after, the
brothers came back, entered petitioner’s yard, and challenged him to a gun duel. Petitioner requested Tayao to stop and
pacify them but Reynaldo refused to calm down and instead fired his gun. Hence, as an act of self-defense, petitioner fired
back twice.
On March 12, 2007, the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 84, rendered its Decision2finding petitioner
guilty as charged, viz:
WHEREFORE, finding the accused GUILTY beyond reasonable doubt of the crime charged in the information, he is hereby
sentenced to suffer the penalty of imprisonment of six (6) years [of] prision correccional, as minimum[;] to ten (10) years
of prision mayor in its medium [period], as maximum.
SO ORDERED.3
Petitioner filed a motion for reconsideration which was denied in an Order4 dated August 16, 2007.
Undaunted, petitioner appealed to the Court of Appeals (CA). In its Decision5 dated February 27, 2009, the CA affirmed in full
the RTC’s Decision, thus:
WHEREFORE, in the light of the foregoing premises, the decision appealed from is hereby AFFIRMED in its entirety.
SO ORDERED.6
Petitioner’s Motion for Reconsideration7 thereto was likewise denied in a Resolution8 dated July 30, 2010.
Hence, this Petition for Review on Certiorari9 under Rule 45 of the Rules of Court where petitioner imputes upon the CA the
following errors:
THE HONORABLE COURT OF APPEALS ERRONEOUSLY APPRECIATED THE FACTS AND EVIDENCE ON RECORD WHEN IT
RULED THAT THE ELEMENT OF UNLAWFUL AGGRESSION WAS NOT SATISFACTORILY PROVEN SINCE THE ACCUSED-
APPELLANT HAS NOT SATISFACTORILY SHOWN THAT THE VICTIM/PRIVATE COMPLAINANT WAS INDEED ARMED WITH A
GUN.
THE HONORABLE COURT OF APPEALS ERRONEOUSLY APPRECIATED THE FACTS AND EVIDENCE ON RECORD WHEN IT
RULED THAT GRANTING FOR THE BENEFIT OF ARGUMENT THAT THERE WAS INDEED UNLAWFUL AGGRESSION, PETITIONER
WAS NO LONGER JUSTIFIED IN FIRING AT THE VICTIM/PRIVATE COMPLAINANT FOR THE SECOND TIME.
THE HONORABLE COURT OF APPEALS ERRONEOSULY APPRECIATED THE FACTS AND EVIDENCE ON RECORD WHEN IT
RULED THAT INTENT TO KILL ON THE PART OF PETITIONER WAS PRESENT CONSIDERING: (A) THE PRIVATE COMPLAINANT
ALLEGEDLY RECEIVED TWO GUNSHOT WOUNDS, AND (B) THE PETITIONER PREVENTED BARANGAY OFFICIALS FROM
INTERVENING AND HELPING OUT THE WOUNDED PRIVATE COMPLAINANT.10
Our Ruling
The Petition must be denied.
The errors petitioner imputes upon the CA all pertain to “appreciation of evidence” or factual errors which are not within the
province of a petition for review on certiorari under Rule 45. The Court had already explained in Batistis v. People11 that:
Pursuant to Section 3, Rule 122, and Section 9, Rule 45, of the Rules of Court, the review on appeal of a decision in a
criminal case, wherein the CA imposes a penalty other thandeath, reclusion perpetua, or life imprisonment, is by petition for
review on certiorari.
A petition for review on certiorari raises only questions of law. Sec. 1, Rule 45, Rules of Court, explicitly so provides, viz:
Section 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment, final order or
resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts,
whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may
include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of
law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed
in the same action or proceeding at any time during its pendency.
Petitioner’s assigned errors, requiring as they do a re-appreciation and re-examination of the evidence, are evidentiary and
factual in nature.12 The Petition must therefore be denied on this basis because “one, the petition for review thereby violates
the limitation of the issues to only legal questions, and, two, the Court, not being a trier of facts, will not disturb the factual
findings of the CA, unless they were mistaken, absurd, speculative, conflicting, tainted with grave abuse of discretion, or
contrary to the findings reached by the court of origin,”13 which was not shown to be the case here.
Besides, findings of facts of the RTC, its calibration of the testimonial evidence, its assessment of the probative weight
thereof, as well as its conclusions anchored on the said findings, are accorded high respect if not conclusive effect when
affirmed by the CA,14 as in this case. After all, the RTC “had the opportunity to observe the witnesses on the stand and
detect if they were telling the truth.”15 “To [thus] accord with the established doctrine of finality and bindingness of the trial
court’s findings of fact, [the Court shall] not disturb [the] findings of fact of the RTC, particularly after their affirmance by the
CA”16as petitioner was not able to sufficiently establish any extraordinary circumstance which merits a departure from the
said doctrine.17
In any event, the Court observes that the CA correctly affirmed the RTC’s ruling that petitioner is guilty of frustrated
homicide and not merely of less serious physical injuries as the latter insists. As aptly stated by the CA:
In attempted or frustrated homicide, the offender must have the intent to kill the victim. If there is no intent to kill on the
part of the offender, he is liable for physical injuries only. Vice-versa, regardless of whether the victim only suffered injuries
that would have healed in nine to thirty days, if intent to kill is sufficiently borne out, the crime committed is frustrated
homicide (Arts. 263-266).
Usually, the intent to kill is shown by the kind of weapon used by the offender and the parts of the victim’s body at which the
weapon was aimed, as shown by the wounds inflicted. Hence, when a deadly weapon, like a bolo, is used to stab the victim
in the latter’s abdomen, the intent to kill can be presumed (Reyes, The Revised Penal Code, 13THED., P. 431).
It is worth highlighting that the victim received two gunshot wounds in the head. Indeed the location of the wounds plus the
nature of the weapon used are ready indications that the accused-appellant’s objective is not merely to warn or incapacitate
a supposed aggressor. Verily, had the accused-appellant been slightly better with his aim, any of the two bullets surely
would have killed him outright. Also, the intent to kill is further exhibited by the fact that the accused-appellant even
prevented barangay officials from intervening and helping x x x the bleeding victim. Indeed, the fact that Reynaldo Marquez
was miraculously able to live through the ordeal and sustain only modicum injuries does not mean that the crime ought to be
downgraded from frustrated homicide to less serious physical injuries. After all, as was mentioned above, what should be
determinative of the crime is not the gravity of the resulting injury but the criminal intent that animated the hand that pulled
the trigger.18
The Court, however, notes that while the penalty imposed upon appellant is also proper, there is a need to modify the
assailed CA Decision in that awards of damages must be made in favor of the victim Reynaldo.
The RTC and the CA correctly held that actual damages cannot be awarded to Reynaldo due to the absence of receipts to
prove the medical expenses he incurred from the incident. “Nonetheless, absent competent proof on the actual damages
suffered, a party still has the option of claiming temperate damages, which may be allowed in cases where, from the nature
of the case, definite proof of pecuniary loss cannot be adduced although the court is convinced that the aggrieved party
suffered some pecuniary loss.”19 Since it was undisputed that Reynaldo was hospitalized due to the gunshot wounds inflicted
by petitioner, albeit as observed by the RTC there was no evidence offered as to the expenses he incurred by reason thereof,
Reynaldo is entitled to temperate damages in the amount of P25,000.00. Aside from this, he is also entitled to moral
damages of P25,000.00. These awards of damages are in accordance with settled jurisprudence.20 An interest at the legal
rate of 6% per annum must also be imposed on the awarded damages to commence from the date of finality of this
Resolution until fully paid.21
WHEREFORE, the Petition is DENIED. The Decision dated February 27, 2009 of the Court of Appeals in CA-G.R. CR No.
31084 affirming in its entirety the March 12, 2007 Decision of the Regional Trial Court of Malolos, Bulacan, Branch 84 in
Criminal Case No. 3486-M-2002 convicting petitioner Rogelio Roque of the crime of frustrated homicide, is AFFIRMED with
the MODIFICATION that the petitioner is ordered to pay the victim Reynaldo Marquez moral damages and temperate
damages in the amount of P25,000,00 each, with interest at the legal rate of 6% per annum from the date of finality of this
Resolution until fully paid.
SO ORDERED.
ECOND DIVISION
G.R. No. 200759, March 25, 2015
FAJ CONSTRUCTION & DEVELOPMENT CORPORATION, Petitioner, v. SUSAN M. SAULOG, Respondent.
DECISION
DEL CASTILLO, J.:
This case illustrates the oft-quoted principle that the Supreme Court is not a trier of facts and does not normally undertake
the re-examination of the evidence presented by the contending parties during trial.
This Petition for Review on Certiorari1 seeks to set aside the November 29, 2011 Decision2 and February 24, 2012
Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 88385 affirming with modification the January 30, 2006
Decision4 of the Regional Trial Court (RTC) of Quezon City, Branch 220 in Civil Case No. Q-02-45865 and denying petitioner’s
Partial Motion for Reconsideration,5 respectively.
Factual Antecedents
On June 15, 1999, petitioner FAJ Construction and Development Corporation and respondent Susan M. Saulog entered into
an Agreement6 (construction agreement) for the construction of a residential building in San Lorenzo Village, Makati City for
a contract price of P12,500,000.00. Payment to petitioner contractor shall be on a progress billing basis, after inspection of
the work by respondent.
Construction of the building commenced, and respondent made a corresponding total payment to petitioner in the amount of
P10,592,194.80. However, for the October 31 and November 6, 2000 progress billing statements sent by petitioner in the
total amount of P851,601.58, respondent refused to pay. After performing additional work, petitioner made another request
for payment, but respondent again refused to pay, prompting petitioner to terminate the construction contract pursuant to
Article 27(b) of the Uniform General Conditions of Contract for Private Construction (or Document 102) of the Construction
Industry Authority of the Philippines, Department of Trade and Industry.7
Petitioner then sent demand letters to respondent on November 24, 2000 and September 28, 2001. In reply, respondent
claimed that petitioner’s work was defective, and that it should instead be made liable thereon.
Petitioner thus filed with the RTC of Quezon City a civil case for collection of a sum of money with damages against
respondent. Docketed as Civil Case No. Q-02-45865 and assigned to Branch 220, the Complaint8 alleged that despite faithful
compliance with the construction agreement, respondent refused to pay the outstanding balance of P851,601.58, which
prompted it to stop construction of the building. Petitioner thus prayed that respondent be ordered to pay the amounts of
P851,601.58 representing the unpaid billings; P625,000.00 representing the retention amount; P50,000.00 for litigation
expenses; 20% attorney’s fees and appearance fees, or P170,000.00; and costs of suit.
In her Answer with Compulsory Counterclaim,9 respondent claimed that while she religiously paid petitioner pursuant to their
construction agreement, petitioner’s work was defective and delayed; that petitioner failed to remedy said defects; that as a
result, rainwater seeped through the building and caused extensive damage to the unfinished building; and that she had to
incur additional substantial expenses for the repair of the building, to remedy the defects caused by petitioner, and to finish
construction of the building. By way of counterclaim, respondent prayed for an award of actual damages in the amount of
P3,213,575.91; lost rentals amounting to P5,391,456.00; additional consequential damages of P1,600,000.00 because she
could not devote herself to her work; additional costs of ongoing repair; P5,000,000.00 moral damages; P5,000,000.00
exemplary damages; P1,387,500.00 as penalties for delay; attorney’s fees and P4,000.00 appearance fees per hearing;
interest; and costs of suit.
After pre-trial, the case was set for trial on the merits.
Petitioner presented its first witness on March 11, 2003. However, the presentation of the witness’s testimony was not
concluded as petitioner’s counsel did not have the required documentary evidence.10 Thus, petitioner moved for a
continuance.
After several opportunities for the presentation of its first witness, petitioner failed to proceed with trial. Its counsel moved
and asked for several postponements of trial, which the trial court granted despite respondent’s opposition. However,
petitioner’s counsel and witness failed to appear during the scheduled April 29, 2003 hearing, prompting the trial court, upon
respondent’s motion, to dismiss the case for failure to prosecute.11
Petitioner filed an unverified motion for reconsideration12 of the April 29, 2003 dismissal order, claiming that its counsel was
unable to attend the scheduled hearing because he suffered arthritis of the knee; however, the motion was not accompanied
by an affidavit or certification to the effect that the character of petitioner’s counsel’s illness is such as to render his non-
attendance excusable. Respondent opposed the motion.13 In a June 23, 2003 Order,14 the trial court granted petitioner’s
motion for reconsideration, thus recalling its April 29, 2003 dismissal order and setting the case for hearing on July 29, 2003
for the continuation of the presentation of petitioner’s evidence.
On July 29, 2003, both petitioner and its counsel again failed to appear. The trial court reset the hearing to September 4,
2003, with a warning that further postponement will not be tolerated.15
Petitioner once more moved for the postponement of the September 4, 2003 hearing, citing conflict of
schedule.16 Respondent opposed the motion, claiming that there was a pattern on petitioner’s part to delay the disposition of
the case despite the trial court’s admonition that no further postponement will be allowed.
On September 4, 2003, petitioner and counsel again failed to appear for the continuation of trial. The trial court, noting
respondent’s manifestation, issued another Order dismissing the case for failure to prosecute, ordering that the direct
testimony of petitioner’s witness be stricken off the record, and setting the case for hearing on respondent’s counterclaim.17
Petitioner again filed a motion for reconsideration18 of the above September 4, 2003 dismissal order, which respondent
opposed,19 and which the trial court denied in a December 16, 2003 Order.20 Petitioner filed a second motion for
reconsideration,21 but the same was denied in a January 14, 2004 Order.22
Petitioner filed a petition for certiorari23 with the CA questioning the above December 16, 2003 and January 14, 2004 Orders
of the trial court, claiming that they were issued with grave abuse of discretion; that the trial court erred in denying a
postponement of trial, in striking off the testimony of its witness, and in declaring that petitioner had the propensity to delay
the case. The Petition was docketed as CA-G.R. SP No. 82239.
On September 30, 2004, the CA issued its Decision24 in CA-G.R. SP No. 82239 dismissing the petition for certiorari and
affirming the trial court’s action, declaring that petitioner adopted a pattern of delay and was guilty of employing dilatory
maneuvers, trifling with respondent’s right to a speedy dispensation of justice, abusing the patience of the trial court and
wasting its time, squandering the people’s money, and impeding the administration of justice. It held further that the trial
court acted rightly in its resolution of the case, treating petitioner with liberality despite its trifling with the expeditious
administration of justice; that petitioner’s complaint was correctly dismissed for failure to prosecute after it was given all the
opportunity to present its evidence; that said dismissal operates as an adjudication on the merits; that petitioner’s right to
due process was not violated; and that petitioner’s second motion for reconsideration is not allowed under Section 5, Rule 37
of the 1997 Rules of Civil Procedure.25 In addition, the appellate court admonished petitioner’s counsel, reminding the latter
not to delay his case, but rather to observe the rules of procedure and not misuse them to defeat the ends of justice.
Petitioner took the matter to this Court, via a petition for review on certiorari docketed as G.R. No. 166336. However, in a
March 7, 2005 Resolution,26 the Petition was denied for failure to submit a verified statement of material date of filing the
motion for reconsideration of the assailed CA judgment, and for failure to show that the appellate court committed any
reversible error. In several other Resolutions27 of this Court, petitioner’s motions for reconsideration and to refer the case to
the Court en banc were denied on the ground, among others, that it failed to sufficiently show that the CA committed any
reversible error.
On January 17, 2006, an Entry of Judgment28 was issued by the Court stating that on August 16, 2005, its March 7, 2005
Resolution in G.R. No. 166336 became final and executory.
In Civil Case No. Q-02-45865, respondent was allowed to present her evidence on the counterclaim. As found by the CA,
respondent’s evidence is as follows:
x x x. She presented the testimony of Rhodora Calinawan, the architect who conducted a complete inspection of the project
first in September 2000, and, second, in November 2000, after typhoon Seniang. Rhodora Calinawan narrated her findings
and identified the photographs submitted as proofs of appellant’s29 substandard work. Among the defects she pointed out
were the sloppily done flooring, the unaligned electrical outlet and switch, dried cement and paint stained flooring, incorrect
colored cement used to fill the gap between the tiles, need to repair door jamb, sloppily done grouting of tiles, incorrect
luggage compartment doors, bubbles in the varnishing works, unaligned sanding of parquet flooring, poor termination of
shower and enclosure and bull nose wood moulding, dirty window sill, lack of screws and rubber on the window, damaged
roof panels, need for plashing and installation of drift edges, and improper installation of asphalt shingles on the roof. After
the typhoon, appellee30 also requested her to make a second inspection. She prepared another report which listed the
following additional defects: the second floor parquet flooring was wet due to the typhoon because the windows were not
properly sealed, lacked sealant and rubber protector.
Susan Saulog took the stand on February 15, 2005. She testified on appellant’s defective work and the damage caused by
typhoon “Seniang” to the unfinished work, notwithstanding the fact that she had already paid a total of P10,592,194.80. She
refused to pay appellant the amount of P851,601.58 because the latter already collected advance payment but had a lot of
unfinished work before it abandoned the project. She made a counter-demand for P4,600,000.00 that excluded the lost
revenue for unearned rentals, exemplary and moral damages. She was supposed to earn P160,000.00 per month from
rentals starting July 2000. After appellant abandoned the project, she still spent P3,820,796.21 to rectify and complete the
same. The accounts chargeable to appellant were listed in Exhibit 21, to wit:
ITEM NO. PARTICULARS AMOUNT

A Bestbuilt Steel Builders 785,299.12
B Sub-Contractor: Fizcon Enterprises 375,166.17
C Labor Contracts & Quotations 243,461.40
D Cash Advances for Materials by FAJ 186,236.62
E Professional Fees 631,666.46
F Rectification of Major Defective Works 422,563.77
G Other Charges 647,629.71
H Other Additional Construction Expenses for Rectification & 528,772.96
Repair Works
GRAND TOTAL AMOUNT 3,820,796.21
The penalty for delay is P12,500.00 per day. From July 30, 2000 up to November 17, 2000, the total penalty amounted to
P1,387,500.00. She suffered sleepless nights because she started to experience frozen shoulder and trigger finger that
necessitated the services of Dr. Alberto Lu, an acupuncturist. Exhibits 30-34 comprised five receipts issued by Alberto M.
Lou, evidencing payment of P400 for services rendered. She claimed reimbursement for the amounts she paid to her
counsel: P20,000.00 as acceptance fees; P4,000.00 per appearance and cost of suit which totaled P100,000.00. She spent
P60,000.00 and P7,000.00, respectively, for the services of Architect Calinauan and an accountant to put the records in
order. She claimed moral damages of P5,000,000.00.31
On January 30, 2006, the trial court rendered its Decision on respondent’s counterclaim, declaring as follows:
After carefully studying all the above evidence, this court resolves that defendant32 has proven her following allegations and
counterclaims, to wit:
(1) That, in fact, the construction work of plaintiff33 was not only delayed, but defective; and that plaintiff abandoned the
construction work, incomplete and with many defects. The evidence on record is overwhelming and in addition to the
testimonies of Arch. Rhodora Calinawan and the defendant herself; the same is proven by Exhs. 1 – 1-B-4; 2 – 2-A; 3; 4 –
4-H-2; 5 – 5-G-2; 6 – 6-G-2; 7 – 7-E-2; 8 – 8-C; 9 – 9-M; 9-N – 9-EE; 15 – 15-A2; 15-B – 15-B-5; 15-B2 – 15-Z.
(2) That defendant paid plaintiff the total amount of P10,592,194.80 before plaintiff abandoned the work (Exhs. 16 – 16-Q).
(3) That defendant had to finish the work abandoned by plaintiff, incurring substantial additional expenses therefor. This is
also supported not only by her testimony, but by documentary evidence presented by her (Exhs. 21; 20 – 20-A; 21 – 21-F;
22 – 22-CCC; 23 – 23-M; 24 – 24-JJJ; 25 – 25-S; 26 – 26-QQ; 28 – 28-AAAA-130; 29 – 29-JJJ).
(4) As to the claim of defendant for moral damages, the Court finds that she is entitled to moral damages, but not for the
amount she is claiming. The testimony given by defendant on how the problems created by plaintiff affected her personally
is believable; and furthermore, it is supported by official receipts of an Acupuncture Consultant (Exhs. 30-34). This is one of
the cases wherein moral damages are allowed by Article 2220 of the New Civil Code. Breach of Contract where the
defendant acted fraudulently or in bad faith.
(5) With respect to exemplary damages, the Court perceives that same should be granted, but moderates the same. Plaintiff
being in the construction business to the public, should be deterred from doing to others, what it did to defendant. This is
one of the situations envisioned by Article 2229 of the New Civil Code, for exemplary damages.
(6) The Court is convinced that attorney’s fees should also be adjudicated, considering the work that counsel for defendant
undertook. Attorney’s fees should be adjudicated, in accordance with Article 2208 of the New Civil Code.
(7) The Court is also persuaded to grant penalties for delay, as provided for in the agreement between the parties (Exhs. 11-
B-1 and 11-B-2).
(8) The Court, however, is not inclined to grant additional consequential damages of P1,600,000.00, because this court finds
that this claim has not been properly supported.
(9) Finally, the Court is inclined to grant defendant’s claim, for lost rentals, which is properly supported by the testimony of
defendant and very plausible under the circumstances, because one of the duplex apartments was constructed for rental
income purposes and its completion and rental was very much delayed, because of the fault of plaintiff.
IN VIEW OF ALL THE FOREGOING, plaintiff FAJ Construction & Development Corporation is hereby ordered to pay defendant
Susan Saulog, the following amounts:
(1) P3,213,575.91 as actual damages;

(2) Lost rentals of P5,391,456.00;
(3) Moral damages of P500,000.00;
(4) Exemplary damages of P500,000.00;
(5) Penalties for delay amounting to P1,387,500.00;
(6) Attorney’s fees of P20,000.00, plus appearance fee of P4,000.00 per appearance,
payable to Atty. Alberto B. Guevara, Jr.;
(7) This court also grants 6% interest, on all the above amounts, commencing from the
date of the filing of the complaint, January 2, 2002.
This Court, however, dismisses the claim of Susan Saulog for additional consequential damages amounting to P1,600,000.00,
which has not been proven.
SO ORDERED.34
Petitioner filed an appeal with the CA. Docketed as CA-G.R. CV No. 88385, the appeal essentially argued that the trial court
erred in holding petitioner liable to the respondent for the amounts stated in the decretal portion of the trial court’s
decision. In addition, petitioner contended that it was erroneous for the trial court to have dismissed its complaint for failure
to prosecute, as it should not be penalized for the negligence of its counsel in the handling of Civil Case No. Q-02-45865,
which is the sole reason for the dismissal thereof.
On November 29, 2011, the CA rendered the assailed Decision affirming with modification the January 30, 2006 Decision of
the trial court, pronouncing thus:
Appellant35 now questions anew the propriety of the dismissal of the complaint on ground of failure to prosecute. Appellant
argues that it should not be made to suffer the consequences of the negligence or mistakes of its counsel.
This Court finds that any disquisition on this issue is improper for being barred by res judicata. x x x
More, appellant’s case was dismissed for failure to prosecute because of the numerous delays caused by its
counsel. Appellant cannot be excused from the actions of its counsel since it is likewise a settled rule that mistake[s] of
counsel binds the client. It is only in case of gross or palpable negligence of counsel when courts must step in and accord
relief to a client who suffered thereby. x x x
The next issue is: did appellee36 adequately prove her right to actual damages for rectification of appellant’s defective
work? Article 1715 of the Civil Code provides:
Article 1715. The contractor shall execute the work in such a manner that it has the qualities agreed upon and has no
defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the work be not of such quality,
the employer may require that the contractor remove the defect or execute another work. If the contractor fails or refuses
to comply with this obligation, the employer may have the defect removed or another work executed, at the contractor’s
cost.
Evidently, Article 1715 gives the employer the options to require the removal of the work, to rectify the flaws in their work,
or to have the work done at the expense of the contractor.
Here, the defective workmanship was amply proven by Architect Rhodora Calinawan’s testimony and documentary evidence
i.e., photographs, receipts, and list of the expenses needed to rectify appellant’s poorly crafted work. Hence, We sustain the
award of actual damages based on these testimonial and documentary evidence.
Regarding the penalty for delay in the amount of One Million Three Hundred Eighty Seven Thousand Five Hundred Pesos
(P1,387,500.00), the same should also be sustained. A contract is the law between the parties, and they are bound by its
stipulations so long as they are not contrary to law, customs, public policy and public morals. The penalty for delay is agreed
upon by the parties themselves. The fact that appellant was already delayed in the completion of the duplex is
undisputed. In fact, record shows that on January 24, 2000, appellee approved the extension requested by appellant. This
request for extension, by itself, is already proof of delay. Thus, at the time appellant abandoned the project, it already
incurred delay. Verily, it is only proper that appellant be made to pay the penalty for delay after appellee no longer agreed
to any further extension.
We now go to the issue of damages.
Moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious or in bad faith,
oppressive or abusive. However, moral damages are improperly awarded, absent a specific finding and pronouncement from
the trial court that a party acted in such manner. Here, the only basis of the trial court in granting moral damages of
P500,000.00 was appellee’s gratuitous claim that she suffered sleepless nights for her frozen shoulder and trigger finger,
supposedly evidenced by 5 official receipts issued by her acupuncturist whom she paid P400.00 per receipt. No evidence,
however, was adduced showing that her frozen shoulder and trigger finger were the direct result of the delayed project. The
basis for such award is too shallow and evidently untenable, hence, the same must be deleted.
As a consequence, the award of exemplary damages should also be vacated. x x x
Also, appellee does not dispute the fact that the total contract price was P12,500,000.00. After paying more than
P10,500,000.00, appellee made several demands for the parts that did not meet the agreed specifications. On the other
hand, appellant was of the firm belief that it had the right to work stoppage, as authorized under the contractor’s
manual. Both parties honestly believed that their respective actions were justified, hence, no bad faith can be attributed to
either party to merit the award of damages.
Too, this Court finds that the trial court erred in holding appellant liable for lost rentals in the amount of Five Million Three
Hundred Ninety One Thousand Four Hundred Fifty Six Pesos (P5,391,456.00). Unrealized profits fall under the category of
actual or compensatory damages. If there exists a basis for reasonable expectation of profits had there been no breach of
contract, indemnification for damages based on such expected profits is proper. Here, appellee did not present any evidence
to show that there was already a potential lessee to one of the units of the duplex. Even assuming that appellee may have
presented evidence to show the existence of a future lessee, she should have presented a contract of lease showing the
contract price. She should have also shown that the rental rate, at that time and in that area was, similar or at least
approximately close to the amount of P160,000.00 per month. Without any of these evidence, damages based on lost rental
is purely speculative. In the same way that one could speculate that the unit will be rented out, a person cannot be
precluded from speculating that the other unit may be occupied by a close relative for free. The court must rely on
competent evidence and must avoid any speculation or give premium to self-serving allegations. As stated, the award of
P5,391,456.00 is in the nature of actual damages. To be recoverable, actual damages must not only be capable of proof, but
must actually be proved with a reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture, or
guesswork in determining the fact and amount of damages. To justify an award of actual damages, there must be
competent proof of the actual amount of loss. Credence can be given only to claims which are duly supported by receipts x x
x. These are not present in the case at bar.
As for attorney’s fees, it is well settled that the law allows judicial discretion to determine whether or not attorney’s fees are
appropriate. The surrounding circumstances of each case are to be considered. Here, We resolve to delete the award of
attorney’s fees since the trial court did not make any particular finding that any of the instances enumerated in Art. 2208 of
the Civil Code exists. More, it is settled that the award of attorney’s fees is the exception rather than the general
rule. Counsel’s fees are not awarded every time a party prevails in a suit because of the policy that no premium should be
placed on the right to litigate.
The trial court correctly imposed 6% interest on all awarded amounts commencing from the date of the filing of the
complaint. When an obligation, not constituting a loan or forbearance of money, is breached, interest on the amount of
damages awarded may be imposed at the discretion of the court at 6% per annum.
ACCORDINGLY, the appealed decision is AFFIRMED WITH MODIFICATION, deleting the award of lost rentals, moral damages,
exemplary damages, and attorney’s fees, including appearance fee.
SO ORDERED.37
Petitioner filed a Partial Motion for Reconsideration, but in a February 24, 2012 Resolution, the CA denied the same. Hence,
the present Petition.
Issues
In a January 28, 2013 Resolution,38 this Court resolved to give due course to the Petition, which raises the following
assignment of errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT RES JUDICATA APPLIES IN THE INSTANT
CASE.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT PETITIONER IS LIABLE FOR ACTUAL
DAMAGES, AND IN IMPOSING THE PENALTY FOR DELAY AND AWARDING INTEREST ON ALL AMOUNTS DUE. 39
In its Petition and Reply40 seeking to reverse and set aside the assailed CA dispositions and praying that judgment be
rendered absolving it from the adjudged pecuniary liabilities or, in the alternative, that a new trial of its case be held,
petitioner argues that res judicata cannot be made as basis to deny it the opportunity to question the dismissal of its case
and to present its evidence because the dismissal of its Petition in G.R. No. 166336 was not an adjudication of the case on its
merits; that the dismissal of Civil Case No. Q-02-45865 was not due to its fault, but solely the gross negligence of its
counsel; that the case should not have been dismissed as it was not guilty of lack of diligence in failing to continue with trial
with reasonable promptitude;41 that it should not be made liable for the adjudged liabilities as they are bereft of factual and
legal basis; that respondent’s witness, architect Rhodora Calinawan (Calinawan), was not competent to testify, nor was she
an objective, reliable, or trustworthy witness; that the supposed actual damages suffered by respondent have not been
adequately proved; that when respondent refused to pay the outstanding balance, petitioner was justified in stopping work,
and any damages suffered by respondent thereafter may not be attributed to it but constitute damnum absque injuria; that
the adjudged penalty for its supposed delay is excessive; and that there is no basis to award interest.
In her Comment,42 respondent contends that the issue of whether the trial and appellate courts correctly decided the amount
of damages is a factual issue which is beyond the jurisdiction of this Court; that with respect to the dismissal of petitioner’s
case in Civil Case No. Q-02-45865 for failure to prosecute, res judicata applies; that petitioner’s claim that it should not be
bound by the negligence of its counsel cannot stand because it was itself negligent in the prosecution of its case despite
having been given by the trial court all the opportunity to present evidence; that with respect to the issue of damages, the
factual findings of the trial and appellate courts may not be disturbed; that petitioner failed to present evidence to controvert
the trial and appellate courts’ findings; that the pecuniary liabilities were justified as petitioner was guilty of delay,
abandonment, and defective workmanship; that there is no ground to reduce the amount of penalties for petitioner’s delay;
and that the award of interest was proper.
Our Ruling
Petitioner’s claim that res judicata cannot apply has no merit. This Court, in G.R. No. 166336, found nothing wrong in the
judgment of the CA in CA-G.R. SP No. 82239 affirming the dismissal of petitioner’s Complaint in Civil Case No. Q-02-45865
for failure to prosecute. In fact, the Court found that the appellate court had not committed any reversible error. This
finding of lack of any reversible error is now final with the entry of judgment in G.R. No. 166336. Thus, petitioner could no
longer prove its case, other than to present controverting evidence on respondent’s counterclaim.
The Court has repeatedly said that minute resolutions dismissing the actions filed before it constitute actual adjudications on
the merits. They are the result of thorough deliberation among the members of the Court. When the Court does not find
any reversible error in the decision of the CA and denies the petition, there is no need for the Court to fully explain its denial,
since it already means that it agrees with and adopts the findings and conclusions of the CA. The decision sought to be
reviewed and set aside is correct. It would be an exercise in redundancy for the Court to reproduce or restate in the minute
resolution denying the petition the conclusions that the CA reached.43
Next, petitioner’s argument that it should not be punished for the negligence of its counsel deserves the same
treatment. Suffice it to state that we have not seen any reason to reverse the CA’s ruling on this matter; on the other hand,
the record will disclose that petitioner was itself neglectful of its duties relative to its case, and it continued to retain the
services of its counsel which it now conveniently claims to be negligent, even after repeatedly suffering from the latter’s
claimed lack of care. It appears that despite witnessing firsthand the caliber of its lawyer during the initial presentation of its
evidence in 2003, petitioner changed counsel only after the trial court’s January 30, 2006 Decision on respondent’s
counterclaim.44 The general rule still applies that the mistakes of counsel bind his client.
On the issue of liability, we find – relying on the identical findings of the trial and appellate courts – that petitioner is guilty of
violating the construction agreement, for its defective and incomplete work, delay, and for unjustified abandonment of the
project. Indeed, we find no reason to disturb the identical pronouncements of the trial court and the CA. The same holds
true with respect to the issue of damages raised by petitioner; it requires an inquiry into the facts, which is no longer this
Court’s realm. In a case previously decided by this ponente concerning a construction contract and where similar allegations
of abandonment, delay and defective workmanship were advanced, it was held that –
Petitioner endeavors to convince us to determine, yet again, the weight, credence, and probative value of the evidence
presented. This cannot be done in this petition for review on certiorari under Rule 45 of the Rules of Court where only
questions of law may be raised by the parties and passed upon by us. In Fong v. Velayo, we defined a question of law as
distinguished from a question of fact, viz:
A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact
when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not
involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of
the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites
a review of the evidence presented, the [question] posed is one of fact. Thus, the test of whether a question is one of law or
of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court
can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise,
it is a question of fact.
It has already been held that the determination of the existence of a breach of contract is a factual matter not usually
reviewable in a petition filed under Rule 45. We will not review, much less reverse, the factual findings of the Court of
Appeals especially where, as in this case, such findings coincide with those of the trial court, since we are not a trier of facts
x x x.45
There is no ground either to doubt the testimony of Calinawan, who testified on the defective quality of petitioner’s work and
the state of construction after the latter abandoned the project. Her testimony merely corroborates already existing
evidence – such as photographs – as well as the testimony of respondent herself. All in all, these pieces of evidence
collectively proved the facts in issue. Besides, Calinawan need not be qualified as an expert witness in order to testify on
facts which are readily apparent to the eye, and even to the layman: it does not require an expert to conclude that flooring is
sloppily done, or that the electrical outlet and switch are not aligned, or that the flooring is stained with paint, or that
incorrect colored cement was used to fill the gap between tiles, or that a door jamb needs repair, or that grouting of tiles is
sloppily done, or that there are unwanted bubbles in the varnishing works, or that the parquet flooring is unaligned or
uneven, or that the window sills are dirty, or that windows lacked the necessary screws and rubber, or that the roof panels
are damaged, or that the installation of asphalt shingles on the roof was improper. Any ordinary individual building a home
would readily notice such defects.
Since respondent suffered damages as a result of petitioner’s defective and delayed work and unjustified abandonment of the
project, the principle of damnum absque injuria cannot apply. The principle cannot apply when there is an abuse of a
person’s right.46
Coming now to the issue of delay, we find that the trial and appellate courts’ grant of P1,387,500.00 not excessive; it is, in
fact, liberal. Construction period was agreed upon at 240 days from receipt by petitioner of a notice to proceed.47 Said
notice was issued on June 18, 1999,48 thus giving petitioner approximately eight months from said date, or – roughly
computed – up to February 18, 2000, to complete the project. Yet, petitioner was still working on the project as late as on
November 22, 2000, after which it stopped work and abandoned the project; this fact is not denied by petitioner.49 Thus,
petitioner was already delayed for more than nine months – that is, beginning March 2000 and ending November of the same
year – or approximately 270 days. At P12,500.00 agreed penalty imposed for each day of delay, petitioner should be
correspondingly liable to respondent for P3,375,000.00 liquidated damages, more or less, under the construction
agreement.50 Yet, the courts below awarded a mere P1,387,500.00; this award is certainly not excessive and should remain,
accepted as it is without question by the respondent.
Finally, the imposition of 6% interest per annum is proper. Indeed, as correctly held by the CA, 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,51 from the filing of the complaint until its full satisfaction.
WHEREFORE, the Petition is DENIED. The November 29, 2011 Decision and February 24, 2012 Resolution of the Court of
SO ORDERED.
SECOND DMSION
March 23, 2015
G.R. No. 202805
ROSARIO BANGUIS-TAMBUYAT, Petitioner,

vs.
WENIFREDA BALCOM-TAMBUYAT, Respondent.
DECISION
DEL CASTILLO, J.:
(CA) in CA-G.R. CV No. 84954 affirming with modification the May 26, 2003 Decision3 of the Regional Trial Court of
Malolos, Bulacan, Branch 10 in LRC Case No. P-443-99, as well as its July 26, 2012 Resolution4 denying
petitioner's Motion for Reconsideration5 of the herein assailed judgment.
Factual Antecedents
Adriano M. Tambuyat (Adriano) and respondent Wenifreda Balcom- Tambuyat (Wenifreda) were married on
September 16, 1965.6 During their marriage, Adriano acquired several real properties, including a 700-square meter
parcel of land located at Barangay Muzon, San Jose del Monte, Bulacan (the subject property),7 which was bought
on November 17, 1991.8 The deed of sale over the said property was signed by Adriano alone as vendee; one of the
signing witnesses to the deed of sale was petitioner Rosario Banguis-Tambuyat (Banguis), who signed therein as
"Rosario Banguis."9 When Transfer Certificate of Title No. T-145321(M) (TCT T-145321) covering the subject
property was issued, however, it was made under the name of "ADRIANO M. TAMBUYAT married to ROSARIO E.
BANGUIS."10
All this time, petitioner Banguis remained married to Eduardo Nolasco (Nolasco). They were married on October 15,
1975, and at all times material to this case, Nolasco was alive, and his marriage to petitioner subsisted and was
never annulled.11
On June 7, 1998, Adriano died intestate.12
On October 18, 1999, Wenifreda filed a Petition for Cancellation13 of TCT T-145321, which was docketed as LRC
Case No. P-443-99 and assigned to Branch 10 of the Regional Trial Court of Malolos, Bulacan (Malolos RTC). She
alleged therein that she was the surviving spouse of Adriano; that TCT T-145321 was erroneously registered and
made in the name of "ADRIANO M. TAMBUYAT married to ROSARIO E. BANGUIS;" that per annexed Marriage
Contract, Banguis was still married to Nolasco; that Banguis could not have been married to Adriano; that the
issuance of the title in Banguis’s name as Adriano’s spouse was due to "an insidious machination by her and the
person who brokered the sale of the subject property, allegedly a cousin or relative of hers;"14 and that consequently,
she suffered damages. Thus, Wenifreda prayed that TCT T-145321 be cancelled; that a new certificate of title be
made out in Adriano’s name, with her as the spouse indicated; that Banguis be ordered to surrender her copy of
TCT T-145321; and that moral and exemplary damages, attorney’s fees, and costs of litigation be adjudged in her
favor.
In her Opposition15 to the petition for cancellation, Banguis denied specifically that the subject property was acquired
by Adriano and Wenifreda during their marriage. She claimed that on the other hand, she alone bought the subject
property using her personal funds; that she and Adriano were married on September 2, 1988 and thereafter lived
together as a married couple; that their union produced a son, who was born on April 1, 1990; that the trial court has
no jurisdiction over the petition for cancellation, which is merely a summary proceeding – considering that a
thorough determination will have to be made as to whether the property is conjugal or exclusive property, and since
she and Adriano have a child whose rights will be adversely affected by any judgment in the case; and that
Wenifreda is guilty of forum-shopping in filing LRC Case No. P-443-99, considering that a prior similar case was
already filed by her and dismissed on April 22, 1999 by Branch 76 of the Malolos RTC. Banguis prayed for the
dismissal of LRC Case No. P-443-99 and to be paid moral damages and attorney’s fees by way of counterclaim.
During the course of the proceedings, the parties presented the following evidence, among others:
1.Marriage Contract of Adriano and Wenifreda;16
2.Publication of Adriano’s death;17
3.Social Security System (SSS) data record of Adriano indicating that Wenifreda is his spouse;18
4.Barangay Council Certificate indicating that Adriano and Wenifreda were legally married and residents of No. 13
Hyacinth Road, Phase V, Pilar Village, Las Piñas City since 1981;19
5.Marriage Contract of Banguis and Nolasco dated October 15, 1975;20
6.Banguis’s SSS Member’s Data Change or Addition Report indicating that Banguis: a) sought to change her name
from "Rosario E. Banguis" to "Rosario B. Nolasco"; b) listed Nolasco as her husband; and c) changed her civil status
to "married;"21
7.Banguis’s correspondence at work – Ocean East Agency Corporation (Ocean East), which was owned and
operated by Adriano – in which she signed as "Rosario B. Nolasco;"22
8.Banguis’s résumé on file with Ocean East, reflecting that she was married;23
9.Negative Certification of Marriage issued by the Civil Registrar of Bulacan to the effect that the Civil Register does
not have any record of Adriano and Banguis’s marriage which was supposedly solemnized on September 2, 1988;24
10.Certification dated April 17, 2002 issued by Rev. Fr. Narciso Sampana, Parish Priest of St. Joseph Parish, to the
effect that the parish never had a parish priest by the name of Fr. Roberto de Guzman – who is claimed to have
solemnized the alleged marriage between Adriano and Banguis;25
11.Banguis’s testimony on direct examination that she and Adriano were married on September 2, 1988; that they
had a son named Adrian; that Adriano purchased the subject property on November 17, 1991 per Deed of Sale –
executed in Manila and with Adriano as the purchaser – entered as "Document No. 173; Page No. 3550; series of
1990" in the notarial registry of Mr. Julian B. Tubig; that she paid for the same with her own money; and that she
stayed at the subject property each Friday night up to Sunday night;26
12.Banguis’s testimony on cross-examination that she is married to Nolasco, who is still alive; that her marriage to
the latter is still subsisting and has not been annulled; and that she knew that Adriano was married to someone
else;27
13.Photographs depicting Adriano and Banguis as a couple and with a child, supposedly taken at the subject
property.28
On May 26, 2003, the Malolos RTC rendered its Decision, decreeing thus:
WHEREFORE, premises considered, judgment is hereby RENDERED in favor of the petitioner herein, as follows:
1.Directing the Register of Deeds of Meycauayan, Bulacan to cancel TCT No. T-145321 (M) and in lieu thereof to
issue a new certificate of title in the name of Adriano M. Tambuyat married to Wenifreda "Winnie" Balcom
Tambuyat;
2.Directing the defendant Rosario Banguis Nolasco of 1714 Ibarra St., Sampaloc, Manila to surrender to the
Register of Deeds for Meycauayan, Bulacan, the owner’s duplicate copy of TCT No. T- 145321 (M) within five (5)
days from receipt of the order, failing which the Register of Deeds should proceed with the cancellation of said TCT.
3.Directing defendant Rosario Banguis Nolasco to pay petitioner the sum of P100,000.00 as and by way of moral
damages.
4.Directing defendant Rosario Banguis Nolasco to pay petitioner the sum of P100,000.00 as and by way of
exemplary damages; and
5.Directing defendant Rosario Banguis Nolasco to pay petitioner attorney’s fees in the amount of P100,000.00, and
the cost of suit.
Accordingly, the counterclaim of the oppositor is hereby DISMISSED for lack of merit.
SO ORDERED.29
In arriving at the above pronouncement, the trial court held among others that under Section 112 of Act No. 496 or
the Land Registration Act – now Section 108 of Presidential Decree No. 1529 (PD 1529) or the Property
Registration Decree30 – court authorization is required for any alteration or amendment of a certificate of title when
any error, omission or mistake was made in entering a certificate or any memorandum thereon, or on any duplicate
certificate, or when there is reasonable ground for the amendment or alteration of the title; that it has been
established that Wenifreda is the surviving spouse of Adriano, and the subject property was acquired during their
marriage, but it was erroneously registered in the name of another; that Banguis had a subsisting marriage with
Nolasco when TCT T-145321 was issued with her being erroneously included and referred to therein as Adriano’s
spouse; that Adrian’s filiation may not be proved collaterally through LRC Case No. P-443-99; that Wenifreda is
entitled to an award of moral and exemplary damages without proof of pecuniary loss, for the damage caused upon
her reputation and social standing caused by the wanton, fraudulent, malicious and unwarranted inclusion of
Banguis’s name in the title; and that Wenifreda is likewise entitled to attorney’s fees as she was compelled to litigate
and incur expenses to protect her interests by reason of Banguis’s unjustified act.
Petitioner appealed the trial court’s Decision with the CA. Docketed as CA-G.R. CV No. 84954, the appeal basically
revolved around the thesis that the trial court erred in applying Section 108 of PD 1529; that with the serious
objections raised by Banguis and considering that she is the actual owner and possessor of the subject property, a
proper action in a different court exercising general jurisdiction should be filed, rather than in the current trial court
which sits merely as a land registration court; that the trial court disregarded Article 148 of the Family Code31 which
provides for the division of properties acquired by individuals united in a defective marriage; that the trial court erred
in awarding damages, attorney’s fees and costs of suit; that the trial court erred in granting execution pending
appeal despite the absence of any good or special reasons; and that the denial of her counterclaim was improper.32
Meanwhile, on October 30, 2003, Wenifreda moved for execution pending appeal. It appears that Banguis failed to
oppose the motion; she did not appear during the scheduled hearings on the motion as well. As a result, the trial
court issued a March 30, 2004 Order directing the issuance of a Writ of Execution. Such writ was thus issued on
April 14, 2004. TCT T-145321 was cancelled, and a new title – TCT T-433713(M) – was issued in its place.
On February 14, 2012, the CA issued the assailed Decision containing the following decretal portion:
WHEREFORE, the appeal is PARTIALLY GRANTED. The assailed Decision dated May 26, 2003 issued by the
Regional Trial Court, Branch 10 of Malolos, Bulacan is AFFIRMED with the modification that the award of moral and
exemplary damages, attorney’s fees and cost of the suit in favor of Wenifreda Tambuyat is hereby deleted.
SO ORDERED.33
The CA sustained the trial court’s application of Section 108 of PD 1529, noting that Banguis’s name was included
in TCT T-145321 by error or mistake. It held that the evidence adduced proved that Wenifreda – and not Banguis –
is the lawful wife of Adriano; that there is a valid and subsisting marriage between Nolasco and Banguis, and the
latter admitted to such fact during the course of the proceedings in the trial court; and that Banguis’s opposition to
Wenifreda’s petition for cancellation of TCT T-145321 is not real and genuine as to place the latter’s title to the
subject property in doubt.34
The CA added that contrary to Banguis’s position, a separate and different proceeding is not necessary to resolve
her opposition to the petition in LRC Case No. P-443-99, as: 1) she in effect acquiesced and freely submitted her
issues and concerns to the trial court for complete determination, submitting all her relevant documentary and other
evidence to the court in order to prove her allegations – particularly that she is the lawful spouse of Adriano and that
she is the actual owner and possessor of the subject property; and 2) pursuant to law35 and jurisprudence,36 the
distinction between the trial court sitting as a land registration court and as a court of general jurisdiction has been
eliminated with the passage of PD 1529. It held further that, based on the evidence adduced, Adriano and Banguis
are not co-owners of the subject property as it has been shown that: a) both of them had valid and subsisting
marriages when they conducted their adulterous relations; b) Banguis failed to present even a modicum of evidence
that she contributed to the purchase of the subject property; and c) the deed of sale itself indicated that Adriano
alone was the vendee. Finally, in denying Wenifreda’s pecuniary awards and Banguis’s counterclaim, the CA held
that the parties are not entitled thereto as there is no legal and factual basis to grant them.
Banguis moved for reconsideration, but in a July 26, 2012 Resolution, the CA was unconvinced. Hence, the present
Petition.
Issues
Banguis cites the following issues for resolution:

I.THE COURT OF APPEALS GROSSLY ERRED IN SUSTAINING THE RTC WHICH CANCELLED AND
CORRECTED THE QUESTIONED ENTRY IN TCT NO. T-145321 (M) FROM "ROSARIO E. BANGUIS" TO
"WENIFREDA ‘WINNIE’ BALCOM TAMBUYAT" UNDER SECTION 108 OF THE PROPERTY REGISTRATION
DECREE DESPITE THE LACK OF JURISDICTION TO HEAR THE SAME IN VIEW OF THE SERIOUS AND
WEIGHTY OBJECTIONS OF THE PETITIONER AND THAT THE INSTITUTION OF ESTATE PROCEEDINGS OF
THE LATE ADRIANO M. TAMBUYAT AND THE CONSEQUENT APPOINTMENT OF AN EXECUTOR OR
ADMINISTRATOR WHICH IS THE PROPER REMEDY WHO CAN GO AFTER HIS PROPERTIES HELD BY
OTHER PERSONS.
II.THE COURT OF APPEALS GROSSLY ERRED IN SUSTAINING THE RTC WHICH CORRECTED AND
CANCELLED THE QUESTIONED ENTRY IN TCT NO. T-145321 (M) THROUGH AN ABSOLUTE AND
COMPLETE DISREGARD OF THE PROOF OF OWNERSHIP AND POSSESSION BY THE PETITIONER OVER
THE SUBJECT PROPERTY.
III.THE COURT OF APPEALS GROSSLY ERRED IN SUSTAINING THE RTC WHICH CORRECTED AND
CANCELLED THE QUESTIONED ENTRY IN TCT NO. T-145321 (M) IN CLEAR VIOLATION OF ARTICLE 148 OF
THE FAMILY CODE PROVIDING FOR THE SHARING OF PROPERTIES ACQUIRED BY PERSONS UNITED IN A
DEFECTIVE MARRIAGE.
IV. THE COURT OF APPEALS GROSSLY ERRED IN SUSTAINING THE RTC WHICH GRANTED THE
IMMEDIATE EXECUTION OF ITS DECISION NOTWITHSTANDING THE SEASONABLE APPEAL OF THE
PETITIONER AND THE UTTER LACK OF ANY GOOD OR SPECIAL REASONS JUSTIFYING THE SAME.37
In her Petition and Reply38 seeking to reverse and set aside the assailed CA dispositions and thus dismiss
Wenifreda’s petition for cancellation in LRC Case No. P-443-99, Banguis insists on her original position adopted
below that Section 108 of PD 1529 cannot apply in view of the contentious and controversial nature of her
opposition to the petition for cancellation, which can be threshed out only in a separate proper proceeding where the
court sits not merely as a land registration court, but as a court of general jurisdiction. She cites Tagaytay-Taal
Tourist Development Corporation v. Court of Appeals,39 Liwag v. Court of Appeals,40 and Vda. de Arceo v. Court of
Appeals,41 which made pronouncements to such effect.
Banguis adds that the instant case involved the partition of Adriano’s estate which in effect transfers the subject
property to Wenifreda and thus divests her and her son Adrian of their rights and interests therein; that based on the
evidence she introduced, it should be concluded that the property belongs to her as it was acquired using solely her
own funds and money borrowed from her sister, and because she has been in constant possession thereof,
introducing improvements thereon through the years; that the subject property is owned in common by her and
Adriano since it was acquired during their cohabitation; and that the CA erred in refusing to rule on the propriety of
the trial court’s grant of execution pending appeal.
In Wenifreda’s Comment,42 it is stressed that the distinction between the trial court acting as a land registration court,
on one hand, and its acting as a court of general jurisdiction, on the other, has been removed with the effectivity of
PD 1529; thus, trial courts are no longer fettered by their former limited jurisdiction which enabled them to grant
relief in land registration cases only when there is unanimity among the parties, or when none of them raises any
adverse claims or serious objections. It is further argued that Banguis’s claim of ownership cannot stand, for the
evidence fails to indicate that she contributed to the purchase of the subject property, even as the deed of sale to
the property itself shows that Adriano alone is the vendee thereof, and Banguis signed merely as a witness thereto.
Finally, respondent explains that during the proceedings covering the motion for the issuance of a writ of execution
pending appeal, Banguis was accorded the opportunity to participate, but she did not; as a result, the old title was
cancelled and a new one was accordingly issued in its stead.
Our Ruling

The trial court in LRC Case No. P-443-99 was not precluded from resolving the objections raised by Banguis in her
opposition to the petition for cancellation; a separate action need not be filed in a different court exercising general
jurisdiction. Banguis should be considered to have acquiesced and freely submitted the case to the trial court for
complete determination on her opposition, when she went to trial and adduced and submitted all her relevant
evidence to the court. "The active participation of the party against whom the action was brought, coupled with his
failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an
invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from
later on impugning the court or body’s jurisdiction."43
Under Section 108 of PD 1529, the proceeding for the erasure, alteration, or amendment of a certificate of title may
be resorted to in seven instances: (1) when registered interests of any description, whether vested, contingent,
expectant, or inchoate, have terminated and ceased; (2) when new interests have arisen or been created which do
not appear upon the certificate; (3) when any error, omission or mistake was made in entering a certificate or any
memorandum thereon or on any duplicate certificate; (4) when the name of any person on the certificate has been
changed; (5) when the registered owner has been married, or, registered as married, the marriage has been
terminated and no right or interest of heirs or creditors will thereby be affected; (6) when a corporation, which owned
registered land and has been dissolved, has not conveyed the same within three years after its dissolution; and (7)
when there is reasonable ground for the amendment or alteration of title.44 The present case falls under (3) and (7),
where the Registrar of Deeds of Bulacan committed an error in issuing TCT T-145321 in the name of "Adriano M.
Tambuyat married to Rosario E. Banguis" when, in truth and in fact, respondent Wenifreda – and not Banguis – is
Adriano’s lawful spouse.
Proceedings under Section 108 are "summary in nature, contemplating corrections or insertions of mistakes which
are only clerical but certainly not controversial issues."45 Banguis’s opposition to the petition for cancellation
ostensibly raised controversial issues involving her claimed ownership and the hereditary rights of Adrian, which she
claims to be her son by Adriano. However, apart from the fact that evidence of Banguis’s ownership is irrelevant in
Wenifreda’s petition, the evidence apparently indicates that Banguis could not be the owner of the subject property,
while a resolution of the issue of succession is irrelevant and unnecessary to the complete determination of
Wenifreda’s petition. The Court is thus led to the conclusion that the Registrar of Deeds of Bulacan simply erred in
including Banguis in TCT T-145321 as Adriano’s spouse.
As correctly ruled by the appellate court, the preponderance of evidence points to the fact that Wenifreda is the
legitimate spouse of Adriano. Documentary evidence – among others, the parties’ respective marriage contracts,
which, together with marriage certificates, are considered the primary evidence of a marital union46 – indicates that
Adriano was married to Wenifreda, while Banguis was married to Nolasco – and both marriages were subsisting at
the time of the acquisition of the subject property and issuance of the certificate of title thereto. Thus, it cannot be
said that Adriano and Banguis were husband and wife to each other; it cannot even be said that they have a
common-law relationship at all. Consequently, Banguis cannot be included or named in TCT T-145321 as Adriano’s
spouse; the right and privilege belonged to Wenifreda alone.
x x x Indeed, Philippine Law does not recognize common law marriages. A man and woman not legally married who
cohabit for many years as husband and wife, who represent themselves to the public as husband and wife, and who
are reputed to be husband and wife in the community where they live may be considered legally married in common
law jurisdictions but not in the Philippines.
1âwphi 1
While it is true that our laws do not just brush aside the fact that such relationships are present in our society, and
that they produce a community of properties and interests which is governed by law, authority exists in case law to
the effect that such form of co-ownership requires that the man and woman living together must not in any way be
incapacitated to contract marriage. In any case, herein petitioner has a subsisting marriage with another woman, a
legal impediment which disqualified him from even legally marrying Vitaliana. In Santero vs. CFI of Cavite, the
Court, thru Mr. Justice Paras, interpreting Art. 188 of the Civil Code (Support of Surviving Spouse and Children
During Liquidation of Inventoried Property) stated: "Be it noted however that with respect to ‘spouse’, the same must
be the legitimate ‘spouse’ (not common-law spouses)."
There is a view that under Article 332 of the Revised Penal Code, the term "spouse" embraces common law relation
for purposes of exemption from criminal liability in cases of theft, swindling and malicious mischief committed or
caused mutually by spouses. The Penal Code article, it is said, makes no distinction between a couple whose
cohabitation is sanctioned by a sacrament or legal tie and another who are husband and wife de facto. But this view
cannot even apply to the facts of the case at bar. We hold that the provisions of the Civil Code, unless
expressly providing to the contrary as in Article 144, when referring to a "spouse" contemplate a lawfully
wedded spouse. Petitioner vis-a-vis Vitaliana was not a lawfully-wedded spouse to her; in fact, he was not legally
capacitated to marry her in her lifetime.47 (Emphasis supplied)
The only issue that needed to be resolved in LRC Case No. P-443-99 is – who should be included in the title to the
subject property as Adriano’s spouse, Banguis or Wenifreda? Was there error in placing Banguis’s name in the title
as Adriano’s spouse? If Banguis is Adriano’s spouse, then there would be no need to amend or even cancel the
title. On the other hand, if Wenifreda is Adriano’s spouse, the inclusion of Banguis would then be erroneous, and
TCT T-145321 would have to be cancelled. All that is required in resolving this issue is to determine who between
them is Adriano’s spouse; it was unnecessary for Banguis to prove that she is the actual owner of the property. Title
to the property is different from the certificate of title to it.
x x x. In Lee Tek Sheng v. Court of Appeals, the Court made a clear distinction between title and the certificate of
title:
The certificate referred to is that document issued by the Register of Deeds known as the Transfer Certificate of
Title (TCT). By title, the law refers to ownership which is represented by that document. Petitioner apparently
confuses certificate with title. Placing a parcel of land under the mantle of the Torrens system does not mean that
ownership thereof can no longer be disputed. Ownership is different from a certificate of title. The TCT is only the
best proof of ownership of a piece of land. Besides, the certificate cannot always be considered as conclusive
evidence of ownership. Mere issuance of the certificate of title in the name of any person does not foreclose the
possibility that the real property may be under co-ownership with persons not named in the certificate or that the
registrant may only be a trustee or that other parties may have acquired interest subsequent to the issuance of the
certificate of title. To repeat, registration is not the equivalent of title, but is only the best evidence thereof. Title as a
concept of ownership should not be confused with the certificate of title as evidence of such ownership although
both are interchangeably used. x x x.
Registration does not vest title; it is merely the evidence of such title. Land registration laws do not give the holder
any better title than what he actually has.48
Nonetheless, if Banguis felt that she had to go so far as to demonstrate that she is the true owner of the subject
property in order to convince the trial court that there is no need to cancel TCT T-145321, then she was not
precluded from presenting evidence to such effect. Understandably, with the quality of Wenifreda’s documentary
and other evidence, Banguis may have felt obliged to prove that beyond the certificate of title, she actually owned
the property. Unfortunately for her, this Court is not convinced of her claimed ownership; the view taken by the CA
must be adopted that she and Adriano could not have been co-owners of the subject property as she failed to
present sufficient proof that she contributed to the purchase of the subject property, while the deed of sale covering
the subject property showed that Adriano alone was the vendee. This Court is not a trier of facts, so it must rely on
the findings of facts of the Court of Appeals, which are thus considered conclusive and binding.49 Moreover, the
Court notes that while Banguis claims that she alone paid for the property using her own funds and money borrowed
from her sister, she nonetheless acknowledges that Adriano is a co-owner thereof, thus implying that he contributed
to its acquisition. Such contradictory statements cast serious doubts on her claim; basically, if she were the sole
purchaser of the property, it would only be logical and natural for her to require that her name be placed on the deed
of sale as the vendee, and not as mere witness – which is what actually occurred in this case. On the other hand, if
Adriano contributed to its purchase, Banguis would have required that her name be placed on the deed as a co-
vendee just the same. Her failure to explain why – despite her claims that she is the purchaser of the property – she
allowed Adriano to be denominated as the sole vendee, renders her claim of ownership doubtful. "Where a party
has the means in his power of rebutting and explaining the evidence adduced against him, if it does not tend to the
truth, the omission to do so furnishes a strong inference against him."50 One cannot also ignore the principle that "the
rules of evidence in the main are based on experience, logic, and common sense."51
Neither can the Court believe Banguis’s assertion that Wenifreda’s petition for cancellation of TCT T-145321 is in
reality a partition of Adriano’s estate which in effect transfers the subject property to Wenifreda and thus divests
Banguis and her son Adrian of their rights and interests therein. LRC Case No. P- 443-99 is simply a case for the
correction of the wrongful entry in TCT T-145321; it simply aims to reflect the truth in the certificate of title – that
Adriano is married to Wenifreda – and nothing else. It would have been a summary proceeding, but Banguis
complicated matters by injecting her claims of ownership, which are irrelevant in the first place for, as earlier stated,
registration is not the equivalent of title.
Finally, with the foregoing disquisition, it becomes unnecessary to resolve the other issues raised by the petitioner,
particularly those relating to the trial court’s March 30, 2004 Order directing the issuance of a writ of execution
pending appeal, as well as the April 14, 2004 Writ of Execution issued, as they have become moot and academic.
WHEREFORE, the Petition is DENIED. The February 14, 2012 Decision and July 26, 2012 Resolution of the Court
of Appeals in CA-G.R. CV No. 84954 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
March 23, 2015
G.R. No. 197115
REPUBLIC OF THE PHILIPPINES, represented by the Secretary of Agriculture, Petitioner,

vs.
FEDERICO DACLAN, JOSEFINA COLLADO and her husband FEDERICO DACLAN, TEODORO DACLAN and
MINVILUZ DACLAN as surviving heirs of deceased JOSE DACLAN, Respondents.
x-----------------------x
G.R. No. 197267
FEDERICO DACLAN, JOSEFINA COLLADO, TEODORO DACLAN and MINVILUZ DACLAN as surviving heirs
of deceased JOSE DACLAN, Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, and represented by the Secretary of Agriculture and PROVINCE OF LA
UNION, represented by its PROVINCIAL GOVERNOR, Respondents.
DECISION
DEL CASTILLO, J.:
Before us are consolidated Petitions for Review on Certiorari1 assailing 1) the January 25, 2011 Decision2 of the
Court of Appeals (CA) in CA-G.R. CV No. 90014 which set aside the July 31, 2007 Decision3 of Branch 32 of the
Regional Trial Court (RTC) of Agoo, La Union, as well as 2) the CA’s May 30, 2011 Resolution4 denying the parties’
respective Motions for Reconsideration.5
Factual Antecedents
The facts, as found by the CA, are as follows:
Sometime in May 1972, the Agoo Breeding Station (or "breeding station") was established by the Department of
Agriculture, through the Bureau of Animal Industry (BAI), Region I, for the purpose of breeding cattle that would be
distributed to the intended beneficiaries pursuant to the livelihood program of the national government. In support of
the said project, plaintiffs6 executed four (4) documents denominated as Deed of Donation in favor of defendant
Republic of the Philippines (or "Republic") donating to the latter four (4) parcels of land, more particularly described
in the following Tax Declarations (TD):
1.TD No. 23769 registered in the name of Federico Daclan covering a [parcel of] land with an area of 15,170 square
meters, more or less;
2.TD No. 38240 registered in the name of Josefina Collado covering a [parcel of] land with an area of 3,440 square
3.TD No. 27220 registered in the name of Teodoro Daclan covering a [parcel of] land with an area of 2,464 square
4.TD No. 1875 registered in the name of Jose Daclan (deceased father of plaintiff Minviluz Daclan) covering a
[parcel of] land with an area of 1,769 square meters, more or less.
These parcels of land are located at Barrio Nazareno, Agoo, La Union. The donation was subject to the conditions
that these parcels of land 1) shall be used solely for the establishment of a breeding station, and 2) shall not be
used for any other purpose, except with the previous consent of the donors or their heirs.
Sometime in 1991, the powers and functions of certain government agencies, including those of the Department of
Agriculture (DA), were devolved to the local government units pursuant to Republic Act No. 7160, otherwise known
as the "Local Government Code". Thus, defendant Province of La Union (or "Province") assumed the powers and
functions of the DA, in the operation of the breeding station.7
In particular, the deeds of donation8 stipulated –
a.That the land herein mentioned shall be used for the establishment of a breeding station and shall not be used for
any other purpose, except with the previous consent of the DONOR or his heirs;
xxxx
c.That in case of non-use, abandonment or cessation of the activities of the BUREAU OF ANIMAL INDUSTRY,
possession or ownership shall automatically revert to the DONOR and all permanent improvements existing thereon
shall become the property of the DONOR; x x x9
All in all, the petitioners in G.R. No. 197267 – Federico Daclan, Josefina Collado, Teodoro Daclan, Jose Daclan (the
Daclans) – and several others donated around 13 hectares of land to the Republic. The uniform deeds of donation
covering these parcels of land contained the same conditions, including the above stipulations relative to exclusive
purpose/use and automatic reversion.10
Sometime after the donations were made, the La Union Medical Center (LUMC) was constructed on a 1.5-hectare
portion of the 13-hectare donated property.11
In a September 4, 2003 Letter12 to the Secretary of the Department of Agriculture, the Daclans and other donors
demanded the return of their donated lands on the ground that the breeding station has ceased operations and that
the land has been abandoned.
On March 28, 2005, the Daclans filed Civil Case No. A-2363 for specific performance against the Republic and the
Province of La Union. The case was assigned to Branch 32 of the RTC of Agoo, La Union (Agoo RTC). The Daclans
essentially claimed in their Amended Complaint13 that pursuant to the automatic reversion clause in the deeds of
donation, they are entitled to a return of their donated parcels of land after the Bureau of Animal Industry (BAI)
ceased operating the breeding station, but that the Republic and the Province failed to honor the said clause and
refused to return their land. They thus prayed that the defendants be ordered to return to them the donated land,
with all improvements existing thereon.
In its Answer,14 the Province alleged that the Daclans have no cause of action since the breeding station was still
existing – although this time it is being operated by the Province, pursuant to the devolution program under the
Local Government Code of 1991, and that the Daclans violated the deeds of donation because they have occupied
the donated land and have begun fencing the same. It prayed for the dismissal of the complaint as well as the grant
of injunctive relief.
In a subsequent Manifestation,15 the Republic opted to adopt the above Answer filed by the Province.
In their Reply,16 the Daclans claimed that the donated land cannot be assigned by the Republic to the Province as
the deeds of donation did not include the Republic’s successors or assigns as intended beneficiaries; that contrary
to the Province’s claim, the breeding station is not operational and has been abandoned, and the existing heads of
cattle found therein do not belong to the government but to former officials of the BAI; and that with the automatic
reversion clause, they are granted the immediate right to occupy the subject land, and no injunctive relief should
issue against them.
Upon motion of the parties, an ocular inspection of the premises was conducted, and a Commissioner’s Report17was
prepared and issued thereafter. The report indicated in part that –
From information gathered from Ms. Cresencia Isibido, a caretaker of the Agoo Breeding Station, the land had an
original area of thirteen (13) hectares. At present though, only eleven point five (11.5) hectares is [sic] being
occupied by the Agoo Breeding Station as 1.5 hectares was [sic] occupied by the La Union Medical Center.
At a distance of about 200 meters from the main entrance of the breeding station, an office is located at the south of
said lot. Beside the office is a shed where six (6) young goats (kids) are housed. Another shed where goats are
housed is located at the northern side of the lot, fronting a water pump station.
It was likewise gathered that at present, the breeding station has a total number of fifty (50) goats. Also, there are
six (6) cows roaming in the pasture land. Four (4) of these cows are pregnant. It was clarified that these cows
belong to the Cross Australian Bi-Bhraman [sic] breed.
There are four (4) caretakers in the breeding station, all of whom are employed by the provincial government of La
Union. They receive salary from the provincial government and they likewise submit monthly reports to the
Provincial Veterinarian. These four caretakers are Cresencia Isibido, Manuel Daclan, Ruben Daclan (son of plaintiff
Federico Daclan), and Tita Fortes.
The group left the breeding station at around 3:30pm.
Agoo, La Union, this 14th day of December, 2006.18
During trial, the witnesses testified as follows:
To substantiate their claim, the plaintiffs presented the following witnesses whose testimonies are summarized,
thus:
REINERIO BELARMINO[,] JR., is 46 years old, married, a resident of Namnama, San Fernando, La Union, and
Regional Director of the Department of Agriculture, Region 1.
Dir. Belarmino testified that by virtue of a subpoena ad testificandum and subpoena duces tecum, he brought to
Court a photocopy of a letter he issued to Atty. Benjamin Tabios, Legal Consultant of the Department of Agriculture
dated October 14, 2003.
Dir. Belarmino said that while he confirmed and affirmed the contents of the letter, he nevertheless could not agree
on [sic] one sentence written therein. This pertains to the entry that the artificial breeding station is no longer
operational. He explained that although he signed the letter, it was his legal officer who prepared the same.
Further, he said that he had been calling his legal officer since it was the latter who drafted said letter. He clarified
that upon personal verification, he found out that it was not the artificial breeding station that was not [operational].
Rather, it was the breeding station that was not operational.
He likewise mentioned that as early as 1993, the Department of Agriculture, particularly the Bureau of Animal
Industry, gave up the breeding station because of the devolution. In particular, the operation of the breeding station
was transferred to the Province of La Union. However, he affirmed that in the deed of donation, there is no mention
of the Province of La Union. Likewise, there is no mention of any successor.
He clarified though that no breeding activity was done by the Department of Agriculture through the Bureau of
Animal Industry since 1993 because ownership of the breeding station was transferred to the Province of La Union.
The transfer was made without the consent of the donors since the transfer was between two government entities.
On the ocular inspection which was conducted, Dir. Belarmino affirmed that at present, there are six cows and fifty
(50) goats in the breeding station. However, he clarified that said 50 goats are not the same goats that were turned
over to the province of La Union as a result of the devolution.
TEODORO DACLAN, 84 years old, married, retired government employee and a resident of Nazareno, Agoo, La
Union, testified that he is one of the plaintiffs in this case.
He said that he executed a Deed of Donation in favor of the Republic of the Philippines, then represented by the
Secretary of the Department of Agriculture. He clarified that as embodied in their complaint, they seek to enforce the
common provision that in case of non-use, abandonment or cessation of activities of the Bureau of Animal Industry,
possession and ownership of the lots subject of donation shall revert x x x to the donors.
In this respect, he said that the Department of Agriculture, through the Bureau of Animal Industry, has no on-going
breeding activity in the above- mentioned lots. He maintained that he came to know of such non-operation of the
breeding station as early as thirteen (13) years ago.
He likewise testified that he was never informed of any devolution which transferred the operations of the breeding
station from the Bureau of Animal Industry to the Province of La Union. Moreover, his permission was never sought
for the use of the donated lots by the Province of La Union.
FEDERICO DACLAN, 83 years old, married, retired employee of the Bureau of Animal Industry and a resident of
Brgy. Nazareno, Agoo, La Union, also testified.
He said that he is one of the plaintiffs in this case. Plaintiff Teodoro Daclan is his brother while plaintiff Minviluz
Daclan is his niece. His spouse, Josefina Collado, is likewise a co-plaintiff.
He added that he donated a parcel of land with an area of 15,170 square meters located at Nazareno, Agoo, La
Union in favor of the Republic of the Philippines through the Secretary of Agriculture.
Further, he reiterated that as embodied in the deed of donation, one of the conditions therein is that the land shall be
used as a breeding station and shall not be used for any other purpose, except with the previous consent of the
donor or his heirs.
He maintained that since 1993 up to the present, the lot is no longer being used as a breeding station nor has the
defendant province of La Union sought his permission for the use of said lot for any other purpose.
JOSEFINA COLLADO, 72 years old, married, housewife and a resident of Nazareno, Agoo, La Union testified that
she and her husband donated a parcel of land situated at Nazareno, Agoo, La Union in favor of the Republic of the
Philippines through the Secretary of Agriculture.
She said that at present, there is no breeding activity being conducted on said lot. She added that there has been no
breeding activity for a long time now. Further, she clarified that she and the other plaintiffs were never notified of a
devolution so much so that the operation of the breeding station was transferred to defendant Province of La Union.
Also, the defendant Province of La Union never secured their consent for the use of the lot for any other purpose
other than a breeding station.
MINVILUZ DACLAN, 75 years old, single, retired teacher and resident of San Pedro, Agoo, La Union testified that
she is the [daughter] of the late Jose Daclan. She said that during the lifetime of her father, she was aware of a
Deed of Donation executed by her father in favor of the Republic of the Philippines represented by the then
Secretary of Agriculture.
She said that the lot subject of the donation is situated in Nazareno, Agoo, La Union. Likewise, she testified that the
donation was premised on the condition that a breeding station is to be established in said property. However, she
maintained that there is no such breeding station.
Further, she was not aware if her father gave his consent for the use of the property for any other purpose other
than for a breeding station. She emphasized that her father gave his consent only for the use of a breeding station.
Likewise, she has not been consulted nor her permission sought for if the land can be used for any other purpose
other than for breeding.
The defendant Province of La Union presented the following witnesses whose testimonies are summarized, thus:
CRESENCIA ISIBIDO, 58 years old, single, government employee and a resident of San Pedro, Agoo, La Union
testified that she is employed at the Office of the Veterinarian, particularly at the Agoo Breeding Station at
Nazareno, Agoo, La Union.
Particularly, she has been employed thereat since August 28, 1974, initially as Farm Worker and now, as Farm
Foreman. As foreman, she exercises supervision over her co-employees and over all animals in the breeding
station. She clarified that in 1989, there were six (6) personnel assigned at the breeding station. She likewise
clarified that from 1974 until 1989, she received her salary from the Bureau of Animal Industry.
During the devolution of 1993, she started receiving her salary from the provincial government of La Union. She
added though that even after devolution took place, the operation of the Agoo Breeding Station continued.
Likewise, she testified that from the time she was promoted as farm foreman, goats, cattle and swine were being
maintained at the breeding station. She recalled that there were about twenty (20) cattle, seventy (70) goats and
eight (8) swine.
When the devolution took place, she specified that the activities in the breeding station included production of
animals, forage and artificial insemination. She said that the cattles in the breeding station were either subjected to
natural insemination or artificial insemination. Upon the other hand, goats are subjected to natural insemination.
Aside from artificial or natural insemination, greasing is also being conducted in the breeding station.
DR. NIDA GAPUZ, 47 years old, married, Provincial Veterinarian and a resident of Bauang, La Union testified that
she is the provincial veterinarian of the province of La Union since October, 2006. Prior to her appointment as
provincial veterinarian, she was the Supervisor Agriculturist of the Provincial Veterinarian’s Office. Again, prior to her
appointment as supervisor agriculturist, she was Agricultural Center Chief II of the same office.
She recalled that in 1983, their office was under the Department of Agriculture Regional Office. Thereafter, they
were transferred to the Provincial Office of the Department of Agriculture. She said that at that time, the Agoo
Breeding Station was already existing.
Thereafter, with the advent of devolution, the Office of the Provincial Veterinarian was created and eventually, they
were separated from the Department of Agriculture.
Further, she testified that in her capacity as Agricultural Center Chief II, she handled the facilities for the Agoo
Breeding Station and the La Union Breeding Station, both of which are under the office of the provincial veterinarian.
She mentioned that she used to visit the Agoo Breeding Station at least two (2) times a month. She added that
natural as well as artificial insemination activities were conducted in said breeding station. As such, she explained
that one of the purpose[s] of the breeding station is to reproduce and disperse animals.
At present, she said that the breeding station engages in goat dispersal and cattle production. There are no swine
since swine production was phased out because of the establishment of the La Union Medical Center within the
vicinity of the breeding station.
Likewise, she said that at present, there are seven (7) heads of cattle being raised in the breeding station. Of these,
two (2) are pregnant. There are also forty-six (46) heads of goats.
ATTY. MAURO CABADING, 53 years old, married, Provincial Assessor and a resident of San Fernando City, La
Union testified that he is familiar with the Agoo Breeding Station because he took photographs thereof sometime
last year.
He explained that he was directed by the governor and the provincial administrator to take photographs of the
breeding station to determine whether the allegations contained in the complaint filed by herein plaintiffs [are] true or
not. He then proceeded to the Agoo Breeding Station accompanied by his driver and a personnel from the Provincial
Veterinarian’s Office.
He maintained that he can recognize the photographs taken at the breeding station since it was his camera that was
used in taking pictures. He then started identifying the photographs, making mention of those which depicted cows,
goats and houses for cows and goats. Also, he said that the [owner] of the goats and cows seen at the photographs
he took is the provincial government of La Union.19
On July 31, 2007, the Agoo RTC rendered its Decision20 in Civil Case No. A-2363, which decreed thus:
WHEREFORE, in view of the foregoing, the Court hereby renders judgment DISMISSING this instant case for
specific performance.
SO ORDERED.21
The trial court held that although the functions and powers of the BAI were transferred to the Province by virtue of
devolution under the Local Government Code of 1991, the Province continued to operate the breeding station. It
added that the Daclans’ consent to the transfer of functions and powers was not necessary as to affect the validity of
the donations of their lands; devolution of power took effect by operation of law. It held further that contrary to the
Daclans’ claims, the preponderance of evidence suggested that the operations of the breeding station never
ceased; and there are farm animals, buildings, structures, and offices being supervised by four caretakers whose
salaries were being paid by the Province, and these personnel submit monthly reports of operations to the provincial
veterinarian.
The Daclans took the Agoo RTC’s July 31, 2007 Decision to the CA via appeal. On January 25, 2011, the CA issued
the assailed Decision, decreeing as follows:
WHEREFORE, in view of all the foregoing, the assailed July 31, 2007 decision of Branch 32 of the Regional Trial
Court of Agoo, La Union is hereby SET ASIDE. The donation insofar as the 1.5 hectare portion of the donated
parcels of land that is now being used by the La Union Medical Center for its medical facility, hence no longer being
used for the purpose for which the donation was constituted, is hereby declared revoked. Accordingly, possession
and ownership of that particular portion of the donated parcels of land shall revert to the donor/s or their heir/s.
SO ORDERED.22
In essence, the CA agreed with the findings of fact of the Agoo RTC, except that it held that the Province violated
the exclusive use stipulations in the deeds of donation when it allowed the construction of the LUMC within a portion
of the donated lands, as the operation of a human medical facility has no relation to the operation of an animal
breeding station, and it has not been shown that the consent of the donors was obtained prior to the construction of
the LUMC. Thus, with respect to the portion occupied by the LUMC, the automatic reversion clauses in the deeds of
donation apply. The appellate court held further that even the Office of the Solicitor General conceded that if any
violation of the deeds of donation occurred, it could only affect that portion which is no longer used as a breeding
station. Finally, it upheld the validity of the automatic reversion clauses in the subject deeds of donation, which it
found to be consistent with law, morals, good customs, public order and public policy.
Both the Daclans and the Republic moved for reconsideration, but on May 30, 2011, the CA issued the second
assailed disposition sustaining its judgment.
The present Petitions were thus filed.

In an October 3, 2011 Resolution23 of the Court, both Petitions were ordered consolidated.
Issues
The following issues are raised:
By the Republic in G.R. No. 197115
I.
THE HONORABLE COURT ERRED IN RULING THAT PETITIONER VIOLATED THE PROVISIONS OF THE
DEEDS OF DONATION.
II.
THE HONORABLE COURT OF APPEALS ERRED IN DIRECTING THE PETITIONER TO RETURN PORTION/S
OF THE PARCEL/S OF LAND DONATED BY RESPONDENTS AND/OR THEIR FOREBEARS BASED ON AN
UNESTABLISHED INFERENCE.24
By the Daclans in G.R. No. 197267
A.
THE HONORABLE COURT OF APPEALS DID NOT DECIDE THE MAIN ISSUES RAISED BY THE PETITIONERS
IN THE TRIAL COURT AND BEFORE IT.
B.
THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORD WITH THE ESTABLISHED FACTS AND THE APPLICABLE LAWS AND JURISPRUDENCE. 25
The Parties’ Respective Arguments
G.R. No. 197115. For the Republic, the lone point of contention is that the CA could not validly order the return to
the Daclans of the donated 1.5-hectare portion where the LUMC is situated because it has not been proved that
such portion formed part of lands originally donated by the Daclans. The Republic contends that the Daclans
donated only an aggregate of 2.2843 hectares, while the breeding station sits on 13 hectares of donated land; the
Daclans did not prove during trial that the 1.5-hectare land where the LUMC is erected sits within the 2.2843
hectares donated by them. It maintains that if reversion must occur, the Daclans must first clearly identify the land
on which the LUMC is erected as theirs. Thus, it prays that the July 31, 2007 Decision of the Agoo RTC be
reinstated.
For their part, the Daclans adopt their Petition in G.R. No. 197267 as their Comment to the Republic’s Petition. In
turn, the Republic manifested that it was adopting its Comment26 to the Daclans’ Petition in G.R. No. 197267 as its
Reply.
G.R. No. 197267. The Daclans in their Petition insist that the deeds of donation they executed are "personal and
exclusively limited to the parties, the donor and the donee. (They do) not extend to or inure to the benefit of their
successors and assigns;"27 the rights and obligations of the parties to the donations are not transmissible by their
nature or stipulation. Thus, the unauthorized turnover of the breeding station to the Province by the BAI – the sole
beneficiary under the deeds of donation – constitutes a violation of the terms of the deeds of donation, thus giving
ground for reversion; and with the passage of the Local Government Code of 1991, the BAI ceased to exist and was
abolished. Thus, the donated lands automatically revert to their original owners. They add that the evidence clearly
indicates that the donated lands are no longer being used as a breeding station, but merely grazing land for a few
animals whose ownership is even in doubt. Finally, the Daclans decry the failure of the Province to provide
"agricultural extension and on-site research services and facilities" as required under the Implementing Rules and
Regulations of the Local Government Code of 1991, which thus constitutes a violation of the stipulation contained in
the deeds of donation to develop and improve the livestock industry of the country. Thus, they pray that the assailed
CA dispositions be set aside completely and all their donated lands be reverted to them.
Notably, the Daclans admit in their Petition that the 1.5-hectare portion where the LUMC is constructed does not
form part of the lands they donated to the government, but belongs to "other donors who are not parties to the
case."28
In its Comment29 with a prayer for the denial of the Daclans’ Petition and reinstatement of the July 31, 2007 Decision
of the Agoo RTC, the Republic argues that the question of whether the breeding station is still in operation is one of
fact which should not be disturbed at this stage of the proceedings; that the Daclans’ admission in their Petition that
the 1.5-hectare portion where the LUMC is constructed does not form part of the lands they donated to the
government contradicts its argument that the CA committed serious error in ordering the reversion of the said
portion to them; that it is not merely the BAI which acted as the donee, but the Republic itself – represented by the
Secretary of the Department of Agriculture – which is the recipient of the Daclans’ donated lands under the deeds;
and that the passage of the Local Government Code of 1991 did not result in the cessation of operations of the
Agoo breeding station.
In an August 28, 2013 Manifestation,30 the Province adopted the Republic’s Comment to the Petition as its own.
Our Ruling
The Court grants the Republic’s Petition in G.R. No. 197115 and denies that of the Daclans’ in G.R. No. 197267.
The preponderance of evidence points to the fact that the breeding station remained operational even after its
transfer from the Republic to the Province. The activities of the BAI did not cease even after it was dissolved after
the government adopted the policy of devolution under the Local Government Code of 1991; these activities were
merely transferred to the Province. Thus, the witnesses for the Daclans and the Republic uniformly declared that the
breeding station remained operational even after the Local Government Code of 1991 was put into effect.
Particularly, Regional Director Reinerio Belarmino, Jr. of the Department of Agriculture, Region 1 declared that after
the breeding station was transferred to the Province, he saw upon ocular inspection that there remained six cows
and fifty goats on the premises. Cresencia Isibido testified that as Farm Foreman, she exercised supervision over
her co-employees in the breeding station; that in 1989, there were six personnel assigned at the breeding station;
that from 1974 until 1989, she received her salary from the BAI; that after devolution, she started receiving her
salary from the Province; and that even after devolution, the operation of the Agoo Breeding Station continued, and
goats, cattle and swine were being maintained thereat. Dr. Nida Gapuz, La Union Provincial Veterinarian, said that
natural as well as artificial insemination activities were being conducted at the breeding station, as well as goat
dispersal and cattle production. Atty. Mauro Cabading, La Union Provincial Assessor, testified that he was directed
by the Governor and the Provincial Administrator to take photographs of the breeding station in order to verify the
complaint filed by the Daclans; that he then proceeded to the Agoo Breeding Station; that he took photographs of
the animals – cows and goats – therein; and that the Province owned said animals at the breeding station.
As against the bare assertions of the Daclans that the breeding station was abandoned and became non-
operational, the testimonies of the above public officers are credible. "In the absence of any controverting evidence,
1avvphi 1
the testimonies of public officers are given full faith and credence, as they are presumed to have acted in the regular
performance of their official duties."31
Devolution cannot have any effect on the donations made by the Daclans to the Republic. As defined, "devolution
refers to the act by which the national government confers power and authority upon the various local government
units to perform specific functions and responsibilities."32 It includes "the transfer to local government units of the
records, equipment, and other assets and personnel of national agencies and offices corresponding to the devolved
powers, functions and responsibilities."33 While the breeding station may have been transferred to the Province of La
Union by the Department of Agriculture as a consequence of devolution, it remained as such, and continued to
function as a breeding station; and the purpose for which the donations were made remained and was carried out.
Besides, the deeds of donation did not specifically prohibit the subsequent transfer of the donated lands by the
donee Republic. The Daclans should bear in mind that "contracts take effect between the parties, their assigns and
heirs, except in cases where the rights and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law."34 Thus, as a general rule, rights and obligations derived from contract
are transmissible.
The Daclans lament the supposed failure of the Province to provide "agricultural extension and on-site research
services and facilities" as required under the Implementing Rules and Regulations of the Local Government Code of
1991, which failure they believe, constituted a violation of the stipulation contained in the deeds of donation to
develop and improve the livestock industry of the country. Yet this cannot be made a ground for the reversion of the
donated lands; on the contrary, to allow such an argument would condone undue interference by private individuals
in the operations of government. The deeds of donation merely stipulated that the donated lands shall be used for
the establishment of a breeding station and shall not be used for any other purpose, and that in case of non-use,
abandonment or cessation of the activities of the BAI, possession or ownership shall automatically revert to the
Daclans. It was never stipulated that they may interfere in the management and operation of the breeding station.
Even then, they could not directly participate in the operations of the breeding station.
Thus, even if the BAI ceased to exist or was abolished as an office, its activities continued when its functions were
devolved to the local government units such as the Province of La Union. It cannot be said that the deeds of
donation may be nullified just by the fact that the BAI became defunct; its functions continued in the government
offices/local government units to which said functions were devolved.
Lastly, the CA cannot validly order the return to the Daclans of the donated 1.5-hectare portion where the LUMC is
situated, because such portion was not donated by them. They admitted that the 1.5-hectare portion where the
LUMC is constructed does not form part of the lands they donated to the government, but belonged to other donors
who are not parties to the instant case. As far as the Daclans are concerned, whatever they donated remains part of
the breeding station and so long as it remains so, no right of reversion accrues to them. Only the original owner-
donor of the 1.5-hectare portion where the LUMC is constructed is entitled to its return.
WHEREFORE, the Court resolves as follows:
1. The January 25, 2011 Decision and May 30, 2011 Resolution of the Court of Appeals in CA-G.R CV No. 90014
are REVERSED and SET ASIDE;
2.The Petition in G.R. No. 197115 is GRANTED. The July 31, 2007 Decision of the Regional Trial Court of Agoo, La
Union, Branch 32 dismissing Civil Case No. A-2363 is REINSTATED; and
3.The Petition in G.R. No. 197267 is DENIED.
SO ORDERED.
SECOND DIVISION
March 18, 2015
G.R. No. 201427
TEOFILO B. ADOLFO, Petitioner,

vs.
FE T. ADOLFO, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside: 1) the October 6, 2009 Decision2 of the Court of Appeals
(CA) in CA-G.R. CV No. 01783 reversing the October 2, 2006 Order3 of the Regional Trial Court, 7th Judicial
Region, Mandaue City (RTC Mandaue), Branch 55 in Civil Case No. MAN-4821; as well as 2) the CA's March 2,
2012 Resolution4 denying petitioner's Motion for Reconsideration5 and Supplement6 thereto.
Civil Case No. MAN-4821

On April 14, 2004, petitioner Teofilo B. Adolfo filed with the RTC Mandaue a Petition7 for judicial separation of
property against his estranged wife, respondent Fe Adolfo, nee Tudtud. Docketed as Civil Case No. MAN-4821 and
assigned to Branch 55, the petition alleged that the parties were married on November 26, 1966; that the union bore
one child; that during the marriage, they acquired through conjugal funds Lot 1087-A-2-E, a 3,652-square meter
property in Brgy. Cabancalan, Mandaue City, Cebu (the subject property) covered by Transfer Certificate of Title No.
(TCT) 18368; that later on, the parties separated due to irreconcilable differences; that since reunion was no longer
feasible, petitioner suggested a separation of the conjugal property, but respondent adamantly refused; that
respondent denied petitioner’s co-ownership of the subject property, claiming the same as her paraphernal property;
that several earnest efforts to amicably settle the matter between them proved unavailing; and that a judicial
separation of property is proper under the circumstances and pursuant to Article 135(6) of the Family
Code.8Petitioner thus prayed that judgment be rendered decreeing a separation of the conjugal property and the
subdivision or sale thereof, to the end of dividing the same or the proceeds thereof; and ordering respondent to pay
petitioner P50,000.00 as attorney’s fees, appearance fees (P2,000.00 per hearing), and P20,000.00 litigation costs.
In her Answer9 with counterclaim, respondent contended that while she remained married to petitioner, she is the
sole owner of the subject property, the same being her paraphernal property which she inherited from her mother;
that petitioner is a lazy bum, gambler, drunkard, wife abuser, and neglectful father; that respondent found all means
to support the family even as petitioner neglected it; that respondent bought on installment a tricycle for the
petitioner’s use in business, but he kept the proceeds thereof to himself and used the same in his gambling and
drinking sprees; that respondent alone took the initiative to support the family and found ways to take care of the
daily needs of her child; that she caused to be built on a portion of her mother’s land a house even while petitioner
was bumming around; that one day, petitioner destroyed the roof of the house that was then being built; that
petitioner subsequently abandoned her and their child in 1968, and transferred to Davao City where he took a
mistress and begot four children by her; that in 1986, petitioner returned to Cebu City seeking reconciliation with
respondent; that respondent took petitioner back, but in 1987 they once more separated; that thereafter, respondent
never again saw or heard from petitioner.
Respondent claimed in her Answer that the subject property was a portion of a bigger lot (mother lot) owned by her
mother Petronila Tudtud which was covered by TCT T-15941. On October 11, 1967, her mother executed a
quitclaim deed transferring a portion of the mother lot – the subject property – to respondent. The mother title TCT
T-15941 was then cancelled and a new one, TCT (17216)- 5415, was issued in respondent’s name. Respondent
then sold the subject property to her brother on January 19, 1968, and a new TCT (17833)-5515 was issued in her
brother’s name. Her brother then mortgaged the property to Development Bank of the Philippines (DBP), which
foreclosed on the same. TCT 18231 was issued in DBP’s name. DBP then sold the property to the spouses Antonio
and Lucy Garcia (the Garcias), and TCT 18266 was in turn issued in their name. Finally, on May 25, 1983, the
Garcias sold back the subject property to respondent, and a new title – TCT 1836810 – was then issued in the name
of respondent "FE M. TUDTUD, x x x married to Teofilo Adolfo."
Respondent argued that she is the sole owner of the subject property, the same being her paraphernal property
which she alone redeemed from the Garcias; that the inclusion of petitioner’s name in TCT 18368 does not make
him a co- owner of the property, but was merely necessary to describe respondent’s civil status; and that under
Article 13511 of the Civil Code, all property brought by the wife to the marriage as well as all property she acquires
during the marriage in accordance with Article 14812 of the same Code constitutes paraphernal property.
Respondent thus prayed that the petition be dismissed. By way of counterclaim, she sought the payment of moral,
exemplary, and nominal damages, attorney’s fees, and litigation expenses.
Civil Case No. MAN-2683
In 1996, respondent’s sister Florencia Tudtud and her husband Juanito Gingoyon (the Gingoyons) filed a case for
partition with damages against respondent. The case was docketed as Civil Case No. MAN-2683 and raffled to
Branch 55 of the RTC Mandaue. The Complaint13 therein alleged that in 1988, respondent executed a deed of sale
in favor of the Gingoyons over a 300-square meter portion of the subject property, but that respondent refused to
partition/subdivide the same even after the Gingoyons paid the taxes, fees and expenses of the sale. For her
defense, respondent claimed in her Answer14 that when the sale to the Gingoyons was made, the subject property
constituted conjugal property of her marriage with petitioner; that as early as 1983, or when the Garcias executed
the deed of sale in her favor, the subject property became a conjugal asset; since petitioner did not sign the deed of
sale in favor of the Gingoyons as he was in Davao at the time and knew nothing about the sale, the sale was null
and void.
On May 15, 2002, the trial court rendered its Decision15 in Civil Case No. MAN-2683, declaring that the subject
property constituted conjugal property of the marriage. It thus nullified the 1988 deed of sale executed by
respondent in favor of the Gingoyons for lack of consent on the part of petitioner, citing Article 124 of the Family
Code.16 The trial court likewise awarded moral and exemplary damages, attorney's fees and litigation expenses in
favor of the respondent in the total amount of P107,000.00.
The Gingoyons filed an appeal with the CA, which was docketed as CA- G.R. CV No. 78971.
Motion for Judgment Based on the Pleadings in Civil Case No. MAN-4821
Meanwhile, during the pre-trial conference in Civil Case No. MAN-4821, petitioner submitted as part of his evidence
and for marking certified true copies of the Gingoyons’ Complaint in Civil Case No. MAN-2683, respondent’s Answer
thereto, and the trial court’s May 15, 2002 Decision in said case.
On August 1, 2005, petitioner filed a Request for Admission17 of 1) the genuineness of the duly marked certified true
copies of the Complaint, Answer, and Decision in Civil Case No. MAN-2683 (Exhibits "F," "G" and "H," respectively);
2) respondent’s declaration in said Answer that the subject property constituted conjugal property of the marriage;
and 3) the trial court’s pronouncement in said case that the subject property forms part of the conjugal estate.
Respondent failed to file her answer or response to the request for admission.
On September 5, 2005, petitioner filed a Motion for Judgment Based on the Pleadings,18 stating that since
respondent failed to answer his request for admission, the matters contained in the request are deemed admitted
pursuant to Rule 26, Section 2 of the 1997 Rules of Civil Procedure19 (1997 Rules); that as a consequence of the
application of the rule, respondent is in effect considered to have admitted that the subject property is a conjugal
asset of their subsisting marriage which may thus be the subject of his petition for judicial separation of property;
and that on account of said admission, a hearing on the merits becomes unnecessary and, instead, Rule 3420 of the
1997 Rules on judgments on the pleadings should apply. Petitioner thus prayed that the trial court render judgment
in his favor based on the pleadings.
Respondent filed an Opposition.21 In her Opposition to Plaintiff’s Memorandum,22 respondent argued among others
that the request for admission was premature considering that the decision in Civil Case No. MAN-2683 was the
subject of an appeal, and thus not yet final.
In an October 11, 2005 Order,23 the trial court directed the transfer of Civil Case No. MAN-4821 to Branch 55 of the
RTC Mandaue, since it is said court which decided the closely related Civil Case No. MAN-2683.
On October 2, 2006, Branch 55 issued an Order24 granting petitioner’s motion for judgment on the pleadings. It held
as follows:
This court has painstakingly exerted effort in going over the record and took serious note of all the pleadings,
documents and others on file. After serious consideration, the court believes and so holds that there is basis in
rendering judgment. The Motion for Judgment Based on the Pleadings though denominated as such but [sic] shall
be treated as a move to seek summary judgment. x x x
xxxx
The court in arriving at this resolution was guided by the following pronouncements by the Supreme Court in the
case of Diman vs. Alumbres, G.R. No. 131466, November 27, 1998, 299 SCRA 459 x x x:
xxxx
In the same case, it was held –

"It is also the law which determines when a summary judgment is proper. It declares that although the pleadings on
their face appear to raise issues of fact – e.g., there are denials of, or a conflict in, factual allegations – if it is shown
by admissions, depositions or affidavits, that those issues are sham, fictitious, or not genuine, or, in the language of
the Rules, that ‘except as to the amount of damages, there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law, the Court shall render a summary judgment for the plaintiff
or the defendant, as the case may be. (Italics and underscoring supplied)
On the other hand, in the case of a summary judgment[,] issues apparently exist – i.e.. facts are asserted in the
complaint regarding which there is as yet no admission, disavowal or qualification; or specific denials or affirmative
defenses are in truth set out in the answer – but the issues thus arising from the pleadings are sham, fictitious, not
genuine, as shown by [affidavits], depositions or admissions. In other words, as a noted authority remarks, a
judgment on the pleadings is a judgment on the facts as pleaded, while a summary judgment is a judgment on the
facts as summarily proven by affidavits, depositions or admissions." (Italics and underscoring supplied)
xxxx
Defendant25 did not file any verified answer or a pleading denying under oath the genuineness and authenticity of the
documents attached to the Request for Admission and of the other matters therein set forth. This failure has far
reaching implications in that the following are deemed admitted: a) the genuineness of Exhibits F, G and H, all
attached to the Request for Admission; b) that she admitted in paragraph 10 in her Answer to Civil Case No. MAN-
2683 that Lot 1087-A-2-E was no longer paraphernal property but rather a conjugal property of Spouses Teofilo and
Fe Adolfo and; c) that RTC, Branch 55, Mandaue City, sustained and/or held the view of defendant (Fe Tudtud) that
Lot 1087-A-2-E is a conjugal property of Spouses Teofilo and Fe Adolfo, thus, dismissed Civil Case No. MAN-2683
and awarded damages to the defendant.
Judicial admissions may be made in (a) the pleadings filed by the parties,
(b) in the course of the trial either by verbal or written manifestations or stipulations, or (c) in other stages of the
judicial proceeding, as in the pre-trial of the case. Admissions obtained through depositions, written interrogatories
or requests for admission are also considered judicial admissions." Page 686, Remedial Law Compendium, Vol. II,
9th Rev. Ed., Regalado
With the admission that Lot 1087-A-2-E is a conjugal property, it follows as its necessary and logical consequence,
that plaintiff26 is entitled to the relief demanded.
xxxx
A DECISION in Civil Case No. MAN-2683 had already been rendered by RTC, Branch 55, on the 15th day of May
2002 with the court finding that Lot 1087-A-2-E is a conjugal property x x x –
xxxx
For reason[s] of expediency and convenience, the court may even take judicial notice of its earlier decision finding
Lot 1087-A-2-E as a conjugal property.27
xxxx
Under the circumstances, judicial separation of property is proper. Aware that the separation has the effect of a
dissolution of the conjugal partnership property regime, the presumptive legitime of Nilo Adolfo (the only common
child of the spouses) has to be delivered in accordance with Article 51 in relation to paragraph (8) Article 127 and
Article 137 of the Family Code of the Philippines.
WHEREFORE, premises considered, judgment is hereby rendered directing the partition of Lot 1087-A-2-E between
the plaintiff and the defendant in equal share of what remains after allocating to Nilo Adolfo a portion of Nine
hundred thirteen (913) square meters representing his presumptive legitime.
The plaintiff is directed to submit to this court the proposed subdivision plan for its consideration before submitting
the same for approval to the Bureau of Lands.
In case of disagreement as to their respective location, the same shall be done through raffle to be conducted by the
sheriff who shall see to it that judgment in this case shall be fully implemented.
SO ORDERED.28
Respondent instituted an appeal with the CA, which was docketed as CA- G.R. CV No. 01783.
Court of Appeals Decision in CA-G.R. CV No. 78971
Meanwhile, on May 30, 2007, the CA rendered its Decision29 in CA-G.R. CV No. 78971. It reversed the May 15,
2002 Decision of the trial court in Civil Case No. MAN-2683. It declared, among others, that the subject property
was respondent’s paraphernal property. Thus, it held:
Proceeding from the foregoing consideration, the finding that Lot No. 1087-A-2-E is a conjugal property does not
have any basis, hence, does not have any merit at all. On the contrary, plaintiffs-appellants30 sufficiently proved that
the aforesaid lot was defendant-appellee’s31 paraphernal property as the latter even admitted that she inherited the
same from her mother although she claimed it as a conjugal property based on the TCT’s attached to her answer.
Another strong indication that Lot No. 1087-A-2-E is solely owned by defendant-appellee is the fact that in another
case (Civil Case No. MAN-2008) involving the same property and the same parties but for a different issue (road
right of way), defendant-appellee alone signed the compromise agreement ceding a portion of the subject lot as a
right of way perpetually open and unobstructed for the benefit of plaintiffs-appellants, defendant-appellee, their
respective heirs, assigns and transferees and guests. The same compromise agreement which became the decision
of the case attained finality without defendant-appellee questioning the absence of her husband’s signature.
xxxx
WHEREFORE, prescinding from the foregoing premises, the appeal is hereby GRANTED and the Decision of the
Regional Trial Court of Mandaue City, Branch 55, dated 15 May 2002, in Civil Case No. MAN-2683 is REVERSED
and SET ASIDE.
Let the partition of Lot No. 1087-A-2-E consisting of 300 square meters bought by plaintiffs-appellants from
defendant-appellee be done in accordance to [sic] the sketch plan executed for that purpose.
SO ORDERED.32
On June 23, 2007, the above CA decision became final and executory.33
Ruling of the Court of Appeals in CA-G.R. CV No. 01783
In CA-G.R. CV No. 01783, respondent filed her Appellant’s Brief,34 where she argued that the trial court erred in
issuing its October 2, 2006 Order directing the partition or sale of the subject property; that it was error for the trial
court to take judicial notice of its own judgment in Civil Case No. MAN-2683 and thus declare that the subject
property is conjugal, since the issue of whether it constitutes conjugal or paraphernal property was still pending in
the appeal in CA- G.R. CV No. 78971; that since the proceedings in Civil Case No. MAN-2683 have not been
terminated and the issue regarding the character of the subject property has not been resolved with finality, then
petitioner’s resort to a request for admission and motion for judgment on the pleadings was premature; and that with
the May 30, 2007 Decision in CA-G.R. CV No. 78971, petitioner and the trial court should submit to the finding
therein that the subject property is her paraphernal property.
In his Appellee’s Brief,35 petitioner insisted that the trial court did not err in treating his motion for judgment on the
pleadings as one for summary judgment; that respondent’s Answer in Civil Case No. MAN-2683 constituted a
judicial admission that the subject property was a conjugal asset, which required no further proof; that respondent’s
failure to reply to his written request for admission also resulted in the acknowledgment that the subject property is a
conjugal asset; that the trial court correctly took judicial notice of the proceedings in Civil Case No. MAN-2683, as
they were relevant and material to the resolution of Civil Case No. MAN-4821; that since it was not respondent who
appealed the May 15, 2002 decision in Civil Case No. MAN-2683, then the finding therein that the subject property
is conjugal should bind her; and that the CA’s eventual finding in CA- G.R. CV No. 78971 that the subject lot was
respondent’s paraphernal property cannot bind him because he was not a party to Civil Case No. MAN-2683.
On October 6, 2009, the CA issued the assailed Decision containing the following decretal portion:
WHEREFORE, based from the foregoing premises, the Order of the Regional Trial Court, Branch 55, Mandaue City,
in Civil Case No. MAN-4821, is hereby REVERSED and SET ASIDE and the records of this case are remanded to
RTC (Branch 55), Mandaue City, for further proceedings.
SO ORDERED.36
In arriving at the above conclusion, the CA held that the trial court cannot treat petitioner’s motion for judgment on
the pleadings as one for summary judgment. It stated that in a proper case for judgment on the pleadings, there are
no ostensible issues at all on account of the defending party’s failure to raise an issue in his answer, while in a
proper case for summary judgment, such issues exist, although they are sham, fictitious, or not genuine as shown
by affidavits, depositions or admissions. In other words, a judgment on the pleadings is a judgment on the facts as
pleaded, while a summary judgment is a judgment on the facts as summarily proved by affidavits, depositions, or
admissions.37 It added that respondent’s Answer appeared on its face to tender an issue; it disputed petitioner’s
claim that the subject property is their conjugal property. The next thing to be determined is whether this issue is
fictitious or sham as to justify a summary judgment.
The CA added that although respondent was bound by the resulting admission prompted by her failure to reply to
petitioner’s request for admission, her claims and documentary exhibits clearly contradict what petitioner sought to
be admitted in his request; that the trial court disregarded the fact that the issue of whether the subject property is
conjugal was still unresolved as CA-G.R. CV No. 78971 was still pending; and that finally, the trial court should have
been guided by the principles that trial courts have but limited authority to render summary judgments and that
summary judgments should not be rendered hastily.38
Petitioner moved to reconsider, but in a March 2, 2012 Resolution, he was rebuffed. Hence, the present Petition was
filed on April 30, 2012.
In a March 20, 2013 Resolution,39 the Court resolved to give due course to the instant Petition. 1âwphi1
Issue
Petitioner now claims that the Court of Appeals erred in deciding the case on a question of substance not in accord
with law, Rule 26 of the 1997 Rules, and applicable jurisprudence.40
In his Petition seeking to reverse and set aside the assailed CA dispositions and thus reinstate the October 2, 2006
Order of the trial court, petitioner insists that respondent’s failure to reply to his written request for admission
resulted in her admitting that the subject property is a conjugal asset, applying Rule 26, Section 2 of the 1997 Rules;
that the CA grossly erred in disregarding the rule; that with the resulting admission, there remains no genuine issue
to be resolved in Civil Case No. MAN-4821, such that judgment based on the pleadings is proper. Finally, petitioner
adds that respondent’s trifling with the law and rules of procedure – by conveniently claiming in one case that the
subject property is conjugal, and then in another that it is paraphernal – should not be countenanced; she should be
held to her original declaration that the subject property is conjugal.
In her Comment,41 respondent counters that, as correctly ruled by the CA, petitioner elected the wrong remedy in
filing a motion for judgment on the pleadings when he should have moved for summary judgment; that in a motion
for judgment on the pleadings, the movant is deemed to admit the truth of all of the opposing party’s material and
relevant allegations, and rest his motion on those allegations taken together with that of his own as are admitted in
the pleadings;42 that the effect of this is that petitioner is deemed to have admitted that the subject property is
paraphernal, as claimed in her Answer; that with the final and executory May 30, 2007 Decision of the CA in CA-
G.R. CV No. 78971, the subject property should now be considered as her paraphernal property, and petitioner’s
case for partition on the claim that the subject property is conjugal should be dismissed for being moot and
academic.
Our Ruling
Judgment on the pleadings is proper "where an answer fails to tender an issue, or otherwise admits the material
allegations of the adverse party’s pleading."43 Summary judgment, on the other hand, will be granted "if the
pleadings, supporting affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law."44
We have elaborated on the basic distinction between summary judgment and judgment on the pleadings, thus:
The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious
character, on the other, are what distinguish a proper case for summary judgment from one for a judgment on the
pleadings. In a proper case for judgment on the pleadings, there is no ostensible issue at all because of the failure
of the defending party’s answer to raise an issue. On the other hand, in the case of a summary judgment, issues
apparently exist-i.e. facts are asserted in the complaint regarding which there is as yet no admission, disavowal or
qualification; or specific denials or affirmative defenses are in truth set out in the answer-but the issues thus arising
from the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions.45
An answer would "fail to tender an issue" if it "does not deny the material allegations in the complaint or admits said
material allegations of the adverse party’s pleadings by confessing the truthfulness thereof and/or omitting to deal
with them at all. Now, if an answer does in fact specifically deny the material averments of the complaint and/or
asserts affirmative defenses (allegations of new matter which, while admitting the material allegations of the
complaint expressly or impliedly, would nevertheless prevent or bar recovery by the plaintiff), a judgment on the
pleadings would naturally be improper."46
On the other hand, "whether x x x the issues raised by the Answer are genuine is not the crux of inquiry in a motion
for judgment on the pleadings. It is so only in a motion for summary judgment. In a case for judgment on the
pleadings, the Answer is such that no issue is raised at all. The essential question in such a case is whether there
are issues generated by the pleadings."47 "A ‘genuine issue’ is an issue of fact which requires the presentation of
evidence as distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded appear
uncontested or undisputed, then there is no real or genuine issue or question as to the facts, and summary
judgment is called for."48
In rendering summary judgment, the trial court relied on respondent’s failure to reply to petitioner’s request for
admission, her admission in Civil Case No. MAN-2683, as well as its May 15, 2002 Decision declaring that the
subject property is a conjugal asset. It took judicial notice of the proceedings in said case. While there is nothing
irregular with this – as courts may "take judicial notice of a decision or the facts prevailing in another case sitting in
the same court if (1) the parties present them in evidence, absent any opposition from the other party; or (2) the
court, in its discretion, resolves to do so"49 – the trial court however disregarded the fact that its decision was then
the subject of a pending appeal in CA-G.R. CV No. 78971. It should have known that until the appeal is resolved by
the appellate court, it would be premature to render judgment on petitioner’s motion for judgment on the pleadings;
that it would be presumptuous to assume that its own decision would be affirmed on appeal. One of the issues
raised in the appeal is precisely whether the subject property is conjugal, or a paraphernal asset of the respondent.
Thus, instead of resolving petitioner’s motion for judgment on the pleadings, the trial court should have denied it or
held it in abeyance. It should have guided petitioner to this end, instead of aiding in the hasty resolution of his case.
In the first place, Civil Case No. MAN-4821 was transferred to it from Branch 56 precisely for the reason that it was
the court which tried the closely related Civil Case No. MAN-2683.
Even if respondent is deemed to have admitted the matters contained in petitioner’s request for admission by her
failure to reply thereto, the trial court should have considered the pending appeal in CA-G.R. CV No. 78971. It
cannot take judicial notice solely of the proceedings in Civil Case No. MAN-2683, and ignore the appeal in CA-G.R.
CV No. 78971. After all, CA-G.R. CV No. 78971 is merely a continuation of Civil Case No. MAN-2683; an appeal is
deemed a continuation of the same case commenced in the lower court.50
On the part of petitioner, it must be said that he could not have validly resorted to a motion for judgment on the
pleadings or summary judgment. While it may appear that under Rules 34 and 35 of the 1997 Rules, he may file a
motion for judgment on the pleadings or summary judgment as a result of the consequent admission by respondent
that the subject property is conjugal, this is not actually the case. Quite the contrary, by invoking the proceedings
and decision in Civil Case No. MAN-2683, petitioner is precluded from obtaining judgment while the appeal in said
case is pending, because the result thereof determines whether the subject property is indeed conjugal or
paraphernal. He may not preempt the appeal in CA-G.R. CV No. 78971.
While it is true that a judgment cannot bind persons who are not parties to the action,51 petitioner cannot, after
invoking the proceedings in Civil Case No. MAN-2683 to secure affirmative relief against respondent and thereafter
failing to obtain such relief, be allowed to repudiate or question the CA’s ruling in CA-G.R. CV No. 78971. The
principle of estoppel bars him from denying the resultant pronouncement by the appellate court, which became final
and executory, that the subject property is respondent’s paraphernal property. "In estoppel, a person, who by his
deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent position,
attitude or course of conduct that thereby causes loss or injury to another. It further bars him from denying the truth
of a fact which has, in the contemplation of law, become settled by the acts and proceeding of judicial or legislative
officers or by the act of the party himself, either by conventional writing or by representations, express or implied or
in pais."52
Finally, the Court notes that the appellate court overlooked the May 30, 2007 Decision in CA-G.R. CV No. 78971,
which became final and executory on June 23 , 2007. The respondent included this development in her appellee's
brief, but the CA did not take it into account. As an unfortunate consequence, the case was not appreciated and
resolved completely.
Thus, with the development in Civil Case No. MAN-2683 brought upon by the final and executory decision in CA-
G.R. CV No. 78971 , petitioner's case is left with no leg to stand on. There being no conjugal property to be divided
between the parties, Civil Case No. MAN-4821 must be dismissed.
WHEREFORE, the Petition is DENIED. The October 6, 2009 Decision and March 2, 2012 Resolution of the Court
ofAppeals in CA-G.R. CV No. 01783 are AFFIRMED WITH MODIFICATION in that Civil Case No. MAN-4821 is
ordered DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 200983, March 18, 2015
REPUBLIC OF THE PHILIPPINES, Petitioner, v. HUANG TE FU, A.K.A. ROBERT UY, Respondent.
DECISION
DEL CASTILLO, J.:
This case reiterates the rule in naturalization cases that when full and complete compliance with the requirements of the
Revised Naturalization Law, or Commonwealth Act No. 473 (CA 473), is not shown, a petition for naturalization must be
perfunctorily denied.
This Petition for Review on Certiorari1 seeks to set aside 1) the November 29, 2011 Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 91213 affirming the September 24, 2007 Order3 of the Regional Trial Court of Quezon City, Branch 96 in Nat.
Case/Spec. Proc. No. Q-05-55251, as well as 2) the CA’s March 7, 2012 Resolution4 denying petitioner’s Motion for
Reconsideration.5c ralawred
Factual Antecedents
On March 19, 2004, respondent Huang Te Fu, a.k.a. Robert Uy – a citizen of the Republic of China (Taiwan) – filed a sworn
Declaration of Intent to Become [a] Citizen of the Philippines6 with the Office of the Solicitor General (OSG).
On April 27, 2005, respondent filed with the Regional Trial Court of Quezon City (trial court) a Petition for
Naturalization,7 which was docketed as Spec. Proc. No. Q-05-55251 and assigned to Branch 96. The Petition states:
I apply for naturalization as citizen of the Philippines and to the Court, respectfully shows [sic]: chanRob lesvi rtua lLawl ibra ry
First: My full name is HUANG TE FU, also known as ROBERT UY; ChanRoblesVi rtua lawlib rary
Second: My places of residence were:

1982 1 Santiago Street, Malinta, Valenzuela City
1982 to Biak na Bato, San Francisco Del Monte, Quezon City
1984
1984 to 235 C 3rd Street, 10th Avenue, Caloocan City
1994
1994 to 64-A Parklane Street, Barangay Sangandaan, Project 8, Quezon City;
present
Third: My trade or profession is a Businessman engaged in the manufacture of zipper, in which I have been connected since
1992; and from which I derive an average monthly income of P15,000.00; ChanRoblesVi rt ualawlib ra ry
Fourth: I was born on the 15th day of August 1976 in Taiwan. I am at present a Citizen or subject of the Republic of China,
under whose laws Filipinos may become naturalized citizens or subjects thereof [sic]; ChanRobles Vi rtua lawlib rary
Fifth: I am married to a Filipino, IRENE D. CHAN, 28 years of age, having been born on 11 April 1977 at Manila, and with
whom I have two (2) children, namely: ROCHELLE IVY C. HUANG, 3 years of age, who was born on 26 March 2002 at [sic]
Quezon City; and REYNARD IVAN C. HUANG, 1 year of age, who was born on 25 February 2004 at [sic] Quezon City. My
wife and two children are presently residing with me at 64-A Parklane Street, Barangay Sangandaan, Project 8, Quezon
City;ChanRobles Virtualawl ibra ry
Sixth: I arrived in the Philippines via China Airlines on the 13th of August 1982; ChanRoblesVirtualawl ibra ry
Seventh: I have filed my Declaration of Intent to Become a Citizen of the Philippines with the Office of the Solicitor General
on 4 March 2004, pursuant to and in compliance with Section 5 of Commonwealth Act No. 473, as amended;8 cralawre d
Eighth: I have resided continuously, for the last twenty three (23) years, in the Philippines since my arrival. I have received
my primary education at Philippine Cultural High School; secondary education at Philippine Cultural High School; and finished
my college education at Ateneo de Manila University with the degree of Bachelor of Science in Computer Science,
respectively, which are schools recognized by the Government and not limited to any race or nationality; ChanRoblesVirtualawl ibra ry
Ninth: I am able to speak and write English and Filipino; ChanRobles Vi rtua lawlib rary
Tenth: I believe in the principle underlying the Philippine Constitution. I am of good moral character and have conducted
myself in a proper and irreproachable manner during the entire period of my residence in the Philippines, in my relations with
the constituted Government as well as with the community in which I am living. I have mingled socially with the Filipinos,
and have evinced a sincere desire to learn and embrace the customs, traditions, and ideals of the Filipinos. I have all the
qualifications required under Section 2, a special qualification under Section 3, by being married to a Filipino woman, and
none of the disqualifications under Section 4 of Commonwealth Act No. 473; ChanRoblesVirtualawl ibra ry
I am not opposed to organized government or affiliated with any association or group of persons who uphold and teach
doctrines opposing all organized governments. I am not defending or teaching the necessity or propriety of violence,
personal assault, or assassination for the success and predominance of men’s ideas. I am not a polygamist nor a believer in
the practice of polygamy. I have not been convicted of any crime involving moral turpitude. I am not suffering from any
mental alienation or incurable diseases. The nation of which I am a citizen or subject of is not at war with the
Philippines. The country of which I am a citizen or subject of grants Filipinos the right to become naturalized citizens or
subjects thereof; ChanRoble sVirt ualawli bra ry
Eleventh: It is my intention in good faith to become a citizen or subject of the Philippines and to renounce absolutely and
forever all allegiance and fidelity to my foreign prince, potentate, state, or sovereignty, and particularly to the Republic of
China of which at this time I am a citizen or subject. I will reside continuously in the Philippines from the date of the filing of
my petition up to the time of my admission to the Philippine Citizenship; C hanRobles Vi rt ualawlib ra ry
Twelfth: I have not heretofore made any petition for citizenship to any Court; ChanRoblesVirt ualawli bra ry
Thirteenth: Mr. BENJAMIN A. MORALEDA, JR., of legal age, married, residing at 82-A Maginoo Street, Barangay Central,
Quezon City, and Ms. BELLA RAMONA A. ANTONANO, of legal age, single, residing at 1 Ligaya Street, Mandaluyong City, who
are both Filipinos, will appear and testify as my witnesses at the hearing of my herein petition.
Attached hereto and made an integral part of this petition are: (a) the Original Certification of Arrival from the Bureau of
Immigration (Annex “A”); (b) Declaration of Intent to Become a Citizen of the Philippines (Annex “B”); (c) Affidavit of the
two witnesses (Annexes “C” and “D”); and (d) my two recent photographs (Annexes “E” and “E-1”).
WHEREFORE, petitioner prays that he be admitted a citizen of the Philippines.9 cralaw lawlib rary
After trial, the trial court issued a September 24, 2007 Order10 granting respondent’s petition for naturalization, decreeing
thus:chanRoblesvi rt ualLaw lib rary
Petitioner11 thereafter testified that he was born on August 15, 1976 in Taiwan; that his father, Huang Ping-Hsung, and
mother, Huang Wen, Chiu-Yueh are both Chinese nationals; that he is the holder of Alien Certificate of Registration No.
E062035 and Immigrant Certificate of Residence No. 259804; that he resided at Lin 4, Chienkuo Li, Panchiao City, Taipei
County, Taiwan Province since his birth until he came to Manila, Philippines on August 13, 1982; that he first stayed at
Santiago Street, Valenzuela City; that they transferred to Biak-na-Bato Street, San Francisco Del Monte and they later
transferred to 23-C, 3rd Street, 10th Avenue, Caloocan City; that petitioner presently resides at No. 64-A Parklane Street,
Barangay Sangandaan, Project 8, Quezon City; that he attended Philippine Cultural High School for his elementary and
secondary education; that he attended Ateneo de Manila University where he took up Bachelor of Science in Computer
Science.
When petitioner graduated from College in the year 2000, he worked as General Manager of MIT Zipper, a company owned
by the family of the petitioner; that as a businessman he conscientiously files Income Tax Returns; that he is presently
married to Irene Chan, a Filipino citizen on October 01, 2000; that he has two children namely, Rochelle Ivy C. Huang, 3
years old, and Reynard Ivan C. Huang, 1 year old and that he and his family are presently residing at 64-A Parklane Street,
Barangay Sangandaan, Project 8, Quezon City.
Petitioner further alleged that he believes in the principles underlying the Philippine Constitution. He had conducted himself
in a proper, irreproachable manner during his entire period of residence in the Philippines in his relations with the constituted
government as well as with the community in which he is living. These allegations are evinced by the clearances petitioner
was able to secure from the Philippine National Police, National Bureau of Investigation, Office of the Clerk of Court –
Regional Trial Court, Quezon City, and the Office of the City Prosecutor. He has mingled socially with the Filipinos, and have
[sic] evinced a sincere desire to learn and embrace the customs, traditions, and ideals of the Filipinos.
Petitioner further alleged that he is not a polygamist nor a believer in the practice of polygamy. He has not been convicted
of any crime involving moral turpitude. He is not suffering from any mental alienation or any incurable or contagious
disease. The nation of which he is presently a citizen or subject of, is not at war with the Philippines. He is not opposed to
organized government or affiliated with any association or group of persons who uphold and teach doctrines opposing all
organized governments. He has all the qualifications required and none of the disqualifications under Commonwealth Act No.
473, as amended.
Moreover, petitioner’s intention to become a citizen of the Philippines is being done in good faith, and to renounce absolutely
and forever all allegiance and fidelity to any foreign state, prince, potentate or sovereignty and particularly to the Chinese
Government of which at this time he is a citizen and subject, and that petitioner shall reside continuously in the Philippines
from the date of filing of this petition up to the time of [his] admission to the Philippine Citizenship.
Based on the foregoing, the Court believes that the petitioner was able to establish by sufficient evidence, both testimonial
and documentary, that he has all the qualifications and none of the disqualifications provided for under the law which will
warrant the granting of the relief being prayed for.
ACCORDINGLY, therefore, the petition for admission as citizen of the Philippines is hereby GRANTED.
This decision shall become executory after two (2) years from its promulgation and after the Court, after hearing, with the
attendance of the Solicitor General or his representative, is satisfied, and so finds that during the intervening time the
applicant has (1) not left the Philippines, (2) dedicated himself continuously to a lawful calling or profession, (3) not been
convicted of any offense or violation of government[-]promulgated rules, or (4) committed any act of [sic] prejudicial to the
interest of the nation or contrary to any government renounced [sic] policies.
Petitioner filed an appeal with the CA, which was docketed as CA-G.R. CV No. 91213. Petitioner contended in its Appellant’s
Brief13 that respondent may not become a naturalized Filipino citizen because: 1) he does not own real estate in the
Philippines; 2) he does not have some known lucrative trade, profession or lawful occupation; 3) he is not gainfully
employed, as he merely worked in the business owned by his family and was merely given allowances by his parents for the
daily expenses of his family; 4) in an August 2001 Deed of Sale14 covering a parcel of land in Antipolo City he and his wife
supposedly purchased, respondent falsely misrepresented himself as a Filipino citizen, thus exemplifying his lack of good
moral character; 5) his income tax returns for the years 2002, 2003 and 2004 reveal that his actual monthly income differs
from his monthly income as declared in his petition for naturalization, leading to the conclusion that either he is evading
taxes or concealing the truth regarding his income; and 6) on cross-examination by petitioner, he could not cite any of the
principles underlying the Philippine Constitution which he is supposed to believe in.
In a short Comment/Opposition15 to petitioner’s brief, respondent admitted that while “he was merely made to sign the Deed
of Sale” which falsely represented him as a Filipino citizen, he “had nothing to do with the preparation” thereof and was
“unaware” that his citizenship was even indicated therein – “he just signed the document as requested by the broker so that
the property will be registered in the name of his wife;” that the discrepancy between his income declarations in his tax
returns and the declared income in his petition for naturalization came to light and resulted from the fact that “he does not
personally file his income tax returns and that he merely received salaries in the range of P15,000.00 per month considering
that he is employed in a family corporation;” that “most of his expenses are taken care of by his parents who own the
corporation,” and this has been explained during his cross-examination; that while petitioner claimed that he could not
cite any underlying principles of the Constitution, he was not confronted by the former about these principles during the
proceedings; and that petitioner’s opposition is based merely on conjecture and particular portions of the evidence which do
not represent the whole context of the proceedings.
On November 29, 2011, the CA issued the assailed Decision, pronouncing thus: chanRoblesvi rtua lLawl ibra ry
First off, an examination of the evidence presented during the proceedings below shows that the petitioner-appellee16 has
been engaged in some lucrative trade or lawful occupation. He works as general manager in their family-owned business,
Crown Shipper Manufacturer and Trading Corporation, a zipper manufacturing company employing workers mostly coming
from the province.
Prior to his appointment as general manager, petitioner-appellee has also been working in the family’s business before his
parents turned over the management of its affairs. This is evidenced by the increase in the declared gross income of the
petitioner-appellee in his Income Tax Returns filed for the years 2002, 2003, 2004 and 2005. The extent of the operations of
the petitioner-appellee’s family business and his involvement in the management thereof are corroborated by the testimonies
of Atty. Benjamin Moraleda and Atty. Bella Ramona Antonano, both friends of the Huang family and the petitioner-appellee
since 1987 and 1994, respectively. Both witnesses also testified that the petitioner-appellee possessed all the qualifications
and none of the disqualifications to become a naturalized citizen of the Philippines.
Secondly, the Solicitor General also averred that the petitioner-appellee failed to conduct himself in a proper and
irreproachable manner during his entire stay or residence in the Philippines. It noted that the petitioner-appellee stated in
his petition that he earns an average of P15,000.00 per month but his declared gross income for 2002 and 2003 indicated
that he earned P120,000.00 annually while in 2004, his annual gross income was P210,000.00. The Solicitor General
contended that because of the petitioner-appellee’s failure to divulge his true income, his moral character has been tainted.
We hold otherwise.
Absent a clear and unmistakable showing that the petitioner-appellee knowingly and deliberately filed a fraudulent return
with intent to evade tax or that he has concealed the truth in his income tax returns, the presumption that the latter has
regularly filed his return prevails. The petitioner-appellee has, in fact, explained before the trial court that his salary is not
exactly fixed; sometimes he earns more or sometimes less than his estimated or average monthly earnings which could well
be between P15,000.00 to P18,000.00. He even testified that he is not included in the payroll since his parents own the
company and his salaries are handed to him by his parents.
In the case of Republic of the Philippines v. Court of Appeals and Loh Khuan Fatt, the Supreme Court did not agree with the
argument of the Solicitor General that there had been a willful failure on the part of the applicant to disclose the petitioner’s
true income, thereby tainting his moral character. The discrepancy between the petitioner’s estimate of his income in his
application and that declared by him during his direct testimony should not be taken against him as an indication of intent to
evade payment of taxes. x x x
xxxx
Lastly, the Solicitor General argued that petitioner-appellee is disqualified from becoming a citizen of the Philippines because
he could not even cite any of the principles underlying the Constitution during cross-examination x x x. chanrobles law
xxxx
We agree with the observation of the petitioner-appellee that the oppositor’s representative during the cross-examination
was actually asking the petitioner-appellee to recite what these underlying principles of the Constitution are in a manner
which a law professor would normally ask his Political Law students. Not being able to enumerate the principles in verbatim
does not necessarily mean that one does not believe in the Constitution. What is important is that the petitioner-appellee
declared under oath that he believes in the principles underlying the Constitution, and that he had no derogatory or criminal
record which would be a clear violation of the law of the land. Apparently, during cross-examination the oppositor-appellant
did not confront the petitioner-appellee of the principles which it thought the latter does not believe in.
WHEREFORE, the appeal is DENIED and the Decision dated September 24, 2007 of the Regional Trial Court of Quezon City,
Branch 96 in Naturalization Case No. Q-05-55251 is AFFIRMED.
Petitioner moved for reconsideration, but in its March 7, 2012 Resolution, the appellate court stood its ground. chanrob lesvi rtua llawli bra ry
Issue
Thus, the instant Petition was filed, raising the following issue: chanRob lesvi rtua lLawl ibra ry
WHETHER X X X RESPONDENT X X X HAS DULY COMPLIED WITH THE RIGID REQUISITES PRESCRIBED BY COMMONWEALTH
ACT NO. 473, OTHERWISE KNOWN AS THE REVISED NATURALIZATION LAW, AS TO ENTITLE HIM TO BE ADMITTED AS A
CITIZEN OF THE PHILIPPINES.18
cralawlawl ibra ry
cralawred
In its Petition and Reply19 seeking the reversal of the assailed CA dispositions as well as the denial of respondent’s petition
for naturalization, petitioner argues that respondent failed to prove that he is engaged in a lucrative trade, profession or
lawful occupation; that respondent’s admission during trial that he is not even in the payroll of his employer belies his claim
that he is the general manager thereof, as well as his claim that he is engaged in a lucrative trade; that respondent’s
declared monthly income is not even sufficient for his family, much less could it be considered “lucrative;” that respondent’s
admission that he received allowances from his parents to answer for the daily expenses of his family further proves the
point that he does not have a lucrative trade; that the monthly income declared in respondent’s petition for naturalization
could not be reconciled with the incomes stated in his annual tax returns; that the inconsistencies in respondent’s testimonial
and documentary evidence point to the fact the he could either be evading taxes or concealing the truth regarding his
income, and indicates that he does not possess the requisite good moral character; that respondent’s act of falsely declaring
himself a Filipino citizen in the August 2001 deed of sale proves lack of good moral character and defiance of the
constitutional prohibition regarding foreign ownership of land; and that respondent has exhibited lack of knowledge of the
underlying principles of the Philippine Constitution.
In his Comment,20 respondent reiterates that the inconsistencies in his income tax returns and declarations during the
naturalization proceedings are explained by the fact that he does not personally file his income tax returns; that his monthly
salary is not fixed; that most of his expenses are taken cared of by his parents who own the zipper manufacturing business
which employs him; that the Antipolo property was not titled in his name, but in the name of his wife, and the title thereto
merely describes and indicates that the owner – his wife – is married to him; that he was merely made to sign the deed of
sale, and he had no hand in its preparation – nor was he aware that his citizenship was indicated therein; and that as he was
not a law student, he could not at the trial be expected to recite verbatim and specifically the underlying legal principles of
the Constitution, which is what petitioner expected him to do at the time. chanroble svirtuallaw lib rary
Our Ruling
The Court finds for petitioner.
In Republic v. Hong,21 it was held in essence that an applicant for naturalization must show full and complete
compliance with the requirements of the naturalization law; otherwise, his petition for naturalization will be
denied. This ponente has likewise held that “[t]he courts must always be mindful that naturalization proceedings are imbued
with the highest public interest. Naturalization laws should be rigidly enforced and strictly construed in favor of the
government and against the applicant. The burden of proof rests upon the applicant to show full and complete compliance
with the requirements of law.”22 cralawred
Section 2 of the Revised Naturalization Law or CA 473 requires, among others, that an applicant for naturalization must be of
good moral character and must have some known lucrative trade, profession, or lawful occupation. In regard to the
requirement that the applicant must have a known lucrative trade, this ponente declared: chanRob lesvi rtual Lawli bra ry
Based on jurisprudence, the qualification of “some known lucrative trade, profession, or lawful occupation” means “not only
that the person having the employment gets enough for his ordinary necessities in life. It must be shown that
the employment gives one an income such that there is an appreciable margin of his income over his expenses
as to be able to provide for an adequate support in the event of unemployment, sickness, or disability to work
and thus avoid one’s becoming the object of charity or a public charge.” His income should permit “him and the
members of his family to live with reasonable comfort, in accordance with the prevailing standard of living, and
consistently with the demands of human dignity, at this stage of our civilization.”
Moreover, it has been held that in determining the existence of a lucrative income, the courts should consider only the
applicant’s income; his or her spouse’s income should not be included in the assessment. The spouse’s additional income is
immaterial “for under the law the petitioner should be the one to possess ‘some known lucrative trade, profession or lawful
occupation’ to qualify him to become a Filipino citizen.” Lastly, the Court has consistently held that the applicant’s
qualifications must be determined as of the time of the filing of his petition.23 (Emphasis supplied) c ralawlaw lib rary
From the above, it may be concluded that there is no basis for the CA finding that respondent is engaged in a lucrative
trade. Indeed, his supposed income of P15,000.00 to P18,000.00 per month as found by the CA is not enough for the
support of his family. By his own admission, most of his family’s daily expenses are still shouldered by his parents who own
the zipper manufacturing business which employs him. This simply means that respondent continues to be a burden to, and
a charge upon, his parents; he lives on the charity of his parents. He cannot support his own family on his own.
Indeed, it is even doubtful that respondent is carrying on a trade at all. He admitted during trial that he was not even listed
or included in the payroll of his family’s zipper business. If this is the case, then he may not be considered an employee
thereof. One of the most effective pieces of evidence to prove employment – aside from the employment contract itself and
other documents such as daily time records24 – is a worker’s inclusion in the payroll. With this admitted fact, one may not be
faulted for believing that respondent’s alleged employment in his family’s zipper business was contrived for the sole purpose
of complying with the legal requirements prior to obtaining Philippine citizenship.
On the other hand, even assuming that respondent was indeed employed by his parents, his non-inclusion in the payroll for
all the years he has worked in his parents’ business25 suggests – as correctly argued by petitioner – an intent to evade
taxes or to conceal the true nature of his employment and the amount of his salary or income. It is concealment of the
truth; an attempt to circumvent with impunity the tax laws, labor laws relative to the employment of aliens, and other laws
that would otherwise regulate respondent’s actions during his stay in this country. Indeed, without payroll records, it can
never be said that respondent works for his parents’ zipper business. If such is the case, then respondent is not required to
state in his income tax return – as is the case – his employer and what he actually receives as salary therefrom; he is free to
conveniently declare any amount of income in his tax returns.
Either way, respondent’s deliberate non-inclusion in the payroll of his parents’ business can have only the most unpleasant
connotations. And his consent to be part of such scheme reflects negatively on his moral character. It shows a proclivity for
untruthfulness and dishonesty, and an unreserved willingness and readiness to violate Philippine laws.
The appellate court’s reliance upon the case of Republic v. Court of Appeals26 is misplaced. In that case, there was only a
discrepancy between the applicant’s estimate of his income in his application and that declared by him during his direct
testimony. In the present case, respondent is not at all listed on the payroll of his parent’s business, where he is supposed
to be its general manager. As a result, there is absolutely no basis for the correct determination of his income; instead, he
invites Us to conveniently rely on his income tax returns and his unilateral declarations. As We have earlier said, if We are to
believe them, then still, they are insufficient to generate a conclusion that respondent is carrying on a lucrative trade; he
cannot support his family from his declared income.
Moreover, respondent’s admitted false declaration under oath contained in the August 2001 deed of sale that he is a Filipino
citizen – which he did to secure the seamless registration of the property in the name of his wife – is further proof of
respondent’s lack of good moral character. It is also a violation of the constitutional prohibition on ownership of lands by
foreign individuals.27 His defense that he unknowingly signed the deed is unacceptable. First of all, as a foreigner living in a
foreign land, he should conduct himself accordingly in this country – with care, circumspect, and respect for the laws of the
host. Finally, as an educated and experienced businessman, it must be presumed that he acted with due care and signed the
deed of sale with full knowledge of its import.28
c ralaw red
Having decided in the foregoing manner, We must conclude the instant case and disregard the other issues and arguments of
the parties; they are deemed irrelevant and will not alter the conclusion arrived at. As far as this Court is concerned,
respondent has failed to satisfy the law which renders him completely undeserving of Filipino citizenship.
WHEREFORE, the Petition is GRANTED. The November 29, 2011 Decision and March 7, 2012 Resolution of the Court of
Appeals in CA-G.R. CV No. 91213 are REVERSED AND SET ASIDE. The September 24, 2007 Order of the Regional Trial
Court of Quezon City, Branch 96 in Nat. Case/Spec. Proc. No. Q-05-55251 is likewise ANNULLED and SET ASIDE, and the
respondent’s Petition for Naturalization in said case is DISMISSED.
SO ORDERED. cralawlawlib
SECOND DIVISION
March 16, 2015
G.R. No.198024

vs.
RAFAEL CUNANAN y DAVID alias "PAENG PUTOL", Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
On appeal is the January 27, 2011 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 04062, which
affirmed the July 1, 2009 Decision2 of the Regional Trial Court (RTC) of Pasig City, Branch 164 in Criminal Case No.
15143-D finding appellant Rafael Cunanan y David alias "Paeng Putol" (appellant) guilty beyond reasonable doubt
of violation of Section 5, Article II of Republic Act (RA) No. 9165 or the Comprehensive Dangerous Drugs Act
of2002 and sentencing him to suffer the penalty of life imprisonment and to pay a fine of P500,000.00 and the costs.
Antecedent Facts
On October 19, 2006, an Information3 was filed charging appellant with the crime of illegal sale of dangerous drugs,
the accusatory portion of which reads:
On or about October 14, 2006, in Pasig City, and within the jurisdiction of this Honorable Court, the accused, not
being lawfully authorized by law, did then and there willfully, unlawfully and feloniously sell, deliver and give away to
PO1 Dario Gunda, Jr., a police poseur-buyer, one (1) heat-sealed transparent plastic sachet containing two
centigrams (0.02gram), of white crystalline substance, which was found positive to the test for methamphetamine
hydrochloride, a dangerous drug, in violation of the said law.
Contrary to law.4
Appellant pleaded not guilty upon his arraignment on April 30, 2007. Trial on the merits immediately followed. In the
course thereof, the testimony of prosecution witness P/Sr. Insp. Lourdeliza G. Cejes (PSI Cejes), the Forensic
Chemist of the Eastern Police District (EPD) Crime Laboratory Office, was dispensed with after the prosecution and
the defense stipulated on the following:
1.That in relation to the arrest of appellant, a request for laboratory examination was made on October 14, 2006 by
P/Sr. Insp. Bernouli D. Abalos (PSI Abalos) of the EPD Anti-Illegal Drugs Special Operation Task Force to the Chief
of the EPD Crime Laboratory Service;
2.That attached to the request is one heat-sealed transparent plastic sachet containing an undetermined amount of
white crystalline substance suspected to be shabu with markings Exh-A RCD/DG dated October 13, 2006, but not
as to the source of the specimen;
3.That the request together with the specimen were delivered by PO2 Michael Familara (PO2 Familara), recorded
by PO1 Menese and received by PSI Cejes;
4.That a qualitative examination on the specimen was conducted by PSI Cejes which gave positive result for the
presence of methamphetamine hydrochloride, a dangerous drug, as shown in Physical Sciences Report No. D-452-
2006E; and
5.The regularity and due execution of the Physical Sciences Report.5
The prosecution’s version of the event as derived from the combined testimonies of PO1 Dario Gunda, Jr. (PO1
Gunda) and PO2 Familara is summarized as follows:
At about 6:00 p.m. on October 13, 2006, a confidential informant (CI) went to the EPD-District Intelligence
Investigation Division (EPD-DIID) Headquarters of Pasig City and informed PSI Abalos that a certain "Paeng Putol,"
later identified as the appellant, was engaged in selling illegal drugs in Purok 4, Barangay Pineda, Pasig City. Acting
on the information, PSI Abalos organized a buy-bust team composed of himself, PO1 Gunda, PO1 Daniel Robiene,
PO2 Familara, SPO1 Jessie Bautista, and PO1 Ambrosio Gam, among others, to entrap appellant. PO1 Gunda was
designated as the poseur-buyer and was thus given two 100-peso bills6 which he marked with his initials "DG," while
the rest of the team would act as back-ups. After a short briefing, PSI Abalos prepared a Pre- Operation
Report/Coordination Sheet7 and coordinated the buy-bust operation with the Pasig City Police Station and the
Philippine Drug Enforcement Agency (PDEA). Thereafter, the team proceeded to and arrived at the target area at
9:20 p.m. PO1 Gunda and the CI walked towards a store along an alley while the others strategically positioned
themselves some five to seven meters away. The CI saw a man wearing gloves standing beside the store and
informed PO1 Gunda that the man was the appellant. Together, they approached appellant who is familiar to the CI.
PO1 Gunda was introduced to appellant as a drug user who wanted to buy shabu worth P200.00. After receiving the
marked money from PO1 Gunda, appellant entered a narrow alley and came back with a small plastic sachet
containing white crystalline substance which he handed to PO1 Gunda. Thereupon, PO1 Gunda gave the pre-
arranged signal to inform the buy-bust team of the consummated transaction and arrested appellant. When asked to
empty his pocket, recovered from appellant were the two marked 100-peso bills used as buy- bust money. Appellant
was then informed of his constitutional rights and the nature of the accusation against him and brought to the EPD
Headquarters. PO1 Gunda stapled the marked money on a bond paper and wrote thereon "recovered pre-marked
buy-bust money dated October 13, 2006." He also marked the plastic sachet with "Exh-A RCD/DG 10/13/06." The
said items were likewise brought to the EPD Headquarters and turned over to PO2 Familara for further investigation.
Later, the seized substance were inventoried and photographed. After this, PO1 Gunda and PO2 Familara brought
appellant, together with a request for his drug testing,8 and the seized substance, as well as a request for its
laboratory examination,9 to the EPD Crime Laboratory. The substance with the corresponding marking "Exh-A
RCD/DG 10/13/06" on its plastic sachet was received by PSI Cejes in the morning of October 14, 2006. Per
Physical Sciences Report No. D-452-2006E issued by PSI Cejes,10 the substance weighing 0.02 gram was found
positive for methamphetamine hydrochloride or shabu, a dangerous drug.
Appellant denied the charge and interposed the defenses of denial and frame-up/extortion. He alleged that after
eating dinner on October 13, 2006, he was watching a bingo game when three men arrived and held him by both
hands. They introduced themselves as policemen and told him that they have a warrant for his arrest. They then
handcuffed and frisked him and took away his wallet and cellphone. The men brought him to a police station where
PO2 Familara threatened to file a case against him unless he gives the police P50,000.00 as settlement. He failed
to give the said amount.
Another witness for the defense, Genedina Guevarra Ignacio, testified that she was outside her house between 7:00
p.m. and 8:00 p.m. of October 13, 2006 when she noticed three men passed by her in haste. The men approached
appellant who was then watching a bingo game across the street and suddenly handcuffed him. She heard
appellant asking the reason for his arrest. She did not know what happened next since she already went inside her
house.
In its July 1, 2009 Decision,11 the trial court adjudged appellant guilty of the crime charged, thus:
WHEREFORE, the Court finds accused Rafael Cunanan y David alias "Paeng Putol" GUILTY beyond reasonable
doubt of violation of Section 5, Article II of R.A. 9165 and hereby imposes upon him the penalty of life imprisonment
and a fine of Five Hundred Thousand Pesos (Php500,000.00) with the accessory penalties provided for under
Section 35 of said R.A. 9165.
The plastic sachet containing shabu (Exhibit "I") is hereby ordered confiscated in favor of the government and
turned over to the Philippine Drug Enforcement Agency for destruction.
With costs against the accused.
SO ORDERED.12
On appeal, the CA affirmed appellant’s conviction in its January 27, 2011 Decision,13 viz:
WHEREFORE, there being no reversible error committed by the trial court, the appeal is DISMISSED. The assailed
Decision dated July 1, 2009 of the RTC, Branch 164, Pasig City, in Criminal Case No. 15143-D, is AFFIRMED.
SO ORDERED.14
Hence, this appeal where appellant points out that: (1) there was no in flagrante delicto arrest as he was not
committing any crime at the time he was apprehended but was merely watching a bingo game; (2) it was
inconceivable for him to openly sell illegal drugs as PO1 Gunda himself testified that at the time of the alleged sale
transaction there were many people around the target area; (3) the apprehending officers failed to comply with the
guidelines on the proper custody of the seized dangerous drug, specifically with respect to its inventory and taking of
photograph, and this casts doubt on whether the plastic sachet with white crystalline substance identified in court
was the same item allegedly seized and confiscated from him; and (4) the testimonies of PO1 Gunda and PO2
Familara as to who was in possession of the seized item from the target area up to the police station were
conflicting.
Our Ruling
The appeal is without merit.
Appellant was lawfully arrested after he was caught in flagrante delicto selling an illegal drug in a buy-bust
operation; contrary to his contention, it was not inconceivable that he would openly sell an illegal drug in public.
Appellant assails the legality of his arrest contending that he was not caught in flagrante delicto. Appellant’s
contention fails to convince. The testimony of PO1 Gunda who acted as the poseur-buyer in the buy-bust operation
clearly recounts how the sale transaction between him and appellant transpired, viz:
Q- After you were introduced by this confidential informant to Paeng Putol that you are user of illegal drugs, what
was the reaction of the target person, this Paeng Putol?
A- The confidential [informant] asked him, "Paeng, halagang dos, meron ka ba[?], kukuha kami.
Q- What was the reply of this alias Paeng Putol?
A- Akina iyong pera, sabi niya.
Q- What did you do?
A- I gave to him the two pieces of one[-]hundred peso bill[s].
Q- What happened?
A- Sinabi niya na antayin ninyo ako diyan. Pumasok siya sa eskinita, hindi kalayuan, mga two to three meters.
Q- What did he do?
A- He returned and gave me one plastic sachet containing suspected shabu.
Q- After he handed to you that plastic sachet, what did you do next?
A- Nag pre-arranged signal ako para tulungan ako sa paghuli kay alias Paeng Putol.
xxxx
Q- What happened?
A- Hinawakan ko siya. Tapos pinakuha ko kung ano iyong laman ng bulsa niya. Ayun na recover ko sa kanyang
possession iyong dalawang daan.15
It is crystal clear from the foregoing that a sale transaction took place between appellant and PO1 Gunda. That the
said transaction involved the illegal sale of dangerous drug was sufficiently shown by the prosecution through its
establishment of the following elements of the offense: "(1) the identity of the buyer and the seller, object and
consideration; and (2) the delivery of the thing sold and the payment therefor."16 Undoubtedly, appellant was lawfully
arrested after he was caught in flagrante delicto selling shabu in a buy-bust operation.
In any event, jurisprudence is settled that "any irregularity attending the arrest of an accused should be timely raised
in a motion to quash the Information at any time before arraignment, failing [in] which, he is deemed to have
waived"17 his right to question the regularity of his arrest. As the records show, except during the inquest
proceedings before the prosecutor’s office, appellant never objected to the regularity of his arrest before his
arraignment. In fact, he even actively participated in the trial of the case. With these lapses, he is estopped from
raising any question regarding the same.18
Also not persuasive is appellant’s argument that it is inconceivable that he would openly sell an illegal drug in a
place where there were many people. The Court has already stated that drug pushers now sell their prohibited
articles to any prospective customer, be he a stranger or not, in private as well as in public places, and even in
daytime.19
The identity and evidentiary value of the seized item have been preserved.
Appellant assails the proof of the corpus delicti by pointing out the arresting officers’ non compliance with the
procedure on the proper custody and disposition of the seized item under Section 21 of RA 9165 and its
Implementing Rules and Regulations, particularly with respect to the inventory and taking of photograph of the
seized item. He contends that while PO1 Gunda testified that an inventory of the seized item was made and a
photograph thereof was taken, such inventory and photograph were not offered as evidence.
Appellant’s contention is untenable. "This Court has consistently ruled that non-compliance with the requirements of
Section 21 of [RA] 9165 will not necessarily render the [item] seized or confiscated in a buy-bust operation
inadmissible. Strict compliance with the letter of Section 21 is not required if there is a clear showing that the
integrity and evidentiary value of the seized [item] have been preserved, i.e., the [item] being offered in court as
[exhibit is], without a specter of doubt, the very same [one] recovered in the buy-bust operation."20 Thus, the
primordial concern is the preservation of the integrity and evidentiary value of the seized items as the same would
be utilized in the determination of the guilt or innocence of the accused.21
Here, the records reveal that after the consummation of the sale and the consequent arrest of appellant, the plastic
sachet sold by appellant was marked with "Exh-A RCD/DG/10/13/06"22 by PO1 Gunda at the place where it was
confiscated. Thereafter, appellant and the seized drug were brought to the police station. And as stipulated by the
parties, a request for laboratory examination of a plastic sachet containing white crystalline substance with marking
"Exh-A RCD/DG/10/13/06" was prepared; the said request and specimen were delivered by PO2 Familara and PO1
Menese to EPD Crime Laboratory and received by PSI Cejes; and, a qualitative examination of the specimen by PSI
Cejes revealed that the same is positive for metamphetamine hydrochloride or shabu, a dangerous drug. During
trial, the marked plastic sachet was presented and identified by PO1 Gunda as the same item sold to him by
appellant.
From this sequence of events, the prosecution was able to show an unbroken link in the chain of custody of the
subject item which is the proof of the corpus delicti. Its integrity and evidentiary value were shown not to have been
compromised notwithstanding the fact that the inventory and photograph thereof which PO1 Gunda claimed to have
been made were not offered in evidence. Besides, "[t]he integrity of the evidence is presumed to have been
preserved unless there is a showing of bad faith, ill will or proof that the evidence has been tampered with."23 In this
case, the defense failed to prove ill motive on the part of the apprehending officers that would have impelled them to
fabricate a serious crime against appellant. Also, the alleged inconsistency in the testimonies of PO1 Gunda and
PO2 Familara as to who was in possession of the item from the police station to the EPD crime laboratory did not
create any doubt that what was submitted for laboratory examination and later presented in court as evidence was
the same drug actually sold by the appellant.
Appellant’s defenses of denial and
frame-up/extortion must fail.

Appellant’s defenses of denial and frame-up/extortion must fail in light of the positive testimony of PO1 Gunda, the
poseur-buyer, that appellant sold to him the illegal drug. Moreover, it was not shown that appellant filed any criminal
or administrative charges against the apprehending officers, thus clearly belying his claim of frame-up/extortion
against them.
All told, appellant’s violation of Section 5, Article II of RA 9165 was duly established beyond reasonable doubt by the
prosecution. Hence, the Court affirms his conviction.
1âw phi 1
Penalty
Under RA 9165, the unauthorized sale of shabu, regardless of its quantity and purity, carries with it the penalty of life
imprisonment to death and a fine ranging from P500,000.00 to P10 million. Here, the penalty of life imprisonment
and a fine of P500,000.00 imposed upon appellant by the RTC and affirmed by the CA are in order. It must be
added, however, that appellant shall not be eligible for parole.24
WHEREFORE, the January 27, 2011 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 04062, which
affirmed the July 1, 2009 Decision of the Regional Trial Court of Pasig City, Branch 164 in Criminal Case No. 15143-
D finding appellant Rafael Cunanan y David guilty beyond reasonable doubt of violation of Section 5, Article II of
Republic Act No. 9165 and sentencing him to suffer the penalty of life imprisonment and to pay a fine of
P500,000.00, is AFFIRMED with the modification that appellant shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
March 11, 2015
G.R. No. 205492
REPUBLIC OF THE PIDLIPPINES, Petitioner,

vs.
SPOUSES DANTE and LOLITA BENIGNO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to. set aside the! January 22,
2013 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 9;7995, which denied the herein petitioner's
Omnibus Motion3 seeking reconsideration of the
CA's October 9, 2012 Resolution4 denying petitioner's Motion for Extension5 of time to file its Appellant's Brief.
Factual Antecedents
On November 2, 1995, spouses Dante and Lolita Benigno (respondents, collectively) filed with the Regional Trial
Court of Calamba, Laguria (Calamba RTC) an Application for Registration6 of title under Presidential DecreeNo.
1529
or the Property Registration Decree. (PD 1529) to a 293-square i:neter lot in Barangay Batong Malake, Los Baños,
Laguna. The case was docketed as LRC Case No. 105-95-C and assigned to Branch 35 of the Calamba RTC.
After trial, the Calamba RTC issued a December 9, 2005 Decision7 granting respondents’ application for registration,
decreeing thus:
WHEREFORE, this Court affirms the Order of general default against the whole world heretofore entered in this
case, and judgment is hereby rendered confirming the title of the applicants spouses Dante Benigno and Lolita Z.
Benigno covered by Tax Declaration No. 0284 and designated as Lot 6489, Cad. Lot No. 450 situated in Brgy.
Batong Malake, of the Municipality of Los Baños, Laguna and ordering the registration of said title in the name of the
said applicants spouses Dante Benigno and Lolita Z. Benigno.
Once this decision has become final, let an order issued [sic] directing the Land Registration Authority to issue the
corresponding decree of registration.
SO ORDERED.8
Petitioner filed its notice of appeal9 on January 10, 2006. In an April 10, 2006 Order,10 the trial court approved the
notice of appeal and directed that the entire records of the case be forwarded to the CA.
The appeal was docketed as CA-G.R. CV No. 97995.
On March 9, 2010, respondents filed a Motion to Dismiss the Appeal and Issue a Final Decree of
Registration,11claiming among others that petitioner has abandoned its appeal. It also filed a Motion to
Resolve12 seeking among others the denial of petitioner’s appeal on the ground of abandonment. But in a July 2,
2010 Order,13 the Calamba RTC denied both motions, stating that it was respondents’ failure to submit certain
required documents – the Affidavit of Publication14 and Certificate of Posting15 – as earlier directed by the court in a
March 26, 2010 Order16which caused the non-transmittal of the records of the case to the CA, thus delaying the
appeal proceedings. On July 26, 2010, respondents filed a Motion for Reconsideration17 of the said Order.
Without awaiting the resolution of its July 26, 2010 Motion for Reconsideration of the July 2, 2010 Order,
respondents filed on September 21, 2011 its Compliance18 and submitted the documents required by the trial court.
In a September 26, 2011 Order19 of the trial court, the branch clerk of court was directed to immediately mark the
documents and thereafter forward the records of the case to the CA. Thus, on December 21, 2011, the acting
branch clerk of court of the Calamba RTC forwarded the entire records of LRC Case No. 105-95-C to the Calamba
Office of the Clerk of Court for transmittal to the CA.
On December 21, 2011, the entire records of LRC Case No. 105-95-C was received by the CA.20
On February 21, 2012, respondents filed a Motion for Early Resolution21 of the appeal, seeking dismissal thereof on
the ground of alleged inaction and failure to prosecute on the part of the petitioner.
Respondents then filed with the CA a Manifestation and Motion to Suspend Proceedings22 dated May 8,
2012. Respondents contended that since its Motion for Reconsideration of the Calamba RTC’s July 2, 2010 Order
1a\^/phi 1
and Motion for Early Resolution of the appeal remained unresolved, the filing of an appellant’s brief by the petitioner
would be premature; thus, the appeal proceedings should be suspended until the said motions are resolved.
In an April 26, 2012 Notice,23 the CA directed petitioner to file its appellant’s brief within 45 days from receipt of the
notice.
On June 22, 2012, petitioner filed a Motion for Extension24 of time to file its brief. It sought an extension of 60 days
from June 21, 2012, or until August 20, 2012, within which to file the same.
In a Resolution25 dated June 26, 2012, the CA required petitioner to comment on respondents’ Manifestation and
Motion to Suspend Proceedings. It likewise granted petitioner’s Motion for Extension.
On July 16, 2012, petitioner filed an Opposition26 to respondent’s Manifestation and Motion to Suspend Proceedings,
with a prayer that the said manifestation and motion be denied for lack of merit.
On August 13, 2012, the CA issued a Resolution27 stating that with the filing of petitioner’s Opposition, respondents’
Manifestation and Motion to Suspend Proceedings are deemed submitted for resolution.
On August 17, 2012, petitioner filed a second Motion for Extension28 of time to file its appellant’s brief, praying for an
extension of 30 days from August 20, 2012, or until September 19, 2012, within which to file its brief.
However, petitioner did not file its brief within the period stated in its second motion for extension. Thus, on October
9, 2012, the CA issued another Resolution29 denying petitioner’s second motion for extension and dismissing its
appeal pursuant to Section 1(e), Rule 50 of the 1997 Rules of Civil Procedure (Rules). It held:
For resolution is oppositor-appellant’s motion for extension of time to file the appellant’s brief, which prays that it be
granted an additional period of thirty (30) days or until September 19, 2012 to file the aforesaid brief.
The records, however, will show the We have already granted oppositor- appellant’s previous motion for extension
of time to file its brief. In our Resolution dated June 26, 2012, We granted oppositor-appellant an additional period of
sixty (60) days or until August 20, 2012 within which to file its brief. However, oppositor-appellant failed to file its
appellant’s brief on or before August 20, 2012. Hence, the instant motion.
Oppositor-appellant should be reminded that the right to appeal is a mere statutory privilege, and should be
exercised only in the manner prescribed by law. The statutory nature of the right to appeal requires the one who
avails of it to strictly comply with the statutes or rules that are considered indispensable interdictions against
needless delays and for an orderly discharge of judicial business. Since oppositor-appellant has not been able to file
its brief within the proper period, We deem it appropriate to dismiss its appeal, pursuant to Section 1(e), Rule 50 of
the Rules of Civil Procedure, viz:
"SECTION 1. Grounds for dismissal of appeal. – An appeal may be dismissed by the Court of Appeals, on its own
motion or on that of the appellee, on the following grounds:
xxxx
(e) Failure of the appellant to serve and file the required number of copies of his brief or memorandum within the
time provided by these Rules;
x x x x"
It should also be noted that the appealed Decision was rendered on December 9, 2005 and the court a quo’s Order
letting the entire records of the instant case be forwarded to this Court was issued on April 10, 2006. Thus, We
believe that it is high time for the applicants-appellees, as the prevailing party in the court a quo’s Decision, to enjoy
the fruits of their victory.
WHEREFORE, appellant’s motion for extension of time to file its brief, dated August 16, 2012, is hereby DENIED.
Accordingly, the instant appeal is DISMISSED, pursuant to Section 1(e), Rule 50 of the Rules of Civil Procedure.
Considering the foregoing, applicants-appellees Manifestation and Motion to Suspend Proceedings, due to Our
alleged inaction on its Motion for Early Resolution, is hereby declared MOOT.
SO ORDERED.30
On October 18, 2012, petitioner filed a third Motion for Extension,31 praying for another 20 days from October 19,
2012, or until November 8, 2012, within which to file its appellant’s brief.
On November 5, 2012, petitioner filed its Appellant’s Brief.32 It likewise filed an Omnibus Motion33 seeking a
reconsideration of the CA’s October 9, 2012 Resolution and, consequently, the admission of its appellant’s brief.
Apologizing profusely for the fiasco, it begged for the appellate court’s leniency, claiming that it cannot be faulted for
the delay in the proceedings on appeal; that in fact, the delay was caused by the failure to transmit the records of
LRC Case No. 105-95-C to the CA, for which the respondents and Calamba City Office of the Clerk of Court should
be faulted; that in the interest of substantial justice, the CA should instead adopt a relaxed interpretation of Section
1(e), Rule 50 of the Rules in order to afford the State an opportunity to present its case fully.
Respondents filed their Comment34 arguing that only petitioner should be faulted for its failure to prosecute the
appeal; that from its repeated motions for extension, it can be seen that petitioner lacked diligence in pursuing its
appeal; and that consequently, the CA committed no error in issuing its October 9, 2012 Resolution.
Assailed Ruling of the Court of Appeals
On January 22, 2013, the CA issued the assailed Resolution, pronouncing thus:
A careful reading of oppositor-appellant’s motion, however, reveals that it does not raise any matter of substance
that would justify the reconsideration being sought. We, therefore, find no compelling reason to disturb Our findings
and conclusion in Our aforementioned Resolution.
WHEREFORE, the Omnibus Motion is DENIED. Our Resolution dated October 9, 2012 stands.
SO ORDERED.35
Thus, the instant Petition was filed.
Issue
In an April 23, 2014 Resolution,36 this Court resolved to give due course to the Petition, which raises the following
sole issue:
THE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW WHEN IT ORDERED THE DISMISSAL
OF THE APPEAL ALTHOUGH THE DELAY IN THE FILING OF THE APPELLANT’S BRIEF WAS CAUSED BY
THE TRIAL COURT AND THE RESPONDENTS.37
In its Petition and Reply38 seeking the reversal of the assailed CA Resolution as well as the dismissal of LRC Case
No. 105-95-C, petitioner reiterates that it should not be faulted for the delay in the proceedings on appeal, as it
resulted from the Calamba City Office of the Clerk of Court’s failure to transmit the records of LRC Case No. 105-95-
C to the CA; that it was the ministerial duty of the clerk of court to transmit the records of the case to the CA, and he
has no authority to withhold the records on the pretext that certain exhibits were lacking; and that the CA should
liberally apply Section 1(e), Rule 50 of the Rules in order to afford the State an opportunity to present its case fully.
Petitioner further argues, at this stage of the proceedings, that the Calamba RTC’s December 9, 2005 Decision
granting respondents’ application for registration is null and void for lack of the required certification from the
Secretary of the Department of Environment and Natural Resources (DENR) that the land applied for is alienable
and disposable land of the public domain. It claims that the mere testimony of a special investigator of the
Community Environment and Natural Resources Office (CENRO) cannot form the basis for the Calamba RTC’s
finding that the land applied for is alienable and disposable, pursuant to the ruling in Republic v. Hanover Worldwide
Trading Corporation;39 respondents should have submitted a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official records. Petitioner justifies the
raising of the issue at this late stage, arguing that the State may not be estopped by the mistakes of its officers and
agents; and that when the inference made by the CA is based on a misapprehension of facts, or when its findings of
fact are manifestly mistaken, absurd or impossible, as in this case, its erroneous decision may be reviewed by this
Court.40
In its Reply, petitioner further points out that the Calamba RTC’s December 9, 2005 Decision is void for lack of
publication;41 in other words, petitioner suggests that respondents in fact failed to cause the publication and posting
of the notice of initial hearing on its application, and that the subsequent submission through its September 21, 2011
Compliance of an Affidavit of Publication and Certificate of Posting of Notice of Initial Hearing was a mere fabrication
and fraudulent submission.
In their Comment,42 respondents insist that the assailed CA disposition is correct in all respects; that petitioner’s
failure to file its brief is not attributable to respondents; that petitioner filed no less than four motions for extension to
file its brief, which is indicative of its failure to prosecute its appeal with reasonable diligence and despite having
been given by the CA the opportunity to do so; that the CA’s authority to dismiss an appeal for failure of the
appellant to file a brief is a matter of judicial discretion;43 that the CA exercised its discretion soundly; that Section
1244 of Rule 44 of the Rules states that extensions of time for the filing of briefs will not be allowed except for good
and sufficient cause; that petitioner should not expect that every motion for extension it files will be granted; and that
the rules on appeal are not trivial technicalities that petitioner can simply disregard at will.
Respondents add that petitioner’s allegations of fraud and fabrication are not substantiated by the evidence; that the
affidavit of publication and certificate of posting were already presented during the initial hearing and later submitted
as part of their formal offer of evidence; that the Calamba RTC admitted the said exhibits and in fact mentioned the
same in its Decision granting the application; and that with the ruling in Republic v. Vega,45 it can be said that despite
the absence of a certified true copy of the DENR original land classification, an application for registration could
nonetheless be approved when there has been substantial compliance with the legal requirements relative to proof
that the land applied for is alienable and disposable.
Our Ruling
The Court finds for petitioner.
It is true, as we have held in numerous cases – particularly Beatingo v. Gasis46 – that the power conferred upon the
CA to dismiss an appeal for failure to file an appellant’s brief is discretionary. We likewise agree with the CA’s
application of Section 1(e), Rule 50 of the Rules. Indeed, petitioner took its liberties in the prosecution of its appeal,
filing at least three motions for extension of time before finally turning in its appellant’s brief, and taking the
demeanor consistent with expecting that each motion for extension of time would be granted.
However, while petitioner, through the Office of the Solicitor General, was admittedly ornery in the prosecution of its
case, it is nonetheless true that "[a]s a matter of doctrine, illegal acts of government agents do not bind the State,"
and "the Government is never estopped from questioning the acts of its officials, more so if they are erroneous, let
alone irregular."47 This principle applies in land registration cases.48 Certainly, the State will not be allowed to
abdicate its authority over lands of the public domain just because its agents and officers have been negligent in the
performance of their duties. Under the Regalian doctrine, "all lands of the public domain belong to the State, and the
State is the source of any asserted right to ownership in land and charged with the conservation of such
patrimony."49
Applicants for registration of title under PD 152950 must prove: "(1) that the subject land forms part of the disposable
and alienable lands of the public domain; and (2) that they have been in open, continuous, exclusive and notorious
possession and occupation of the land under a bona fide claim of ownership since 12 June 1945 or earlier. Section
14(1) of the law requires that the property sought to be registered is already alienable and disposable at the time the
application for registration is filed."51 And, in order to prove that the land subject of the application is alienable and
disposable public land, "the general rule remains: all applications for original registration under the Property
Registration Decree must include both (1) a CENRO or PENRO52 certification and (2) a certified true copy of the
original classification made by the DENR Secretary."53
A perfunctory appraisal of the records indicates that respondents did not present any documentary evidence in LRC
Case No. 105-95-C to prove that the land applied for is alienable and disposable public land. Their Exhibits "A" to
"N"54 are bereft of the required documentary proof – particularly, a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official records, and a CENRO or PENRO
certification – to show that the 293-square meter land applied for registration is alienable and disposable public land.
Respondents do not dispute this; in fact, they sought the application of the exceptional ruling in Republic v.
Vega55precisely to obtain exemption from the requirement on the submission of documentary proof showing that the
property applied for constitutes alienable and disposable public land.
Consequently, the December 9, 2005 Decision of the Calamba RTC is rendered null and void. The trial court had no
basis in fact and law to grant respondents’ application for registration as there was no proof of alienability adduced.
As such, it "has no legal and binding effect, force or efficacy for any purpose. In contemplation of law, it is non-
existent. Such judgment or order may be resisted in any action or proceeding whenever it is involved. It is not even
necessary to take any steps to vacate or avoid a void judgment or final order; it may simply be ignored. x x x
Accordingly, a void judgment is no judgment at all. It cannot be the source of any right nor of any obligation. All acts
performed pursuant to it and all claims emanating from it have no legal effect."56
"The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably belong to the
State. The onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application for
registration is alienable and disposable rests with the applicant."57 "[P]ublic lands remain part of the inalienable land
of the public domain unless the State is shown to have reclassified or alienated them to private persons."58 "Unless
public land is shown to have been reclassified or alienated to a private person by the State, it remains part of the
inalienable public domain. Indeed, occupation thereof in the concept of owner, no matter how long, cannot ripen into
ownership and be registered as a title."59
Therefore, even if the Office of the Solicitor General was remiss in the handling of the State’s appeal, we
nevertheless cannot allow respondents’ application for registration since they failed to prove that the land applied for
is alienable and disposable public land. Respondents cannot invoke Republic v. Vega60 to claim substantial
compliance with the requirement of proof of alienability; there is complete absence of documentary evidence
showing that the land applied for forms part of the alienable and disposable portion of the public domain. Complete
absence of proof is certainly not equivalent to substantial compliance with the required amount of proof.
Having disposed of the case in the foregoing manner, We find no need to resolve the other issues raised by the
parties, as they have become irrelevant in view of the finding that respondents failed to prove that the land applied
for forms part of the alienable and disposable portion of the public domain. The only available course of action is to
dismiss respondents’ application for registration.
We are aware that respondents have come to court at great cost and effort. The application for registration was filed
way back in 1995. However, the difficult lesson that must be realized here is that applicants for registration of public
land should come to court prepared and complete with the necessary evidence to prove their registrable title;
otherwise, their efforts will be for naught, and they would only have wasted. precious time, resources and energy in
advancing a lost cause.
WHEREFORE, the Petition is GRANTED. The October 9, 2012 and January 22, 2013 Resolutions of the Court of
Appeals in CA-G.R. CV No. 97995 are REVERSED AND SET ASIDE. The December 9, 2005 Dedsion of the
Regional Trial Court of Calamba, Laguna, Branch 35 in LRC Case No. 105-95-C is likewise SET ASIDE, and LRC
Case No. 105-95-C is thus ordered DISMISSED.
SO ORDERED.
SECOND DIVISION
March 11, 2015
G.R. No.192284
ALEX TIONCO y ORTEGA, Petitioners,

vs.
RESOLUTION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the January 21, 2010
Decision1 of the Court of Appeals (CA) in CA-G.R. CR No. 31924, which affirmed the August 29, 2008 Amended
Decision2 of the Regional Trial Court (RTC), Manila, Branch 11 in Criminal Case No. 02- 205012 finding petitioner
Alex Tionco3 y Ortega (petitioner) guilty beyond reasonable doubt of violation of Section 11(3), Article II of Republic
Act No. 9165 (R.A. 9165) or The Comprehensive Dangerous Drugs Act of 2002. Also questioned is the CA's May
13, 2010 Resolution4 denying the motion for reconsideration thereto.
Factual Antecedents
In an Amended Information5 dated September 4, 2002, petitioner was charged with violation of Section 11(3), Article
II of R.A. 9165, the pertinent portions of which read:
That on or about July 24, 2002, in the City of Manila, Philippines, the said accused, without being authorized by law
to possess any dangerous drug, did then and there willfully, unlawfully and knowingly have in his possession and
under his custody and control white crystalline substance known as shabu placed in one (1) heat-sealed transparent
plastic sachet weighing ZERO AND POINT ZERO FOUR SEVEN (0.047) GRAM, containing methylamphetamine
hydrochloride, a dangerous drug, without the corresponding license or prescription thereof.
Contrary to law.6
Petitioner entered a plea of not guilty to the charge upon his arraignment on December 9, 2002.
During the pre-trial, the prosecution dispensed with the testimony of Forensic Chemist P/Insp. Judycel Macapagal
(P/Insp. Macapagal) of the Western Police District (WPD) Crime Laboratory after the defense admitted that the drug
specimen, together with the letter-request for laboratory examination, were personally delivered by PO1 Elymar
Garcia (PO1 Garcia) to P/Insp. Macapagal and that the said specimen weighing 0.047 gram tested positive for
shabu per her Chemistry Report.7 Likewise dispensed with after a stipulation during the trial was the testimony of the
case investigator, PO1 Garcia.
At around 3:45 in the afternoon of July 24, 2002, PO1 Joel G. Sta. Maria (PO1 Sta. Maria) and PO1 Fernando
Reyes were conducting an anti-criminality patrol in Parola Compound, Tondo, Manila. From a distance of about
three meters, they saw petitioner holding and examining a plastic sachet with white crystalline substance believed to
be shabu. They approached petitioner and after ascertaining the contents of the plastic sachet, confiscated the
same. Petitioner was arrested, told of his alleged violation, and apprised of his constitutional rights. Thereupon,
petitioner and the confiscated plastic sachet were brought to the police station where the seized item was marked by
PO1 Sta. Maria with petitioner’s initials "ATO" before turning it over to PO1 Garcia for investigation and disposition.
PO1 Garcia prepared a letter request for the examination of the substance found inside the plastic sachet by the
WPD Crime Laboratory. Together with PO1 Sta. Maria, PO1 Garcia then brought the seized item to the crime
laboratory, which after examination by P/Insp. Macapagal, was found to be positive for methamphetamine
hydrochloride or shabu.
Petitioner denied the charges against him. He recounted that in the morning of July 24, 2002, he was sitting in front
of his uncle’s house when policemen approached and arrested him. When he asked them why he was being
arrested, he was merely told to follow their instructions. He was brought to Police Station 2 where he was frisked but
nothing illegal was found on him. He was detained after being informed that he violated the law pertaining to drugs.
PO1 Sta. Maria demanded P6,000.00 from him in exchange for his release but no money was forthcoming.
The RTC, in its Amended Decision8 of August 29, 2008, convicted petitioner, viz:
WHEREFORE, the foregoing premises considered, the Court in Criminal Case No. 02-205012, finds accused Alex
Tionco y Ortega GUILTY beyond reasonable doubt of the crime of violation of Section 11(3), Art. II of R.A. 9165,
and sentences him to imprisonment of twelve (12) years and one (1) day to fifteen (15) years and to pay a fine of
P300,000.00.
SO ORDERED.9

On appeal, the CA found the elements of illegal possession of dangerous drug present in the case. Moreover, it
accorded the police officers the presumption of regularity in the performance of their duties since they were not
impelled by improper motive in imputing the crime against petitioner. The CA also upheld the integrity and
evidentiary value of the confiscated item after observing that its chain of custody was duly established. On the other
hand, it did not give merit to petitioner’s assertion that it was highly improbable for him to openly display the sachet
of shabu in broad daylight and for the police officers to see the same at a distance of three meters. This is in light of
PO1 Sta. Maria’s positive identification of petitioner as the person who unlawfully possessed the illegal drug. Anent
the alleged inconsistency in the testimony of the said police officer with respect to petitioner’s position at the time he
was arrested, i.e., whether he was facing his companion or leaning on the wall, the CA ratiocinated that the same is
a peripheral matter which is inconsequential to the determination of petitioner’s guilt. Thus, the dispositive portion of
the CA’s January 21, 2010 Decision:10
WHEREFORE, the Amended Decision dated August 29, 2008 of the trial court is affirmed.
SO ORDERED.11
Petitioner filed a Motion for Reconsideration,12 which was denied in a Resolution13 dated May 13, 2010.
Issues
I.
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN GIVING FULL WEIGHT AND CREDENCE TO THE
PROSECUTION’S EVIDENCE [NOTWITHSTANDING] THE APPREHENDING TEAM’S FAILURE TO PROVE THE
INTEGRITY AND IDENTITY OF THE ALLEGED CONFISCATED SHABU.
II.
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE PETITIONER’S CONVICTION
DESPITE THE PREVAILING IRREGULARITIES IN THE APPREHENDING OFFICERS’ PERFORMANCE OF
THEIR OFFICIAL DUTIES.14
The Petition is not impressed with merit.
The well-established rule is "that findings of the trial courts which are factual in nature and which involve credibility
are accorded respect when no glaring errors; gross misapprehension of facts; or speculative, arbitrary and
unsupported conclusions can be gathered from such findings."15 "[T]he determination by the trial court of the
credibility of witnesses, when affirmed by the appellate court, is accorded full weight and credit as well as great
respect, if not conclusive effect."16 Here, there is no compelling reason to deviate from the findings of both the trial
and appellate courts as explained hereunder.
"For illegal possession of regulated or prohibited drugs, the prosecution must establish the following elements: (1)
the accused is in possession of an item or object, which is identified to be a prohibited drug; (2) such possession is
not authorized by law; and (3) the accused freely and consciously possessed the drug."17 As correctly found by the
CA, the prosecution was able to establish through testimonial, documentary and object evidence the aforesaid
elements. The circumstances on how petitioner was seen holding and examining a piece of plastic sachet
containing white crystalline substance, how the same was confiscated from him by the police officers, and his
eventual arrest were aptly narrated by PO1 Sta. Maria in a direct and consistent manner. In open court, the same
witness positively identified petitioner as the person holding the plastic sachet.18 He also identified the plastic sachet
marked "ATO" as the same item confiscated from petitioner.19 There is nothing on record to show that petitioner was
legally authorized to possess the same. And having been caught in flagrante delicto, there is prima facie evidence
that petitioner freely and consciously possessed the drug,20 which he failed to rebut. Indeed, all the elements of the
offense charged are obtaining in this case.
The Court finds unpersuasive petitioner’s contention that it is highly improbable and contrary to human experience
that he would hold and examine the subject plastic sachet with people around and in broad daylight. It has been
observed in many cases that drug pushers sell their prohibited articles to any prospective customer, be he a
stranger or not, in private as well as in public places, even during daytime. Undeniably, drug pushers have become
increasingly daring, dangerous and, worse, openly defiant of the law. Hence, what matters is not the time or place
where the violation was committed but the acts constituting the violation of the dangerous drug law.21
Further, the alleged inconsistency in PO1 Sta. Maria’s testimony pertaining to petitioner’s actual position when he
was said to be seen holding the sachet of shabu is too trivial and irrelevant to the elements of the crime. This Court
has ruled that "inconsistencies in the testimonies of witnesses which refer to minor and insignificant details cannot
destroy their credibility. Such minor inconsistencies even guarantee truthfulness and candor."22
With respect to the seized illegal substance, the presentation of the drug itself constitutes the corpus delicti of the
offense and its existence is indispensable to a judgment of conviction. It behooves upon the prosecution to establish
beyond reasonable doubt the identity of the narcotic substance. It must be shown that the item subject of the
offense is the same substance offered in court as exhibit.23 The chain of custody requirements provided for in
Section 21, Article II of R.A. 9165 performs this function as it ensures the preservation of the integrity and
evidentiary value of the item so that unnecessary doubts concerning the identity of the evidence are removed.24
In this case, petitioner attempts to raise doubts on the identity of the item confiscated from him. He asserts that
there was failure on the part of the police officers to preserve the integrity and evidentiary value of the seized item
as no physical inventory thereof was conducted, or photograph of it taken, immediately upon seizure, in violation of
the procedures provided by law.
Petitioner’s assertions are untenable. It is significant to note that the defense did not question the admissibility of the
seized item as evidence during trial. In no instance did he intimate before the trial court that there were lapses in the
handling and safekeeping of the item that might affect its admissibility, integrity and evidentiary value. It was only
during the appeal to the CA that he questioned the same. Settled is the rule that no question will be entertained on
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appeal unless it had been raised in the court below as enunciated in People v. Sta. Maria25 and reiterated in
subsequent cases.26
Besides, while there was indeed no physical inventory conducted and no photograph of the seized item was taken,
the Court has already ruled in several cases that the failure of the arresting officers to strictly comply with the law is
not fatal and will not render an accused’s arrest illegal or the items seized/confiscated from him inadmissible. "What
is of utmost importance is the preservation of the integrity and the evidentiary value of the seized items, as the same
would be utilized in the determination of the guilt or innocence of the accused."27 Here, after petitioner was arrested
and the suspected shabu was confiscated from him by PO1 Sta. Maria, the latter immediately brought the item to
the police station where he marked the plastic sachet with petitioner’s initials "ATO," and turned it over to the
investigator PO1 Garcia. The latter, together with PO1 Sta. Maria, then forwarded the said plastic sachet marked
with "ATO" ·and the letter request for laboratory examination to the WPD Crime Laboratory. Forensic Chemist
P/Insp. Macapagal personally received the same from PO1 Garcia and after conducting qualitative examination on
the contents thereof, found the same to be positive for methamphetamine hydrochloride or shabu. When the
prosecution presented as evidence in court the plastic sachet marked with "ATO," PO 1 Sta. Maria in no uncertain
terms positively identified it as the one he confiscated from petitioner. It is therefore beyond cavil that the chain of
custody of the seized item was shown to not have been broken, and, hence, its integrity and evidentiary value
properly preserved.
Finally, the CA correctly rejected petitioner's defenses of denial and extortion for being self-serving and
uncorroborated by strong and convincing evidence. Such line of defense must fail in light of the positive testimony of
the prosecution witness identifying petitioner as the unlawful possessor of the subject shabu.
All told, the Court sustains petitioner's conviction for violation of Section 11, Article II of R.A. 9165. There being no
aggravating or mitigating circumstance, the Court likewise affirms the penalty imposed upon him which is an
indeterminate sentence of twelve (12) years and one '(1)day to fifteen (15) years and a fine of P300,000.00, the
same being within the range of the penalty provided under Sec. 11(3),28 Article II of R.A. 9165.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed January 21, 2010 Decision and May
13, 2010 Resolution of the Court of Appeals in CA-G.R. CR No. 31924 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
March 09, 201
A.C. No. 7158
YOLANDA A. ANDRES,MINETTE A. MERCADO, and ELITO P. ANDRES, Complainants,

vs.
ATIY. SALIMATHAR V. NAMBI, Respondent.
DECISION
DEL CASTILLO, J.:
This is a Complaint for Disbarment1 filed against then Labor Arbiter Salimathar V. Nambi (respondent) on the ground
of gross ignorance of the law in issuing an Amended Alias Writ of Execution against M.A. Blocks Work, Inc. and its
incorporators,whothe herein complainants, are not parties to the case.
Factual Antecedents
On December 10, 2003, respondent rendered a Decision2 in a consolidated labor case3 against M.A. Mercado
Construction and spouses Maximo and Aida Mercado (spouses Mercado), thefallo of which reads: ~~
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents, M.A. Mercado
Construction and Maximo and Aida Mercado to reinstate the complainants to their former position[s] without loss of
seniority rights and to pay jointly and severally, their full backwages from October 28, 2000 up to the date of this
decision plus ten (10%) percent attorney’s fees of the total monetary award.
The Research and Information Unit of this Office is hereby directed to compute complainants[’] monetary award
which shall form part of this decision.
The complaint for damages is dismissed. The complaint against Shoemart, Inc., is likewise DISMISSED for lack of
merit.
SO ORDERED.4
The respondents in the labor case, namely the Spouses Mercado, doing business under the name and style of M.A.
Mercado Construction, interposed an appeal which was dismissed for failure to post an appeal bond. Thus, an Alias
Writ of Execution was issued to implement the Decision.
Thereafter, the complainants in the labor case filed an Ex Parte Motion for Amendment of an Alias Writ of
Execution.5 They claimed that they could hardly collect the judgment award from M.A. Mercado Construction
because it allegedly transferred its assets to M.A. Blocks Work, Inc. They thus prayed that the Alias Writ of
Execution be amended to include M.A. Blocks Work, Inc. and all its incorporators/stockholders6 as additional
entity/personalities against which the writ of execution shall be enforced.
In an Order7 dated February 10, 2006, respondent granted the motion to amend the alias writ of execution.
Accordingly, on February 17, 2006 an Amended Alias Writ of Execution was issued to enforce the monetary
judgment amounting to P19,527,623.55 against M.A. Blocks Work, Inc. and all its incorporators.
By way of special appearance, M.A. Blocks Work, Inc., together with three of its stockholders who are the
complainants in this administrative case, namely Yolanda A. Andres, Minette A. Mercado and Elito P. Andres, filed
an Urgent Motion to Quash8 the Amended Alias Writ of Execution, contending that they are not bound by the
judgment as they were not parties to the labor case. In an Order9 dated March 13, 2006, however, respondent
denied the Urgent Motion to Quash.
Aggrieved, herein complainants filed the instant Complaint for Disbarment, which we referred to the IBP on March 4,
2007 for investigation, report and recommendation.10
IBP’s Report and Recommendation
In his Report and Recommendation11 dated September 6, 2010, the Investigating Commissioner found respondent
guilty of gross ignorance of the law and recommended that he be suspended from the practice of law for a period of
six months. This was adopted and approved with modification by the IBP Board of Governors in an April 12, 2011
Resolution, to wit:
RESOLUTION NO. XIX-2011-110

Adm. Case No. 7158
Yolanda A. Andres, et al. vs.
Atty. Salimathar V. Nambi
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification
the Report and Recommendation of the Investigating Commissioner in the above-entitled case herein made part of
this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, considering respondent[’s] contumacious disregard of the lawful Order of Supreme Court
and the Commission on Bar Discipline of the IBP, and for his failure to appear despite due notices, Atty. Salimathar
V. Nambi is hereby SUSPENDED from the practice of law for six (6) months.12 (Emphasis in the original).
Issue
Whether respondent is guilty of gross ignorance of the law and of violating the Code of Professional Responsibility.
Our Ruling
At the outset, it must be emphasized that in this administrative proceeding, our discussion should be limited only on
the issue of whether respondent acted in gross ignorance of the law when he granted the motion to amend the alias
writ of execution; when he issued an Amended Alias Writ of Execution to enforce the monetary judgment against
M.A. Blocks Work, Inc. and all its incorporators; and when he denied complainants’ Urgent Motion to Quash.
As a rule, for one to be held administratively accountable for gross ignorance of the law, there must be a showing
that the error was gross and patent as to support a conclusion that the actor was so moved with malice, bad faith,
corruption, fraud, and dishonesty. As such, our discussion should be focused primarily on whether respondent
grossly erred in issuing the above orders as to amount to malice, bad faith, corruption, fraud and dishonesty.
On the other hand, we need not delve into the issue of whether there is an apparent misapplication of the doctrine of
piercing the veil of corporate fiction when respondent issued the Amended Alias Writ of Execution. For one, it is
outside the ambit of this administrative proceeding. Moreover, the issue of whether the doctrine of piercing the veil
of corporate fiction applies is the subject of an appeal brought by complainants before the National Labor Relations
Commission and eventually to the Court of Appeals.13
We perused the records of the case particularly respondent’s Order14 dated March 13, 2006 denying complainants’
Urgent Motion to Quash. Therein, we note that respondent’s ruling was not arrived at arbitrarily; on the contrary, he
cited grounds based on his personal assessment of the facts at hand, viz:
As culled from the case record, there is substantial evidence that respondents Maximo A. Mercado and Aida A.
Mercado, who are doing business under the name and style of M.A. Mercado Construction put up a corporation in
the name of M.A. Block Works, Inc. where individual movants are one of the incorporators. We give credence to the
argument of the complainants that the incorporators therein are relatives of Maximo A. Mercado and Aida Mercado
as shown by the Articles of Incorporation adduced by the former. The incorporators listed have similar family names
of the Mercados and the Andreses and common address at Gen. Hizon, Quezon City and 50 Daisy St., Quezon
City, and Maximo A. Mercado is the biggest stockholder. Aside from the Articles of Incorporation, complainants also
submitted a Letter of Intent/Notice To Proceed where respondents, despite their representation that they have
already ceased their business operation, are still continuing their business operation. The documents submitted by
the complainants were corroborated by certification issued by Maggie T. Jao, AVP-Assistant Controller of SM Prime
Holdings, Inc. that based on their records, an amount of P3,291,300.00 representing a sum total of all goods,
effects, money and credit that was garnished belong to M.A. Mercado Construction and/or Maximo Mercado and/or
Aida Mercado and/or M.A. Block Works, Inc. and/or Gertrudes Casilda A. Mercado, Yolanda A. Andres, Minette A.
Mercado and/or Elito P. Andres.
This Office has therefore, enough reason to conclude that respondents Maximo A. Mercado and Aida Mercado and
the movants herein are one and the same. Movants are alter egos or business conduits to defraud the complainants
and to consequently evade payment of judgment award. x x x As respondents are duly notified and aware of the
execution proceedings, the argument of denial of due process is untenable.15
It is apparent from the foregoing disquisition that respondent’s conclusion had some bases and was not plucked
from thin air, so to speak. Clearly, respondent did not act whimsically or arbitrarily; his ruling could not in any
manner be characterized as imbued with malice, fraud or bad faith. To reiterate what we have already stated above,
we are not here to judge in this present administrative proceeding whether respondent’s ratiocination on the
application of the piercing of corporate veil is correct; our only concern here is to decide whether respondent’s error
was so gross as to amount to fraud and dishonesty. Based on the above-quoted disquisition, it cannot be said, by
any stretch of imagination, that respondent’s error, if any, was so gross or that he was actuated by malice when he
issued the above orders. His conclusion was reached after an examination of the documents presented and
evaluation and assessment of the arguments raised by the parties. He did not capriciously rule on the issues
presented; on the contrary, he exerted efforts to weigh the positions of the contending parties.
In any event, we hold that respondent should not be held accountable for committing an honest mistake or an error
in the appreciation of the facts of the case before him. Otherwise every labor arbiter or any judicial or quasi-judicial
officer for that matter, would be continually plagued with the possibility of being administratively sanctioned for every
honest mistake or error he commits. For sure, this would not augur well to the administration of justice as a whole.
Pertinently, the Court ruled in Andrada v. Judge Banzon,16 viz:
Well-settled is the rule that unless the acts were committed with fraud, dishonesty, corruption, malice or ill-will, bad
faith, or deliberate intent to do an injustice, respondent judge may not be held administratively liable for gross
misconduct, ignorance of the law or incompetence of official acts in the exercise of judicial functions and duties,
particularly in the adjudication of cases.
Further, to hold a judge administratively accountable for every erroneous rule or decision he renders would be
nothing short of harassment and would make his position doubly unbearable. To hold otherwise would be to render
judicial office untenable, for no one called upon to try the facts or interpret the law in the process of the
administration of justice can be infallible in his judgment.17
Based on the foregoing, we have no basis to hold respondent administratively liable for gross ignorance of the law.
However, we note that respondent had consistently and obstinately disregarded the Court's and IBP's orders. It is
on record that respondent totally ignored the Court's June 7, 2006 Resolution18 directing him to file his Comment. He
also failed to attend the mandatory conference before the IBP's Commission on Bar Discipline despite
notice.19Neither did he file his Position Paper. As a former Labor Arbiter, respondent should know that orders of the
court "are not mere requests but directives which should have been complied with promptly and completely."20 "He
disregarded the oath he took when he was accepted to the legal profession 'to obey the laws and the legal orders of
the duly constituted legal authorities.' x x x His conduct was unbecoming of a lawyer who is called upon to obey
court orders and processes and is expected to stand foremost in complying with court directives as an officer of the
court."21
Section 27, Rule 138 of the Rules of Court provides:
Sec. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor. - A member of the bar may
1âwphi 1
be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other
gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral
turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a willful
disobedience of any lawful order of a superior court, or for corruptly or willfully appearing as an attorney for a party
to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally
or through paid agents or brokers, constitutes malpractice. (Emphasis supplied)
Considering that this appears to be respondent's first infraction, we find it proper to impose on himpenaltythe of
reprimand with warning that commission of the same or similar infraction will be dealt with more severely.
WHEREFORE, the Court REPRIMANDS respondent Atty. Salimathar V. Nambi for obstinately and unjustifiably
refusing to obey lawful orders of the Court and the Integrated Bar of the Philippines, with a warning that a repetition
of the same or similar act or offense shall be dealt with more severely.
Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Nambi's record as a
member of the Bar.
SO ORDERED.
SECOND DIVISION
G.R. No. 197818 February 25, 2015
PEOPLE OF THE PIDLIPPINES, Plaintiff-Appellee,

vs.
ALLAN DIAZ y ROXAS, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Challenged in this final recourse is the February 11, 2011 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-
H.C. No. 04206, which affirmed in toto the November 5, 2009 Decision2 of the Regional Trial Court (RTC), Branch 2,
Manila, in Criminal Case No. 08-263032 convicting appellant Allan Diaz y Roxas (appellant) of violation of Section 5,
Article II of Republic Act (R.A.) No. 9165 or the Comprehensive Dangerous Drugs Act of 2002.
Factual Antecedents
In an Information3 dated August 7, 2008, appellant was charged with illegal sale of shabu violation of Section 5,
Article II of R.A. No. 9165 committed as follows:
That on or about August 2, 2008, in the City of Manila, Philippines, the said accused, not having been authorized by
law to sell, trade, deliver, or give away to another any dangerous drug, did then and there willfully, unlawfully and
knowingly sell or offer for sale one (1) heat[-]sealed transparent plastic sachet with markings "ARD-1" containing
ZERO POINT ZERO ONEEIGHT (0.018) [gram] of white crystalline substance known as "SHABU", [or]
methylamphetamine hydrochloride, a dangerous drug.
CONTRARY TO LAW.4
Appellant entered a pleaof not guilty upon his arraignment on August 22, 2008 and filed a petition for bail. The
petition was denied for lack of merit on November 17, 2008.
The parties' respective versions of the incident are as follows:
On August 1, 2008, a confidential informant reported to the Pandacan Police Station (PS-10), Manila Police District,
about appellant's illegal drug trade activities in Kahilum I, Pandacan, Manila. At around10:00 p.m. of the same day,
a briefing was held and a buy-bust team composed of PO2 Arthuro Coronel, (PO2 Coronel), as poseur-buyer, PO3
Edgar Lacson, PO1 Ramil Carel and PO1 Richard Sibayan, as back-ups, was created. PO2 Coronel was provided
with three pieces of 100-peso bills which he marked with his initials "AC1-AC3."5 A Pre-Operation Report and
Coordination Sheet6 were then prepared and sent to the Philippine Drug Enforcement Agency.
At about 4:00 a.m. the next day, the team along with the informant proceeded to Kahilum I, Pandacan on board
three vehicles. From a distance, they saw appellant chatting with a male companion. The informant and PO2
Coronel approached appellant who was by then already alone. The informant introduced PO2 Coronel to the
appellant as a buyer of shabu. Appellant informed them that he has available shabu by saying "mayroon." Thus,
PO2 Coronel gave appellant the previously initialed three 100-peso bills and, in exchange therefor, the latter gave
him a small plastic sachet containing white crystalline substance suspected to be shabu. At that juncture, PO2
Coronel made the pre-arranged signal and immediately arrested appellant. After appellant was apprised of his
constitutional rights, the buy-bust team brought him to the police station and turned him over to the investigator. At
the police station, the plastic sachet containing the suspected shabu was marked by PO2 Coronel with "ARD-1," the
initials of appellant. A request for laboratory examination7 of the subject item was thereafter prepared by Police
Senior Inspector Peter L. Nerviza. Later, the submitted specimen weighing 0.018 gram was found positive for
methylamphetamine hydrochloride or shabu, a dangerous drug, per Chemistry Report No. D-725-08.8
Appellant, on the other hand, claimed that between 10:00 and 11:00 p.m. of August 1, 2008, he was walking home
when he was suddenly arrested, allegedly for verification purposes only, by policemen whose names he cannot
recall. He was brought to a police station and thereafter to an inquest prosecutor in the City Hall of Manila where he
first came to know that he was being charged with violation of R.A. No. 9165.
After trial, the RTC convicted appellant as charged and accordingly sentenced him in its Decision9 of November 5,
2009 as follows:
WHEREFORE, finding accused, Allan Diaz y Roxas, GUILTY beyond reasonable doubt of the crime charged, he is
hereby sentenced to life imprisonment and to pay a fine of ₱500,000.00 without subsidiary imprisonment in case of
insolvency and to pay the costs.
xxxx
SO ORDERED.10
Appellant appealed to the CA contending that the prosecution failed to prove his guilt beyond reasonable doubt
since the police officers failed to mark, conduct a physical inventory of, and photograph the subject item in his
presence and those of the persons mentioned under Sec. 21(1) of R.A. No. 9165.
By its assailed Decision11 of February 11, 2011, the CA affirmed in toto the RTC Decision. It found that the
prosecution was able to establish appellant's guilt to a moral certainty. Moreover, the CA did not doubt that the
shabu presented before the RTC was the same shabu seized from appellant since the prosecution likewise
established its unbroken chain of custody. Thus:
WHEREFORE, premises considered, the assailed decision of the RTC of Manila, Branch 2 dated November 5,2009
is hereby AFFIRMED IN TOTO.
SO ORDERED.12
Hence, this appeal.
Our Ruling
The appeal has no merit.

Appellant assails the trial court's assessment of the credibility of prosecution witness PO2 Coronel. He faults the
RTC in giving more faith and credit to PO2 Coronel's testimony regarding the buy-bust operation over his defense of
denial.
"[P]rosecution of cases involving illegal drugs depends largely on the credibility of the police officers who conducted
the buy-bust operation. It is fundamental that the factual findings of the trial [court] and those involving credibility of
witnesses are accorded respect when no glaring errors, gross misapprehension of facts, or speculative, arbitrary,
and unsupported conclusions can be gathered from such findings. The trial court is in a better position to decide the
credibility of witnesses, having heard their testimonies and observed their deportment and manner of testifying
during the trial. The rule finds an even more stringent application where said findings are sustained by the [CA],"13as
in this case. The Court has thoroughly examined the records of this case and finds the testimony of PO2 Coronel
credible. The said testimony is pertinently supported by documents such as the marked buy-bust money, chemistry
report, affidavit of arrest, among others, which all clearly attest to the fact that a sale of shabu took place between
him and appellant. On the other hand, appellant's defense of denial, aside from being self-serving, is
unsubstantiated and thus, has little weight in law. Hence, the lower courts correctly gave more credence to the
evidence of the prosecution.
Appellant banks on the prosecution's alleged failure to comply with the requirements of law14 with respect to the
proper marking, inventory, and taking of photograph of the seized specimen. However, it does not escape the
Court's attention that appellant failed to contest the admissibility in evidence of the seized item during trial. In fact, at
no instance did he manifest or even hint that there were lapses on the part of the police officers in handling the
seized item which affected its integrity and evidentiary value. As held by the Court in People v. Domado,15 citing
People v. Hernandez,16 objection to the admissibility of evidence cannot be raised for the first time on appeal. When
a party desires the court to reject the evidence offered, he must so state in the form of objection. Without such
objection, he cannot raise the question for the first time on appeal. In this case, appellant raised the police
operatives' alleged non-compliance with Section 21, Article II of R.A. No. 9165 for the first time on appeal before the
CA. Thus, following established jurisprudence, the alleged flaws do not adversely affect the prosecution's case.
In any event, it is "settled that an accused may still be found guilty, despite the failure to faithfully observe the
requirements provided under Section 21 of R.A. [No.] 9165, for as long as the chain of custody remains
unbroken."17Here, it is beyond cavil that the prosecution was able to establish the necessary links in the chain of
custody of the subject specimen from the moment it was seized from appellant up to the time it was presented
during trial as proof of the corpus delicti. As aptly observed by the CA:
[T]he contention of appellant that the police officers failed to comply with the provisions of paragraph 1, Section 21
of R.A. No. 9165 for the proper procedure in the custody and disposition of the seized drugs, is untenable. Record
shows that PO2 Coronel marked the confiscated sachet of "shabu" at the police station and in the presence of
appellant and the duty investigator. PO2 Coronel clarified that the reason why he marked the said "shabu" at the
police station and not at the scene of the crime was because the place where they transacted was dark. Thus, it is
only proper to preserve the confiscated item and mark it in a lighted and safe place which is at the police station.
Then, the said "shabu" was properly turned over to the duty investigator, together with the marked money.
Afterwards, the alleged "shabu" was brought to the forensic chemist for examination. Likewise, the members of the
buy-bust team executed their affidavits of arrest immediately after appellant was apprehended and at the trial, PO2
Coronel positively identified the seized drugs. Indeed, the prosecution evidence had established the unbroken chain
of custody of the seized drugs from the buy-bust team, to the investigating officer and to the forensic chemist. Thus,
there is no doubt that the "shabu" presented before the court a quo was the same "shabu" seized from appellant
and that indeed, he committed the crime charged in the information.18
All told, the Court finds appellant's conviction of the offense charged, as well as the imposition upon him of the
penalty of life imprisonment and payment of fine of ₱500,000.00, proper. It must be added, however, that appellant
1âwphi1
shall not be eligible for parole.19
WHEREFORE, the assailed February 11, 2011 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 04206 is
AFFIRMED with the MODIFICATION that appellant Allan Diaz y Roxas shall not be eligible for parole.
SO ORDERED
SECOND DIVISION
G.R. No. 200308 February 23, 2015

vs.
MERA "JOY" ELEUTERIO NIELLES, @ MERA NIELLES DELOS REYES, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Mera Joy Eleuterio Nielles @Mera Nielles Delos Reyes was charged with the crime of Qualified Theft in
an Information that reads as follows:
That on or about and sometime in July, 2004 in the City of Makati, Philippines and a place within the jurisdiction of
this Honorable Court, the above-named accused, being then the cashier of complainant Juanita J. Flores and as
such enjoying the trust and confidence reposed upon her by the said complainant, with intent to gain and without the
knowledge and consent of the owner thereof, with grave abuse of confidence, did then and there willfully, unlawfully
and feloniously take, steal, and carry away collected money in the total amount of ₱640,353.86 to the damage and
prejudice of the complainant, in the aforementioned amount of ₱640,353.86. CONTRARY TO LAW.1
In an Order2 dated January 18, 2005, the Regional Trial Court (RTC) of Makati City, Branch 132, ordered appellant's
release from confinement after having posted a bond in the amount ₱100,000.00 undertaken by Far Eastern Surety
& Insurance Company, Inc. under Bond No. 8385. Appellant was thereafter arraigned where she pleaded not guilty
to the charges.3
Trial on the merits ensued.
The prosecution established that private complainant Juanita Flores (Flores) was engaged in the business of
guaranteeing purchase orders and gift checks of Shoemart and Landmark and disposing, selling or transferring
them for consideration. Appellant initially worked as Flores’ house help but was eventually hired to work at Flores’
office performing clerical jobs like sorting invoices. When Flores’ business grew, appellant was assigned to bill and
collect from sub-guarantors, and to encash and deposit checks. On July 15, 2004, appellant collected ₱640,353.86
from the sub-guarantors. However, appellant did not remit the amount to Flores or deposit it in her (Flores’) account.
Instead, she issued 15 personal checks totaling ₱640,353.86 and deposited them to Flores’ account. All the checks
were dishonored upon presentment due to "account closed." Appellant thereafter absconded.
For her part, appellant denied having stolen the amount of ₱640,353.86.
In a Judgment4 dated March 26, 2008, the RTC of Makati City, Branch 132, found appellant guilty of the crime of
qualified theft, thus:
Given the foregoing, accused Nielles took ₱640,353.86 belonging to private complainant Juanita J. Flores, without
the latter’s consent. The taking was done with intent to gain because when the accused’s checks bounced, she
failed to remit or return the amount. The accused’s act was accomplished without the use of violence against or
intimidation of persons or force upon things, but rather by the use of abuse of confidence reposed [by] private
complainant [upon] her. Thus, the elements of theft, as well as the circumstances that made the same as qualified
theft, are present in the instant case.
Accused Nielles, on the other hand, denied having stolen and carried away ₱640,353.86. Aside from her bare
denial, she did not present any evidence to support this claim. In fact, she did not deny that the checks were issued
and deposited by her. Furthermore, she did not provide any reason or motive why Juanita would file the present
case against her. Accordingly, her denial has no basis and deserves no consideration.5
The dispositive portion of the RTC Judgment reads:

WHEREFORE, the Court finds the accused, Mera "Joy" Eleuterio Nielles a.k.a. Mera Nielles Delos Reyes, GUILTY
beyond reasonable doubt of the crime of Qualified Theft and hereby sentences her to suffer the penalty of
imprisonment of four (4) years of prision correccional, as minimum to twenty (20) years of reclusion temporal, as
maximum. She is ordered to pay private complainant Juanita J. Flores ₱640,353.86 as actual damages.
SO ORDERED.6
Aggrieved, appellant filed a notice of appeal. At the same time, she submitted a Renewal Certificate7 of her bond
effective for the period January 18, 2008 to January 18, 2009.
In her Brief, appellant asserted that since private complainant Flores was abroad on July 15, 2004, she could not
have personally known whether appellant indeed collected amounts from the sub-guarantors. She posited that mere
issuance of the 15 checks is not proof that she received/collected payments from the sub-guarantors or that she
failed to remit the monies belonging to Flores. She insisted that the prosecution failed to establish that she indeed
collected monies from the sub-guarantors amounting to ₱640,353.86. Appellant also theorized that she might have
issued the checks in favor of the sub-guarantors for whatever transactions they have between them; and that
thereafter, when she went to these sub-guarantors to collect their dues for private complainant, these sub-
guarantors used the same checks she previously issued as their payment for private complainant. For that reason
her personal checks were deposited in private complainant’s account.
The CA, however, in its Decision8 dated May 26, 2011, was not impressed by appellant’s protestations. It held that
the fact that Flores was out of the country during the commission of the offense is irrelevant since the prosecution
has satisfactorily established that upon her arrival in the Philippines, she immediately investigated the matter and
talked to the sub-guarantors. Flores also confirmed that indeed appellant issued 15 personal checks in lieu of the
amounts collected and deposited the same to Flores’ account but were all dishonored upon presentment.
Significantly, the CA noted that aside from her bare denial, appellant did not present any evidence to support her
claim that she did not steal the amount of ₱640,353.86 from Flores. In fine, the CA found all the elements for the
crime of qualified theft to be present.
Thus, the CA affirmed with modification the ruling of the trial court, viz:
WHEREFORE, premises considered, the instant Appeal is hereby DENIED. Accordingly, the assailed 26 March
2008 Decision of the Regional Trial Court of Makati City, Branch 132 in Criminal Case No. 04-3643 is AFFIRMED
with MODIFICATION. Accused-appellant is hereby sentenced to suffer the penalty of reclusion perpetua. She is
further ordered to pay Private Complainant the amount of ₱640,353.86.
SO ORDERED.9
Hence, this appeal. In a Resolution10 dated April 18, 2012, we required both parties to file their Supplemental Briefs.
The Office of the Solicitor General manifested that it is no longer filing its supplemental brief. On the other hand,
appellant maintains in her Supplemental Brief11 that the prosecution failed to establish that she unlawfully took the
amount of ₱640,353.86 belonging to Flores. She claims that mere issuance of the checks does not prove unlawful
taking of the unaccounted amount. She insists that, at most, the issuance of the checks proves that the same was
issued for consideration. On February5, 2013, appellant furnished this Court her bond renewal certificate12 issued by
Far Eastern Surety & Insurance Co., Inc. effective for the period January 18, 2013 to January 18, 2014.
Our Ruling
We concur with the findings of the trial court and the Court of Appeals that the prosecution satisfactorily established
all the elements of qualified theft, to wit: 1) taking of personal property;2) that said property belongs to another; 3)
that the said taking was done with intent to gain; 4) that it was done without the owner’s consent; 5) that it was
accomplished without the use of violence or intimidation against persons, or of force upon things; and 6) that it was
done with grave abuse of confidence.13 As correctly found by the appellate court:
Private complainant testified that Accused-appellant took the amount of ₱640,353.86 from her without her consent
by failing to turn over the amount she collected from the former’s sub-guarantors. Instead, she issued fifteen (15)
personal checks and deposited the same to Private Complainant’s account which however, all bounced for the
reason "account closed". The taking of the amount collected by Accused-appellant was obviously done with intent to
gain as she failed to remit the same to Private Complainant. Intent to gain is presumed from the act of unlawful
taking. Further, the unlawful act was accomplished by Accused-appellant without the use of violence or intimidation
against persons, [or] of force upon things as the payment to her of the said amount was voluntarily handed to her by
the sub-guarantors as she was known to be entrusted with the collection of payments.
The circumstance of grave abuse of confidence that made the same as qualified theft was also proven. Accused-
1âw phi 1
appellant herself testified that as a cashier, her functions and responsibilities include billings and collections from
their agents and making of deposits and withdrawals in behalf of Private Complainant. Moreover, when the payment
for the purchase orders or gift checks becomes due, she would fill up the four (4) blank checks given by the sub-
guarantor with the knowledge and consent of Private Complainant. It is beyond doubt that an employee like a
cashier who comes into possession of the monies she collected enjoys the confidence reposed in her by her
employer, as in the instant case.14
We are one with the trial court and the appellate court in finding that the element of taking of personal property was
satisfactorily established by the prosecution. During her cross-examination, private complainant Flores testified that
upon having been apprised of the unremitted collections, she conducted an investigation and inquired from her sub-
guarantors who admitted making payments to appellant.15 She also testified during cross-examination that when
appellant arrived from Hongkong, the latter went to Flores’ office and admitted to having converted the collections to
her personal use.16 Interestingly, when it was her turn to testify, appellant did not rebut Flores’ testimony. During her
direct examination, appellant only testified thus:
Atty. Regino – Question:
Madam Witness, you are being charged here with taking, stealing and carrying away collected money in the total
amount of ₱640,353.86, that is owned by Juanita J. Flores. What can you say about this allegation?
Witness:
That is not true, sir.
Atty. Regino – Question:
What is your basis in stating that?
Witness:
I never took that six hundred forty thousand that they are saying and, I never signed any document with the sub-
guarantors that I [took] money from them.17
Notably, when Flores testified during her cross-examination that she talked to the sub-guarantors who admitted
having made payments to appellant, the latter’s counsel no longer made further clarifications or follow-up questions.
Thus, Flores’ testimony on this fact remains on record unrebutted. Clearly, it is futile on the part of the appellant to
belatedly claim in her Brief before the appellate court that the prosecution should have presented these sub-
guarantors so they could be cross-examined.18 There is likewise no merit in her contention that the prosecution is
guilty of suppression of evidence when they did not present these sub-guarantors19 simply because the defense, on
its own initiative, could very well compel, thru the compulsory processes of the court, the attendance of these sub-
guarantors as witnesses.20 Moreover, we note that appellant did not even attempt to discredit the testimony of Flores
to the effect that upon her arrival from Hongkong, appellant went to Flores’ office and admitted to having committed
the offense.
Significantly, when appellant was placed on the witness stand, she did not even make any attempt to explain her
issuance of the 15 checks. In fact, during her entire testimony, she never made any mention about the personal
checks that she issued and deposited in Flores’ account. It was only in her Memorandum21 filed with the trial court
and her Brief22 submitted to the appellate court that the same was discussed. However, her explanation as to its
issuance is so convoluted that it defies belief. All that appellant could claim is that the issuance of the checks only
proves that the same was for a consideration – but omitted to explain what the consideration was. She also
theorized that she might have issued the checks to the sub-guarantors for her personal transactions but likewise
failed to elaborate on what these transactions were. In any event, if indeed appellant did not steal the amount of
₱640,353.86 belonging to Flores, how come she issued 15 personal checks in favor of the latter and deposited the
same in her account, albeit they were subsequently dishonored? Besides, we note that in appellant’s Counter
Affidavit23 dated August 20, 2004 subscribed before 3rd Assistant City Prosecutor Hannibal S. Santillan of Makati
City, she already admitted having taken without the knowledge and consent of private complainant several purchase
orders and gift checks worth thousands of pesos. She claimed though that she was only forced to do so by Edna
Cruz and cohorts.
We also concur with the findings of the trial court and the CA that the prosecution established beyond reasonable
doubt that the amount of ₱640,353.86 actually belonged to Flores; that appellant stole the amount with intent to gain
and without Flores’ consent; that the taking was accomplished without the use of violence or intimidation against
persons, or of force upon things; and that it was committed with grave abuse of confidence.
Anent the penalty imposed, Articles 309 and 310 of the Revised Penal Code state:
Art. 309. Penalties. Any person guilty of theft shall be punished by:
The penalty of prision mayor in its minimum and medium periods, if the value of the thing stolen is more than 12,000
pesos but does not exceed 22,000 pesos; but if the value of the thing stolen exceeds the latter amount, the penalty
shall be the maximum period of the one prescribed in this paragraph, and one year for each additional ten thousand
pesos, but the total penalty which may be imposed shall not exceed twenty years. In such cases, and in connection
with the accessory penalties which may be imposed and for the purpose of the other provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case may be.
xxxx
Art. 310. Qualified theft. The crime of theft shall be punished by the penalties next higher by two degrees than those
respectively specified in the next preceding articles, if committed by a domestic servant, or with grave abuse of
confidence, or if the property stolen is motor vehicle, mail matter or large cattle or consists of coconuts taken from
the premises of the plantation or fish taken from a fishpond or fishery, or if property is taken on the occasion of fire,
earthquake, typhoon, volcanic eruption, or any other calamity, vehicular accident or civil disturbance.
Based on the foregoing, since the amount taken is ₱640,353.86, then the imposable penalty shall be the maximum
period of prision mayor in its minimum and medium periods, or eight(8) years, eight (8) months and one (1) day to
ten (10) years, adding one (1) year for each additional ₱10,000.00. Thus, from ₱640,353.86, we deduct ₱22,000.00,
giving us a balance of ₱618,353.86 which we divide by ₱10,000.00. We now have sixty-one (61)years which we will
add to the basic penalty of eight (8) years, eight (8) months and one (1) day to ten (10) years. However, as stated in
Article 309, the imposable penalty for simple theft should not exceed a total of twenty (20) years. Thus, if appellant
had committed only simple theft, her penalty would be twenty (20) years of reclusion temporal. Considering however
that in qualified theft, the penalty is two degrees higher, then the appellate court properly imposed the penalty of
reclusion perpetua.24
Finally, we note that appellant has not yet been committed to prison. In view thereof and based on our foregoing
discussion, appellant must be ordered arrested and committed to prison to start serving her sentence.
ACCORDINGLY, the assailed May 26, 2011 Decision of the Court of Appeals in CA-G.R. CR No. 31635 is
AFFIRMED. The Regional Trial Court of Makati City, Branch 132 is DIRECTED to issue a warrant for the arrest of
appellant and to order her commitment at the Correctional Institution for Women, and to submit to this Court a
Report of such commitment, all within ten (10) days from receipt of this Resolution. The Superintendent,
Correctional Institution for Women is DIRECTED to confirm to this Court the confinement of appellant within ten (10)
days therefrom.
SO ORDERED.
SECOND DIVISION
G.R. No.195774 February 23, 2015

vs.
LARRY BASILIO y HERNANDEZ, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Challenged in this final recourse is the August 26, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C.
No. 03358 which affirmed the April 3, 2008 Decision2 of the Regional Trial Court (RTC) of Manila, Branch 35 in
Criminal Case No. 06-248048, convicting appellant Lany Basilio y Hernandez (appellant) of Violation of Section 5,
Article II of Republic Act (R.A.) No. 91653 and sentencing him to suffer the penalty of life imprisonment and to pay a
fine of ₱500,000.00.
Factual Antecedents
Pursuant to an information he received the day before, Police Senior Inspector (PSI) Julian T. Olonan (PSI Olonan)
organized in the morning of November 2, 2006 a team to conduct a "buy-bust" operation against a certain "Kagi"
who was said to be active in the illegal sale of drugs. The team was composed of SPO1 Teresito Cabanganan, PO3
Renato Jimenez (PO3 Jimenez), PO2 Richard Nieva, PO2 Ferdinand Manlapaz and SPO1 Federico Chua (SPO1
Chua). SPO1 Chua was designated as the poseur-buyer and was thus provided with a ₱100-bill as purchase
money, while the rest of the team would serve as back-ups.
At about 10:00 p.m., the team proceeded to the target area in San Gabriel, Old Sta. Mesa, Manila. Together withthe
informer, SPO1 Chua approached "Kagi," later identified as the appellant, who was sitting on the street pavement
and told the latter that he was going to score. Appellant asked SPO1 Chua "magkano" and the latter replied "piso
lang." Appellant got the money from SPO1 Chua and in turn handedto the latter a small heat-sealed transparent
plastic sachet containing white crystalline substance. Whereupon, SPO1 Chua scratched the back of his head
signifying to the back-up members that the sale had been consummated. Forthwith, SPO1 Chua arrested appellant,
informed him of his constitutional rights, and brought him and the seized item to the police station. Thereat, SPO1
Chua placed the marking "LBH" on the plastic sachet and turned over the same to their investigator, PO3 Jimenez.
A request for laboratory examination of the seized item was thereafter prepared4 which, together with the seized
item, was delivered by PO3 Jimenez to the Manila Police District (MPD) Crime Laboratory and was received by
Forensic Chemical Officer PSI Elisa G. Reyes (PSI Reyes). PSI Reyes then conducted a qualitative examination of
the specimen which weighed 0.083 gram and tested positive for Methylamphetamine Hydrochloride, a dangerous
drug.5
Appellant denied the accusation against him. He averred that on the night of November 2, 2006, he was on his way
home when five police officers in civilian attire who were looking for an alias "Peter" suddenly accosted him. When
he asked the officers why they were arresting him, he received no reply and was instead hit in the mouth by one of
them. Appellant surmised that the reason why he was charged with dealing in illegal drugs is his failure to give
information about alias "Peter."
In its April 3, 2008 Decision, 6the RTC found all the elements of illegal sale of dangerous drugs to have been clearly
established by the prosecution. Moreover, it gave full faith and credence to the testimonies of the apprehending
police officers for being positive, categorical and straightforward. And there being no showing of bad faith on their
part, the RTC upheld the presumption of regularity in the performance of duty in their favor. On the other hand, it
rejected appellant’s unsubstantiated defense of denial. Ultimately, the RTC ruled, viz:
IN VIEW OF ALL THE FOREGOING, the Court finds the accused, Larry Basilio y Hernandez, GUILTY beyond
reasonable doubt of the offense charged and hereby sentences him to suffer the penalty of life imprisonment; to pay
a fine of Five Hundred Thousand (₱500,000.00) Pesos, and the cost of suit.
xxxx
SO ORDERED.7
On appeal to the CA, appellant questioned the police officers’ noncompliance with the requirements set forth under
Section 21 of R.A. No. 9165. The CA, however, aside from not finding any violation of the said provision, agreed that
all the elements of the offense charged were duly established. It held in its August 26, 2010 Decision,8 as follows:
WHEREFORE, in the light of the foregoing, the appealed DECISION dated April 3, 2008 of the Regional Trial Court
(RTC) of Manila, Branch 35, finding herein accused-appellant Larry H. Basilio guilty beyond reasonable doubt of the
crime charged, in Criminal Case No. 06-248048, is hereby AFFIRMED.
SO ORDERED.9
Hence, this appeal.
Issue
Whether the lower courts correctly convicted appellant of the offense of illegal sale of shabu. Our Ruling
The appeal is devoid of merit.
Elements of illegal sale of dangerous drugs established in this case.
To obtain a conviction for violation of Section 5,Article II of R.A. No. 9165 involving a buy-bust operation, the
following essential elements must be established: "(1) the identity of the buyer and the seller, the object of the sale
and consideration; and (2) the delivery of the thing sold and its payment. What is material is the proof that the
transaction or sale actually took place, coupled with the presentation in court of the corpus delicti as
evidence."10Thus, the delivery of the illicit drug to the poseur-buyer and the receipt by the seller of the marked money
consummate the illegal transaction.
Here, all the foregoing elements are obtaining. The prosecution witnesses positively identified appellant as the seller
of the substance to the poseur-buyer, SPO1 Chua, for the sum of ₱100.00. The white crystalline substance
presented during trial was identified bySPO1 Chua as the substance sold and delivered to him by appellant. The
substance when examined by Forensic Chemical Officer PSI Reyes tested positive to methylamphetamine
hydrochloride or shabu. Clearly, the prosecution has adequately and satisfactorily proved all the elements of the
offense.
Chain of custody unbroken; integrity and

evidentiary value of the seized drug
preserved.
The chain of custody requirement aims to ensure that the integrity and evidentiary value of the seized item are
preserved, so much so that doubts as to the identity of the evidence are removed. "To be admissible, the
prosecution must show by records or testimony, the continuous whereabouts of the exhibit at least between the time
it came into possession of the police officers and until it was tested in the laboratory to determine its composition up
to the time it was offered in evidence."11
Appellant questions the chain of custody of the seized item. As borne out by the records, however, the confiscated
plastic sachet with white crystalline substance was in the possession of SPO1 Chua after the buy-bust operation
and apprehension of appellant. He then brought the same to the police station and, thereat, marked it with the
letters "LBH" which stand for appellant’s initials. Thereafter, the marked sachet and its contents, as well as the
request for laboratory examination thereof, were delivered by PO3 Jimenez to the MPD Crime Laboratory where it
was received by PSI Reyes.12 In her Chemistry Report No. D-1274-06,13 PSI Reyes confirmed that the specimen
bearing the same marking "LBH" tested positive for methylamphetamine hydrochloride or shabu. A small heat-
sealed transparent plastic sachet containing white crystalline substance presented in court was identified during trial
by SPO1 Chua to be the same item sold to him by appellant during the buy-bust operation. It is therefore plain that
the subject illegal substance presented and identified in court was the very same object sold and delivered by the
appellant to the poseur-buyer. Indeed, there was an unbroken chain in the custody of the subject prohibited drug.
Appellant also posits that the marking of the seized item at the police station instead of at the place of seizure
immediately after his arrest engendered serious doubt as to its identity. The Court is not convinced. Marking the
subject item at the police station did not dent the prosecution's case. While R.A. No. 9165 provides for the
immediate marking of the seized item, it does not specify a time frame when and where said marking should be
done. In fact, in People v. Resurreccion,14 the Court had the occasion to rule that marking upon immediate
confiscation contemplates even marking at the nearest police station or office of the apprehending team.
Finally, while it is admitted that the apprehending officers failed to conduct an inventory of the seized item and to
photograph the same as required by paragraph 1, Section 21, Article II of R.A. No. 9165 and Section 21(a) of its
Implementing Rules and Regulations, the non-compliance did not affect the seized item's evidentiary weight and
admissibility in evidence. As previously discussed, the chain of custody of the seized item was unbroken, hence, its
integrity and evidentiary value were not compromised. It must be stressed that what is of utmost importance is the
preservation of the integrity and evidentiary value of the seized item.15
All told, the Court finds appellant's conviction, as well as the penalties imposed upon him, proper. It must be added,
however, that he shall not be eligible for parole.16
WHEREFORE, the August 26, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 03358, which
affirmed the April 3, 2008 Decision of the Regional Trial Court of Manila, Branch 35 in Criminal Case No. 06-248048
convicting appellant Larry Basilio y Hernandez of violation of Section 5, Article II of Republic Act No. 9165 and
sentencing him to suffer the penalty of life imprisonment and to pay a fine of ₱500,000.00, is AFFIRMED with the
MODIFICATION that he shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 194606 February 18, 2015

vs.
ALFREDO REYES y SANTOS, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
This is an appeal from the Decision1 dated June 17, 2010 of the Court of Appeals (CA) in CA-G.R. CR-HC No.
03459, which affirmed in toto the Decision2 dated June 12, 2008 of the Regional Trial Court (RTC), Branch 28, San
Fernando City, La Union in Criminal Case No. 6931, finding Alfredo Reyes y Santos (appellant) guilty beyond
reasonable doubt of the crime of violation of Section 5, Article II of Republic Act (R.A.) No. 9165.
Factual Antecedents
On June 30, 2005, an Information3 charging appellant with violation of Section 5, Article II of R.A. 9165, otherwise
known as "The Comprehensive Dangerous Drugs Act of 2002," as amended, was filed with the RTC of San
Fernando City, La Union. Its accusatory allegations read:
That on or about the 29th day of June 2005, in the City of San Fernando, (La Union), Philippines, and within the
jurisdiction of this Honorable Court the above-named accused, did then and there wilfully, unlawfully and feloniously
sell and deliver to a poseur-buyer two (2) heat[-]sealed transparent plastic sachets containing methamphetamine
hydrochloride otherwise known as "Shabu," weighing ZERO POINT EIGHTY TWO (0.82) gram and ZERO POINT
EIGHTY FIVE (0.85) gram with a total weight of ONE POINT SIXTY SEVEN (1.67) [grams], without first securing
the necessary permit, license or prescription from the proper government agency. CONTRARY TO LAW.4
Appellant pleaded not guilty during his arraignment. After the termination of the pre-trial conference, trial ensued.
On June 28, 2005, a confidential informant (CI) went to the Philippine Drug Enforcement Agency (PDEA) office in
Camp Diego Silang, San Fernando City, La Union and reported to SPO1 Rene Acosta (SPO1Acosta) that appellant
was selling shabu. SPO1 Acosta relayed the information to his superior officer, Senior Inspector Reynaldo Lizardo
(Sr. Insp. Lizardo), who formed a buy-bust team and designated SPO1 Acosta as poseur-buyer. The CI contacted
appellant by cellular phone and introduced SPO1 Acosta as a buyer of shabu. SPO1 Acosta then talked to appellant
and they agreed to meet at around 6:00 a.m. the next day at the monument located in Barangay Madayedeg, San
Fernando City.
On June 29, 2005, SPO1 Acosta and PDEA Agent Ellizier Ignacio (Ignacio), who would act as back-up, arrived in
the designated area at 5:30 a.m. Ignacio positioned himself 10 meters away from SPO1 Acosta. Appellant arrived
after 20 minutes with the CI and approached SPO1 Acosta. The CI then introduced SPO1 Acosta to appellant as the
buyer of shabu. SPO1 Acosta asked appellant if he was the same person he talked to over the phone the previous
night. When appellant answered in the affirmative, SPO1 Acosta asked him if he has the stuff and if SPO1 Acosta
could see them. Appellant thus handed over to SPO1 Acosta two plastic sachets containing white crystalline
substance. SPO1 Acosta then made the pre-arranged signal by removing the towel from his shoulder to indicate the
completion of the transaction. Ignacio thus rushed to SPO1 Acosta and together, they arrested appellant.
Anent the seized items, SPO1 Acosta took possession of the same up until they were brought to the police station.
Thereat, he marked them with his initials "RA." On the same day, Sr. Insp. Lizardo prepared and signed a Request
for Laboratory Examination5 that SPO1 Acosta delivered together with the seized plastic sachets to the PNP Crime
Laboratory Office in La Union. Police Inspector Valeriano Laya II (P/Insp. Laya) conducted a qualitative examination
on the contents of the plastic sachets and confirmed the same to be positive for methamphetamine hydrochloride or
shabu, a dangerous drug.6
Appellant denied the accusations against him. He claimed that on June 28, 2005, he was on board a bus bound for
San Fernando City, La Union to discuss a business proposal with his wife’s nephew, Rolando Pinon,Jr. (Pinon).
However, Pinon was not around when he arrived in the early morning of June 29, 2005. Tired from the long journey,
appellant boarded a tricycle and instructed the driver to take him to the cheapest hotel. While on their way, a car
suddenly blocked the road and three of the four men on board the vehicle alighted and pointed their guns at him. He
was instructed to board the car and taken to Carlatan, San Fernando City, La Union. Upon their arrival, his captors
ordered him to face the wall and take off his clothes. They also confiscated his bag and then asked him why there
was shabu inside. He denied possession of the same. Appellant spent the night in detention and was brought to the
RTC of San Fernando City, La Union the following morning.
The RTC found appellant guilty as charged and disposed of the case in its June 12, 2008 Decision7 as follows:
WHEREFORE, the Court finds accused Alfredo Reyes y Santos GUILTY beyond reasonable doubt for Violation of
Section 5, Article II of Republic Act No. 9165, otherwise known as the "Comprehensive Dangerous Drugs Act of
2002," and sentences him to suffer life imprisonment, and to pay a fine of [O]ne [M]illion [P]esos (Php1,000,000.00).
The accused, who is a detention prisoner, is credited to the full extent of his preventive imprisonment.
The confiscated 1.67 grams of methamphetamine hydrochloride, otherwise known as "shabu," is turned over to the
Philippine Drug Enforcement Agency (PDEA), Regional Office, San Fernando City, La Union, for proper disposition.
SO ORDERED.8
The RTC approved the notice of appeal9 filed by appellant.10 Hence, the entire records of the case was transmitted to
the CA where the appeal was docketed as CA-G.R. CR-H.C. No. 03459.
On June 17, 2010, the CA rendered its Decision11 affirming the RTC’s judgment of conviction. It ruled that the
prosecution’s evidence duly established the consummation of the illegal sale of shabu and that the seizure,
handling, custody and examination of the seized drug were well-documented and undertaken in an uninterrupted
manner.
Persistent, appellant filed the instant appeal.12 When asked to file their supplemental briefs,13 both parties opted not
to file any as there are no new issues to be raised.14 Appellant’s Argument
Adopting the same issues he raised in the CA, appellant argues that the prosecution was unable to establish the
elements of the illegal sale of shabu by failing to identify him as the seller of the shabu and to prove that payment
was given in consideration thereof. He also asserts that there is no proof that the integrity and evidentiary value of
the seized shabu was preserved in accordance with Section 21(a) of the Implementing Rules of R.A. 9165. Aside
from the fact that the marking of the seized items was not done immediately after seizure in the presence of the
persons mentioned by the said law, not even a single photograph of the seized items was taken and submitted by
the apprehending officers. Appellant likewise calls attention to the absence of marked money in the buy-bust
operation, the failure to provide him with a counsel immediately after his arrest, and his detention for more than 24
hours. According to appellant, these considerations disqualify the arresting officers from enjoying the presumption of
regularity in the performance of their official duty. Hence, more credence should have instead been given to his
defense of denial.
Our Ruling
Appellant’s conviction must be sustained albeit with modification.
All elements of illegal sale of dangerous drugs must be proven; receipt of appellant of payment for the purported
sale of shabu was not established in this case.
The crime of illegal sale of dangerous drugs, such as shabu, has the following elements: "(1) the identity of the
buyer and the seller, the object, and consideration; (2) the delivery of the thing sold and the payment therefor."15"The
delivery of the illicit drug to the poseur-buyer and the receipt by the seller of the marked money successfully
consummate the buy-bust transaction."16
In this case, SPO1 Acosta positively identified appellant as the person he transacted with and who handed to him
the two sachets of shabu presented in court. However, and as correctly pointed out by appellant, the prosecution
was unable to discharge its burden of establishing the element of consideration or payment for the sachets of
shabu. SPO1 Acosta practically admitted in his testimony the lack of consideration or payment for the sachets of
shabu delivered to him by appellant, viz:
Q Then, after that, Mr. Witness, what happened?
A "Do you have with you the stuff?", that’s my word.
Q You asked him if he [has the] stuff?
A Yes, ma’am.
Q What was his answer?

A "Yes", that’s his word.
Q When he answered, "Yes", what happened?
A "Can I see it?", that’s my word.
Q What happened after you asked him you wanted to see it?
A I was not sure if it was from his bag or from his pocket, but he brought it out from his side and told me that this is
the one.
xxxx
PROS. BONDAD:
Q After that, when he brought out the stuff and showed the same, what happened afterwards?
A Then he gave it to me.
Q When he gave it to you, what happened?
A When I got hold and confirm[ed] that it was shabu, I took off my red towel from my shoulder as a pre-arranged
signal and informed the accused that I am a PDEA member.
Q When you informed the accused that you are a police officer assigned at PDEA, what happened?
A Then, "You are under arrest and you will now go to our office". We informed him of his constitutional right.17
xxxx
Q During your cross-examination, you stated that you did not get the serial number of the money which you are
supposed to use during the transaction supposed to be between you and the accused because the reason was that,
it was not actually buy-bust but only delivery.
A Yes, ma’am.
Q Why did you say that it is only a delivery and there is no need for you to go through the procedure of pre-dusting
the money and getting the serial number of the money you are going to use?
A First and foremost, it is a delivery. In attempting to sell, there is no need to give the money. The moment that I
saw the shabu and I [was] already able to get hold of it, there is no longer need for me to [get] the money.18
Clearly, the element of receipt of payment for the thing sold is absent in this case. Hence, the offense of illegal sale
of shabu against appellant cannot stand. However, this finding does not necessarily result in appellant’s exoneration
as will be discussed below.
Appellant is guilty instead of illegal delivery of shabu.
The Information states that appellant did "wilfully, unlawfully, and feloniously sell and deliver" to PO1 Acosta plastic
sachets containing shabu with a total weight of 1.67 grams. Thus, the charge against him was not confined to the
sale of shabu.19 To deliver a dangerous drug is an act that is also punishable under the same Section 5, Article II of
R.A. 9165, which provides:
Section 5. Sale, Trading, Administration, Dispensation, Delivery, Distribution and Transportation of Dangerous
Drugs and/or Controlled Precursors and Essential Chemicals.- The penalty of life imprisonment to death and a fine
ranging from Five hundred thousand pesos (₱500,000.00) to Ten million pesos (₱10,000,000.00) shall be imposed
upon any person, who, unless authorized by law, shall sell, trade, administer, dispense, deliver, give away to
another, distribute, dispatch in transit or transport any dangerous drug, including any and all species of opium poppy
regardless of the quantity and purity involved, or shall act as a broker in any such transaction. (Emphasis supplied)
Under Article I, Section 3(k) of the same statute, the term "deliver" means "any act of knowingly passing a
dangerous drug to another, personally or otherwise, and by any means, with or without consideration." On the other
hand, "sell" as defined in Section 3(ii) refers to "any act of giving away any dangerous drug and/or controlled
precursor and essential chemical whether for money or any other consideration."
To establish the guilt of an accused for the illegal delivery of a dangerous drug, there must be evidence that "(1) the
accused passed on possession of a dangerous drug to another, personally or otherwise, and by any means; (2)
such delivery" is not authorized by law; and (3) the accused knowingly made the delivery with or without
consideration.20
In this case, there was a prior arrangement between SPO1 Acosta and appellant to meet. During the scheduled
1âw phi1
meeting, SPO1 Acosta introduced himself and asked appellant for the shabu. Appellant responded by taking out
from his pocket the shabu and handing over its possession to SPO1 Acosta without receiving any payment therefor.
Appellant had no authority under the law to deliver the shabu since he was working as a carpenter at the time of his
arrest.21 Appellant likewise knowingly and voluntarily made the delivery. On the basis therefore of the charges
against appellant and the evidence presented by the prosecution, he is guilty beyond reasonable doubt of illegal
delivery of shabu under Section 5, Article II of R.A. 9165.
The police officers complied with the chain of custody rule and Section 21(a) of the Implementing Rules and
Regulations of R.A. 9165.
The Court disagrees with the contention of appellant that the police officers did not comply with the chain of custody
rule under Section 21(a) of the Implementing Rules and Regulations of R.A. 9165, which reads as follows:
Sec. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs, Plant Sources of
Dangerous Drugs, Controlled Precursors and Essential Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment.- The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous
drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia and/or laboratory
equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately after seizure and
confiscation, physically inventory and photograph the same in the presence of the accused or the person/s from
whom such items were confiscated and/or seized, or his/her representative or counsel, a representative from the
media and the Department of Justice (DOJ), and any elected public official who shall be required to sign the copies
of the inventory and be given a copy thereof: Provided that the physical inventory and photograph shall be
conducted at the place where the search warrant is served; or at the nearest police station or at the nearest office of
the apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of
the seized items are properly preserved by the apprehending officer/team, shall not render void and invalid such
seizures of and custody over the items;
In this case, the Certificate of Inventory22 prepared by the police officers belies the contention of appellant that there
was no compliance with the above-quoted provision. While the said certificate was signed only by the DOJ
representative, the failure of the police officers to include the signatures of the other persons enumerated under the
subject provision does not affect the evidentiary weight of the subject shabu as the chain of custody of the evidence
remained unbroken.23 In like manner, the absence of photographs of the seized shabu does not render said drugs
inadmissible or impair the integrity of the chain of custody of the same.24 As established by the prosecution, the
police officers immediately arrested appellant after his delivery of the sachets of shabu. They took him to the police
station together with the seized items and conducted an investigation on his commission of the criminal offense. The
Certificate of Inventory was prepared and Sr. Insp. Lizardo made a formal request for a laboratory examination
which SPO1 Acosta personally delivered on the same day to the police crime laboratory together with the sachets of
shabu marked with his initials "RA." PO1 Florendo received the items and delivered them to P/Insp. Laya, who
conducted qualitative tests on the contents of the sachets that had a total weight of 1.67 grams. The results
confirmed that the sachets contained shabu. During trial, PO1 Acosta identified the sachets of shabu marked with
his initials "RA" as the very same sachets given to him by appellant. He likewise identified appellant to be the same
person who delivered the seized sachets of shabu to him. Undoubtedly, the shabu inside the sachets marked "RA"
that was submitted for laboratory examination and tested positive was the same dangerous drug delivered by
appellant to SPO1 Acosta during the operation and the very same item presented during the trial. Considering that
the integrity and evidentiary value of the seized items were properly preserved, strict compliance with the requisites
under said provision of the implementing rules may therefore be disregarded.25 Moreover, the marking of the seized
sachets of shabu a few moments prior to its transfer to the crime laboratory complies with the requirement that such
marking be done immediately upon confiscation since it was undertaken while the shabu was still in the police
station. There is also no doubt that the marking was done in the presence of appellant since he was also in the
police station at the time of the marking. The short period in which these events occurred ensures the preservation
of the integrity and evidentiary value of the seized items.
The police officers are presumed to have regularly performed their official duties.
Under the above circumstances, the RTC and CA did not err in giving credence to the narration of the incident by
the prosecution witnesses, who as police officers, are presumed to have regularly performed their official duties.
This presumption is not overturned by the assertion of appellant that: (1) they failed to present the marked money;
(2) they failed to inform him upon arrest of his constitutional right to counsel; and (3) they detained him for 24 hours
before the filing of the charges.
The presentation of the marked money is immaterial in this case since the crime of illegal delivery of a dangerous
drug can be committed even without consideration or payment. The positive testimony of SPO1 Acosta that
appellant was informed of his constitutional rights upon arrest also prevails over the uncorroborated and self-serving
testimony to the contrary of the latter. Even assuming that appellant was not informed of his right to counsel upon
arrest, the same will not result in his acquittal since the rule is that such an infraction renders inadmissible only the
extrajudicial confession or admission made during custodial investigation.26 Here, appellant did not confess or admit
the charge against him and even raised the defenses of denial and alibi. His guilt was established by the testimonies
of the police officers.
Lastly, there was no unlawful delay in the filing of charges against appellant since the police officers had 36 hours
from detention to bring him to the proper judicial authorities. The police officers complied with this requirement since
SPO1 Acosta testified that appellant was detained only for more than 24 hours. Notably, neither proof nor allegation
exists on record that appellant was detained for a period longer than allowed by law. Moreover, it is worth stressing
that while a delay in the delivery of appellant to the proper judicial authorities is a violation of Article 125 of the
Revised Penal Code,27 it does not affect the p resumption of regularity in the performance of the official duties of the
police officers in the absence of criminal charges against them.
Appellant's denial.
As regards appellant's defense of denial, suffice it to say that we have viewed this defense with disfavor for being
inherently weak which cannot prevail I over the positive and. credible testimonies of the prosecution witnesses that
appellant committed the crime.28
The Proper Penalty
Under Section 5, Article II of R.A. 9165, the penalty for the unauthorized delivery of shabu, regardless of the quantity
and purity, is life imprisonment to death and a fine ranging from ₱500,000.00 to ₱10 million. However, with the
enactment of R.A. 9346,29 only life imprisonment and fine shall be imposed. Moreover, appellant is not eligible for
parole pursuant to Section 2 of the Indeterminate Sentence Law. Hence, appellant is sentenced to life imprisonment
without eligibility for parole and ordered to pay a fine of P 1 million. WHEREFORE, the Decision dated June 17,
2010 of the Court of Appeals in CA-G.R. CR-H.C. No. 03459, which affirmed the Decision dated June 12, 2008 of
the Regional Trial Court, Branch 28, San Fernando City, La Union, in Criminal Case No. 6931, is AFFIRMED with
the MODIFICATIONS that appellant Alfredo Reyes y Santos is declared guilty beyond reasonable doubt of illegal
delivery of shabu penalized under Section 5, Article II of Republic Act No. 9165, and is sentenced to life
imprisonment without eligibility for parole and ordered to pay a fine of ₱1 million.
SO ORDERED.
SECOND DIVISION
G.R. No. 193855 February 18, 2015

vs.
VIRGILIO LARGO PERONDO, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
This is an appeal from the December 3, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 00738
that affirmed in toto the May 30, 2007 Decision2 of the Regional Trial Court (RTC) of Cebu City, Branch 58, in
Criminal Case No. CBU-66693 finding appellant Virgilio Largo Perondo (appellant) guilty of Violation of Section 5,
Article II of Republic Act (R.A.) No. 91653 and imposing upon him the penalty of life imprisonment and a fine of
₱500,000.00.
Factual Antecedents
An Information4 containing the following accusatory allegations was filed against appellant:
That on or about the 20th day of July 2003, at about 10:45 P.M., in the City of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, the said accused, with deliberate intent, and without authority of law, did then
and there sell, deliver or give away to a poseur buyer one heat sealed plastic packet of 0.05 gram of white
crystalline substance, locally known as "SHABU" containing Methylamphetamine hydrochloride, a dangerous drug.
CONTRARY TO LAW.5
Appellant pleaded "not guilty" during his arraignment on October 7, 2003. After the pre-trial conference, trial ensued.
The prosecution presented Police Senior Inspector Mutchit G. Salinas (PSI Salinas), a Forensic Chemist, and buy-
bust team members SPO2 Benjamin G. Genzon, Jr. (SPO2 Genzon) and PO3 Simeon A. Tapanan, Jr. (PO3
Tapanan). From their testimonies, the following version of the incident emerged:
On July 20, 2003, SPO2 Genzon, SPO1 James Estrera (SPO1 Estrera), PO3 Emmanuel Sarmiento (PO3
Sarmiento) and PO3 Tapanan were briefed regarding a planned buy-bust operation to be conducted against
appellant on that same day in Brgy. San Roque, Cebu City. During the briefing, a civilian asset was designated as
the poseur-buyer and two 50-peso marked bills were given to him as buy-bust money.
Thereafter, the team proceeded to the target area and, upon arrival, strategically positioned themselves 10 to 15
meters away from the barangay hall where appellant was seen standing. The poseur-buyer approached appellant.
After briefly talking to the latter, the poseur-buyer took out the 50-peso marked bills from his pocket and gave them
to the appellant. In exchange, appellant handed over to the poseur-buyer a small plastic pack containing white
crystalline substance. The poseur-buyer examined it and then touched his head, which was the pre-arranged signal
that the transaction was already consummated. The members of the buy-bust team then rushed to the scene and
arrested appellant. They recovered from him the buy-bust money. Anent the plastic sachet, PO3 Tapanan retrieved
the same from the poseur-buyer while PO3 Sarmiento wrote thereon appellant’s initials. A qualitative examination
conducted on the contents of the plastic sachet by PSI Salinas later revealed that the substance is positive for
methamphetamine hydrochloride or shabu.
Appellant denied that a buy-bust operation was conducted against him. Instead, he claimed that at around 9:15 p.m.
of July 20, 2003, he was eating and watching television at a barbecue stand when he was suddenly arrested by
SPO1 Estrera, PO3 Sarmiento and PO3 Tapanan. He was then taken to a police station and interrogated on the
identities of big time drug dealers in Cebu. Because he was not able to provide any information as he is not even
from Cebu, the police officers blottered an incident implicating him in the alleged sale of shabu.
The RTC gave credence to the testimony of the prosecution witnesses and convicted appellant of the crime
charged. In its May 30, 2007 Decision,6 it disposed of the case as follows: Accordingly, this court finds the accused
GUILTY as charged and hereby sentences him to Life Imprisonment and to pay a fine of ₱500,000.00.
The pack of shabu, Exhibit "B", is confiscated in favor of the state for proper disposition.
SO ORDERED.7
Appellant filed a Notice of Appeal,8 which was approved by the RTC. Hence, the entire records of the case were
forwarded to the CA.9
In his Brief,10 appellant maintained that the RTC erred in finding him guilty of the offense charged because: (1) the
members of the buy-bust team could not give an accurate account of what really transpired during the alleged
operation; (2) there was no pre-operation report submitted to the Philippine Drug Enforcement Agency (PDEA); (3)
the poseur-buyer was not presented as witness; and (4) the prosecution failed to establish the corpus delicti.
On the other hand, appellee, through the Office of the Solicitor General (OSG), averred that: (1) the prosecution was
able to prove all the elements of the offense charged; (2) the failure to present the poseur buyer as witness is not
fatal since his testimony would merely be corroborative to the testimonies of the police officers who positively
identified appellant as the seller; (3) the presumption of regularity on the part of the police officers was correctly
applied by the RTC since no improper motive was attributed to them; (4) a pre-operation report to the PDEA is not a
requirement under R.A. 9165; and (5) the prosecution was able to prove the identity of the confiscated drug.11
Agreeing with the OSG, the CA ruled as follows in its December 3, 2009 Decision:12 WHEREFORE, premises
considered, the assailed Decision dated May 30, 2007 of the Regional Trial Court of Cebu City, Branch 58 is hereby
AFFIRMED in toto.
No costs.
SO ORDERED.13
Hence, this appeal.
Issue
Appellant’s lone assignment of error in his Appellant’s Brief filed with the CA which he adopted in this appeal per a
Manifestation In Lieu of Supplemental Brief14 is as follows:
THE TRIAL COURT ERRED IN FINDING ACCUSED-APPELLANT GUILTY OF VIOLATING SECTION 5, ARTICLE
II OF REPUBLIC ACT 9165 DESPITE FAILURE OF THE PROSECUTION TO PROVE HIS GUILT BEYOND
REASONABLE DOUBT.15
Our Ruling
There is no merit in the appeal.
All the elements of the offense of Illegal

Sale of Shabu were proven in this case.
In a successful prosecution for illegal sale of shabu, the following elements must concur: "(1) [the] identity of the
buyer and the seller, the object, and the consideration; and (2) the delivery of the thing sold and the payment
therefor. x x x What is material in a prosecution for illegal sale of dangerous drugs is the proof that the transaction or
sale actually took place, coupled with the presentation in court of the corpus delicti."16
In this case, the prosecution successfully proved the existence of all the essential elements of illegal sale of shabu.
Appellant was positively identified by the police officers who conducted the buy-bust operation as the person who
sold the shabuto the poseur buyer. PO3 Tapanan testified, viz:
Q It was SPO2 Benjamin Genzon, Jr. who conducted the briefing?
A Yes, sir.
Q How was the briefing conducted? A We have two (2) ₱50.00 peso bills to be used as buy[-]bust money.
Q Who will do the role as poseur[-]buyer? A Civilian asset.
Q Did you reach the place where you were to conduct buy-bust operation?
A Yes, sir.
Q Where was that place?
A Barangay San Roque.
Q When you were already there, can you tell this court what happened?
A Our poseur[-]buyer was already talking with the subject.
Q Was he alone at that time?
A Yes, sir.
Q How far were you from the police asset and the subject?
A About 15 meters.
Q In that place did you actually see what happened?
A Yes, sir.
Q What did you see?
A The asset was touching his head as a pre-arranged signal which shows that the transaction was already
consummated.
Q When you saw the signal, what did you do?
A We immediately approached him.
Q When you said "we" what do you mean, who were with you?
A SPO1 James Estrera, PO3 Emmanuel Sarmiento and SPO2 Benjamin Genzon, Jr.
Q When you reach[ed] near them, what happened?

A We arrested the subject.
Q What did you recover from the subject?
A (A) Small plastic pack of white crystalline substance and two pieces ₱50.00[-]peso bills used as buy-bust money.
xxxx
Q Do you mean that the shabu was in the possession of the accused?
A The two pieces of ₱50.00 peso bills [were] in his possession but the shabu was in the possession of our asset.
Q When you x x x already arrested the suspect, what did you do?
A We informed him of [his] constitutional rights.
xxxx
Q After you informed him [of] the nature of his crime and his rights, what happened next?
A We detained him.
Q If the suspect Virgilio Largo Perondo the accused is inside the court room, can you still identify him?
A Yes, sir. (Witness points to a person who is raising his right hand and who when asked [of] his name answer[ed]
Virgilio Largo Perondo.)
Q When you said you were able to recover one small pack of shabu and 2 pcs. [of] ₱50.00[-]peso bills, where are
these now?
A We submitted [them] to the crime laboratory for examination?
Q I have here Exhibit "B," a small pack of shabu that was examined by PSI Mutchit Salinas per Chemistry Report
No. D-1252-2003, look at this and tell this Honorable Court whether this is the very same small plastic pack of white
crystalline substance that was recovered from the possession of accused Virgilio Perondo?
A Yes, sir, this is the very same evidence.
Q How do you know?
A [It has] the initial[s] [of the] name of the accused.
Q Who wrote the initial[s]?
A PO3 Emmanuel Sarmiento.
Q Were you around when that was marked?
A Yes, sir.
Q Who brought this item to the PNP Crime Laboratory?
A I was the one.
Q Was there a letter-request attached to the specimen?

A Yes, sir, there was.
Q I will show you this letter request, please go over this and tell this Honorable Court if this [is] the one that you are
referring to?
A Yes, sir.17
SPO2 Genzon corroborated the testimony of PO3 Tapanan on material points. He testified as follows:
Q On July 20, 2003, where were you assigned?
A At Police Station 3 Legaspi Extension, Cebu City.
Q At around 10:45 in the evening of the same day, can you remember where you were?
A We conducted a buy-bust operation at Brgy. San Roque, Cebu City.
Q Who was the subject of the buy-bust operation?
A Virgilio Largo Perondo, sir.
Q Who were your companions during that time?
A SPO1 James Estrera, PO3 Emmanuel Sarmiento, PO3 Simeon Tapanan.
Q Where did you conduct this operation?
A At Brgy. San Roque near the barangay hall.
xxxx
Q If this Virgilio Perondo [is] inside the courtroom, will you be able to identify him?
A Yes, ma’am, the third person sitting from the last. (Witness pointed to the third person sitting from the last who
when asked answered to the name of VIRGILIO PERONDO.)
xxxx
Q When you arrived at the area where you were supposed to conduct the buy-bust operation, what did you observe
if any?
A It was 10:45 in the evening and the subject was near the barangay hall.
Q What did you observe near the barangay hall?
A He was there actively selling dangerous drugs.
Q To whom was he selling these dangerous drugs?
A To our asset who acted as our poseur[-]buyer.
Q How far were you when the accused sold these drugs to your asset?
A I cannot exactly recall, ten (10) to eleven (11) meters.

xxxx
Q What did you observe while you were ten (10) to eleven (11) meters away from the accused?
A The suspect and the poseur-buyer had a conversation.
xxxx
Q What happened next after you observedthat the accused and the poseur[-]buyer had a conversation?
A The poseur[-]buyer got the buy[-]bust money from his pocket and handed it to the suspect. In return, the suspect
gave the small plastic packet containing white crystalline substance believed to be shabu to the poseur[-]buyer.
Q What happened next after the exchange of the buy-bust money and the shabu?
A The poseur[-]buyer first examined the plastic pack at the same time signaling us that the transaction was
consummated then we rushed up towards them.
Q After the signal was given[,] what did you do next if any?
A We hurriedly rushed up to the suspect and the poseur[-]buyer then we introduced ourselves as police officers and
arrested the suspect for x x x violation of [S]ec. 5, [A]rt. 2 of R.A. 9165.
Q What happened next after you arrested the accused?
A We informed him [of] his constitutional rights.
Q What happened to the plastic pack which you said your asset bought from the accused and which you said
contained shabu?
A We brought it to our office and madea letter request for a laboratory examination to the PNP Crime Laboratory.
Q You said that there was a letter-request to the PNP Crime laboratory for the examination of the said plastic pack. I
am showing to you what had been previously marked as our Exhibit "A," is this the same letterrequest which you
said your office prepared for the transmittal of the shabu to the crime laboratory?
A Yes ma’am, because there is the handwriting of PO3 Tapanan.
Q If the said plastic pack which you said PO3 Tapanan brought to the crime laboratory as shown to you, will you be
able to identify the same?
A Yes, ma’am.
Q What would be your basis?
A The initial[s] of the accused.
Q [I am] [s]howing to you what had been marked as our Exhibit "B," can you tell this Honorable Court if this is the
same plastic pack which PO3 Tapanan, Jr. brought to the crime laboratory?
A This is the one ma’am.18
Forensic Chemist PSI Salinas, for her part, examined the confiscated crystalline substance weighing 0.05 gram and
found it to be positive for methamphetamine hydrochloride or shabu. This finding is contained in Chemistry Report
No. D-1252-2003.19
It is clear from the foregoing that the prosecution was able to establish the elements of illegal sale of shabu.
"Prosecutions involving illegal drugs depend largely on the credibility of the police officers who conducted the buy-
bust operation."20 Here, the Court finds no reason to doubt the credibility of the prosecution witnesses and their
testimonies. The RTC and the CA are one in finding that their testimonies were direct, definite, consistent with one
another in relevant points and also with the physical evidence. It bears to stress that the "findings of the trial courts
which are factual in nature and which involve credibility are accorded respect when no glaring errors, gross
misapprehension of facts, or speculative, arbitrary, and unsupported conclusions can be gathered from such
findings. The reason for this is that the trial court is in a better position to decide the credibility of witnesses, having
heard their testimonies and observed their deportment and manner of testifying during the trial. The rule finds an
even more stringent application where said findings are sustained by the Court of Appeals,"21 as in this case.
The presentation of the poseur buyer is

not indispensable to the successful
prosecution of the case against
appellant.
The Court is not impressed with appellant’s insistence that the failure to present the poseur-buyer is fatal to the
prosecution. It must be noted that whatever relevant information the poseur-buyer may have was also equally
known to the police officers who testified for the prosecution during trial. This is considering that they all participated
in the planning and implementation of the buy-bust operation and were all direct witnesses to the actual sale of the
shabu, the appellant’s arrest immediately thereafter, and the recovery from him of the marked money. Hence, the
testimony of the poseur-buyer was not indispensable or necessary; it would have been cumulative merely, or
corroborative at best.22
There was no evidence of improper

motive on the part of the police officers.
Appellant failed to proffer clear and convincing evidence of improper motive to overturn the presumption that the
arresting officers regularly performed their duties. There is no evidence on record to corroborate his self-serving
declaration that the charges against him were fabricated for his failure to give the names of those engaged in illegal
drug trade in Cebu. Thus, there is no basis to suspect the veracity of the statements of the police officers who
testified against him.
Moreover, appellant’s defenses of denial and frame-up do not deserve credence. Denial cannot prevail over the
positive testimony of prosecution witnesses. On the other hand, frame-up is viewed with disfavor since it can easily
be fabricated and is a common ploy in prosecutions for violation of the Dangerous Drugs Law. For these defenses to
prosper, they must be proved with clear and convincing evidence. However, none exists in this case.
Besides, appellant should have filed the proper charges against the police officers if he was indeed a victim of
frame-up. "The fact that no administrative or criminal charges were filed lends cogency to the conclusion that the
1âwphi 1
alleged frame-up was merely concocted as a defense scheme."23
The seized item was the same item

presented for examination in the crime
laboratory.
Appellant contends that the testimony of PSI Salinas, the Forensic Chemist, was insufficient to conclude that the
sachet of shabu she examined in the crime laboratory was the same illegal drug allegedly seized from him. This is
due to the fact that the specimen, when turned overby PO3 Tapanan to the crime laboratory, was received by one
PO1 Abesia and not by PSI Salinas. And since it was not shown that PSI Salinas knew of the manner with which
PO1 Abesia handled the specimen or of what happened to the specimen while it was in the latter’s custody, it
cannot be reasonably concluded from PSI Salinas’ testimony that it was the same drug allegedly seized from
appellant.
Appellant’s contention does not adversely affect the identity, integrity and probative value of the seized shabu.
Indeed, the Crime Laboratory Request24 shows that it was PO1 Abesia who received the seized plastic sachet with
white crystalline substance fromPO3 Tapanan on July 21, 2003. Notably, however, Chemistry Report No. D-1252-
200325 reveals that PSI Salinas immediately conducted an examination on the specimen submitted and released the
result thereof on that day. The span of time that lapsed from the time the specimen was received by PO1 Abesia
until the same was examined by PSI Salinas was, therefore, too short to be considered consequential. Also, the
marking placed on the seized item by PO3 Sarmiento matches the label of the heat-plastic packet containing white
crystalline substance that, per said Chemistry Report No. D-1252-2003, was examined by PSI Salinas. It is thus
reasonable to conclude that the specimen submitted was the same one examined. Besides, appellant’s claim that
the same may have been altered is just his mere speculation and nothing more.
Lastly, appellant's argument that the buy-bust operation is fatally flawed for failure of the police officers to coordinate
with the PDEA .deserves scant consideration. Coordination with the PDEA is not a crucial requisite of a proper buy-
bust operation;26 it is not invalidated by mere non-coordination with the PDEA.27
All told, there is no reason to disturb the findings of the RTC, as affirmed by the CA, that appellant is guilty beyond
reasonable doubt of illegal sale of shabu, as defined and penalized under Section 5, Article II of R.A. 9165.
The Proper Penalty
R.A. 9165 imposes the penalty of life imprisonment to death and a fine ranging from ₱500,000.00 to PIO million for
the unauthorized sale of shabu, regardless of its quantity and purity. However, with the enactment of R.A.
9346,28appellant shall only be penalized with life imprisonment and fine,29 as correctly imposed by the RTC and
affirmed by the CA. It must be added, however, that appellant shall not be eligible for parole pursuant to Section 2 of
the Indeterminate Sentence Law.
WHEREFORE, the Decision dated December 3, 2009 of the Court of Appeals in CA-G.R. CR-HC 00738 which
affirmed the Decision dated May 30, 2007 of the Regional Trial Court of Cebu City, Branch 58, in Criminal Case No.
CBU-66693, convicting appellant Virgilio Largo Perondo alias Bayot for Violation of Section 5, Article II of Republic
Act No. 9165, as amended by Republic Act No. 9346, and sentencing him to suffer the penalty of life imprisonment
and to pay a fine of ₱500,000.00, is AFFIRMED with the MODIFICATION that he shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 195850 February 16, 2015

vs.
ABOLA BIO y PANAYANGAN, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Assailed in this appeal is the September 21, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R CR-H.C. No.
03859, which affirmed the January 5, 2009 Decision2 of the Regional Trial Court (RTC), Branch 82, Quezon City,
finding appellant Abola Bio y Panayangan (appellant) guilty beyond reasonable doubt of Violation of Sections 5
(illegal sale of dangerous drugs) and 11 (illegal possession of dangerous drugs), Article II of Republic Act (R.A.) No.
9165 or the Comprehensive Dangerous Drugs Act of 2002.
The evidence for the prosecution established that at around 9:00 p.m. of September 8, 2003, an asset reported to
Police Superintendent Nilo Wong (P/Supt. Wong), Chief of the Station Anti-Illegal Drugs Special Operations Task
Unit (SAID-SOTU), Novaliches Police Station, the alleged illegal drugs activities of appellant. P/Supt. Wong
immediately formed a team composed of SP03 Mario Concepcion, PO2 Noel Magcalayo, PO1 Edmond Paculdar,
PO1 Emeterio Mendoza, PO! Michael Collado and PO2 Fernando Salonga (PO2 Salonga). As PO2 Salonga would
act as the poseur-buyer, he was provided with two 100-peso bills as buy-bust money.
The team then proceeded to the designated area along Ramirez St., Brgy. Nova Proper. Upon arrival thereat an
hour later, the asset introduced PO2 Salonga to the appellant as a buyer of shabu. After a brief conversation,
appellant agreed to the sale. PO2 Salonga handed to appellant the two 100-peso bills and, in turn, the latter gave
the former a plastic sachet. PO2 Salonga thereupon scratched his head as the pre-arranged signal to his
companions that the sale had been consummated. He then introduced himself to appellant as a police officer and
apprehended him. However, before he could handcuff appellant, a woman later identified as appellant’s wife,
suddenly grabbed appellant such that the latter was able to run away. PO2 Salonga gave a chase and caught
appellant, who, when searched, was found possessing another plastic sachet suspected to contain shabu.
Appellant, together with the buy-bust money previously marked with PO2 Salonga’s initials "FAS" and the two
plastic sachets, were then brought to the Novaliches Police Station. Thereat, the plastic sachet subject of the sale
was marked with the initial "FAS"3 while the sachet recovered from appellant’s possession with "FAS-1."4 They were
thereafter turned over to the duty desk officer for booking and later, to PO1 Oliver Estrelles (PO1 Estrelles), the
police investigator on duty. Afterwards, appellant and the above-mentioned pieces of evidence were brought by PO2
Salonga and PO1 Estrelles to the Philippine National Police (PNP) Crime Laboratory. A qualitative examination
conducted by Forensic Chemist P/Insp. Leonard Arban5 shows that each sachet contained a net weight of 0.15
gram of white crystalline substance that tested positive for methamphetamine hydrochloride or shabu as indicated in
Chemistry Report No. D-927-03.6
For his part, appellant interposed the defenses of denial and extortion. He claimed that he was just buying charcoal
when arrested. One of the policemen who is not familiar to him demanded ₱80,000.00 for settlement.
After trial, the RTC rendered a Decision7 on January 5, 2009 finding appellant guilty beyond reasonable doubt of
Violation of Sections 5 and 11, Article II of R.A. 9165. It ruled that the elements for the prosecution of illegal sale and
illegal possession of dangerous drugs have been established. The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
a) Re: Criminal case No. Q-03-120914 – The Court finds accused ABOLA BIO y PANAYANGAN guilty beyond
reasonable doubt of a violation of Section 5, Article II of R.A. No. 9165 and accordingly, hereby sentences him to
suffer the penalty of LIFE IMPRISONMENT and to pay a fine in the amount of Five Hundred Thousand
(₱500,000.00) Pesos.
b) Re: Criminal Case No. Q-03-120915 – The Court finds accused ABOLA BIO y PANAYANGAN guilty beyond
reasonable doubt of a violation of Section 11, Article II of R.A. No. 9165 and accordingly, hereby sentences him to
suffer the penalty of imprisonment of TWELVE (12) YEARS and ONE (1) DAY as MINIMUM to FOURTEEN (14)
YEARS as MAXIMUM and to pay a fine in the amount of THREE HUNDRED THOUSAND (₱300,000.00) PESOS.
The Branch Clerk of Court is hereby ordered to transfer the possession and custody of the dangerous drugs subject
of these cases to the Philippine Drug Enforcement Agency for proper disposition and final disposal.
SO ORDERED.8
Appellant appealed to the CA.
In its Decision9 dated September 21,2010, the CA found a confluence of the elements of illegal sale and illegal
possession of dangerous drugs as to justify appellant’s conviction for the said offenses. It likewise noted that the
prosecution was able to establish the integrity and evidentiary value of the shabu seized from appellant. Ultimately,
the CA affirmed appellant’s conviction, thus:
WHEREFORE, premises considered, the assailed judgment of conviction is hereby AFFIRMED. SO ORDERED.10
Hence, this appeal.
Appellant posits that the prosecution failed to prove the indispensable element of corpus delicti of the crime. He
maintains that the prosecution failed to show that the police officers complied with the requirements of R.A. 9165 in
handling the seized evidence, particularly with respect to the immediate marking, physical inventory and taking of
photographs of the items confiscated. According to him, this raises serious doubts as to the integrity and evidentiary
value of the evidence. Moreover, appellant claims that he was not assisted by counsel during the investigation and
inquest proceedings in violation of his fundamental right to due process.
The appeal fails.
After reviewing the evidence on record, the Court is fully convinced that a legitimate buy-bust operation was indeed
conducted against appellant wherein he sold to PO2 Salonga one plastic sachet of shabu and that an ensuing body
search revealed that he possessed another plastic sachet containing the same illegal substance.
To sustain a conviction under Section 5, Article II of R.A. 9165, all that is needed for the prosecution to establish are
(1) the identity of the buyer, seller, object and consideration; and (2) the delivery of the thing sold and the payment
therefor.11 In illegal possession of dangerous drugs, on the other hand, it is necessary to prove that: (1) the accused
is in possession of an item or object which is identified to be a prohibited drug; (2) such possession is not authorized
by law; and, (3) the accused freely and consciously possessed the drug.12
In his testimony, PO2 Salonga, the poseur-buyer, positively identified appellant as the seller of the plastic sachet
containing white crystalline substance which was later identified by the PNP Forensic Chemist to be positive for
methamphetamine hydrochloride or shabu. The same sachet and substance was identified in court by PO2 Salonga
as the shabu sold to him by appellant for the sum of ₱200.00. As correctly ruled, therefore, by both lower courts, all
the elements of the offense of illegal sale of shabu are obtaining in this case. In the same vein, appellant, upon
being frisked after his apprehension, was found possessing another plastic sachet containing 0.15 gram of
methamphetamine hydrochloride or shabu. There is no evidence on record showing that he was legally authorized
to possess the same. Neither was there any explanation that he did not freely or consciously possess the said illegal
drug. Settled is the rule that "possession of dangerous drugs constitutes prima facie evidence of knowledge or
animus possidendi, which is sufficient to convict an accused in the absence of a satisfactory explanation of such
possession."13 Clearly, all the elements of the offense of illegal possession of dangerous drugs are likewise present
in this case.
Appellant, however, questions the integrity and evidentiary value of the seized items due to the failure of the police
officers to comply with requirements set forth under Section 21 of R.A. 9165.
The Court, however, finds that the chain of custody of the seized items was shown to be intact and unbroken
notwithstanding the failure of the apprehending officers to mark the evidence upon arrest, to make the inventory,
and to take photographs of the same in the presence of the appellant and the persons mentioned in Section 21 of
R.A. 9165. As held in People v. Domado,14 mere lapses in procedures need not invalidate a seizure if the integrity
and evidentiary value of the seized items can be shown to have been preserved. Thus, the CA aptly held, viz:
In the recent case of People vs. Jakar Mapan Le, the Supreme Court clarified that there are links that must be
established in the chain of custody in the buy-bust situation: first, the seizure and marking, if practicable, of the
illegal drug recovered from the accused by the apprehending officer; second, the turnover of the illegal drug seized
by the apprehending officer to the investigating officer; third, the turnover by the investigating officer of the illegal
drug to the forensic chemist for laboratory examination; and fourth, the turnover and submission of the marked
illegal drug seized from the forensic chemist to the court.
In the present case, the links in the chain have been duly proven. During the conduct of the buy-bust operation,PO2
SALONGA, the poseur-buyer, was able to confiscate two (2) plastic sachets of shabu from accused-appellant: the
first one was sold to him in exchange for the buy-bust money, and the second one was recovered from the latter
during the routinary frisk conducted by PO2 SALONGA. He thereafter gave the plastic sachets to SPO3
CONCEPCION, who kept the same in his custody until they reached the police station, where SPO3
CONCEPCION, in turn, surrendered them to the desk officer who placed the appropriate markings
thereon. Subsequently, the seized items were turned over to PO1 ESTRELLES, the police officer on duty, who
1âwphi1
prepared the request for laboratory examination on the specimens, which he delivered, together with the seized
plastic sachets, to the PNP Crime Laboratory on September 9, 2003. [Thereupon], forensic chemist P/INSP ARBAN
duly received the request for laboratory examination and the confiscated items and conducted the qualitative
examination thereon, which yielded positive results.
Thus, the prosecution in this case was able to establish the integrity and the evidentiary value of the shabu seized
from accused-appellant, hence, there was substantial compliance with the requirements of the law. It must be
stressed that non-compliance with Sec.21 of [R.A.] 9165 does not render an accused’s arrest illegal or the items
seized/confiscated from him inadmissible. The requirements under [R.A.] 9165 and its implementing rules are not
inflexible. What is essential is ‘the preservation of the integrity and the evidentiary value of the seized items, as the
same would be utilized in the determination of the guilt or innocence of the accused.’15
Anent appellant’s claim of denial of due process allegedly because he was not assisted by counsel during the
investigation and inquest proceedings, the Court cannot accord credence to the same. As correctly observed by the
CA, this issue cannot be raised for the first time on appeal without offending the basic rules of f air play, justice and
due process. Besides, the fact that he was not assisted by counsel during the investigation and inquest proceedings
does not in any way affect his culpability. It has already been held that "the infractions of the so-called Miranda
rights render inadmissible only the extrajudicial confession or admission made during custodial
investigation."16 Here, appellant's conviction was based not on his alleged uncounseled confession or admission but
on the testimony of the prosecution witness.
In light of the above discussion and of P02 Salonga's positive identification of appellant, the courts below rightly
brushC1d aside his defenses of denial and frame-up or extortion. Aside from being not substantiated by strong and
convincing evidence, the Court has viewed such defenses with disfavor for they can easily be concocted and are
common and standard ploy in prosecutions for violation of the Dangerous Drugs Act.17
All told, the Court affirms appellant's conviction of the offenses charged. As to the penalties imposed, the Court also
finds them proper and likewise affirms the same. However, appellant is not eligible for parole with respect to the
case of illegal sale of shabu.18
WHEREFORE, the assailed September 21, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 03859 is
AFFIRMED with the MODIFICATION that appellant Abola Bio y Panayangan is not eligible for parole with respect to
the case for illegal sale of shabu.
SO ORDERED.
SECOND DIVISION
G.R. No. 195245, February 16, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JIMMY GABUYA Y ADLAWAN, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
In this appeal, Jimmy Gabuya y Adlawan (appellant) assails the May 19, 2010 Decision1 of the Court of Appeals (CA) in CA-
G.R. CR-H.C. No. 01795 which affirmed the December 8, 2005 Joint Decision2 of the Regional Trial Court (RTC), Branch 127,
Caloocan City in Criminal Cases Nos. C-68369 and C-68370, finding him guilty beyond reasonable doubt of violation of
Sections 5 (sale of dangerous drugs) and 11 (possession of dangerous drugs), Article II of Republic Act No. 91653 (R.A.
9165) and sentencing him to suffer the penalties of life imprisonment and to pay a fine of P500,000.00 for illegal sale, and
twelve (12) years, eight (8) months and one (1) day to seventeen (17) years and eight (8) months and to pay a fine of
P300,000.00 for illegal possession, with subsidiary imprisonment in the event of insolvency in both cases.
Factual Antecedents
PO1 Joel Rosales (PO1 Rosales) relayed to Police Inspector Cesar Cruz (P/Insp. Cruz) the information he received from a
confidential informant that appellant was selling illegal drugs on Second Avenue, Caloocan City. Thus, P/Insp. Cruz formed a
buy-bust team and dusted a P100.00 bill with ultraviolet fluorescent powder to be used as marked money. He designated
PO1 Rosales as poseur-buyer while the other members, consisting of PO3 Manuel De Guzman (PO3 De Guzman), PO3
Rodrigo Antonio, PO3 Ferdinand Modina and PO2 Amadeo Tayag, would serve as back-ups. When the team arrived at the
designated area, PO1 Rosales and the confidential informant went ahead while the rest of the buy-bust team positioned
themselves in strategic locations. The confidential informant left after pointing appellant to PO1 Rosales. PO1 Rosales then
approached appellant and told him that he wanted to buy illegal drugs worth P100.00. He then showed appellant the
P100.00 marked money who took the same and placed it in his pocket. Thereafter, appellant retrieved from another pocket
three plastic sachets containing white crystalline substance and gave one to PO1 Rosales, who thereupon scratched his head
as the pre-arranged signal to the buy-bust team that the illegal drug transaction had already been consummated. When the
back-ups arrived, PO1 Rosales informed appellant that he is a police officer and immediately caused his arrest. He then
confiscated the other two plastic sachets from appellant while PO3 De Guzman recovered the marked money after appellant
emptied his pocket.4 c ralawlawl ibra ry
Appellant, together with the marked money and the specimens recovered from him, were turned-over to the police
investigator, PO3 Randulfo Hipolito, who marked each sachet with the letters JGA, the initials of appellant.5 The seized items
and appellant were thereafter brought to the police crime laboratory for examination of the forensic chemist, P/Insp. Jimmy
Calabocal (P/Insp. Calabocal). The results revealed that: (1) the contents of all the plastic sachets were positive for
methamphetamine hydrochloride or shabu;6 (2) the contents of the two sachets recovered from appellant weighed 0.09
gram while the other one subject of the sale weighed 0.05 gram;7 and (3) appellant’s hand and the marked money were
positive for ultraviolet fluorescent powder.8 cralaw lawlib rary
During trial, PO1 Rosales identified appellant as the person who sold him shabu for P100.00 during the buy-bust
operation.9 He also identified the sachets of shabu that were formally offered in evidence as the same items that were seized
from appellant.10 cralawlaw lib rary
For his part, appellant pleaded “not guilty” to the crimes charged.11 He testified that while waiting for a jeep to take him
home, persons in civilian clothes approached him and asked if he is a Muslim. When he answered in the negative, they
invited him to go with them to a barangay hall since a complaint had allegedly been filed against him. When he refused,
they forced him to go with them. Appellant claimed that he was taken instead to a house and told to produce P20,000.00 in
exchange for his release. Because he failed to comply, he was transferred to the police station where he was given a
cellphone to call someone to post bail for him. On his second day in the police precinct, he was taken to a certain Fiscal
Guiyab who signed a document presented by PO1 Rosales. They then proceeded to the hospital for a medical examination
before returning to the city jail. As to the result of the examination for the presence of fluorescent powder, appellant
explained that his hands tested positive because a certain Antonio gave him a P100.00 bill purportedly to be spent for his
dinner. He accepted the bill but when he was about to be accompanied out of the detention cell, Antonio took back the
money.12 cralawlawl ibra ry
In its Joint Decision of December 8, 2005,13 the RTC ruled that the prosecution was able to prove the guilt of appellant
beyond reasonable doubt for the offenses charged. It found the buy-bust operation to be valid, the warrantless arrest and
body search carried out against appellant as justified, and the testimony of PO1 Rosales to be credible. The RTC likewise
held that the prosecution was able to establish the unbroken link in the chain of custody of the illegal drugs in both
cases. The dispositive portion of its Joint Decision reads: chanRoble svirtual Lawlib ra ry
PREMISES CONSIDERED, the prosecution having established to a moral certainty the guilt of Accused JIMMY GABUYA Y
ADLAWAN, this Court hereby renders judgment as follows:
1. In Crim. Case No. 68370 for Violation of Sec. 5, Art. II of R.A. 9165, this Court in the absence of any aggravating
circumstance hereby sentences aforenamed Accused to LIFE IMPRISONMENT, and to pay the fine of Five hundred thousand
pesos (P500,000.00) with subsidiary imprisonment in case of insolvency.
2. In Crim. Case No. 68369 for Violation of Sec. 11, Art. II of [R.A.] 9165, this Court in the absence of any aggravating
circumstance hereby sentences same Accused to twelve (12) years, eight (8) months and one (1) day to seventeen (17)
years and eight (8) months and to pay the fine of Three hundred thousand pesos (P300,000.00) with subsidiary
imprisonment in case of insolvency.
Subject drugs in both cases are hereby declared confiscated and forfeited in favor of the government to be dealt with in
accordance with law. cralawred
x x x x14
In his appeal to the CA, appellant asserted that the RTC erred in finding him guilty beyond reasonable doubt since the failure
of the buy-bust team to coordinate with the Philippine Drug Enforcement Agency (PDEA) and to mark the seized items at the
place of seizure constituted gaps in the chain of custody. These gaps, according to appellant, created doubts as to whether
the items allegedly seized from him were the same items presented during the trial.
In its Decision15 dated May 19, 2010, the CA ruled that the prosecution ably established the following elements of illegal sale
of dangerous drugs: (1) the identity of the buyer and seller, the object, and consideration; and (2) the delivery of the thing
sold and the payment therefor. This is considering that PO1 Rosales positively identified appellant as the person who sold to
him the shabu in exchange for the marked money.
The CA also affirmed the RTC’s ruling that appellant is guilty of possession of dangerous drugs as characterized by the
following requisites: (1) the accused is in possession of an item or object which is identified to be a prohibited drug; (2) such
possession is not authorized by law; and (3) the accused freely and consciously possessed the said drug. The appellate court
took note that PO1 Rosales testified that other sachets of shabu were recovered from appellant during the buy-bust
operation and that his testimony is corroborated by Physical Sciences Report No. D-630-03 and by the testimony of P/Insp.
Calabocal, which both show that the specimens confiscated from appellant are indeed shabu.
The CA held that the RTC did not err in finding the warrantless arrest and search effected upon appellant legally justified
since he was apprehended in flagrante delicto during a legitimate buy-bust operation. It likewise ruled that aside from the
fact that findings of the RTC are accorded high respect, the failure of appellant to prove any ill motive on the part of the buy-
bust team justifies the RTC’s application of the presumption that the police officers performed their duties regularly.
Moreover, the CA did not find merit in appellant’s argument that the failure of the police officers to mark the seized items at
the scene of the crime, to conduct an inventory of the subject specimen, and to take photograph thereof are procedural
lapses that created gaps in the chain of custody. It held that non-compliance with the procedure for the custody of seized
items under paragraph 1, Section 21, Article II of R.A. 9165 does not invalidate the buy-bust operation since the prosecution
was nonetheless able to prove that the police officers properly preserved the integrity and evidentiary value of the
seized shabuas provided in Section 21(a), Article II of the Implementing Rules and Regulations of said law.
In view of the above, the CA ultimately ruled thus: cha nRoblesvi rt ual Lawlib rary
WHEREFORE, premises considered, the present appeal is hereby DENIED and [the] challenged Decision of the Court a
quo dated 08 December 2005 STANDS.
SO ORDERED.16
Insisting on his acquittal, appellant interposes this appeal where he raises as additional issues in his Supplemental Brief17 the
following: (1) the failure of the police officers to mark the seized sachets of shabu not only at the scene of the crime but also
in his presence; and (2) the lack of information on the whereabouts of the shabu after it was examined by the Forensic
Chemist, P/Insp. Calabocal, whose testimony did not cover the manner in which the specimens were handled after the
examination.
Our Ruling
After a thorough review of the records of the case vis-à-vis the assailed Decision, the Court finds the appellate court’s
resolution of the issues raised in Accused-Appellant’s Brief, as well as the conclusions reached by it, to be in order. Hence,
there is no reason to dwell on them again.
The Court notes, however, that the CA did not touch upon appellant’s assertion that the failure of the police officers to
coordinate with the PDEA is a serious procedural defect. Be that as it may, it must be made clear that the resolution of the
said issue will not result in appellant’s exoneration. The omission of the CA to discuss and pass upon the same in its assailed
Decision is not a fatal flaw since coordination of the buy-bust operation with the PDEA is not an indispensable element of the
crimes of illegal sale and possession of dangerous drugs such as shabu.18 cralawlawlibra ry
Going now to the issues raised by appellant in his Supplemental Brief, appellant avers that the police officers did not comply
with Section 21 of R.A. 9165 and its Implementing Rules, particularly when they failed to mark the seized items at the scene
of the crime in his presence. He likewise argues that the lack of information on the whereabouts of the shabu after its
examination by the forensic chemist and the absence of testimony thereon revealed a gap in the chain of custody of the
evidence.
It is well to note that the records of the case are bereft of evidence that appellant, during trial, interposed any objection to
the non-marking of the seized items in his presence and the lack of information on the whereabouts of the shabu after it was
examined by P/Insp. Calabocal. While he questioned the chain of custody before the CA, the alleged defects appellant is now
alluding to were not among those he raised on appeal. The defects he raised before the CA were limited to the alleged lack
of physical inventory, non-taking of photographs of the seized items, and the supposed failure of the police officers to mark
the sachets of shabu at the crime scene. But even then, it was already too late in the day for appellant to have raised the
same at that point since he should have done so early on before the RTC.19 It bears stressing that the Court has already
brushed aside an accused’s belated contention that the illegal drugs confiscated from his person is inadmissible for failure of
the arresting officers to comply with Section 21 of R.A. 9165.20 This is considering that “[w]hatever justifiable grounds may
excuse the police officers from literally complying with Section 21 will remain unknown, because [appellant] did not question
during trial the safekeeping of the items seized from him. Objection to evidence cannot be raised for the first time on appeal;
when a party desires the court to reject the evidence offered, he must so state in the form of an objection. Without such
objection, he cannot raise the question for the first time on appeal.”21 Besides and as already mentioned, the CA has already
concluded that the identity of the seized drugs was established by the prosecution and its integrity preserved, viz.: chanRoble svirtual Lawli bra ry
Ultimately, We find that the prosecution convincingly proved that the police operatives indeed complied with the required
unbroken chain in the custody of the subject illegal drugs, viz: a.) beginning from the lawful buy-bust operation undertaken
by the police operatives on 06 June 2003 and the recovery of the subject illegal drugs as well as the marked money resulting
from the Appellant’s valid warrantless search and seizure; b.) upon seizure of the one hundred (Php100) pesos with serial
number #JK623663 used as marked money and the subject drugs by PO1 ROSALES, said specimens remained in his
possession until they were turned over to the police investigator PO2 HIPOLITO upon reaching the police headquarters; c.)
upon receipt of the subject drugs and buy-bust money, PO2 HIPOLITO marked the specimens “JGA-1” (0.05 gram),”JGA-
2”(0.04 gram) and “JGA-3”(0.05 gram) which stands for the Appellant’s initials; d.) a Laboratory Examination Request was
then prepared by Chief Police Inspector CESAR GONZALES CRUZ (Chief P/Insp. CRUZ) addressed to the Chief PNP, NPD
Crime Laboratory Office, Samson Road, Caloocan City, requesting for the examination of the three (3) pieces of small plastic
transparent [heat-sealed] sachets containing white crystalline substance that were confiscated from the Appellant; e.) upon
receipt of the subject drugs, the same [were] examined by forensic chemist P/Insp. CALABOCAL who found [them] to be
positive for shabu; f.) thereafter, Chief P/Insp. CRUZ prepared a Referral Slip dated 06 June 2003 addressed to the City
Prosecutor of Caloocan presenting as evidence, inter alia, the three (3) plastic sachets confiscated from the Appellant, the
Laboratory Examination Report dated 06 June 2003 and the one hundred (Php100) pesos used as marked money; g.) the
three (3) plastic sachets were turned over to the custody of the prosecutor which PO1 ROSALES identified on direct
examination as the subject drugs sold and confiscated from Appellant during the buy-bust operation; h.) the subject
specimens were then marked as Exhibits “C-1”, C-2” and “C-3” for the prosecution and was finally surrendered to the court a
quo when formally offered as evidence by the prosecution on 19 August 2004.22
In view of the foregoing, the Court upholds appellant’s conviction for violation of Sections 5 and 11, Article II of R.A. 9165 as
well as the penalties imposed upon him. It must be added, however, that he is not eligible for parole with respect to the
case of illegal sale of shabu.23 cralaw lawlib rary
WHEREFORE, the assailed May 19, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 01795 is AFFIRMED with
the MODIFICATION that appellant Jimmy Gabuya y Adlawan is not eligible for parole with respect to the case of illegal sale
of shabu.
SECOND DIVISION
G.R. No. 194999 February 9, 2015

vs.
GLORIA NEPOMUCENO y PEDRAZA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
On August 11, 2003, two Informations charging Gloria Nepomuceno y Pedraza (appellant) with violation of Sections
5 (Sale of Dangerous Drugs) and 15 (Use of Dangerous Drugs), Article II of Republic Act (RA) No. 9165 or the
Comprehensive Dangerous Drugs Act of 2002, were filed in the Regional Trial Court (RTC) of Makati, Branch 64.
The Information in Criminal Case No. 03-2917 charged appellant with violation of Section 5, Article II of RA 9165 in
the following manner: That on or about the 9th day of August, 2003, in the City of Makati, Metro Manila, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, without the necessary license 9r
prescription and without being authorized by law, did then and there willfully, unlawfully and feloniously sell, deliver
and give away Methylamphetamine Hydrochloride weighing zero point zero three (0.03) gram, a dangerous drug, in
consideration of ₱100.00.
CONTRARY TO LAW.1
On the other hand, the accusatory portion of the Information in Criminal Case No. 04-1407 charged appellant with
violation ofSection 15, Article II of RA 9165 as follows:
That on or about the 9th day of August, 2003 in the City of Makati, Metro Manila, Philippines, a place within the
jurisdiction of this Honorable Court, the above-named accused, not being authorized by law to use dangerous drug,
and having been arrested and found positive for the use of Methylamphetamine after a confirmatory test, did then
and there, willfully, unlawfully and feloniously use Methylamphetamine, a dangerous drug, in violation of the said
law.
CONTRARY TO LAW.2
During arraignment, appellant pleaded notguilty to both charges. After the termination of the pre-trial conference,
trial ensued.
The prosecution established that the Chief of the Drug Enforcement Unit (DEU) of the Makati Philippine National
Police (PNP) received a report from a confidential informant (CI) that appellant was selling shabu. He thus formed a
buy-bust team to entrap appellant composed of PO2 VicenteBarrameda (PO2 Barrameda), who was designated as
the poseur-buyer and team leader, PO2 Virginio Costa, PO2 Rodrigo Igno, PO1 Alex Inopia, and PO1 Randy
Santos (PO1 Santos). The Chief of the DEU conducted a briefing and provided the buybust team with two 50-peso
bills as marked money. Meanwhile, PO2 Barrameda coordinated the buy-bust operation with the Philippine Drug
Enforcement Agency.
On August 9, 2003, at around 2:00 p.m., the buy-bust team deployed itself at the corner of Caton and Zobel Streets,
Barangay La Paz, Makati City. The team members positioned themselves in strategic locations while PO2
Barrameda and the CI approached appellant. The CI introduced PO2 Barrameda to appellant as a buyer of shabu.
PO2 Barrameda told appellant that he needed ₱100.00 worth of shabu and gave her the marked money as
payment. Appellant took out from her pocket and turned-over to PO2 Barrameda a small plastic sachet containing
white crystalline substance. Upon receipt thereof, PO2 Barrameda lighteda cigarette as the pre-arranged signal that
the transaction had been consummated. PO1 Santos rushed to the scene and recovered from the right hand of
appellant the buy-bust money. PO1 Barrameda marked the subject plastic sachet with the initials "GPN." Appellant
was thenarrested and brought to the DEU of Makati where she was turned over to the duty investigator for
documentation. Thereafter, appellant and the seized plastic sachet with its contents were taken to the PNP Crime
Laboratory for drug testing and laboratory examination, respectively. Specimen of the white crystalline taken from
the plastic sachet tested positive for shabu.
Appellant denied selling shabu. She recalled that on August 9, 2003 at around 1:30 p.m., while she was standing in
front of her house in San Andres, Manila, six men in civilian clothes arrested her. They informed her that they were
from the DEU of Makati and that she was being arrested for selling them shabu. They dragged her away from her
house while her husband and son-in-law were inside and unaware of what was happening to her. Atthe DEU office,
appellant was told to empty her pockets and was asked of the whereabouts of a certain Johnny, who was an alleged
supplier of illegal drugs in their area.
Rulings of the Regional Trial Court and the Court of Appeals
On April 5, 2006, the RTC rendered a Decision3 convicting appellant for illegal sale of shabuin Criminal Case No.
03-2917,but acquitting her for illegal use of the same in CriminalCase No. 04-1407 due to insufficiency of evidence.
The dispositive portion of the Decision reads: WHEREFORE, in view of the foregoing[,] judgment is rendered as
follows:
1. In Criminal Case No. 03-2917, for violation of Section 5, Art. II, RA 9165, the accused GLORIA NEPOMUCENO y
PEDRAZA, is found GUILTY beyond reasonable doubt and is sentenced to suffer life imprisonment and pay a fine
of ₱500,000.00. The period during which the accused is detained at the Makati City Jail shall be considered inher
favor pursuant to existing rules.
2. In Criminal Case No. 04-1407, for violation of Sec. 15, Art. II, RA 9165, the accused GLORIA NEPOMUCENO y
PEDRAZA, is ACQUITTED for insufficiency of evidence.
The Branch Clerk of Court is directedto transmit to the Philippine Drug Enforcement Agency (PDEA) the one (1)
piece of plastic sachet of shabu weighing of 0.03 gram subject matter of these cases, for said agency’s appropriate
disposition.
SO ORDERED.4
Appellant appealed her conviction to the Court of Appeals (CA) where it was docketed as CA-G.R. CR-H.C. No.
02318.The CA denied her appeal in its Decision5 dated August 25, 2010. The dispositive portion reads:
WHEREFORE, premises considered, the present appeal is hereby DENIED and challenged Decision of the court a
quodated 05 April 2006 STANDS.
SO ORDERED.6
Appellant thus interposed this appeal reiterating that her positive identification by the police officers cannot berelied
upon since the police officers were not familiar with her appearance. Thus, there was no assurance that she was the
person reported by the CI to be engaged in an illegal drug activity. Appellant insists that the warrantless arrest,
search and seizure carried out by the police officers against her were illegal since they merely suspected that she
committed a crime.7 She continues to argue that the evidence allegedly recovered from her has no evidentiary value
for failure of the buy-bust team to photograph the seized shabuin the presence of a representative from media, the
Department of Justice (DOJ) and any elected public official who shall sign copies of the inventory pursuant to RA
9165.
Our Ruling
The Court is satisfied that the prosecution dischargedits burden in a prosecution for illegal sale of dangerous drugs,
which are: "(1) the identity of the buyer and the seller, the object and consideration; and, (2) the delivery of the thing
sold and the payment therefor."8 This offense merely requires the consummation of the selling transaction, which
occursthe moment the buyer exchanges his money for the drugs of the seller.9
PO2 Barrameda, the police officer who acted as buyer, testified on the buybust operation against appellant and
positively identified her as the seller of the seized shabuthat was sold to him for ₱100.00. PO1 Santos, another
police officer and member of the buy-bust team, corroborated the testimony of PO2 Barrameda. While they had not
seen appellant prior to the buy-bust operation, the CI readily identified and introduced her to PO2 Barrameda.
In cases involving the illegal sale ofdangerous drugs, "credence should be given to the narration of the incident by
the prosecution witnesses, especially when they are police officers who are presumed to have performed their
duties in a regular manner, unless there is evidence to the contrary. Moreover, in the absence of proof of motive to
falsely impute such a serious crime against the appellant, the presumption of regularity in the performance of official
duty, as well as the findings of the trial court on the credibility of witnesses, shall prevail over [appellant’s] self-
serving and uncorroborated denial."10 Appellant therefore had the burden to overcome the presumption that the
police officers regularly and properly discharged their duties11 which she failed to do. Against the evidence of the
prosecution, her defenses of alibi, denial and frame-up crumble. Aside from being weak and uncorroborated, such
defenses are viewed with disfavor since they can easily be concocted and are common and standard ploy in
prosecutions for violation of the Dangerous Drugs Act.12
Appellant’s contention that her warrantless arrest was unlawful does not deserve credence. The facts on record do
not substantiate her claim that she was apprehended merely on suspicion of committing a crime. On the contrary,
appellant was arrested after committing a criminal offense thatresulted from a successful buy-bust operation. Having
been apprehended in flagrante delicto, the police officers were not only authorizedbut were even duty-bound to
arrest her even without a warrant.13
Besides, appellant’s objection to the legality of her warrantless arrest and the admissibility in evidence of the
shabushe sold is not a valid ground to warrant a reversal of the rulings of the RTC and the CA. Such an objection
must be manifested prior to entering her plea,otherwise, it is deemed waived.14 Here, appellant failed to move for the
quashal of the Information prior to arraignment due to the alleged illegalityof her arrest or to object to the same
during her arraignment. She even actively participated in the trial and only questioned the validity of her arrest in the
CA. As a result of this omission, she is deemed to have waived any objection to the defects that may have attended
her arrest.
Also, appellant’s guilt for selling shabu, a dangerous drug, cannot be reversed by her assertion that the
apprehending officers failed to observe the procedure for the custody and disposition of the seized drug as provided
in Section 21(1), Article II of RA 9165, particularly the conduct of physical inventory and taking of photograph of the
seized item.
Section 21(1),15 Article II of RA 9165 clearlyoutlines the post-seizure procedure for the custody and disposition of
seized drugs. The law mandates that the police officer taking initial custody of the drug shall immediately after
seizure and confiscation, take photograph and conduct physicalinventory of the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, his/her representativeor counsel, a
representative from the media and the DOJ, and any elected public official, who shall sign the copies of the
inventory and begiven a copy thereof.
Notwithstanding the explicit directive of said law, Section 21(a) of its Implementing Rules and Regulations 16 provides
a saving clausewhenever there is non-compliance, to wit:
x x x Provided, further, that non-compliance with these requirements under justifiable grounds, as long as the
integrity and the evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall
not render void and invalid such seizuresof and custody over said items.
It can be easily understood from a cursory reading of the implementing rules that the crucial factor is the
preservation of the integrity and the evidentiary value of the seized items since they will be used to determine the
guilt or innocence of the accused.17
In this case, it is admitted that there was no physical inventory and photographing of the seized drug as mandated
by law. However, it was shown that the integrity and evidentiary value of the item has been preserved and
1âwphi1
remained intact. The crucial links in the chain of custody of the seized drug subject matter of the case from its
confiscation from appellant up to its presentation as evidence was duly accounted for and shown to have not been
broken. It was established that after the seizure of the small plastic sachet, PO2 Barrameda immediately marked it
with the initials "GPN" while PO1 Santos confiscated the buy-bust money from appellant’s possession. The police
officers took appellant and the recovered items to the desk officer who investigated the case. After the investigation,
a request for laboratory examination was prepared by P/Supt. Jose Ramon Q. Salido. The confiscated small plastic
sachet marked "GPN'' and the request were brought by P02 Barrameda to the PNP Crime Laboratory in Camp
Crame, Quezon City and was received by P/lnsp. Stella Garciano Ebuen (P/Insp. Ebuen) for examination. P/lnsp.
Ebuen conducted a laboratory examination on the 0.03 gram of white crystalline substance found inside the plastic
sachet marked "GPN'' which tested positive for methylamphetamine hydrochloride. This fmding is contained in
Chemistry Report No. D-1002-03.18 During trial, and based on the marking he placed, P02 Barrameda identified the
seized item as the very same sachet he bought and recovered from appellant. He also identified appellant to be the
same person who sold the seized shabu to him and the plastic sachet marked "GPN'' that contained the dangerous
drug. Considering this sequence of events, there is no doubt that the sachet marked "GPN" submitted for laboratory
examination and found positive for shabu was the same one sold to the poseur-buyer during the buy-bust operation
and the very same item presented during the trial as the corpus delicti. No irregularity was shown to have attended
the chain of custody of the shabu. Its identity, integrity and probative value were preserved and kept intact by the
police officers.
All told, there is no reason to disturb the fmdings that appellant is guilty beyond reasonable doubt of violation of
Section 5, Article II of RA 9165 as well as the penalty imposed upon her. However, it must be added that appellant
is not eligible for parole.19
WHEREFORE, the August 25, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 02318 is AFFIRMED
with the MODIFICATION that appellant Gloria Nepomuceno y Pedraza shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 190348 February 9, 2015
PEOPLE OF THE PIIlLIPPINES, Plaintiff-Appellee,

vs.
NILO COLENTAVA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:

On appeal is the May 29, 2009 Decision1 of the Court of Appeals (CA) in CA-GR. CR-H.C. No. 00760, which
affirmed with modification the April 23, 2007 Joint Judgment2 of the Regional Trial Court (RTC) of Bayawan City,
Negros Oriental, Branch 63 in Criminal Cases Nos. 205, 206, and 207. The RTC found appellant Nilo Colentava
(appellant) guilty beyond reasonable doubt of three counts of qualified rape and sentenced him to suffer
imprisonment of reclusion perpetua and to pay the victim "AAA"3 ₱75,000.00 as civil indemnity, ₱50,000.00 as moral
damages, and ₱25,000.00 as exemplary damages in each Case.
Factual Antecedents
Appellant was charged with qualified rape defined and penalized under paragraph (1) of Article 266-A of the
Revised Penal Code(RPC), in relation to paragraph (1) of Article 266-B thereof, in three separate Informations, viz:
Crim. Case No. 205
That on or about June 2003, in the City of Bayawan, Philippines and within the jurisdiction of this HonorableCourt,
the said accused, by means of intimidation, did then and there willfully, unlawfullyand feloniously lie and succeeded
in having carnal knowledge [of] "AAA," his daughter, a minor, sixteen (16) years old, against her will.
Contrary to Article 266-A, in relation to Paragraph 1 of Article 266-B of the Revised Penal Code.4
Crim. Case No. 206
That on or about the 29th day of July 2003, in the City of Bayawan, Philippines and within the jurisdiction of this
Honorable Court, the said accused, by means of intimidation, did then and there willfully, unlawfully and feloniously
lie and succeeded in having carnal knowledge [of] "AAA," his daughter, a minor, sixteen (16) years old, against her
will.
Crim. Case No. 207
That on or about the 4th day of August 2003, in the City of Bayawan, Philippines and within the jurisdiction of this
Honorable Court, the said accused, by means of intimidation, did then and there willfully, unlawfully and feloniously
lie and succeeded in having carnal knowledge [of] "AAA," his daughter, a minor, sixteen (16) years old, against her
will.
Upon arraignment on April 19, 2004,appellant, assisted by counsel de parte, entered a plea of not guilty to each
charge. After pre-trial was terminated, trial on the merits followed.
According to the prosecution’s evidence, "AAA," who was born on February 3, 1987, was 16 years old when the
alleged incidents of rape were committed against her by her own father, the appellant in this case, in the months of
June, July, and August inthe year 2003. Its version of the incidents is as follows:
When "AAA" was just eight months old, her parents left her to the care and custody of her grandmother "BBB," who
is appellant’s mother. They lived in Brgy. Tayawan, Bayawan City, Negros Oriental. In 2002, appellant returned to
Brgy. Tayawan and stayed in a house at Sitio Baco,7 which is near "BBB’s" house in Tayawan.
Sometime in June 2003,"BBB" instructed "AAA" togo to her father in Sitio Baco. Upon arriving thereat at 5:00 p.m.,
"AAA"did the household chores.8 Once done, "AAA" ate dinner by herself since appellant atthat time was still out.
Afterwards, she went to sleep.
At around 10:00 in the evening, "AAA" was roused from her sleep by appellant who ordered her toopen the main
door for him. "AAA" noticed that appellant was drunk.9 After opening the door, "AAA" went back to her room, but
appellant followed her and lay down beside her. He started kissing and hugging "AAA." Thereafter, he pointed his
.357 magnum pistolat her and took off her clothes.10 Appellant then positioned himself on top of "AAA" and inserted
his penis into her vagina. Oncesatiated, he threatened "AAA" not to tell "BBB" or else he would kill her.11 Out of fear,
"AAA"kept to her herself what appellant did to her.
About a month later or on July 29, 2003, "AAA" was again at home with appellant in Sitio Baco. After they finished
dinner, "AAA"went up to her room to rest. Appellant followed and lay down beside her. He embraced and kissed
"AAA" and took off her clothes. He then insertedhis penis into "AAA’s" vagina.12 When done, appellant pointed his
pistol at "AAA" and threatened to kill her and "BBB" if she would disclose her ordeal to anyone.
On August 21, 2003, appellant once more entered "AAA’s" room after they finished supper. He lay down beside
"AAA," hugged and kissed her and slowly removed her clothes. Afterwards, he positioned himself on top of "AAA"
and inserted his penis into her vagina.13 After having intercourse with "AAA," appellant again brought out his pistol,
pointed it at "AAA," and sternly reminded her not to tell her grandmother, otherwise he would kill them both.
It was only after the third rape incident that "AAA" finally mustered the courage to reveal to her grandmother what
had happened. As a result, her grandmother disallowed her toreturn to appellant’s house and instead sent her to her
aunt in Kabankalan. However, she went back to her grandmother’s house so she could continue her schooling.
On September 11, 2003, "AAA," together with two friends, reported the rape incidents to the Department of Social
Welfare and Development. There, she was asked if she wanted her father to be arrested. When she replied in the
affirmative, she was subjected to a medical examination. Dr. Edalin L. Dacula (Dr. Dacula), the City Health Officer of
Bayawan City who conducted the medical examination on "AAA" on September 11, 2003, issued a Medico Legal
Report showing that "AAA’s" vaginal orifice is open with healed lacerations at 3:00 and 12:00 o’clock
positions.14According to Dr. Dacula, these lacerations were caused by previous sexual intercourse.15
Appellant denied the accusations of rape against him.He claimed that he had been staying in Manila since 1990 for
work. It was only inMay of 2003 that he again saw "AAA" when hereturned to Bayawan City, Negros Oriental. He
was prompted to come homebecause he received a letter from "BBB" informing him that his daughter was
frequently out with her friends and at times even failed to go home.16
When appellant confronted "AAA" about her ways, the latter got furious and exclaimed that appellant does not have
the right to scold her because he was never present when she was growing up.17 Appellant was shocked by "AAA’s"
actuation that he held her hair and slapped her.18 After a while, appellant entered "AAA’s" room and tried to
apologize for hurting her. However, they had another argument prompting appellant to again lay his hands on her.
"CCC," the older brother of"AAA," testified that heresided with appellant from June to August of 2003 at Sitio Baco.
Heclaimed that during that time, "AAA" never lived with them because she stayed with their grandmother in
Tayawan proper.19 He also testified that at that time, "AAA" had a boyfriend named Jovito Sulpot with whom"AAA"
exchanged love letters.20 The said letters, however, were already burned.21
"BBB," for her part, confirmed that"AAA" lived withher in Brgy. Tayawan since she was born. When asked during
trial if there was ever a time when the appellant stayed and slept with "AAA," "BBB" answered in the
negative.22 "BBB" claimed that appellant lived in a different house located in Sitio Baco since he was working on their
landthere. She testified that the distance between appellant’s house in Sitio Baco and her house in Tayawan is
about 1½ kilometers and could be traversed in 45 minutes by foot.23
In a Joint Judgment24 dated April 23, 2007, the RTC found appellant guilty as charged, viz: WHEREFORE,the
prosecution having proved the guilt of the accused beyond reasonable doubt of the crime of Rape defined and
penalized under Article 266-A in relation to paragraph 1 of Article 266-B of the Revised Penal Code, accused NILO
COLENTAVA is CONVICTED of triple rape and sentenced to triple Reclusion Perpetua. He is hereby ordered to pay
complainant [AAA], for each count, the sum of Seventy Five Thousand Pesos (Php75,000.00) or a total of Two
Hundred Twenty FiveThousand Pesos (Php225,000.00) as civil indemnity; Fifty Thousand Pesos (Php50,000.00) for
each count or a total of One Hundred Fifty Thousand Pesos (Php150,000.00) as moral damages; and Twenty Five
Thousand Pesos (Php25,000.00) each or a total of Seventy Five Thousand Pesos (Php75,000.00) as exemplary
damages.
Finally, the entire records of these cases are hereby directed transmitted to the Court of Appeals Visayas, Cebu City
for automatic review as these cases involve the imposition of the capital punishment.
SO ORDERED.25
On appeal, the CA affirmed with modification the RTC’s conviction of appellant in a Decision26 dated May 29, 2009,
thus:
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED with MODIFICATION. Appellant
NILO COLENTAVA is found GUILTY beyond reasonable doubt of three (3) counts of qualified rape and is
sentenced to suffer the penalty of reclusion perpetua for each count without eligibility of parole and for each count of
rape; he ishereby ordered to pay private complainant ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages,
and ₱25,000.00 as exemplary damages on the three (3) counts. Costs against appellant.
SO ORDERED.27
Assignment of Errors
Appellant submits the following assignment of errors:
THE TRIAL COURT ERRED IN CONVICTING THE ACCUSEDAPPELLANT OF THREE (3) COUNTS OF RAPE
DESPITE THE FACT THAT HIS GUILT WAS NOT PROVEN BEYOND REASONABLE DOUBT.28
THE PRIVATE COMPLAINANT’SACTUATIONS AFTER THE INCIDENTS NEGATE THE POSSIBILITY OF RAPE. 29
THE PROSECUTION UTTERLY FAILEDTO PROVE THE ELEMENT OF INTIMIDATION.30 Appellant argues that
the charges against him should not have been given credence because "AAA’s" narration of the events leading to
the alleged rape were vague and highly improbable. The surrounding circumstances leading to the alleged three
incidents of rape were all the same which is highly unusual and contrary to common experience. Appellant also
contends that "AAA’s" conduct after the alleged rape incidents is questionable. Appellant argues that if he indeed
raped "AAA," then the lattershould have avoided returning to his house at Sitio Baco after the alleged first incident of
rape. Appellant also suggests that the normal thing to do on the part of "AAA" was to report the rape to her
grandmother which she failed to do. Appellant likewise posits that the prosecution failed to rebut his allegation that
"AAA" was mad athim because he chastised her due to her improper ways. According to appellant, this could have
been the reason why "AAA" pressed charges against him.
Appellant further argues that the prosecution failed to prove the attendance of intimidation in the commission of the
crimes.
Our Ruling
The appeal is without merit.
At the outset, we note that in his brief31 filed with the CA, appellant challenged "AAA’s" credibility by highlighting the
discrepancy between her testimony and the allegation inthe Information in Criminal Case No. 207 as to the date of
the commission of the third rape. "AAA" asserted that the third rape happened on August 21,2003, while the
Information stated that it occurred on August 4, 2003. In debunking appellant’s argument, the CA held:
The alleged inconsistency in the dateof the third rape is trivial and forgivable, since a victim of rape cannotpossibly
give an exacting detail for each of the previous incidents as these may just be but mere fragments of a prolonged
and continuing nightmare, a bad experience she might even be struggling to forget. Verily, the exact date of rape is
not an essential element of the crime, and the mere failure to give a precise date, let alone an incorrect estimate, will
not discredit the testimony of the victim.32
While this Court agrees with the CA that the exact date of the commission of rape is not an essential element of
saidcrime, it cannot, however, convince itself that "AAA" committed any inconsistencies in declaring that the third
rape occurred on August 21, 2003. From the time "AAA" executed her sworn Affidavit33 dated September 16, 2003
up to the time she took the witness stand on July 6, 2004,34 "AAA" never wavered and has consistently declared that
her father ravished her for the third time on August 21, 2003. On the other hand, it is obvious that the mistake was a
mere typographicalerror committed by the prosecution in the preparation of the Information dated February 9, 2004.
Ideally, said Information should have been consistent on every detail with "AAA’s" earlier sworn Affidavit. In any
case, an Information is valid as long as it distinctly states the elements of the offense and the acts or omissions
constitutive thereof. It is not necessary to state therein the precise datethe offense was committed, except when it is
a material ingredient of the offense.35 And as earlier mentioned, in rape cases the date or time of commission of the
offense isnot an essential ingredient of said crime.36 "In fact, the precise time when the rape takes place has no
substantial bearing on its commission."37
The prosecution was able to establish all the elements of qualified rape.
Rape under paragraph 1, Article 266-A of the RPC is committed as follows:
ART. 266-A. Rape, When and How Committed. – Rape is committed –
1. By a man who shall have carnal knowledge of a woman under any of the following circumstances:
a. Through force, threat or intimidation;
b. When the offended party is deprived of reason or is otherwise unconscious;
c. By means of fraudulent machination or grave abuse of authority;
d. When the offended party is under twelve (12) years of age or is demented, even though none of the
circumstances mentioned above be present.
If committed by a parent against his child under 18 years of age, the rape is qualified under paragraph 1, Article
266-B of the same code, viz:
ART. 266-B. Penalties. - Rape under paragraph 1 of the next preceding article shall be punished by reclusion
perpetua.
xxxx
The death penalty shall also be imposed if the crime of rape is committed with any of the following aggravating/
qualifying circumstances:
1. When the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-parent,
guardian, relative by consanguinity or affinity within the third civil degree, or the common law spouse of the parent of
the victim.
The elements therefore of qualified rape are: "(1)sexual congress; (2) with a woman; (3) done by force and without
consent; (4) the victim is under [18] years of age at the time of the rape; (5) the offender is a parent (whether
legitimate, illegitimate or adopted) of the victim."38
"In this case, both the trial court and the [CA] found that the prosecution was able to sufficiently establish all the
elements of qualified rape. This Court sees no reason to depart from the findings of the lower courts."39 "AAA’s"
testimony on her harrowing experience in the hands of appellant was found by the lower courts to be positive,
straightforward, categorical and steadfast. Moreover, the evidence on record established that "AAA" was just 16
years old when appellant, her own father, had carnal knowledge of her. Clearly,all the elements of qualified rape are
present in this case.
"AAA’s" credibility must be upheld and
her testimony accorded credence
"AAA’s" narration of her ordeal was clear and consistent, thus:
On the first incident of rape in June 2003:
Q: And what did he do to you, Miss Witness?
A: He [lay down] beside me.
Q: So when your father [lay down] beside you, Miss Witness, what happened next?
A: He hug[ged] me.
Q: And what else, Miss Witness?
A: He kissed my face.
Q: And what else, Ms. witness, if there were other things done by your father?
A: That’s the time he rape[d] me.
xxxx
COURT:
You said your father rape[d] you, how did he do it?
A: He pointed to me his [.]357 and he [took] off my short pants.
xxxx
PROS. BALBUENA:
Q: After your father remove[d] your panty, what did [he] do next?
A: He also remove[d] his short[s] and brief.
Q: And after he remove[d] his short[s] and brief, what did he do?
A: He positioned himself on top of me.
Q: And when he positioned [himself] on top of you, what did he do?
A: He let his [iyaha] enter [my private part].
COURT:
What do you mean by "iyaha"?
A: His penis. He let his private part [enter my private part].
xxxx
COURT:
How did he rape you?
A: He let his private organ enter my private organ.
Q: After he rape[d] you, what did he do?
A: He warn[ed] me not totell it to my grandmother.
Q: Did you tell your grandmother, Ms. Witness?
A: No.
Q: Why, Miss witness?
A: He is going to kill us if I am going to divulge the matter.40
On the second incident of rape on July 29, 2003:
Q: Will you kindly tell us how your father rape[d] you on July 29, 2003, Miss witness?
A: He remove[d] my short[s] and panty. He also remove[d] his brief and short[s] then he positioned himself ontop of
me and then he let his private part enter my private part.
Q: After his private part enter[ed] into your private part[,] what happened next, Miss witness?
A: He pointed to me his gun again and he warned me not to divulge it again to my grandmother.
Q: Did you not divulge it to your grandmother, Miss witness?
A: No, I did not divulge.
Q: Why, Miss witness?
A: Because he is going to kill us if I am going to divulge it to my grandmother.41
On the third incident of rape on August 21, 2003:
Q: Can you recall, Miss witness, where were you onAugust 21, 2003 at 5:00 o’clock in the afternoon?
A: Yes.
Q: Where were you, Miss witness?
A: Also at Sitio Baco.
Q: Where particularly in Sitio Baco?

A: [In] the house where [I] live[d] together with my father.
xxxx
Q: And when your father entered again your room, what did your father do?
A: He lay down beside me.
Q: And when your father lay down beside you, what did you do if any, Miss witness?
A: He remove[d] again my short[s] and panty.
Q: And after he remove[d your] short[s] and panty, what did he do?
A: He remove[d] his shorts and brief.
Q: And after your father remove[d] his short[s] and brief, what [did] he do next?
A: He positioned himself on top of me.
Q: And when your father positioned himself on top of you, what did he do?
A: He again let his private part enter my private part.
Q: And after his private part enter[ed] into your private [part], what happened next?
A: Again, he pointed to mehis gun and warned me again not to divulge it to my grandmother.42
It must also be noted that "AAA" cried at some pointwhile giving her testimony.
Given the foregoing, and considering that both the trial court and the CA found "AAA" a credible witness, the Court
affirms their assessment of "AAA’s" credibility. The evaluation of the trial court judge from the viewpoint of having
observed the witness on the stand, coupled by the fact that the CA affirmed the finding of the trial court, is binding
on the court unless it can be shown that facts and circumstances have been overlooked or misinterpreted which, if
considered, would affect the disposition of the case in a different manner. The Court finds none in this case.
Moreover, it is noteworthy that "AAA" was a minor at the time she was raped. The Court has been consistent in
giving credenceto testimonies of childvictims especially in sensitive cases of rape. In People v. Garcia,43 it was held
that:
Testimonies of child-victims are normally given full weight and credit, since when a girl, particularly if she is a minor,
says that she has been raped, she says in effect all that is necessary to show that rape has in fact been committed.
When the offended party is of tender age and immature, courts are inclined to give credit to her account of what
transpired, considering not only her relative vulnerability but also the shame to which she would be exposed if the
matter to which she testified is not true. Youth and immaturity are generally badges of truth and sincerity. A young
girl’s revelation that she had been raped, coupled with her voluntary submission to medical examination and
willingness to undergo public trial where she could be compelled to giveout the details of an assault on her dignity,
cannot be so easily dismissed as mere concoction.44
The Court thus upholds the credibility of "AAA" and accords credence to her testimony. Appellant’s defenses of
denial and improper motive fail to persuade.
Appellant denies the rape charges against him and imputes improper motive upon "AAA." He claims that "AAA" filed
the case because he chastised and slapped her in a fit of anger. Appellant’s contention, however, is far from being
persuasive.
The Court has ruled thata young girl’s revelation that she had been raped cannot be easily labeled asa mere
concoction. In People v. Melivo,45 it was held that:
It takes much more for a sixteen year old lass to fabricate a story of rape, have her private parts examined, subject
herself to the indignity of a public trial and endure a lifetime of ridicule. Even when consumed with revenge, it takes
a certain amount of psychological depravity for a young woman to concoct a story which would put her own father
for the most of his remaining life to jail and drag herself and the rest of her family to a lifetime of shame.
It must be added that the defenses of denial and improper motive can only prosper when substantiated by clear and
convincing evidence. There being no such evidence in this case, the said defenses are no morethan self-serving
assertions that deserve no weight in law. Certainly, theycannot prevail over "AAA’s" positive and categorical
testimony. Thus, appellant’s defenses of denial and imputation of improper motive fail to persuade.
"AAA’s" conduct after the rape incidents does not negate the fact that she was raped; Intimidation is attendant in the
commission of the crimes of qualified rape.
Appellant insists that "AAA’s" conduct after the alleged rape belies her claim that she was sexually molested. He1âwphi1
maintains that "AAA’s" act of remaining silent and of even returning to his house in Sitio Baco after the first alleged
rape are not the natural reactionsof a rape victim. Also, appellant concludes that the delay inreporting the rape
charges casts serious doubt on the truthfulness thereof.
Appellant’s arguments deserve scant consideration. It has been held that while "the conduct of the victim
immediately following the alleged sexual assault is of utmost importance as ittends to establish the truth or falsity of
the charge of rape, it is not accurate to say that there is a typical reaction or norm of behavior among rape victims,
as not every victim can be expectedto act conformably with the usual expectation of mankind and there is no
standard behavioral response when one is confronted with a strange orstartling experience, each situation being
different and dependent on the various circumstances prevailing in each case."46
Moreover, "AAA" was able to satisfactorily explain her reason for still going back to his father’s house in Sitio Baco
despite the occurrence of the first incident of rape. This was aptly mentioned by the CA in its assailed Decision, viz:
It was explained by appellee that the reason why she was there at the house of [her] father was because it was her
grandmother who commanded her to go to Baco. The testimony of appellee during the cross-examination is worth
mentioning, viz:
Q: After the first incident why did you still stay at your house in Baco?
A: Because if I will not go there, my father will go to Tayawan and he will "maoy".
Q: Will you elaborate what is "maoy?"
A: He will go wild in Tayawan.
Court: Go mad you referred to?
A: Yes. ATTY. MIRAFLOR:
Q: How did you know this?
A: Because he was there in Tayawan.
Q: You sacrifice[d] yourself [by staying] with your father in Baco even if something had happened to you x x x so that
your father will not "maoy" in Tayawan?
A: Because [it was] my grandmother [who] actually command[s] me [to] go home toBaco[, otherwise, it is] my father
[who] will go to them and hurt them.
Q: When was that?
A: In the year 2003.
Q: And when your grandmother forced you to go back to Baco, did you not tell your grandmother what [happened] to
you?
A: No.47
Also, it cannot be reasonably expectedthat "AAA" would hastily report the rape to her grandmother or to the
authorities considering that appellant threatened to kill her and her grandmother should she divulge the incident.
"AAA" was justified in thinking that appellant would make good his threat considering that he has a gun which he
even poked at "AAA" everytime hewould warn her against telling others of the rape. Indeed, failure to immediately
disclose the rape does not warrant the conclusion that the victim was not raped especially in this case where a
minor was threatened at gunpoint.
This, thus, brings the Court to appellant’s contention that intimidation was not established in this case, of which this
Court is unconvinced. To recall, "AAA" had unequivocally stated in her testimony that appellant, during the first
incident, pointed his .357 gun at her before raping her. During the succeeding rape incidents, appellant used the
same gun to threaten her should she reveal her defilement to her grandmother or to anyone. Verily, the element of
intimidation was sufficiently established. At any rate, even assuming that the prosecution failed to establish the
presence ofintimidation, the same would not alter the outcome of this case. "Settled is the rule that in incestuous
rape, the father’s moral ascendancy and influence over his daughter substitutes for violence and intimidation."48
All told, the Court affirms the lower court’s conviction of appellant for three counts of qualified rape.
Penalty
Under Article 266-B of the RPC, the death penalty shall be imposed when the victim of rape is below 18 years of
age and the offender is a parent, ascendant, step-parent, guardian, relative by consanguinity or affinity within the
third civil degree, or the common law spouse of the parent of the victim. The death penalty cannot, however, be
imposed in view of Republic Act No. 9346.49 In lieu of the death penalty, the penalty of reclusion perpetua without
eligibility for parole shall be imposed. Hence, the Court finds proper the penalty imposed by the CA upon appellant
which is reclusion perpetua without eligibility of parole in each of the three counts of qualified rape.
Awards of Damages
The CA's awards of ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages, and ₱25,000.00 as exemplary
damages, for each count of qualified rape must however be modified. Pursuant to People v. Gambao,50 we hold that
"AAA" is entitled to ₱100,000.00 as civil indemnity, ₱100,000.00 as moral damages and P 100,000.00 as exemplary
damages, for each count of qualified rape.
Finally, all damages awarded shall earn interest at the rate of 6% per annum from date of finality of this judgment
until fully paid.51
WHEREFORE, the Decision dated May 29, 2009 of the Court of Appeals in CA-GR. CR-H.C. No. 00760 finding
appellant Nilo Colentava guilty of three counts of qualified rape and sentencing him to suffer the penalty of reclusion
perpetua without eligibility for parole for each count is AFFIRMED with the following MODIFICATIONS:
(1) Appellant Nilo Colentava is ordered to pay the victim "AAA" ₱100,000.00 as civil indemnity, ₱100,000.00 as
moral damages, and ₱100,000.00 as exemplary damages, for each count of qualified rape;
(2) All damages awarded shall earn interest at the rate of 6% per annum from the date of finality of this resolution
until fully paid.
SO ORDERED .
SECOND DIVISION
G.R. No. 192785, February 04, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JOMER BUTIAL, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
The prosecution’s evidence must establish that the illegal drug presented in court is the same illegal drug actually recovered
from appellant.1chanRoble svirtual Lawlib ra ry
This is an appeal from the February 26, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 03170 which
affirmed in toto the December 3, 2007 Decision3 of the Regional Trial Court (RTC) of Tabaco City, Branch 17 in Criminal Case
No. T-3864 finding Jomer Butial (appellant) guilty of violating Section 5,4 Article II of Republic Act No. 9165 or the
Comprehensive Dangerous Drugs Act of 2002.
Factual Antecedents
On December 16, 2002, an Information5 was filed against appellant, the accusatory portion of which reads as follows: chan roble svi rtual lawlib rary
That on or about the 21st day of October, 2002, at 10:35 o’clock in the morning, more or less, at Purok 4, Barangay Sto.
Cristo, Tabaco City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with
deliberate intent to violate the law, did then and there willfully, unlawfully, knowingly and criminally sell, deliver and give
away to a poseur-buyer, METHAMPHETAMINE HYDROCHLORIDE otherwise known as “SHABU”, contained in two (2)
transparent plastic sachets each weighing approximately 0.1 gm., without the necessary government authority, to the
detriment of public welfare.
ACTS CONTRARY TO LAW.6
After appellant pleaded “not guilty” to the charge, pre-trial and trial ensued.
The prosecution presented as witnesses Gilbert Borlagdan (Borlagdan), PO2 Roy Martirez (PO2 Martirez), SPO4 Rosalino
Bonavente (SPO4 Bonavente), SPO4 Benito Bognaloc and SPO1 Carlos H. Desuasido (SPO1 Desuasido). 7 From their
testimonies, the following version emerged:
The Chief of Police of Tabaco City instructed PO2 Martirez and SPO4 Bonavente to conduct a buy-bust operation on appellant
after receiving information that he was selling illegal drugs. Thus, on October 21, 2002, PO2 Martirez arranged for
Borlagdan, a police asset, to act as a poseur-buyer and gave him four P100 bills as marked money. PO2 Martirez, SPO4
Bonavente and Borlagdan proceeded to Purok 4, Sto. Cristo, Tabaco City to entrap appellant.
Upon their arrival, Borlagdan walked towards a house which is under construction. PO2 Martirez and SPO4 Bonavente, on the
other hand, hid behind houses which were about seven meters away from where Borlagdan was. Borlagdan approached
appellant who was then working at the construction site and asked if he could purchase shabu. When an agreement was
reached, Borlagdan handed over the marked money to the appellant while the latter, in turn, gave him two plastic sachets
containing white crystalline substance. After the transaction, Borlagdan walked towards the place where PO2 Martirez and
SPO4 Bonavente were hiding. When he passed by them, Borlagdan nodded his head as a signal that the sale was already
consummated and gave the sachets to PO2 Martirez. Thereupon, the police officers came out of hiding. They immediately
approached appellant who threw something on the ground. PO2 Martirez arrested appellant and brought him to the police
station. SPO4 Bonavente who was left behind searched the place where he saw appellant throw something and found therein
a plastic sachet containing white crystalline substance. He also summoned for the owner of the house being constructed and
asked for appellant’s belongings. He was given a backpack which he brought to the police station.
Meanwhile at the police station, PO2 Martirez ordered appellant to empty his pockets and recovered from him one of the four
P100 bills used as marked money. PO2 Martirez then turned over the said marked money and the two plastic sachets to the
police investigator. When SPO4 Bonavente arrived, he likewise gave appellant’s backpack to the police investigator, who, in
turn, searched the same. Found therein were more sachets containing white crystalline substance.
Two days later, five sachets with white crystalline substance were referred and delivered to the crime laboratory for
examination which all tested positive for shabu, viz: chan roble svirtual lawlib rary
xxxx
SPECIMEN SUBMITTED:
Five (5) heat-sealed transparent plastic sachets marked as “A” through “E” each with white crystalline substance having the
following markings and recorded net weights:
A = 3.7240 gram[s] B = 0.8642 gram C = 0.0513 gram8

D = 0.0336 gram E = 0.0313 gram
Appellant and two others, namely, Lourdes Benavides and Elsa San Buenaventura, both residents of Purok 4, Sto. Cristo,
Tabaco who claimed to have witnessed appellant’s arrest, testified for the defense. Their version of the incident is as follows:
While appellant was working at the construction site, Robert Sierra (Sierra) arrived and asked if there is a vacancy. When
appellant said that he had to ask the owner first, Sierra departed. A few minutes later, PO2 Martirez and SPO4 Bonavente
arrived and arrested appellant. They took him to the police station. Thereat, PO2 Martirez opened appellant’s bag which was
brought to the station by SPO4 Bonavente. After asking him to identify the same, PO2 Martirez placed something inside the
bag and then closed it. Appellant was then ordered to open the bag. When he complied, pictures of him holding the bag and
the plastic sachets containing white crystalline substance were taken. PO2 Martirez also inserted a P100 bill into the back
pocket of his pants and thereafter presented him to the Chief of Police.
The RTC gave credence to the testimonies of the prosecution’s witnesses. It convicted appellant of the offense charged and
disposed of the case in its December 3, 2007 Decision9 as follows: chan roblesv irtuallawl ib rary
WHEREFORE, from the foregoing, accused Jomer Butial is hereby found GUILTY of Violation of Section 5, Article II, Republic
Act [No.] 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002, and he is hereby sentenced to suffer
the penalty of life imprisonment and to pay a fine of P500,000.00. Costs against accused.
SO ORDERED.10
Appellant filed a notice of appeal,11 which was approved by the RTC.12 Hence, the records of the case were transmitted to
the CA where the appeal was docketed as CA-G.R. CR-H.C. No. 03170.
Finding the RTC’s conviction of appellant to be well-supported by evidence, the CA, in its February 26, 2010 Decision,13 ruled
as follows:chan roblesv irtuallawl ib rary
WHEREFORE, the instant appeal is DISMISSED for lack of merit and the challenged Decision dated December 3, 2007 in
Criminal Case No. T-3864 is AFFIRMED in TOTO.
SO ORDERED.14
Hence, this appeal. cralawre d
Issues
For the first time in this appeal, appellant questions his warrantless arrest. He posits that his arrest was illegal since he was
not arrested in flagrante delicto. The police officers did not have personal knowledge that he was committing a crime as they
were hiding behind houses seven meters away from the place where the alleged transaction took place and did not actually
see the whole incident. This being the case, the sachets allegedly seized from him cannot be used in evidence against him
being “fruits of a poisonous tree.” Appellant also contends that the prosecution was unable to prove all the elements of the
offense of illegal sale of drugs. He likewise points to the failure of the police officers to properly observe the procedure
outlined in Section 21, RA 9165 and argues that the same constitutes a break in the chain of custody. cralawred
Our Ruling
The appeal must be granted.
The prosecution failed to show that the

identity and integrity of the corpus delicti
have been preserved.
There is merit in appellant’s contention that not all elements of the offense of illegal sale of shabu were proven and that
there were unexplained gaps and irregularities in the chain of custody of the seized items.
In a successful prosecution for the illegal sale of drugs, there must be evidence of the following elements: “(1) the identities
of the buyer and the seller, the object, and the consideration; and (2) the delivery of the thing sold and the payment
therefor.”15 The evidence of corpus delicti must also be established beyond doubt. In this case, the shabu “constitutes the
very corpus delicti of the offense and in sustaining a conviction under [RA 9165], the identity and integrity of the corpus
delicti must definitely be shown to have been preserved.”16 “The chain of custody requirement performs this function in buy-
bust operations as it ensures that doubts concerning the identity of the evidence are removed.”17 chanRoble svirtual Lawlib ra ry
The initial link in the chain of custody starts with the seizure of the plastic sachets from appellant and their marking by the
apprehending officer. “Marking after seizure is the starting point in the custodial link, thus it is vital that the seized
contraband is immediately marked because succeeding handlers of the specimens will use the markings as reference. The
marking of the evidence serves to separate the marked evidence from the corpus of all other similar or related evidence from
the time they are seized from the accused until they are disposed at the end of criminal proceedings, obviating switching,
‘planting,’ or contamination of evidence.”18 A review of the records, however, reveals that the confiscated sachets subject of
the illegal sale of shabu were not marked. PO2 Martirez, himself, admitted that he did not put any markings on the two
plastic sachets that were handed to him by Borlagdan after the latter’s purchase of the same from appellant.19 While he
mentioned that the police investigator to whom he turned over the items wrote something down or made some initials
thereon, he nevertheless could not remember who wrote the initials.20 And albeit later, PO2 Martirez identified the police
investigator as SPO1 Desuasido,21 the latter, however, when called to the witness stand, did not testify that he made any
markings on the said sachets or, at the very least, that he received the same from PO2 Martirez. His testimony merely
focused on the fact that he prepared the affidavit of a certain Baltazar.22
chanRoblesvirtual Lawlib ra ry
While SPO4 Bonavente testified that he put markings on several sachets of shabu allegedly seized from appellant, it cannot
be gathered from his testimony that the ones he marked were those sachets subject of this case. Instead, what it suggests
is that those he marked were the sachets belonging to appellant which he subsequently recovered, i.e., the one allegedly
thrown away by appellant and picked up by SPO4 Bonavente from the ground, and those found inside appellant’s
bag, viz:
chan roblesv irtuallawl ib rary
[PROS. At that time[,] how was the buy-bust operation carried out?
BROTAMONTE]-
[SPO4 Bonavente]- During that time we were in Sto. Cristo. When our asset got in the
house and came out he sent positive sign that he already bought
the prohibited drugs. So I and Roy Martirez immediately got
inside the house.
Q- What happened next?
A- Upon seeing us[,] this Butial tried to escape and Roy Martirez
grabbed him and they grappled with each other. I saw Butial
throw pieces of sachets and I picked up said sachets which
contained shabu.
Q- How many sachets?
A- Only one.
xxxx
Q- What happened next?
A- After two minutes[,] the owner of the house arrived. I asked him
[for] the belongings of Butial and he picked up the bag in the
corner and handed it to me.
xxxx
Q- Upon arrival at the Tabaco Police Station[,] what happened there
particularly, insofar as the bag was concerned?
A- I presented the bag to the desk officer for record purposes and to
the duty investigator.
Q- What did you do with the bag after that?
A- The duty investigator searched the bag.
Q- Where were you when the bag was searched.
A- I was outside the investigation room and I was only informed that
they found another sachet inside the bag.
xxxx
Q- Tell us if you actually witnessed the procedure of the search?
A- No. Sir. I just saw the sachet already on the table when I was
informed by the desk officer.
Q- Having seen the evidence already on the table[,] what did you do,
if any?
A- I told the desk officer to prepare the papers to preserve the
items.
Q- To preserve the integrity and identity of the supposed items[,]
what else did you undertake, if any?
A- I remember, I put my initials [on] the sachets.
Q- Can you still recall what items were those where you put your
initials?
A- The sachets, sir.
Q- Can you still recall how many sachets were those?
A- I cannot recall.
Q- Those sachets that bear your initials, if the same will be shown to
you again, will you be able to identify them by way of your
markings or initials?
A- Yes, sir.
Q- I have here several sachets containing crystalline substance
[e]ncased in two bigger transparent sachets which were turned
over by the PNP Crime No. 5[,] please look at [these] and tell us
if you could recognize [them]?
A- Yes, sir, I recognize [them].
xxxx
Q- I am showing to you the contents of one bigger transparent
plastic packet consisting of two small sachets with crystalline
substance in [them]. Please look at [them] and tell us if you are
familiar with [them].
A- (Witness examining the very small sachets containing a very
small amount of white crystalline substance).
This is not my initial.
Q- There is a marking which is not of the witness and said witness
looking at the bigger transparent packet from which these two
plastic sachets came from. Look at [them] and tell us if you could
recognize [them].
A- (Witness looking and examining the bigger plastic and
recogniz[ing] the initials as [those] of Martirez).
Q- How about [the other] marking?
A- I do not know.
Q- How about these three other plastic sachets containing crystalline
substance which I just took out from the previously sealed plastic
container?
A- [These are] my initials.
COURT Witness acknowledging that it is his signature and also his
INTERPRETER: marking on the other bigger one. Two small and one bigger
sachets. Smaller sachet with D-325-02 marked “A” with initial of
Bonavente. Smaller sachet D-325-02 marked “B” with initial of
Bonavente. Smallest sachet D-325-02 marked “C.”23 (Emphases
supplied)
Moreover, the Request for Laboratory Examination24 of the items seized suggests that the seized items were improperly
handled. As may be recalled, the police officers submitted five sachets of shabu for laboratory examination. Aside from
those three sachets marked by SPO4 Bonavente, the two other sachets were listed and described as follows in the said
request:chan rob lesvi rtua llawlib rary
x xxx
2. Evidence/Documents submitted:
xxxx
Two (2) transparent plastic packets containing white crystalline suspected to be Methamphetamine Hydrochloride (Shabu),
approximately 0.1 gm. each, and One (1) P100.00 with SN ES684504, all placed in a heat-sealed transparent
plastic with marking [letter] “I” on both sides;25 (Emphasis supplied)
Notably, the portion “and One (1) P100.00 with SN ES684504, all placed in a heat-sealed transparent plastic with marking
[letter] “I” on both sides” was obliterated by pen markings and the erasure was initialed by SPO1 Desuasido. But even
without the said erasure, the two transparent plastic packets containing white crystalline substance appear to have no
markings at all. Only the heat-sealed transparent plastic supposedly containing them has the marking letter “I,” which holds
no significance as the making of the said marking is also not supported by any testimony during trial.
Clearly, the absence of markings creates an uncertainty that the two sachets seized during the buy-bust operation were part
of the five sachets submitted to the police crime laboratory. The prosecution’s evidence failed to establish the marking of the
two sachets of shabu subject of this case, which is the first link in the chain of custody and which would have shown that the
shabu presented in evidence was the same specimen bought from appellant during the buy-bust operation. The lack of
certainty therefore on a crucial element of the crime i.e., the identity of the corpus delicti, warrants the reversal of the
judgment of conviction.26 chanRoble svi rtual Lawli bra ry
The failure of the prosecution to identify the corpus delicti is more glaring after considering that none of the five sachets
submitted to the police crime laboratory for qualitative examination and turned out positive for shabu weighed close to the
two plastic sachets that had an approximate weight of 0.1 gram each as stated in the Information. As previously mentioned,
the police officers sent five sachets that were marked and given corresponding weights, viz: chanroblesv irt uallawl ibra ry
A = 3.7240 gram[s] B = 0.8642 gram C = 0.0513 gram8

D = 0.0336 gram E = 0.0313 gram
It therefore appears that the sachets of shabu confiscated during the buy-bust operation are totally different from the
sachets forwarded to the police crime laboratory and thereafter presented in evidence.
As a final note, it does not escape the Court’s attention that there was also no testimony from the police officers that they
conducted a physical inventory and took photographs of the sachets of shabuconfiscated from appellant pursuant to Section
21(1)27 of Article II of RA 9165. Their sworn statements did not mention any inventory-taking or photographing of the
same. They also did not bother to offer any justification for this omission.28 At this point, it is apt to restate the Court’s
pronouncement in People v. Pepino-Consulta:29 chanRoblesv irt ual Lawlib rary
[T]he Court cannot emphasize enough that zealousness on the part of law enforcement agencies in the pursuit of drug
peddlers is indeed laudable. However, it is of paramount importance that the procedures laid down by law be complied with,
especially those that involve the chain of custody of the illegal drugs. This is necessary in order to dispel even the most
infinitesimal of doubts on the outcome of arrests any buy-bust operations, so as not to render naught the efforts and the
resources put forth in the apprehension and prosecution of violators of our drug laws.30
WHEREFORE, the appeal is GRANTED. The February 26, 2010 Decision of the Court of Appeals in CA-G.R. CR-HC No.
03170 affirming the December 3, 2007 Decision of the Regional Trial Court of Tabaco City, Branch 17, in Criminal Case No.
T-3864, finding appellant Jomer Butial guilty of Violating Section 5, Article II of Republic Act No. 9165, is REVERSED and
SET ASIDE and a new one is entered ACQUITTING him of the charge. Criminal Case No. T-3864 is DISMISSED.
The Director of the Bureau of Corrections is ordered to immediately release appellant Jomer Butial from detention, unless he
is confined for another lawful cause, and to report to this Court compliance within five days from receipt of this Resolution.
EN BANC
G.R. No. 207257 February 3, 2015
HON. RAMON JESUS P. PAJE, in his capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES (DENR), Petitioner,
vs.
HON. TEODORO A. CASIÑO, HON. RAYMOND V. PALATINO, HON. RAFAEL V. MARIANO, HON.
EMERENCIANA A. DE JESUS, CLEMENTE G. BAUTISTA, JR., HON. ROLEN C. PAULINO, HON. EDUARDO
PIANO, HON. JAMES DE LOS REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA
LIPUMANO-GARCIA, NORAIDA VELARMINO, BIANCA CHRISTINE GAMBOA ESPINOS, CHARO SIMONS,
GREGORIO LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSO, RODOLFO
SAMBAJON, REV. FR. GERARDO GREGORIO P. JORGE, CARLITO A. BALOY, OFELIA D. PABLO, MARIO
ESQUILLO, ELLE LATINAZO, EVANGELINE Q. RODRIGUEZ, JOHN CARLO DELOS REYES, Respondents.
x-----------------------x
G.R. No. 207276
REDONDO PENINSULA ENERGY, INC., Petitioner,

vs.
EMERENCIANA A. DE JESUS, CLEMENTE G. BAUTISTA, JR., HON. ROLEN C. PAULINO, HON. EDUARDO
GREGORIO LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSO, RODOLFO
SAMBAJON, REV. FR. GERARDO GREGORIO P. JORGE, CARLITO A. BALOY, OFELIA D. PABLO, MARIO
ESQUILLO, ELLE LATINAZO, EVANGELINE Q. RODRIGUEZ, JOHN CARLO DELOS REYES, RAMON JESUS
P. PAJE, in his capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES AND SUBIC BAY METROPOLITAN AUTHORITY, Respondents.
x-----------------------x
G.R. No. 207282
HON. TEODORO A. CASIÑO, HON. RAYMOND V. PALATINO, HON. EMERENCIANA A. DE JESUS,

CLEMENTE G. BAUTISTA, JR., HON. RAFAEL V. MARIANO, HON. ROLEN C. PAULINO, HON. EDUARDO
GREGORIO LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSA, RODOLFO
SAMBAJON, ET AL., Petitioners,
vs.
RAMON JESUS P. PAJE in his capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, SUBIC BAY METROPOLITAN AUTHORITY, AND REDONDO PENINSULA ENERGY,
INC., Respondents.
x-----------------------x
G.R. No. 207366
SUBIC BAY METROPOLITAN AUTHORITY, Petitioner,

vs.
EMERENCIANA A. DE JESUS, HON. ROLEN C. PAULINO, HON EDUARDO PIANO, HON. JAMES DE LOS
REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA LIPUMANOGARCIA, NORAIDA
VELARMINO, BIANCA CHRISTINE GAMBOA, GREGORIO LLORCA MAGDARAOG, RUBELHPERALTA, ALEX
CORPUS HERMOSO, RODOLFO SAMBAJON, REV. FR. GERARDO GREGORIO P. JORGE, CARLITO A.
BALOY, OFELIA D. PABLO, MARIO ESQUILLO, ELLE·LATINAZO, EV ANGELINE Q. RODRIGUEZ, JOHN
CARLO DELOS REYES, HON. RAMON JESUS P. PAJE, in his capacity as SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES AND REDONDO PENINSULA ENERGY,
INC.,Respondents.
DECISION
DEL CASTILLO, J.:
Before this Court are consolidated Petitions for Review on Certiorari1 assailing the Decision2 dated January 30, 2013
and the Resolution3 dated May 22, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 00015, entitled "Hon.
Teodoro A. Casiño, et al. v. Hon. Ramon Jesus P. Paje, et al."
Factual Antecedents
In February 2006, Subic Bay Metropolitan Authority· (SBMA), a government agency organized and established
under Republic Act No. (RA) 7227,4 and Taiwan Cogeneration Corporation (TCC) entered into a Memorandum of
Understanding (MOU) expressing their intention to build a power plant in Subic Bay which would supply reliable and
affordable power to Subic Bay Industrial Park (SBIP).5
On July 28, 2006, SBMA and TCC entered into another MOU, whereby TCC undertook to build and operatea coal-
fired power plant.6 In the said MOU, TCC identified 20 hectares of land at SitioNaglatore, Mt. Redondo, Subic Bay
Freeport Zone (SBFZ) as the suitable area for the project and another site of approximately 10 hectares tobe used
as an ash pond.7 TCC intends to lease the property from SBMA for a term of 50 years with rent fixed at$3.50 per
square meter, payable in 10 equal 5-year installments.8
On April 4, 2007, the SBMA Ecology Center issued SBFZ Environmental Compliance Certificate (ECC) No. EC-
SBFZ-ECC-69-21-500 in favor of Taiwan Cogeneration International Corporation (TCIC), a subsidiary of TCC,9 for
the construction, installation,and operation of 2x150-MW Circulating Fluidized Bed (CFB) Coal-Fired Thermal Power
Plant at Sitio Naglatore.10
On June 6, 2008, TCC assigned all its rights and interests under the MOU dated July 28, 2006 to Redondo
Peninsula Energy, Inc. (RP Energy),11 a corporation duly organized and existing under the laws of the Philippines
with the primary purpose of building, owning, and operating powerplants in the Philippines, among
others.12Accordingly, an Addendum to the said MOU was executed by SBMA and RP Energy.13
RP Energy then contracted GHD Pty, Ltd. (GHD) to prepare an Environmental Impact Statement (EIS) for the
proposed coal-fired power plant and to assist RP Energy in applying for the issuance ofan ECC from the
Department of Environment and Natural Resources (DENR).14 On August 27, 2008, the Sangguniang
Panglungsodof Olongapo City issued Resolution No. 131, Series of 2008, expressing the city government’s
objection to the coal-fired power plant as an energy source and urging the proponent to consider safer alternative
sources ofenergy for Subic Bay.15
On December 22, 2008, the DENR, through former Secretary Jose L. Atienza, Jr., issued an ECC for the proposed
2x150-MW coal-fired power plant.16
Sometime thereafter, RP Energy decided to include additional components in its proposed coal-fired power plant.
Due to the changes in the project design, which involved the inclusion of a barge wharf, seawater intake breakwater,
subsea discharge pipeline, raw water collection system, drainage channel improvement, and a 230kV double-circuit
transmission line,17 RP Energy requested the DENR Environmental Management Bureau(DENR-EMB) to amend its
ECC.18 In support of its request, RP Energy submitted to the DENR-EMBan Environmental Performance Report and
Management Plan (EPRMP), which was prepared by GHD.19
On June 8, 2010, RP Energy and SBMA entered into a Lease and Development Agreement (LDA) over a
380,004.456-square meter parcel of land to be used for building and operating the coal-fired power plant.20
On July 8, 2010, the DENR-EMBissued an amended ECC (first amendment) allowing the inclusion ofadditional
components, among others.21
Several months later, RP Energy again requested the DENR-EMB to amend the ECC.22 Instead of constructing a
2x150-MW coal-fired power plant, as originally planned, it now sought toconstruct a 1x300-MWcoal-fired power
plant.23 In support of its request, RP Energy submitted a Project Description Report (PDR) to the DENR-EMB.24
On May 26, 2011, the DENR-EMB granted the request and further amended the ECC (second amendment).25
On August 1, 2011, the Sangguniang Panglalawiganof Zambales issued Resolution No. 2011-149, opposing the
establishment of a coal-fired thermal power plant at SitioNaglatore, Brgy. Cawag, Subic, Zambales.26
On August 11, 2011, the Liga ng mga Barangayof Olongapo City issued Resolution No. 12, Series of 2011,
expressing its strong objection to the coal-fired power plant as an energy source.27
On July 20, 2012, Hon. Teodoro A. Casiño, Hon. Raymond V. Palatino, Hon. Rafael V. Mariano, Hon. Emerenciana
A. De Jesus, Clemente G. Bautista, Jr., Hon. Rolen C. Paulino,Hon. Eduardo Piano, Hon. James de los Reyes,
Hon. Aquilino Y. Cortez, Jr., Hon. Sarah Lugerna Lipumano-Garcia, Noraida Velarmino, Bianca Christine Gamboa
Espinos, Charo Simons, Gregorio Llorca Magdaraog, Rubelh Peralta, Alex Corpus Hermoso,Rodolfo Sambajon,
Rev. Fr. Gerardo Gregorio P. Jorge, Carlito A. Baloy, Ofelia D. Pablo, Mario Esquillo, Elle Latinazo, Evangeline Q.
Rodriguez, and John Carlo delos Reyes (Casiño Group) filed before this Court a Petition for Writ of Kalikasan
against RP Energy, SBMA, and Hon. Ramon Jesus P. Paje, in his capacity as Secretary of the DENR.28
On July 31, 2012, this Court resolved, among others, to: (1) issue a Writ of Kalikasan; and (2) refer the case to the
CA for hearing and reception of evidence and rendition of judgment.29 While the case was pending, RP Energy
applied for another amendment to its ECC (third amendment) and submitted another EPRMP to the DENR-EMB,
proposing the construction and operation of a 2x300-MW coal-fired power plant.30
On September 11, 2012, the Petition for Writ of Kalikasanwas docketed as CA-G.R. SP No. 00015 and raffled to the
Fifteenth Division of the CA.31 In the Petition, the Casiño Group alleged, among others, that the power plant project
would cause grave environmental damage;32 that it would adversely affect the health of the residents of the
municipalities of Subic,Zambales, Morong, Hermosa, and the City of Olongapo;33 that the ECC was issued and the
LDA entered into without the prior approval of the concerned sanggunians as required under Sections 26 and 27 of
the Local Government Code (LGC);34 that the LDA was entered into without securing a prior certification from the
National Commission on Indigenous Peoples (NCIP) as required under Section 59 of RA8371 or the Indigenous
Peoples’ Rights Act of 1997 (IPRA Law);35 that Section 8.3 of DENR Administrative Order No. 2003-30 (DAO 2003-
30) which allowsamendments of ECCs is ultra viresbecause the DENR has no authority to decide on requests for
amendments of previously issued ECCs in the absence of a new EIS;36 and that due to the nullity of Section 8.3 of
DAO 2003-30, all amendments to RP Energy’s ECC are null and void.37
On October 29, 2012, the CA conducted a preliminary conference wherein the parties, with their respective
counsels, appeared except for Hon. Teodoro A. Casiño, Hon. Rafael V. Mariano, Hon. Emerencia A. De Jesus,
Clemente G. Bautista, Mario Esquillo, Elle Latinazo,Evangeline Q. Rodriguez, and the SBMA.38 The matters taken
up during the preliminary conference were embodied in the CA’s Resolution dated November 5, 2012, to wit:
I. ISSUES
A. Petitioners (Casiño Group)

1. Whether x x x the DENR Environmental Compliance Certificate (‘ECC’ x x x) in favor of RP Energy for a 2x150
MW Coal-Fired Thermal Power Plant Project (‘Power Plant,’ x x x ) and its amendment to 1x300 MW Power Plant,
and the Lease and Development Agreement between SBMA and RP Energy complied with the Certification
Precondition as required under Section 59 of Republic Act No. 8371 or the Indigenous People’s Rights Act of 1997
(‘IPRA Law,’ x x x);
2. Whether x x x RP Energy can proceed with the construction and operation of the 1x300 MW Power Plant without
prior consultation with and approval of the concerned local government units (‘LGUs,’ x x x ), pursuant to Sections
26 and 27 of Republic Act No. 7160 or the Local Government Code;
3. Whether x x x Section 8.3 of DENRAdministrative Order No. 2003-30 (‘DAO No. 2003-30,’ x x x ) providing for the
amendment of an ECC is null and void for being ultra vires; and
4. Whether x x x the amendment of RPEnergy’s ECC under Section 8.3 of DAO No. 2003-30 is null and void.
B. Respondent RP Energy
1. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked;
1.1 Whether x x x the same is valid until annulled;
2. Whether x x x petitioners exhausted their administrative remedies with respect to the amended ECC for the 1x300
MW Power Plant;
2.1 Whether x x x the instant Petition is proper;
3. Whether x x x RP Energycomplied with all the procedures/requirements for the issuance of the DENR ECC and
its amendment;
3.1 Whether x x x a Certificate of Non-Overlap from the National Commission on Indigenous Peoples is applicable in
the instant case;
4. Whether x x x the LGU’s approval under Sections 26 and 27 of the Local Government Code is necessaryfor the
issuance of the DENR ECC and its amendments, and what constitutes LGU approval;
5. Whether x x x there is a threatened or actual violation of environmental laws to justify the Petition;
5.1 Whether x x x the approved 1x300 MW Power Plant complied with the accepted legal standards on thermal
pollution of coastal waters, air pollution, water pollution, and acid deposits on aquatic and terrestrial ecosystems;
and
6. Whether x x x the instant Petition should be dismissed for failure to comply with the requirements of
properverification and certification of nonforum shopping with respect to some petitioners.
C. Respondent DENR Secretary Paje
1. Whether x x x the issuance of the DENR ECC and its amendment in favor of RP Energy requires compliance with
Section 59 of the IPRA Law, as well as Sections 26 and 27 of the Local Government Code;
2. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked in this proceeding; and
3. Whether x x x Section 8.3 of DAO No. 2003-30 is valid.
II. ADMISSIONS/DENIALS
Petitioners, through Atty. Ridon, admittedall the allegations in RP Energy’s Verified Return, except the following:
1. paragraphs 1.4 to 1.7;
2. paragraphs 1.29 to 1.32; and
3. paragraphs 1.33 to 1.37.
Petitioners made no specific denial withrespect to the allegations of DENR Secretary Paje’s Verified Return. x x x
Respondent RP Energy proposed the following stipulations, which were all admitted by petitioners, through Atty.
Ridon, viz:
1. The 1x300 MW Power Plant is not yet operational;
2. At present, there is no environmental damage;
3. The 1x300 MW Power Plant project is situated within the Subic Special Economic Zone; and
4. Apart from the instant case, petitioners have not challenged the validity of Section 8.3 of DAO No. 2003-30.
Public respondent DENR Secretary Paje did not propose any matter for stipulation.39
Thereafter, trial ensued.
The Casiño Group presented three witnesses, namely: (1) Raymond V. Palatino, a two-term representativeof the
KabataanPartylist in the House of Representatives;40 (2) Alex C. Hermoso, the convenor of the Zambales-Olongapo
City Civil Society Network,a director of the PREDA41 Foundation, and a member of the Zambales Chapter of the
Kaya NatinMovement and the Zambales Chapter of the People Power Volunteers for Reform;42 and (3) Ramon
Lacbain, the ViceGovernor of the Province of Zambales.43
RP Energy presented five witnesses,namely: (1) JunisseP. Mercado (Ms. Mercado), an employee of GHD and the
Project Directorof ongoing projects for RP Energy regarding the proposed power plant project;44 (2) Juha Sarkki
(Engr. Sarkki), a Master of Science degree holder inChemical Engineering;45 (3) Henry K. Wong, a degree holder of
Bachelor of Science Major in Mechanical Engineering from Worcester Polytechnic Institute;46 (4) Dr. Ely Anthony R.
Ouano (Dr. Ouano), a licensed Chemical Engineer, Sanitary Engineer, and Environmental Planner in the
Philippines;47 and (5) David C. Evangelista (Mr. Evangelista), a Business Development Analyst working for RP
Energy.48
SBMA, for its part, presented its Legal Department Manager, Atty. Von F. Rodriguez (Atty. Rodriguez).49
The DENR, however, presented no evidence.50
Meanwhile, on October 31, 2012, a Certificate of Non-Overlap (CNO) was issued in connection with RP Energy’s
application for the 2x300-MW coal-fired power plant.51
On November 15, 2012, the DENR-EMB granted RP Energy’s application for the third amendment to its ECC,
approving the construction and operation of a 2x300-MW coal-fired power plant, among others.52
On January 30, 2013, the CA rendereda Decision denying the privilege of the writ of kalikasanand the application for
an environment protection order due to the failure of the Casiño Group to prove that its constitutional right to a
balanced and healthful ecology was violated or threatened.53 The CA likewise found no reason to nullify Section 8.3
ofDAO No. 2003-30. It said that the provision was not ultra vires,as the express power of the Secretary of the
DENR, the Director and Regional Directors of the EMB to issue an ECC impliedly includes the incidental power to
amend the same.54 In any case, the CA ruled that the validity of the said section could not becollaterally attacked in a
petition for a writ of kalikasan.55
Nonetheless, the CA resolved to invalidate the ECC dated December 22, 2008 for non-compliance with Section 59
of the IPRA Law56 and Sections 26 and 27 of the LGC57 and for failure of Luis Miguel Aboitiz (Mr. Aboitiz), Director of
RP Energy, to affix his signature in the Sworn Statement of Full Responsibility, which is an integral part of the
ECC.58 Also declared invalid were the ECC first amendment dated July 8, 2010 and the ECC second amendment
dated May 26, 2011 in view of the failure of RP Energy to comply with the restrictions set forth in the ECC, which
specifically require that "any expansion of the project beyond the project description or any change in the activity x x
x shall be subject to a new Environmental Impact Assessment."59 However, as to the ECC third amendment dated
November 15, 2012, the CA decided not to rule on its validity since it was not raised as an issue during the
preliminary conference.60
The CA also invalidated the LDA entered into by SBMA and RP Energy as it was issued without the prior
consultation and approval of all the sanggunians concerned as required under Sections 26 and 27 of the LGC,61 and
in violation of Section 59, Chapter VIII ofthe IPRA Law, which enjoins all departments and other governmental
agencies from granting any lease without a prior certification that the area affected does not overlap with any
ancestral domain.62 The CA noted that no CNO was secured from the NCIP prior to the execution of the LDA,63 and
that the CNO dated October 31, 2012 was secured during the pendency of the case and was issued in connection
with RP Energy’s application for a 2x300-MW coalfired power plant.64
Thus, the CA disposed of the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered DENYING the privilege of the writ of kalikasan
and the application for an environmental protection order. The prayer to declare the nullity of Section 8.3 of the
DENR Administrative Order No. 2003-30 for being ultra vires is DENIED; and the following are all declared
INVALID:
1. The Environmental Compliance Certificate (ECC Ref. Code: 0804-011-4021) dated 22 December 2008 issued in
favor of respondent Redondo Peninsula Energy, Inc. by former Secretary Jose L. Atienza, Jr. of the Department of
Environment and Natural Resources;
2. The ECC first amendment dated 08 July 2010 and ECC second amendment dated 26 May 2011, both issued in
favor ofrespondent Redondo Peninsula Energy, Inc. by OIC Director Atty. Juan Miguel T. Cunaof the Department of
Environment and Natural Resources, Environmental Management Bureau; and
3. The Lease and Development Agreement dated 08 June 2010 entered into by respondents Subic Bay
Metropolitan Authority and Redondo Peninsula Energy, Inc. involving a parcel of land consisting of ₱380,004.456
square meters.
SO ORDERED.65
The DENR and SBMA separately moved for reconsideration.66 RP Energy filed a Motion for Partial
Reconsideration,67 attaching thereto a signed Statement of Accountability.68 The Casiño Group, on the other hand,
filed Omnibus Motions for Clarification and Reconsideration.69
On May 22, 2013, the CAissued a Resolution70 denying the aforesaid motions for lack of merit. The CA opined that
the reliefs it granted in its Decision are allowed under Section 15, Rule 7 of the Rules of Procedure for
Environmental Cases as the reliefs enumerated therein are broad, comprehensive, and nonexclusive.71 In fact,
paragraph (e) of the saidprovision allows the granting of "such other reliefs" in consonance with the objective,
purpose, and intent of the Rules.72 SBMA’s contention that the stoppage of a project for non-compliance with Section
59 of the IPRA Law may only be done by the indigenous cultural communities or indigenous peoples was also
brushed aside by the CA as the Casiño Group did not file a case under the IPRA Law but a Petition for a Writ of
Kalikasan, which is available to all natural or juridical persons whose constitutional right to a balanced and healthful
ecology is violated, or threatened to be violated.73 As to RP Energy’s belated submission of a signed Statement of
Accountability, the CA gaveno weight and credenceto it as the belated submission of such document, long after the
presentation of evidence of the parties had been terminated, is not in accord with the rules of fair play.74 Neither was
the CA swayed by the argument that the omitted signature of Luis Miguel Aboitiz is a mere formal defect, which
does not affect the validity of the entire document.75 The dispositive portion of the Resolution reads:
WHEREFORE,premises considered, respondents Subic Bay Metropolitan Authority’s Motion for Reconsideration
dated 18 February 2013, Department of Environment and Natural Resources Secretary Ramon Jesus P. Paje’s
Motion for Reconsideration dated 19 February 2013, and Redondo Peninsula Energy, Inc.’s Motion for Partial
Reconsideration dated 22 February 2013, as well as petitioners’ OmnibusMotions for Clarification and
Reconsideration dated 25 February 2013,are all DENIED for lack of merit.
SO ORDERED.76
Unsatisfied, the parties appealed to this Court.
The Casiño Group’s arguments
The Casiño Group, in essence, argues that it is entitled to a Writ of Kalikasan as it was able to prove that the
operation of the power plant would cause environmental damage and pollution, and that thiswould adversely affect
the residents of the provinces of Bataan and Zambales, particularly the municipalities of Subic, Morong, Hermosa,
and the City of Olongapo. It cites as basis RP Energy’s EIS, which allegedly admits that acid rain may occur in the
combustion of coal;77 that the incidence of asthma attacks among residents in the vicinity of the project site may
increasedue to exposure to suspended particles from plant operations;78 and that increased sulfur oxides (SOx) and
nitrogen oxides (NOx) emissions may occur during plant operations.79 It also claims that when the SBMA conducted
Social Acceptability Policy Consultations with different stakeholders on the proposed power plant, the results
indicated that the overall persuasion of the participants was a clear aversion to the project due to environmental,
health, economic and socio-cultural concerns.80 Finally, it contends that the ECC third amendment should also be
nullified for failure to comply with the procedures and requirements for the issuance of the ECC.81
The DENR’s arguments
The DENR imputes error on the CAin invalidating the ECC and its amendments, arguing that the determination of
the validity of the ECC as well as its amendments is beyond the scope of a Petition for a Writ of Kalikasan.82 And
even if it is within the scope, there is no reason to invalidate the ECC and its amendments as these were issued in
accordance with DAO No. 2003-30.83 The DENR also insists that contrary to the view of the CA, a new EIS was no
longer necessary since the first EIS was still within the validity period when the first amendment was requested, and
that this is precisely the reason RP Energy was only required to submit an EPRMP in support of its application for
the first amendment.84 As to the second amendment, the DENR-EMB only required RP Energy to submit documents
to support the proposed revision considering that the change in configuration of the power plant project, from
2x150MW to 1x300MW, was not substantial.85 Furthermore, the DENR argues that no permits, licenses, and/or
clearances from other government agencies are required in the processing and approval of the ECC.86 Thus, non-
compliance with Sections 26 and 27 of the LGC as well as Section 59 ofthe IPRA Law is not a ground to invalidate
the ECC and its amendments.87 The DENR further posits that the ECC is not a concession, permit, or license but is
a document certifying that the proponent has complied with all the requirements of the EIS System and has
committed to implement the approved Environmental Management Plan.88 The DENR invokes substantial justice so
that the belatedly submitted certified true copy of the ECC containing the signature of Mr. Aboitiz on the Statement
of Accountability may be accepted and accorded weight and credence.89
SBMA’s arguments
For its part, SBMA asserts that since the CA did not issue a Writ of Kalikasan, it should not have invalidated the LDA
and that in doing so, the CA acted beyond its powers.90 SBMA likewise puts in issue the legal capacity of the Casiño
Group to impugn the validity of the LDA91 and its failure to exhaust administrative remedies.92 In any case, SBMA
contends that there is no legal basis to invalidate the LDA as prior consultation under Sections 26 and 27 of the
LGC is not required in this case considering that the area is within the SBFZ.93 Under RA 7227, it is the SBMA which
has exclusive jurisdiction over projects and leases within the SBFZ and that in case of conflict between the LGC and
RA 7227, it is the latter, a special law, which must prevail.94 Moreover, the lack of prior certification from the NCIP is
alsonot a ground to invalidate a contract.95 If at all, the only effect of non-compliance with the said requirement under
Section 59 of the IPRA Law is the stoppage or suspension of the project.96 Besides, the subsequent issuance of a
CNO has cured any legal defect found in the LDA.97
RP Energy’s arguments
RP Energy questions the proprietyof the reliefs granted by the CA considering that it did not issue a writ of
kalikasanin favor of the Casiño Group.98 RP Energy is of the view that unless a writ of kalikasanis issued, the CA has
no power to grant the reliefs prayed for in the Petition.99 And even if it does, the reliefs are limited to those
enumerated in Section 15, Rule 7 of the Rules of Procedure for Environmental Cases and that the phrase "such
other reliefs" in paragraph (e) should be limited only to those of the same class or general nature as the four other
reliefs enumerated.100 As to the validity of the LDA, the ECC and its amendments, the arguments of RP Energy are
basically the same arguments interposed by SBMA and the DENR. RP Energy maintains that the ECC and its
amendments were obtained in compliance with the DENR rules and regulations;101 that a CNO is not necessary in
the execution of anLDA and in the issuance of the ECC and its amendments;102 and that prior approval of the local
governments, which may be affected by the project, are not required because under RA 7227, the decision of the
SBMA shall prevail in matters affecting the Subic Special Economic Zone (SSEZ), except in matters involving
defense and security.103 RP Energy also raises the issue of non-exhaustion of administrative remedies on the part of
the Casiño Group.104 Preliminaries
This case affords us an opportunity to expound on the nature and scope of the writ of kalikasan. It presents some
interesting questions about law and justice in the context of environmental cases, which we will tackle in the main
body of this Decision.
But we shall first address some preliminary matters, in view of the manner by which the appellate court disposed of
this case.
The Rules on the Writ of Kalikasan,105 which is Part III of the Rules of Procedure for Environmental Cases,106 was
issued by the Court pursuant to its power to promulgate rules for the protection and enforcement of constitutional
rights,107 in particular, the individual’s rightto a balanced and healthful ecology.108 Section 1 of Rule 7 provides:
Section 1. Nature of the writ.- The writ is a remedy available to a natural or juridical person, entity authorized by law,
people’s organization, nongovernmental organization, or any public interest group accredited by or registered with
any government agency, on behalf of persons whose constitutional right to a balanced and healthful ecology is
violated, or threatened with violation by an unlawful act or omission of a public official or employee, or private
individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of
inhabitants in two or more cities or provinces.
The writ is categorized as a special civil action and was, thus, conceptualized as an extraordinary remedy,which
aims to provide judicial relief from threatened or actual violation/s of the constitutional right to a balanced and
healthful ecology of a magnitude or degree of damage that transcends political and territorial boundaries.109 It is
intended "to provide a strongerdefense for environmental rights through judicial efforts where institutional
arrangements of enforcement, implementation and legislation have fallen short"110 and seeks "to address the
potentially exponential nature of large-scale ecological threats."111
Under Section 1 of Rule 7, the following requisites must be present to avail of this extraordinary remedy: (1) there is
an actual or threatened violation of the constitutional right to a balanced and healthful ecology; (2) the actual or
threatened violation arises from an unlawful act or omission of a public official or employee, or private individual or
entity; and (3) the actual or threatened violation involves or will lead to an environmental damage of such magnitude
as to prejudice the life, health or property ofinhabitants in two or more cities or provinces.
Expectedly, the Rules do not definethe exact nature or degree of environmental damage but only that it must be
sufficientlygrave, in terms of the territorial scope of such damage, so as tocall for the grant ofthis extraordinary
remedy. The gravity ofenvironmental damage sufficient to grant the writ is, thus, to be decided on a case-to-case
basis.
If the petitioner successfully proves the foregoing requisites, the court shall render judgment granting the privilege of
the writ of kalikasan. Otherwise, the petition shall be denied. If the petition is granted, the court may grant the reliefs
provided for under Section 15of Rule 7, to wit: Section 15. Judgment.- Within sixty (60) daysfrom the time the
petition is submitted for decision, the court shall render judgment granting or denying the privilege of the writ of
kalikasan.
The reliefs that may be granted under the writ are the following:
(a) Directing respondent to permanently cease and desist from committing acts or neglecting the performance of a
duty in violation of environmental laws resulting in environmental destruction or damage;
(b) Directing the respondent public official, government agency, private person or entity to protect, preserve,
rehabilitate or restore the environment;
(c) Directing the respondent public official, government agency, private person or entity to monitor strict compliance
with the decision and orders of the court;
(d) Directing the respondent public official, government agency, or private person or entity to make periodic reports
on the execution of the final judgment; and
(e) Such other reliefs which relate to the right of the people to a balanced and healthful ecology or to the protection,
preservation, rehabilitation or restoration of the environment, except the award of damages to individual petitioners.
It must be noted, however,that the above enumerated reliefs are non-exhaustive. The reliefs that may be granted
under the writ are broad, comprehensive and non-exclusive.112
Prescinding from the above, the DENR, SBMA and RP Energy are one in arguing that the reliefs granted by the
appellate court, i.e.invalidating the ECC and its amendments, are improper because it had deniedthe Petition for
Writ of Kalikasanupon a finding that the Casiño Group failed to prove the alleged environmental damage, actual or
threatened, contemplated under the Rules.
Ordinarily, no reliefs could and should be granted. But the question may be asked, could not the appellate court
have granted the Petition for Writ of Kalikasanon the ground of the invalidity of the ECC for failure to comply with
certain laws and rules?
This question is the starting point for setting up the framework of analysis which should govern writ of kalikasan
cases.
In their Petition for Writ of Kalikasan,113 the Casiño Group’s allegations, relative to the actual or threatened violation
of the constitutional right to a balanced and healthful ecology, may be grouped into two.
The first set of allegations deals withthe actual environmental damage that will occur if the power plant project
isimplemented. The Casiño Group claims that the construction and operation of the power plant will result in (1)
thermal pollution of coastal waters, (2) air pollution due to dust and combustion gases, (3) water pollution from toxic
coal combustion waste, and (4) acid deposition in aquatic and terrestrial ecosystems, which will adversely affect the
residents of the Provinces of Bataan and Zambales, particularly the Municipalities of Subic, Morong and Hermosa,
and the City of Olongapo.
The second set of allegations deals with the failureto comply with certain laws and rules governing or relating to the
issuance ofan ECC and amendments thereto. The Casiño Group claims that the ECC was issued in violation of (1)
the DENR rules on the issuance and amendment of an ECC, particularly, DAO 2003-30 and the Revised Procedural
Manual for DAO 2003-30 (Revised Manual), (2) Section 59 of the IPRA Law,and (3) Sections 26 and 27 of the LGC.
In addition, it claims that the LDA entered into between SBMA and RP Energy violated Section 59 of the IPRA Law.
As to the first set of allegations, involving actual damage to the environment, it is not difficult to discern that, if they
are proven, then the Petition for Writ of Kalikasan could conceivably be granted.
However, as to the second set of allegations, a nuanced approach is warranted. The power of the courts to nullify an
ECC existed even prior to the promulgation of the Rules on the Writ of Kalikasanfor judicial review of the acts of
administrative agencies or bodies has long been recognized114 subject, of course, to the doctrine of exhaustion of
administrative remedies.115
But the issue presented before us is nota simple case of reviewing the acts of an administrative agency, the DENR,
which issued the ECC and its amendments. The challenge to the validity ofthe ECC was raised in the context of a
writ of kalikasancase. The question then is, can the validity of an ECC be challenged viaa writ of kalikasan?
We answer in the affirmative subject to certain qualifications.

As earlier noted, the writ of kalikasanis principally predicated on an actual or threatened violation of the
constitutional right to a balanced and healthful ecology, which involves environmental damage of a magnitude that
transcends political and territorial boundaries. A party, therefore, who invokes the writ based on alleged defects or
irregularities in the issuance of an ECC must not only allege and prove such defects or irregularities, but mustalso
provide a causal link or, at least, a reasonable connection between the defects or irregularities in the issuance of an
ECC and the actual or threatened violation of the constitutional right to a balanced and healthful ecology of the
magnitude contemplated under the Rules. Otherwise, the petition should be dismissed outright and the action re-
filed before the proper forum with due regard to the doctrine of exhaustion of administrative remedies. This must be
so ifwe are to preserve the noble and laudable purposes of the writ against those who seek to abuse it.
An example of a defect or an irregularity in the issuance of an ECC, which could conceivably warrant the granting of
the extraordinary remedy of the writ of kalikasan, is a case where there are serious and substantial
misrepresentations or fraud in the application for the ECC, which, if not immediately nullified, would cause actual
negative environmental impacts of the magnitude contemplated under the Rules, because the government
agenciesand LGUs, with the final authority to implement the project, may subsequently rely on such substantially
defective or fraudulent ECC in approving the implementation of the project.
To repeat, in cases of defects or irregularities in the issuance of an ECC, it is not sufficient to merely allege such
defects or irregularities, but to show a causal link or reasonable connection with the environmental damage of the
magnitude contemplated under the Rules. In the case at bar, no such causal link or reasonable connection was
shown or even attempted relative to the aforesaid second set of allegations. It is a mere listing of the perceived
defects or irregularities in the issuance of the ECC. This would havebeen sufficient reason to disallow the resolution
of such issues in a writ of kalikasan case.
However, inasmuch as this is the first time that we lay down this principle, we have liberally examined the alleged
defects or irregularities in the issuance of the ECC and find that there is only one group of allegations, relative to the
ECC, that can be reasonably connected to anenvironmental damageof the magnitude contemplated under the
Rules. This is withrespect to the allegation that there was no environmental impact assessment relative to the first
and second amendments to the subject ECC. If this were true, then the implementation of the project can
conceivably actually violate or threaten to violate the right to a healthful and balanced ecology of the inhabitants
near the vicinity of the power plant. Thus, the resolution of such an issue could conceivably be resolved in a writ of
kalikasan case provided that the case does not violate, or is anexception to the doctrine of exhaustion of
administrative remedies and primary jurisdiction.116
As to the claims that the issuance of the ECC violated the IPRA Law and LGC and that the LDA, likewise, violated
the IPRA Law, we find the same not to be within the coverage of the writ of kalikasanbecause, assuming there was
non-compliance therewith, no reasonable connection can be made to an actual or threatened violation of the right to
a balanced and healthful ecology of the magnitude contemplated under the Rules.
To elaborate, the alleged lackof approval of the concerned sanggunians over the subject project would not lead toor
is not reasonably connected with environmental damage but, rather, it is an affront to the local autonomy of LGUs.
Similarly, the alleged lack of a certificate precondition that the project site does not overlap with an ancestral domain
would not result inor is not reasonably connected with environmental damage but, rather, it is an impairment of the
right of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral domains. These alleged
violationscould be the subject of appropriate remedies before the proper administrative bodies (like the NCIP) or a
separate action to compel compliance before the courts, as the case may be. However, the writ of kalikasan would
not be the appropriate remedy to address and resolve such issues.
Be that as it may, we shall resolve both the issues proper in a writ of kalikasan case and those which are not,
commingled as it were here, because of the exceptional character of this case. We take judicial notice of the
looming power crisis that our nation faces. Thus, the resolution of all the issues in this case is of utmost urgency and
necessity in order to finally determine the fate of the project center of this controversy. If we were to resolve only the
issues proper in a writ of kalikasancase and dismiss those not proper therefor, that will leave such unresolved
issues open to another round of protracted litigation. In any case, we find the records sufficient to resolve all the
issues presented herein. We also rule that, due to the extreme urgency of the matter at hand, the present case is an
exception to the doctrine of exhaustion of administrative remedies.117 As we have often ruled, in exceptional cases,
we can suspend the rules of procedure in order to achieve substantial justice, and to address urgent and paramount
State interests vital to the life of our nation.
Issues
In view of the foregoing, we shall resolve the following issues:
1. Whether the Casiño Group was able to prove that the construction and operation of the power plant will cause
grave environmental damage.
1.1. The alleged thermal pollution of coastal waters, air pollution due to dust and combustion gases, water pollution
from toxic coal combustion waste, and acid deposition to aquatic and terrestrial ecosystems that will becaused by
the project.
1.2. The alleged negative environmental assessment of the project by experts in a report generated during the
social acceptability consultations.
1.3. The alleged admissions of grave environmental damage in the EIS itself of the project.
2. Whether the ECC is invalid for lackof signature of Mr. Luis Miguel Aboitiz, as representative of RP Energy, in the
Statement of Accountability of the ECC.
3. Whether the first and second amendments to the ECC are invalid for failure to undergo a new environmental
impact assessment (EIA) because of the utilization of inappropriate EIA documents.
4. Whether the Certificate of Non-Overlap, under Section 59 of the IPRA Law, is a precondition to the issuanceof an
ECC and the lack of its prior issuance rendered the ECC invalid.
5. Whether the Certificate of Non-Overlap, under Section 59 of the IPRA Law, is a precondition to the consummation
of the Lease and Development Agreement (LDA) between SBMA and RPEnergy and the lack of its prior issuance
rendered the LDA invalid.
6. Whether compliance with Section 27, in relation to Section 26, of the LGC (i.e., approval of the concerned
sanggunianrequirement) is necessary prior to the implementation of the power plant project.
7. Whether the validity of the third amendment to the ECC can be resolved in this case.
Ruling
The parties to this case appealed from the decision of the appellate court pursuant to Section 16, Rule7 of the Rules
of Procedure for Environmental Cases, viz:
Section 16. Appeal.- Within fifteen (15) days from the date of notice of the adverse judgment or denialof motion for
reconsideration, any party may appeal to the Supreme Court under Rule45 of the Rules of Court. The appeal may
raise questions of fact. (Emphasis supplied)
It is worth noting that the Rules on the Writ of Kalikasan allow the parties to raise, on appeal, questions of fact—
and, thus, constitutes an exception to Rule 45 of the Rules of Court— because ofthe extraordinary nature of the
circumstances surrounding the issuance of a writ of kalikasan.118 Thus, we shall review both questions of law and
fact in resolving the issues presented in this case.
We now rule on the above-mentioned issues in detail.
I.
Whether the Casiño Group was able to prove that the construction and operation of the power plant will cause grave
environmental damage.
The alleged thermal pollution of coastal
waters, air pollution due to dust and
combustion gases, water pollution from
toxic coal combustion waste, and acid
deposition in aquatic and terrestrial
ecosystems that willbe caused by the
project.
As previously noted, the Casiño Group alleged that the construction and operation of the power plant shall adversely
affect the residents of the Provinces of Bataan and Zambales, particularly, the Municipalities of Subic, Morong and
Hermosa, and the City of Olongapo, as well as the sensitive ecological balance of the area. Their claims of
ecological damage may be summarized as follows:
1. Thermal pollution of coastal waters. Due to the discharge of heated water from the operation of the plant, they
claim that the temperature of the affected bodies of water will rise significantly. This will have adverse effects on
aquatic organisms. It will also cause the depletion of oxygen in the water. RP Energy claims that there will beno
more than a 3°C increase in water temperature but the Casiño Group claims that a 1°C to 2°C rise can already
affect the metabolism and other biological functions of aquatic organisms such asmortality rate and reproduction.
2. Air pollution due to dust and combustion gases. While the Casiño Group admits that Circulating Fluidized Bed
(CFB) Coal technology, which will be used in the power plant, is a clean technology because it reduces the emission
of toxic gases, it claims that volatile organic compounds, specifically, polycyclic aromatic hydrocarbons (PAHs) will
also be emitted under the CFB. PAHs are categorized as pollutants with carcinogenic and mutagenic
characteristics. Carbon monoxide, a poisonous gas, and nitrous oxide, a lethal global warming gas, will also be
produced.
3. Water pollution from toxic coal combustion waste. The waste from coal combustion or the residues from burning
pose serious environmental risk because they are toxic and may cause cancer and birth defects. Their release to
nearby bodies of water will be a threatto the marine ecosystem of Subic Bay. The project is located in a flood-prone
area and is near three prominent seismic faults as identified by Philippine Institute of Volcanology and Seismology.
The construction of an ash pond in an area susceptible to flooding and earthquake also undermines SBMA’s duty to
prioritize the preservation of the water quality in Subic Bay.
4. Acid deposition in aquatic and terrestrial ecosystems. The power plant will release 1,888 tons of nitrous oxides
and 886 tons of sulfur dioxide per year. These oxides are responsible for acid deposition. Acid deposition directly
impacts aquatic ecosystems. It is toxic to fish and other aquatic animals. It will also damage the forests near Subic
Bay as well as the wildlife therein. This will threaten the stability of the biological diversity of the Subic Bay Freeport
which was declared as one of the ten priority sites among the protected areas in the Philippines and the Subic
Watershed and Forest Reserve. This will also have an adverse effect on tourism.119
In its January 30, 2013 Decision, the appellate court ruled that the Casiño Group failed to prove the above
allegations.
We agree with the appellate court.
Indeed, the three witnesses presented by the Casiño Group are not experts on the CFB technology or on
environmental matters. These witnesses even admitted on cross-examination that theyare not competent to testify
on the environmental impact of the subject project. What is wanting in their testimonies is their technical
knowledgeof the project design/implementation or some other aspects of the project, even those not requiring
expertknowledge, vis-à-vis the significant negative environmental impacts which the Casiño Group alleged will
occur. Clearly, the Casiño Group failed to carry the onusof proving the alleged significant negative environmental
impacts of the project. In comparison, RP Energy presented several experts to refute the allegations of the Casiño
Group.
As aptly and extensively discussed by the appellate court:
Petitioners120 presented three (3) witnesses, namely, Palatino, Hermoso, and Lacbain, all of whom are not experts on
the CFB technology or even on environmental matters. Petitioners did not present any witness from Morong or
Hermosa. Palatino, a former freelance writer and now a Congressman representing the Kabataan Partylist, with a
degree of BS Education major in Social Studies, admitted that he is not a technical expert. Hermoso, a Director of
the PREDA foundation which is allegedly involved on environmental concerns, and a member of Greenpeace, is not
an expert on the matter subject of this case. He is a graduate of BS Sociology and a practicing business director
involved in social development and social welfare services. Lacbain, incumbent ViceGovernor of the Province of
Zambales, anaccounting graduate with a Master in Public Administration, was a former BancoFilipino teller,
entertainment manager, disco manager, marketing manager and college instructor, and is also not an expert on the
CFB technology. Lacbain also admitted that he is neither a scientist nor an expert on matters of the environment.
Petitioners cited various scientific studies or articles and websites culled from the internet. However, the said
scientific studiesand articles including the alleged Key Observations and Recommendations on the EIS of the
Proposed RPE Project by Rex Victor O. Cruz (Exhibit "DDDDD") attached to the Petition, were not testified to by an
expert witness, and are basically hearsay in nature and cannot be given probative weight. The article purportedly
written by Rex Victor O. Cruz was not even signed by the said author, which fact was confirmed by Palatino.
Petitioners’ witness, Lacbain, admitted that he did not personally conduct any study on the environmental or health
effects of a coal-firedpower plant, but only attended seminars and conferences pertaining to climate change; and
that the scientific studies mentioned in the penultimate whereas clause of Resolution No. 2011-149 (Exhibit
"AAAAA") of the Sangguniang Panlalawiganof Zambales is based on what he read on the internet, seminars he
attended and what he heard from unnamed experts in the field of environmental protection.
In his Judicial Affidavit (Exhibit "HHHHH"), Palatino stated that he was furnished by the concerned residents the Key
Observations and Recommendations on the EIS of Proposed RPE Project by Rex Victor O. Cruz, and that he
merely received and read the five (5) scientific studies and articles which challenge the CFB technology. Palatino
also testified that: he was only furnished by the petitioners copies of the studies mentioned in his Judicial Affidavit
and he did not participate in the execution, formulation or preparation of any of the said documents; he does not
personally know Rex Cruz or any of the authors of the studies included in his Judicial Affidavit; he did not read other
materials about coal-fired power plants; he is not aware of the acceptable standards as far as the operation of a
coal-fired power plant is concerned; petitioner Velarmino was the one who furnished him copies of the documents in
reference to the MOU and some papers related to the case; petitioner Peralta was the one who e-mailed to him the
soft copy ofall the documents [letters (a) to (o) of his Judicial Affidavit], except the LGU Resolutions; and he has
never been at the actual Power Plant projectsite. It must be noted that petitioners Velarmino and Peralta were never
presented as witnesses in this case. In addition, Palatino did not identify the said studies but simplyconfirmed that
the said studies were attached to the Petition.
Indeed, under the rules of evidence, a witness can testify only to those facts which the witness knows of his orher
personal knowledge, that is, which are derived from the witness’ own perception. Concomitantly, a witness may not
testify on matters which he or she merely learned from others either because said witness was told or read or heard
those matters. Such testimony is considered hearsay and may not be received as proof of the truth of what the
witness has learned. This is known as the hearsay rule. Hearsay is notlimited to oral testimony or statements; the
general rule that excludes hearsay as evidence applies to written, as well as oral statements. There are several
exceptions to the hearsay rule under the Rules of Court, among which are learned treatises under Section 46 of
Rule 130, viz:
"SEC. 46. Learned treatises. -A published treatise, periodical or pamphlet on a subjectof history, law, science, or art
is admissible as tending to prove the truth of a matter stated therein if the court takes judicial notice, or a witness
expert in the subject testifies, that the writer of the statement in the treatise, periodical or pamphlet is recognized in
his profession or calling as expert in the subject."
The alleged scientific studies mentioned in the Petition cannot be classified as learned treatises. We cannot take
judicial notice of the same, and no witness expert in the subjectmatter of this case testified, that the writers of the
said scientific studies are recognized in their profession or calling as experts in the subject.
In stark contrast, respondent RP Energy presented several witnesses on the CFB technology.
In his Judicial Affidavit, witness Wong stated that he obtained a Bachelor of Science, Major in Mechanical
Engineering from Worcester Polytechnic Institute; he is a Consulting Engineer of Steam Generators of URS; he was
formerly connected with Foster Wheeler where he held the positions of site commissioning engineer, testing
engineer, instrumentation and controls engineer, mechanical equipment department manager, director of boiler
performance and mechanical design engineering and pulverized coal product director. He explained that: CFB
stands for Circulating Fluidized Bed; it is a process by which fuel is fed to the lower furnace where it is burned in an
upward flow of combustion air; limestone, which is used as sulfur absorbent, is also fed to the lower furnace along
with the fuel; the mixture offuel, ash, and the boiler bed sorbent material is carried to the upper part of the furnace
and into a cyclone separator; the heavier particles which generally consist of the remaining uncombusted fuel and
absorbent material are separated in the cyclone separator and are recirculated to the lower furnace to complete the
combustion of any unburned particles and to enhance SO2 capture by the sorbent; fly ash and flue gas exit the
cyclone and the fly ash is collected in the electrostatic precipitator; furnace temperature is maintained in the range of
800° to 900° C by suitable heat absorbing surface; the fuel passes through a crusher that reduces the size to an
appropriate size prior to the introduction into the lower furnace along with the limestone; the limestone is used as a
SO2 sorbent which reacts with the sulfur oxides to form calcium sulfate, an inert and stable material; air fans at the
bottom of the furnace create sufficient velocity within the steam generator to maintain a bed of fuel, ash, and
limestone mixture; secondary air is also introduced above the bed to facilitate circulation and complete combustion
of the mixture; the combustion process generates heat, which then heats the boiler feedwater flowing through boiler
tube bundles under pressure; the heat generated in the furnace circuit turns the water to saturated steam which is
further heated to superheated steam; this superheated steam leaves the CFB boiler and expands through a steam
turbine; the steam turbine is directly connected to a generator that turns and creates electricity; after making its way
through the steam turbine, the low-pressure steam is exhausted downwards into a condenser; heat is removed from
the steam, which cools and condenses into water (condensate); the condensate is then pumped back through a
train of feedwater heaters to gradually increase its temperature beforethis water is introduced to the boiler to start
the process all over again; and CFB technology has advantagesover pulverized coal firing without backend cleanup
systems, i.e., greater fuel flexibility, lower SO2 and NOx emissions. Moreover, Wong testified, inter alia, that: CFBs
have a wider range of flexibility so they can environmentally handle a wider range of fuel constituents, mainly the
constituent sulfur; and is capable of handling different types of coal within the range of the different fuelconstituents;
since CFB is the newer technology than the PC or stalker fire, it has better environmental production; 50 percent
ofthe electric generation in the United States is still produced by coal combustion; and the CFB absorbs the sulfur
dioxide before it is emitted; and there will be a lower percentage of emissions than any other technology for the coal.
In his Judicial Affidavit, Sarrki, stated that: he is the Chief Engineer for Process Concept in FosterWheeler; he was a
Manager of Process Technology for Foster Wheeler from 1995 to 2007; and he holds a Master of Science degree in
Chemical Engineering.He explained that: CFB boilers will emit PAHs but only in minimal amounts, while BFB will
produce higher PAH emissions; PAH is a natural product of any combustion process; even ordinary burning, such
as cooking or driving automobiles, will have some emissions that are not considered harmful; it is only when
emissions are of a significant level that damage may be caused; a CFB technology has minimal PAH emissions; the
high combustion efficiency of CFB technology, due to long residence time of particles inside the boiler, leads to
minimal emissions of PAH; other factors such as increase in the excess air ratio[,] decrease in Ca/S, as well as
decrease in the sulfur and chlorine contents of coal will likewise minimize PAH production; and CFB does not cause
emissions beyond scientificallyacceptable levels. He testified, inter alia, that: the CFB technology is used worldwide;
they have a 50% percent share of CFB market worldwide; and this will be the first CFB by Foster Wheeler in the
Philippines; Foster Wheeler manufactures and supplies different type[s] of boilers including BFB, but CFB is always
applied on burning coal, so they do not apply any BFB for coal firing; CFB has features which have much better
combustion efficiency, much lower emissions and it is more effective as a boiler equipment; the longer the coal
stays inthe combustion chamber, the better it is burned; eight (8) seconds is already beyond adequate but it keeps a
margin; in CFB technology, combustion technology is uniform throughout the combustion chamber; high velocity is
used in CFB technology, that is vigorous mixing or turbulence; turbulence is needed to get contact between fuel and
combustion air; and an important feature of CFB is air distribution.
In his Judicial Affidavit, Ouano stated that: he is a licensed Chemical Engineer, Sanitary Engineer and
Environmental Planner in the Philippines; he is also a chartered Professional Engineer inAustralia and a member of
the colleges of environmental engineers and chemical engineers of the Institution of Engineers (Australia); he
completed his Bachelor in Chemical Engineering in 1970, Master of Environmental Engineering in 1972 and Doctor
of Environmental Engineering in 1974; he also graduated from the University of Sydney Law School with the degree
of Master of Environmental Law in 2002 and PhD in Law from Macquarie University in 2007. He explained in his
Judicial Affidavit that: the impacts identified and analyzed in the EIA process are all potential or likely impacts; there
are a larger number of EIA techniques for predicting the potential environmental impacts; it is important to note that
all those methods and techniques are only for predicting the potential environmental impacts, not the real impacts;
almost all environmental systems are non-linear and they are subject to chaotic behavior that even the most
sophisticated computer could not predict accurately; and the actual or real environmental impact could only be
established when the project is in actual operation. He testified, inter alia, that: the higher the temperature the higher
the nitrous oxide emitted; in CFB technology, the lower the temperature, the lower is the nitrogen oxide; and it still
has a nitrogen oxide but not as high as conventional coal; the CFB is the boiler; from the boiler itself,different
pollution control facilities are going to be added; and for the overall plant with the pollution control facilities, the
particulate matters, nitrogen oxide and sulfur dioxide are under control. (Citations omitted)121
We also note that RP Energy controverted in detail the afore-summarized allegations of the Casiño Group on the
four areas of environmental damage that will allegedly occur upon the construction and operation of the power plant:
1. On thermal pollution of coastal waters.
As to the extent of the expected rise in water temperature once the power plant is operational, Ms. Mercado stated
in her JudicialAffidavit thus:
Q: What was the result of the Thermal Plume Modeling that was conducted for RP Energy?
A: The thermal dispersion modeling results show that largest warming change (0.95°C above ambient) is observed
in the shallowest (5 m) discharge scenario. The warmest surface temperature change for the deepest (30 m)
scenario is 0.18°C. All the simulated scenarios comply with the DAO 90-35 limit for temperature rise of 3°C within
the defined 70 x 70 m mixing zone. The proposed power plant location is near the mouth of Subic Bay, thus the tidal
currents influence the behavior of thermal discharge plume. Since the area is well-flushed, mixing and dilution of the
thermal discharge is expected.
It also concluded that corals are less likely to be affected by the cooling water discharge as corals may persist in
shallow marine waterswith temperatures ranging from 18°C to 36°C. The predicted highest temperature of 30.75°C,
from the 0.95°C increase in ambient in the shallowest (5 m) discharge scenario, is within this range.122
In the same vein, Dr. Ouano stated in his Judicial Affidavit:
Q: In page 41, paragraph 99 of the Petition, it was alleged that: "x x x a temperature change of 1°C to 2°C
canalready affect the metabolism and other biological functions of aquatic organisms such as mortality rate and
reproduction." What is your expert opinion, if any, on this matter alleged by the Petitioners?
A: Living organisms have proven time and again that they are very adaptable to changes in the environment. Living
organisms have been isolated in volcanic vents under the ocean living on the acidic nutrient soup of sulfur and other
minerals emitted by the volcano to sub-freezing temperature in Antarctica. Asa general rule, metabolism and
reproductive activity [increase] with temperature until a maximum is reached after which [they decline]. For this
reason, during winter, animals hibernate and plants become dormant after shedding their leaves. It is on the onset
of spring that animals breed and plants bloom when the air and water are warmer. At the middle of autumn when the
temperature drops to single digit, whales, fish, birds and other living organisms, which are capable of migrating,
move to the other end of the globe where spring is just starting. In the processes of migration, those migratory
species have to cross the tropics where the temperature is not just one or two degrees warmer but 10 to 20 degrees
warmer. When discussing the impact of 1 to 2 degrees temperature change and its impact on the ecosystem, the
most important factors to consider are – (1) Organism Type – specifically its tolerance to temperature change
(mammals have higher tolerance); (2) Base Temperature – it is the temperature over the optimum temperature such
that an increasewill result in the decline in number of the organisms; (3) Mobility or Space for Migration (i.e., an
aquarium with limited space or an open ocean that the organism can move to a space more suited to [a] specific
need, such as the migratory birds); and (4) Ecosystem Complexity and Succession. The more complex the
ecosystem the more stable it is as succession and adaptation [are] more robust.
Normally, the natural variation in water temperature between early morning to late afternoon could be several
degrees (four to five degrees centigrade and up to ten degrees centigrade on seasonal basis). Therefore, the less
than one degree centigrade change predicted by the GHD modeling would have minimal impact.123
On cross-examination, Dr. Ouano further explained—
ATTY. AZURA:
x x x When you say Organism Type – you mentioned that mammals have a higher tolerance for temperature
change?
DR. OUANO:
Yes.
ATTY. AZURA:
What about other types of organisms, Dr. Ouano? Fish for example?
DR. OUANO:
Well, mammals have high tolerance because mammals are warm[- ]blooded. Now, when it comes to cold[-]blooded
animals the tolerance is much lower. But again when you are considering x x x fish [e]specially in open ocean you
have to remember that nature by itself is x x x very brutal x x x where there is always the prey-predator relationship.
Now, most of the fish that we have in open sea [have] already a very strong adaptability mechanism.And in fact,
Kingman back in 1964 x x x studied the coal reefaround the gulf of Oman where the temperature variation on day to
day basis varied not by 1 degree to 2 degrees but by almost 12 degrees centigrade. Now, in the Subic Bay area
which when you’re looking at it between daytime variation, early dawn when it is cold, the air is cold, the sea
temperature, sea water is quite cold. Then by 3:00 o’clock in the afternoon it starts to warm up. Sothe variation [in
the] Subic Bay area is around 2 to 4 degrees by natural variation from the sun as well as from the current that goes
around it. So when you are talking about what the report has said of around 1 degree change, the total impact x x x
on the fishes will be minimal. x x x
ATTY. AZURA:
x x x So, you said, Dr. Ouano, that fish, while they have a much lower tolerance for temperature variation, are still
very adaptable. What about other sea life, Dr. Ouano, for example, sea reptiles?
DR. OUANO:
That’s what I said. The most sensitive part of the marine ecology is physically the corals because corals are non-
migratory, they are fix[ed]. Second[ly] x x x corals are also highly dependent on sunlight penetration. If they are
exposed out of the sea, they die; if theyare so deep, they die. And that is why I cited Kingman in his studies of coral
adaptability [in] the sea ofOman where there was a very high temperature variation, [they] survived.
ATTY. AZURA:
Would you be aware, Dr. Ouano, if Kingman has done any studies in Subic Bay?
DR. OUANO:
Not in Subic Bay but I have reviewedthe temperature variation, natural temperature variation from the solar side, the
days side as well as the seasonal variation. There are two types of variation since temperatures are very critical.
One is the daily, which means from early morning to around 3:00 o’clock, and the other one is seasonal variation
because summer, December, January, February are the cold months and then by April, May we are having warm
temperature where the temperature goes around 32-33 degrees; Christmas time, it drops to around 18 to 20
degrees so it[']sa variation of around seasonal variation of 14 degrees although some of the fish might even migrate
and that is why I was trying to put in corals because they are the ones that are really fix[ed]. They are not in a
position to migrate in this season.
ATTY. AZURA:
To clarify. You said that the most potentially sensitive part of the ecosystem would be the corals. DR. OUANO:
Or threatened part because they are the ones [that] are not in a position to migrate.
ATTY AZURA:
In this case, Dr. Ouano, with respectto this project and the projected temperature change, will the corals in Subic
Bay be affected?
DR. OUANO:
As far as the outlet is concerned, they have established it outside the coral area. By the time it reaches the coral
area the temperature variation, as per the GHD study is very small, it[’]s almost negligible.
ATTY AZURA:
Specifically, Dr. Ouano, what does negligible mean, what level of variation are we talking about?
DR. OUANO:
If you are talking about a thermometer, you might be talking about, normally about .1 degrees centigrade. That’sthe
one that you could more or less ascertain. x x x
ATTY. AZURA:
Dr. Ouano, you mentioned in youranswer to the same question, Question 51, that there is a normal variation in
water temperature. In fact, you said there is a variation throughout the day, daily and also throughout the year,
seasonal. Just to clarify, Dr. Ouano. When the power plant causes the projected temperature change of 1 degree to
2 degrees Celsius this will be in addition to existing variations? What I mean, Dr. Ouano, just so I can understand,
how will that work? How will the temperature change caused by the power plant work with the existing variation?
DR. OUANO:
There is something like what we call the zonal mixing. This is an area of approximately one or two hectares where
the pipe goes out, the hot water goes out. So that x x x, we have to accept x x x that [throughout it] the zone will be
a disturb[ed] zone. After that one or two hectares park the water temperature is well mixed [so] that the temperature
above the normal existing variation now practically drops down to almost the normal level.124
2. On air pollution due todust and combustion gases.
To establish that the emissions from the operation of the power plant would be compliant with the standards under
the Clean Air Act,125 Ms. Mercado stated in her Judicial Affidavit thus:
271. Q: What was the result of the Air Dispersion Modeling that was conducted for RP Energy?
A: The Air Dispersion Modeling predicted that the Power Plant Project will produce the following emissions,which
[are] fully compliant with the standards set by DENR:
Predicted GLC126 for 1-hr National Ambient Air Quality

averaging period Guideline Values
SO2 45.79 µg/Nm3 340 µg/Nm3
NO2 100.8 µg/Nm3 260 µg/Nm3
CO 10 µg/Nm3 35 µg/Nm3
Predicted GLC for 8-hr averaging National Ambient Air Quality

period Guideline Values
CO 0.19 mg/ncm 10 µg/Nm3
Predicted GLC for 24-hr averaging National Ambient Air Quality

SO2 17.11 µg/Nm3 180 µg/Nm3
NO2 45.79 µg/Nm3 150 µg/Nm3
Predicted GLC for 1-yr averaging National Ambient Air Quality

SO2 6.12 µg/Nm3 80 µg/Nm3
NO2 No standard ---
CO No standard ---
272. Q: What other findings resulted from the Air Dispersion Modeling, if any?
A: It also established that the highest GLC to CleanAir Act Standards ratio among possible receptors was located
1.6 km North NorthEast ("NNE") of the Power Plant Project. Further, this ratio was valued only at 0.434 or less than
half of the upper limit set out in the Clean Air Act. This means that the highest air ambient quality disruption will
happen only 1.6 km NNE of the Power Plant Project, and that such disruption would still be compliant with the
standards imposed by the Clean Air Act.127
The Casiño Group argued, however, that, as stated inthe EIS, during upset conditions, significant negative
environmental impact will result from the emissions. This claim was refuted by RP Energy’s witness during cross-
examination:
ATTY. AZURA:
If I may refer you to another page of the same annex, Ms. Mercado, that’s page 202 of the same document, the
August 2012. Fig. 2-78 appears to show, there’s a Table, Ms. Mercado, the first table, the one on top appears to
show a comparison in normal and upset conditions. I noticed, Ms. Mercado, that the black bars are much higher
than the bars in normal condition. Can you state what this means?
MS. MERCADO:
It means there are more emissions that could potentially be released when it is under upset condition.
ATTY. AZURA:
I also noticed, Ms. Mercado, at the bottom part of this chart there are Receptor IDs, R1, R2, R3 and so forth and on
page 188 of this same document, Annex "9-Mercado," there is a list identifying these receptors, for example,
Receptor 6, Your Honor, appears to have been located in Olongapo City, Poblacion. Just so I can understand, Ms.
Mercado, does that mean that if upset condition[s] were to occur, the Olongapo City Poblacion will be affected by
the emissions? MS. MERCADO:
All it means is that there will be higher emissions and a higher ground concentration. But you might want to alsopay
attention to the "y axis," it says there GLC/CAA [Ground Level Concentration/Clean Air Act limit]. So it means that
even under upset conditions… say for R6, the ground level concentration for upset condition is still around .1 or 10%
percent only of the Clean Air Act limit. So it’s still much lower than the limit.
ATTY. AZURA:
But that would mean, would it not, Ms. Mercado, that in the event of upset conditions[,] emissionswould increase in
the Olongapo City Poblacion?
MS. MERCADO:
Not emissions will increase. The emissions will be the same but the ground level concentration, the GLC, will be
higher if you compare normal versus upset. But even if it[’]s under upset conditions, it is still only around 10%
percent of the Clean Air Act Limit.
xxxx
J. LEAGOGO:
So you are trying to impress upon this Court that even if the plant is in an upset condition, it will emit less than what
the national standards dictate?
MS. MERCADO:
Yes, Your Honor.128
With respect to the claims that the powerplant will release dangerous PAHs and CO, Engr. Sarrki stated in his
Judicial Affidavit thus:
Q: In page 42, paragraph 102 of the Petition, the Petitioners alleged that Volatile Organic Compounds ("VOC")
specifically Polycyclic Aromatic Hydrocarbon ("PAH") will be emitted even by CFB boilers. What can you say about
this?
A: Actually, the study cited by the Petitioners does not apply to the present case because it does not refer to CFB
technology. The study refers to a laboratory-scale tubular Bubbling Fluidized Bed ("BFB") test rig and not a CFB.
CFB boilers will emit PAHs but only in minimal amounts. Indeed, a BFB will produce higher PAH emissions.
xxxx
Q: Why can the study cited by Petitioners not apply in the present case?
A: The laboratory-scale BFB used in the study only has one (1) air injection point and does not replicate the staged-
air combustion process of the CFB that RP Energy will use. Thisstaged-air process includes the secondary air.
Injecting secondary air into the system will lead to more complete combustion and inhibits PAH production. There is
a study entitled "Polycyclic Aromatic Hydrocarbon (PAH) Emissions from a Coal-Fired Pilot FBC System" byKunlei
Liu, Wenjun Han, Wei-Ping Pan, John T. Riley found in the Journal of Hazardous Materials B84 (2001) where the
findings are discussed.
Also, the small-scale test rig utilized in the study does not simulate the process conditions (hydrodynamics, heat
transfer characteristics, solid and gas mixing behavior, etc.) seen in a large scale utility boiler, like those which
would be utilized by the Power Plant Project.
xxxx
Q: Aside from residence time of particles and secondary air, what other factors, if any, reduce PAH production?
A: Increase in the excess air ratio will also minimizePAH production. Furthermore, decrease in Calcium to Sulfur
moral ratio ("Ca/S"), as well as decrease in the sulfur and chlorine contents of coal will likewise minimize PAH
production. This is also based on the study entitled "Polycyclic Aromatic Hydrocarbon (PAH) Emissions from a Coal-
Fired Pilot FBC System" by Kunlei Liu, Wenjun Han, Wei-Ping Pan, John T. Riley.
In RP Energy’s Power Plant Project, the projected coal to be utilized has low sulfur and chlorine contents minimizing
PAH production. Also, due to optimum conditions for the in-furnace SO2capture, the Ca/S will be relatively low,
decreasing PAH production.
Q: In paragraph 104 of the Petition, it was alleged that "Carbon monoxide (CO), a poisonous, colorless and odorless
gas is also produced when there is partial oxidation or when there is not enough oxygen (O2) to form carbon dioxide
(CO2)." What can you say about this?
A: CFB technology reduces the CO emissions of the Power Plant Project to safe amounts. In fact, I understand that
the projected emissions level of the Power Plant Project compl[ies]with the International Finance Corporation ("IFC")
standards. Furthermore, characteristics of CFB technology such as long residence time, uniform temperature and
high turbulence provide an effective combustion environment which results [in] lower and safer CO emissions.
Q: I have no further questions for youat the moment. Is there anything you wish to add to the foregoing?
A: Yes. PAH is a natural product of ANY combustion process. Even ordinary burning, such as cooking or driving
automobiles, will have some emissions that are not considered harmful. It is only when emissions are of a significant
level that damage may be caused.
Given that the Power Plant Project will utilize CFB technology, it will have minimal PAH emissions. The high
combustion efficiency of CFB technology, due to the long residence time of particles inside the boiler, leads to the
minimal emissions of PAH. Furthermore,other factors such as increase in the excess air ratio, decrease in Ca/S, as
well as decrease in the sulfur and chlorine contents of coal will likewise minimize PAH production. CFB does not
cause emissions beyond scientifically acceptable levels, and we are confident it will not result in the damage
speculated by the Petitioners.129
3. On water pollution from toxic coal combustion waste.
With regard to the claim that coal combustion waste produced by the plant will endanger the health of the
inhabitants nearby, Dr. Ouano stated in his Judicial Affidavit thus:
Q: In page 43, paragraph 110 of the Petition, it was alleged that: "[s]olid coal combustion waste is highly toxic and is
said to cause birth defects and cancer risks among others x x x." What is your expert opinion, if any, on this matter
alleged by the Petitioners?
A: Coal is geologically compressed remains of living organisms that roamed the earth several million years ago. In
the process of compression, some of the minerals in the soil, rocks or mud, the geologic media for compression, are
also imparted into the compressed remains. If the compressing media of mud, sediments and rocks contain high
concentration of mercury, uranium, and other toxic substances, the coal formed will likewise contain high
concentration of those substances. If the compressing materials have low concentration of those substances, then
the coal formed will likewise have low concentration of those substances. If the coal does not contain excessive
quantities of toxic substances, the solid residues are even used in agriculture to supply micronutrients and improve
the potency of fertilizers. It is used freely as a fill material in roads and other construction activities requiring large
volume of fill and as additive in cement manufacture. After all, diamonds that people love to hang around their necks
and keep close to the chest are nothing more than the result of special geologic action, as those in volcanic pipes on
coal.130
RP Energy further argued, a matter which the Casiño Group did not rebut or refute, that the waste generated by the
plant will be properly handled, to wit:
4.1.49 When coal is burned in the boiler furnace, two by-products are generated - bottom and fly ash. Bottom ash
consists oflarge and fused particles that fall to the bottom of the furnace and mix with the bed media.Fly ash
includes finegrained and powdery particles that are carried away by flue gas into the electrostatic precipitator, which
is then sifted and collected. These by-products are non-hazardous materials. In fact, a coal power plant’s Fly Ash,
Bottom Ash and Boiler Slag have consequent beneficial uses which "generate significant environmental, economic,
and performance benefits." Thus, fly ash generated during the process will be sold and transported to cement
manufacturing facilities or other local and international industries.
4.1.50 RP Energy shall also install safety measures to insure that waste from burning of coal shall be properly
handled and stored.
4.1.51 Bottom ash will be continuously collected from the furnace and transferred through a series of screw and
chain conveyors and bucket elevator to the bottom ash silo. The collection and handling system is enclosed to
prevent dust generation. Discharge chutes will be installed at the base of the bottom ash silo for unloading. Open
trucks will be used to collect ash through the discharge chutes. Bottom ash will be sold, and unsold ash will be
stored in ash cells. A portion of the bottom ash will be reused as bed materialthrough the installation of a bed media
regeneration system (or ash recycle). Recycled bottom ash will be sieved using a vibrating screen and transported
to a bed material surge bin for re-injection into the boiler.
4.1.52 Fly ash from the electrostatic precipitator is pneumatically removed from the collection hopper using
compressed air and transported in dry state to the fly ash silo. Two discharge chutes will be installed at the base of
the fly ash silo. Fly ash can either be dry-transferred through a loading spout into an enclosed lorry or truck for
selling, re-cycling, or wet-transferred through a wet unloader into open dump trucks and transported to ash cells. Fly
ash discharge will operate in timed cycles, with an override function to achievecontinuous discharge if required. Fly
ash isolation valves in each branch line will prevent leakage and backflow into non-operating lines.
4.1.53 Approximately 120,000m² will be required for the construction of the ash cell. Ash will be stacked along the
sloping hill, within a grid of excavations (i.e. cells) with a 5m embankment. Excavated soils will be used for
embankment construction and backfill. To prevent infiltration [of] ash deposits into the groundwater, a clay layer with
minimum depth of400mm will be laid at the base of each cell. For every 1-m depth of ash deposit, a 10-cm soil
backfill will be applied to immobilize ash and prevent migration via wind. Ash cell walls will be lined with high-density
polyethylene to prevent seepage. This procedure and treatment method is in fact suitable for disposal of toxic and
hazardous wastes although fly ash is not classified as toxic and hazardous materials.131
Anent the claims that the plant is susceptible to earthquake and landslides, Dr. Ouano testified thus:
J. LEAGOGO:
In terms of fault lines, did you study whether this project site is in any fault line?
DR. OUANO:
There are some fault linesand in fact, in the Philippines it is very difficult to find an area except Palawan where there
is no fault line within 20 to 30 [kilometers]. But then fault lines as well as earthquakes really [depend] upon your
engineering design. I mean, Sto. Tomas University has withstood all the potential earthquakes we had in Manila[,]
even sometimes it[’]s intensity 8 or so because the design for it back in 1600 they are already using what we call
floating foundation. So if the engineering side for it[,] technology is there to withstand the expected fault line
[movement]. J. LEAGOGO:
What is the engineering side of the project? You said UST is floating.
DR. OUANO:
The foundation, that means to say you don’t break…
J. LEAGOGO:
Floating foundation. What about this, what kind of foundation?
DR. OUANO:
It will now depend on their engineering design, the type of equipment…
J. LEAGOGO:
No, but did you read it in their report?
DR. OUANO: It[’]s not there in their report because it will depend on the supplier, the equipment supplier.
J. LEAGOGO:
So it[’]s not yet there?
DR. OUANO:
It[’]s not yet there in the site but it is also covered inour Building Code what are the intensities of earthquakes
expected of the different areas in the Philippines.
J. LEAGOGO:
Have you checked our geo-hazard maps in the Philippines to check on this project site?
DR. OUANO:
Yes. It is included there in the EIA Report.
J. LEAGOGO:
It[’]s there?
DR. OUANO:
It[’]s there.132
4. On acid deposition in aquatic and terrestrial ecosystems.
Relative to the threat of acid rain, Dr. Ouano stated in his Judicial Affidavit, thus:
Q: In page 44, paragraph 114 of the Petition, it was alleged that "the coalfired power plant will release 1,888 tons of
nitrous oxides (NOx) per year and 886 tons of sulfur dioxide (SO2) per year. These oxides are the precursors to the
formation of sulfuric acid and nitric acid which are responsible for acid deposition." Whatis your expert opinion on
this matter alleged by the Petitioners?
A: NO2 is found in the air, water and soil from natural processes such as lightning, bacterial activities and geologic
activities as well as from human activities such as power plants and fertilizer usage in agriculture. SO2 is also found
in air, water and soil from bacterial, geologic and human activities. NO2 and SO2 in the air are part of the natural
nitrogen and sulfur cycle to widely redistribute and recycle those essential chemicals for use by plants. Without the
NO2 and SO2 in the air, plant and animal life would be limited to small areas of this planet where nitrogen and sulfur
are found in abundance. With intensive agricultural practices, nitrogen and sulfur are added in the soil as fertilizers.
Acid rain takes place when the NO2 and SO2 concentration are excessive or beyond those values set in the air
quality standards. NO2 and SO2 in the air in concentrations lower than those set in the standards have beneficial
effect to the environment and agriculture and are commonly known as micronutrients.133
On clarificatory questions from the appellate court, the matter was further dissected thus:
J. LEAGOGO:
x x x The project will release 1,888 tons of nitrous oxide per year. And he said, yes; that witness answered, yes,
itwill produce 886 tons of sulfur dioxide per year. And he also answered yes, that these oxides are the precursors to
the formation of sulfuric acid and nitric acid. Now my clarificatory question is, with this kind of releases there will be
acid rain?
DR. OUANO:
No.
J. LEAGOGO:
Why?
DR. OUANO:
Because it[’]s so dilute[d].
J. LEAGOGO:
It will?
DR. OUANO:
Because the acid concentration is so dilute[d] so that it is not going to cause acid rain.
J. LEAGOGO:
The acid concentration is so diluted that it will not cause acid rain?
DR. OUANO:
Yes .
J. LEAGOGO:
What do you mean it[’]s so diluted? How will it be diluted?
DR. OUANO:
Because it[’]s going to be mixed withthe air in the atmosphere; diluted in the air in the atmosphere. And besides this
886 tons, this is not released in one go, it is released almost throughout the year.
J. LEAGOGO:
You also answered in Question No. 61, "acid raintakes place when the NO2 AND SO2 concentration are
excessive." So whendo you consider it as excessive?
DR. OUANO:
That is something when you are talking about acid…
J. LEAGOGO:
In terms of tons of nitrous oxide and tons of sulfur oxide, when do you consider it as excessive?
DR. OUANO:
It is in concentration not on tons weight, Your Honor.
J. LEAGOGO:
In concentration?
DR. OUANO:
In milligrams per cubic meter, milligrams per standard cubic meter.
J. LEAGOGO:
So being an expert, whatwill be the concentration of this kind of 1,888 tons of nitrous oxide? What will be the
concentration in terms of your…?
DR. OUANO:
If the concentration is in excess ofsomething like 8,000 micrograms per standard cubic meters, then there isalready
potential for acid rain.
J. LEAGOGO:
I am asking you, Dr. Ouano, you said it will release 1,888 tons of nitrous oxide?
DR. OUANO:
Yes .
J. LEAGOGO:
In terms of concentration, what will that be?
DR. OUANO:
In terms of the GHD study that will result [in] 19 milligrams per standard cubic meters and the time when acid rain
will start [is when the concentration gets] around 8,000 milligrams per standard cubic meters. So we have 19
compared to 8,000. So weare very, very safe.
J. LEAGOGO:
What about SO2?
DR. OUANO:
SO2, we are talking about ... youwon’t mind if I go to my codigo. For sulfur dioxide this acid rain most likely will start
at around 7,000 milligrams per standard cubic meter but then … sorry, it[’]s around 3,400 micrograms per cubic
meter. That is the concentration for sulfur dioxide, and in our plant it will be around 45 micrograms per standard
cubic meter. So the acid rain will start at 3,400 and the emission is estimated here to result to concentration of 45.7
micrograms.
J. LEAGOGO:
That is what GHD said in their report.
DR. OUANO:
Yes. So that is the factor of x x x safety that we have.134
Apart from the foregoing evidence, wealso note that the above and other environmental concerns are extensively
addressed in RP Energy’s Environmental Management Plan or Program(EMP). The EMP is "a section in the EIS
that details the prevention, mitigation, compensation, contingency and monitoring measures to enhance positive
impacts and minimize negative impacts and risks of a proposed project or undertaking."135 One of the conditions of
the ECC is that RP Energy shall strictly comply with and implement its approved EMP. The Casiño Group failed to
contest, with proof, the adequacy of the mitigating measures stated in the aforesaid EMP.
In upholding the evidence and arguments of RP Energy, relative to the lack of proof as to the alleged significant
environmental damage that will be caused by the project, the appellate court relied mainly on the testimonies of
experts, which we find to be in accord withjudicial precedents. Thus, we ruled in one case:
Although courts are not ordinarily bound by testimonies of experts, 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 and 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 isto 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 effects (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 inthe
absence of an abuse of that discretion.136
Hence, we sustain the appellate court’s findings that the Casiño Group failed to establish the alleged grave
environmental damage which will be caused by the construction and operation of the power plant.
In another vein, we, likewise, agree with the observationsof the appellate court that the type of coal which shall be
used in the power plant has important implications as to the possible significant negative environmental impacts of
the subject project.137 However, there is no coal supply agreement, as of yet, entered into by RP Energy with a third-
party supplier. In accordance with the terms and conditions of the ECC and in compliance with existing
environmental laws and standards, RP Energy is obligated to make use of the proper coal type that will not cause
significant negative environmental impacts.
The alleged negative environmental

assessment of the project by experts in a
report generated during the social
acceptability consultations
The Casiño Group also relies heavily on a report on the social acceptability process of the power plant project to
bolster itsclaim that the project will cause grave environmental damage. We purposely discuss this matter in this
separate subsection for reasons which will be made clear shortly.
But first we shall present the pertinent contents of this report.
According to the Casiño Group, from December 7 to 9, 2011, the SBMA conducted social acceptabilitypolicy
consultations with different stakeholders on RP Energy’s proposed 600 MW coal plant project at the Subic Bay
Exhibition and Convention Center. The results thereof are contained in a document prepared by SBMA entitled
"Final Report: Social Acceptability Process for RP Energy, Inc.’s 600-MW Coal Plant Project" (Final Report). We
notethat SBMA adopted the Final Report as a common exhibit with the Casiño Group in the course of the
proceedings before the appellate court.
The Final Report stated that there was a clear aversion to the concept of a coal-fired power plant from the
participants. Their concerns included environmental, health, economic and socio-cultural factors. Pertinent to this
case is the alleged assessment, contained in the Final Report, of the potential effects of the project by three experts:
(1) Dr. Rex Cruz (Dr. Cruz), Chancellor of the University of the Philippines, Los Baños and a forest ecology expert,
(2) Dr. Visitacion Antonio, a toxicologist, who related information as to public health; and (3) Andre Jon Uychiaco, a
marine biologist.
The Final Report stated these experts’alleged views on the project, thus:
IV. EXPERTS’ OPINION
xxxx
The specialists shared the judgment that the conditions were not present to merit the operation of a coal-fired power
plant,and to pursue and carry out the project with confidence and assurance that the natural assets and ecosystems
within the Freeport area would not be unduly compromised, or that irreversible damage would not occur and that the
threats to the flora and fauna within the immediate community and its surroundings would be adequately addressed.
The three experts were also of the same opinion that the proposed coal plant project would pose a wide range of
negative impacts on the environment, the ecosystems and human population within the impact zone.
The specialists likewise deemed the Environment Impact Assessment (EIA) conducted by RPEI to be incomplete
and limited in scope based on the following observations:
i. The assessment failed to include areas 10km. to 50km. from the operation site, although according tothe panel,
sulfur emissions could extend as far as 40-50 km.
ii. The EIA neglected to include other forests in the Freeport in its scope and that there were no specific details on
the protection of the endangered flora and endemic fauna in the area. Soil, grassland, brush land, beach forests and
home gardens were also apparently not included in the study.
iii. The sampling methods used inthe study were limited and insufficient for effective long-term monitoring of surface
water, erosion control and terrestrial flora and fauna.
The specialists also discussed the potential effects of an operational coalfired power plant [on] its environs and the
community therein. Primary among these were the following:
i. Formation of acid rain, which would adversely affect the trees and vegetation in the area which, in turn, would
diminish forest cover. The acid rain would apparently worsen the acidity of the soil in the Freeport.
ii. Warming and acidification of the seawater in the bay, resulting in the bio-accumulationof contaminants and toxic
materials which would eventually lead to the overall reduction of marine productivity.
iii. Discharge of pollutants such as Nitrous Oxide, Sodium Oxide, Ozone and other heavy metals suchas mercury
and lead to the surrounding region, which would adversely affect the health of the populace in the vicinity.
V. FINDINGS
Based on their analyses of the subject matter, the specialists recommended that the SBMA re-scrutinize the coal-
fired power plant project with the following goals in mind:
i. To ensure its coherence and compatibility to [the] SBMA mandate, vision, mission and development plans,
including its Protected Area Management Plan;
ii. To properly determine actual and potential costs and benefits;
iii. To effectively determine the impacts on environment and health; and
iv. To ensure a complete and comprehensive impacts zone study.

The specialists also urged the SBMA to conduct a Comprehensive Cost And Benefit Analysis Of The Proposed Coal
Plant Project Relative To Each Stakeholder Which Should Include The Environment As Provider Of Numerous
Environmental Goods And Services.
They also recommended an Integrated/Programmatic Environmental Impact Assessmentto accurately determine the
environmental status of the Freeport ecosystem as basis and reference in evaluating future similar projects. The
need for a more Comprehensive Monitoring System for the Environment and Natural Resourceswas also reiterated
by the panel.138
Of particular interest are the alleged key observations of Dr. Cruz on the EIS prepared by RP Energy relative to the
project:
Key Observations and Recommendations on the EIS of Proposed RPE Project
Rex Victor O. Cruz
Based on SBMA SAP on December 7-9, 2011
1. The baseline vegetation analysis was limited only within the project site and its immediate vicinity. No vegetation
analysis was done in the brushland areas in the peninsula which is likely to be affected in the event acid rain forms
due to emissions from the power plant.
2. The forest in the remaining forests inthe Freeport was not considered as impact zone as indicated by the lack
ofdescription of these forests and the potential impacts the project might have on these forests. This appears to be a
key omission in the EIS considering that these forests are well within 40 to 50 km away from the site and that there
are studies showing that the impacts of sulphur emissions can extend as far as 40 to 50 km away from the source.
3. There are 39 endemic fauna and 1 endangered plant species (Molave) in the proposed project site. There will be
a need to make sure that these species are protected from being damaged permanently in wholesale. Appropriate
measures such as ex situconservation and translocation if feasible must be implemented.
4. The Project site is largely in grassland interspersed with some trees. These plants if affected by acid rain or by
sulphur emissions may disappear and have consequences on the soil properties and hydrological processes in the
area. Accelerated soil erosion and increased surface runoff and reduced infiltration of rainwater into the soil.
5. The rest of the peninsula is covered with brushland but were never included as part of the impact zone.
6. There are home gardens along the coastal areas of the site planted to ornamental and agricultural crops which
are likely to be affected by acid rain.
7. There is also a beach forest dominated by aroma, talisai and agoho which will likely be affectedalso by acid rain.
8. There are no Environmentally Critical Areas within the 1 km radius from the project site. However, the
OlongapoWatershed Forest Reserve, a protected area is approximately 10 kmsouthwest of the projectsite.
Considering the prevailing wind movement in the area, this forest reserve is likely to be affected by acid rain if it
occurs from the emission of the power plant. This forest reserve is however not included as partof the potential
impact area.
9. Soil in the project site and the peninsula is thin and highly acidic and deficient in NPK with moderate to severe
erosion potential. The sparse vegetation cover in the vicinity of the projectsite is likely a result of the highly acidic
soil and the nutrient deficiency. Additional acidity may result from acid rain that may form in the area which could
further make it harder for the plants to grow in the area that in turn could exacerbate the already severe erosion in
the area. 10. There is a need to review the proposalto ensure that the proposed project is consistent with the vision
for the Freeport as enunciated in the SBMA Master Plan and the Protected Area Management Plan. This will
reinforce the validity and legitimacy of these plans as a legitimate framework for screening potential locators in the
Freeport. Itwill also reinforce the trust and confidence of the stakeholders on the competence and authority of the
SBMA that would translate in stronger popular support to the programs implemented in the Freeport.
11. The EGF and Trust Fund (Table 5.13) should be made clear that the amounts are the minimum amount and that
adequate funds will be provided by the proponent as necessary beyond the minimum amounts. Furthermore the
basis for the amounts allocated for the items (public liability and rehabilitation) in Trust Fund and in EGF (tree
planting and landscaping, artificial reef establishment) must be clarified. The specific damages and impacts that will
be covered by the TF and EGF must also be presented clearly at the outset to avoid protracted negotiations in the
event of actual impacts occurring in the future.
12. The monitoring plan for terrestrial flora and fauna is not clear on the frequency of measurement. More
importantly, the proposed method of measurement (sampling transect) while adequate for estimating the diversity of
indices for benchmarking is not sufficient for long[-]term monitoring. Instead, long[-]term monitoringplots (at least 1
hectare in size) should be established to monitor the long[-]term impacts of the project on terrestrial flora and fauna.
13. Since the proposed monitoring of terrestrial flora and fauna is limited to the vicinity of the project site, it will be
useful not only for mitigating and avoiding unnecessary adverse impacts ofthe project but also for improving
management decisions if long[-]term monitoring plots for the remaining natural forests in the Freeport are
established. These plots will also be useful for the study of the dynamic interactions of terrestrial flora and fauna with
climate change, farming and other human activities and the resulting influences on soil, water, biodiversity, and
other vital ecosystem services in the Freeport.139
We agree with the appellate court that the alleged statements by these experts cannot be given weight because
they are hearsay evidence. None of these alleged experts testified before the appellate court to confirm the pertinent
contents of the Final Report. No reason appears in the records of this case as to why the Casiño Group failed to
present these expert witnesses.
We note, however, that these statements, on their face, especially the observations of Dr. Cruz, raise serious
objections to the environmental soundness of the project, specifically, the EIS thereof.It brings to fore the question of
whether the Court can, on its own, compel the testimonies of these alleged experts in order to shed light on these
matters in view of the rightat stake— not just damage to the environment but the health, well-being and,ultimately,
the livesof those who may be affected by the project.
The Rules of Procedure for Environmental Cases liberally provide the courts with means and methods to obtain
sufficient information in order to adequately protect orsafeguard the right to a healthful and balanced ecology. In
Section 6 (l)140 of Rule 3 (Pre-Trial), when there is a failure to settle, the judge shall, among others, determine the
necessity of engaging the services of a qualified expert as a friend of the court (amicus curiae). While, in Section
12141 of Rule 7 (Writ of Kalikasan), a party may avail of discovery measures: (1) ocular inspection and (2) production
or inspection of documents or things. The liberality of the Rules in gathering and even compelling information,
specifically with regard to the Writ of Kalikasan, is explained in this wise: [T]he writ of kalikasanwas refashioned as a
tool to bridge the gap between allegation and proof by providing a remedy for would-be environmental litigants to
compel the production of information within the custody of the government. The writ would effectively serve as a
remedy for the enforcement of the right to information about the environment. The scope of the fact-finding power
could be: (1) anything related to the issuance, grant of a government permit issued or information controlled by the
government or private entity and (2) [i]nformation contained in documents such as environmental compliance
certificate (ECC) and other government records. In addition, the [w]rit may also be employed to compel the
production of information, subject to constitutional limitations. This function is analogous to a discovery measure,
and may be availed of upon application for the writ.142
Clearly, in environmental cases, the power toappoint friends of the court in order to shed light on matters requiring
special technical expertise as well as the power to order ocular inspections and production of documents or things
evince the main thrust of, and the spirit behind, the Rules to allow the court sufficient leeway in acquiring the
necessary information to rule on the issues presented for its resolution, to the end that the right toa healthful and
balanced ecology may be adequately protected. To draw a parallel, in the protection of the constitutional rights of an
accused, when life or liberty isat stake, the testimonies of witnesses may be compelled as an attribute of the Due
Process Clause. Here, where the right to a healthful and balanced ecology of a substantial magnitude is at stake,
should we not tread the path of caution and prudence by compelling the testimonies of these alleged experts?
After due consideration, we find that, based on the statements in the Final Report, there is no sufficiently compelling
reason to compel the testimonies of these alleged expert witnesses for the following reasons.
First, the statementsare not sufficiently specificto point to us a flaw (or flaws) in the study or design/implementation
(or some other aspect) of the project which provides a causal link or, at least, a reasonable connection between the
construction and operation ofthe project vis-à-vis potential grave environmental damage. In particular, they do not
explain why the Environmental Management Plan (EMP) contained in the EIS of the project will notadequately
address these concerns.
Second, some of the concerns raisedin the alleged statements, like acid rain, warming and acidification of the
seawater, and discharge of pollutants were, as previously discussed, addressed by the evidence presented by RP
Energy before the appellate court. Again, these alleged statements do not explain why such concerns are not
adequately covered by the EMP of RP Energy.
Third, the key observations of Dr. Cruz, while concededly assailing certain aspects of the EIS, do not clearly and
specifically establish how these omissions have led to the issuance of an ECC that will pose significant negative
environmental impacts once the project is constructed and becomes operational. The recommendations stated
therein would seem to suggest points for improvement in the operation and monitoring of the project,but they do not
clearly show why such recommendations are indispensable for the project to comply with existing environmental
laws and standards, or how non-compliance with such recommendations will lead to an environmental damage of
the magnitude contemplatedunder the writ of kalikasan. Again, these statements do not state with sufficient
particularity how the EMP in the EIS failed to adequately address these concerns.
Fourth, because the reason for the non-presentation of the alleged expert witnesses does not appear on record, we
cannot assume that their testimonies are being unduly suppressed.
By ruling that we do not find a sufficiently compelling reason to compel the taking of the testimonies of these alleged
expert witnesses in relation to their serious objections to the power plant project, we do not foreclose the possibility
that their testimonies could later on be presented, in a proper case, to more directly, specifically and
sufficientlyassail the environmental soundness of the project and establish the requisite magnitude of actualor
threatened environmental damage, if indeed present. After all, their sense ofcivic duty may well prevail upon them to
voluntarily testify, if there are truly sufficient reasons tostop the project, above and beyond their inadequate claims in
the Final Report that the project should not be pursued. As things now stand,however, we have insufficient bases to
compel their testimonies for the reasons already proffered.
The alleged admissions of grave

environmental damage in the EIS of the
project.
In their Omnibus Motions for Clarification and Reconsideration before the appellate court and Petition for Review
before thisCourt, the Casiño Group belatedly claims that the statements in the EIS prepared by RPEnergy
established the significant negative environmental impacts of the project. They argue in this manner:
Acid Rain
35. According to RP Energy’s Environmental Impact Statement for its proposed 2 x 150 MW Coal-Fired Thermal
Power Plant Project, acid rain may occur in the combustion of coal, to wit – x x x x
During the operation phase, combustion of coal will result in emissions of particulates SOx and NOx. This may
contribute to the occurrence of acid rain due to elevated SO2 levels in the atmosphere. High levels of NO2
emissions may give rise to health problems for residents within the impact area.
xxxx
Asthma Attacks
36. The same EPRMP143 mentioned the incidence of asthma attacks [as a] result of power plant operations, to wit –
xxxx
The incidence of asthma attacks among residents in the vicinity of the project site may increase due to exposure to
suspended particulates from plant operations.144
RP Energy, however, counters that the above portions of the EIS were quoted out of context. As to the subject of
acid rain, the EIS states in full:
Operation
During the operation phase, combustion of coal will result in emissions of particulates, SOx and NOx. This may
contribute to the occurrence of acid rain due to elevated SO2 levels in the atmosphere. High levels of NO2
emissions may give rise to health problems for residents within the impact area. Emissions may also have an effect
onvegetation (Section 4.1.4.2). However, the use of CFBC technology is a built-in measure that results in reduced
emission concentrations. SOx emissions will beminimised by the inclusion of a desulfurisation process, whilst NOx
emissions will be reduced as the coal is burned at a temperature lower than that required to oxidise
nitrogen.145(Emphasis supplied)
As to the subject of asthma attacks, the EIS states in full:
The incidence of asthma attacks among residents in the vicinity of the project site may increase due to exposureto
suspended particulates from plant operations. Coal and ash particulates may also become suspended and
dispersed into the air during unloading and transport, depending on wind speed and direction. However, effect on air
quality due to windblown coal particulates will be insignificant as the coal handling system will have enclosures (i.e.
enclosed conveyors and coal dome) to eliminate the exposure of coal to open air, and therefore greatly reduce the
potential for particulates from being carried away by wind (coalhandling systems, Section 3.4.3.3). In addition, the
proposed process will include an electrostaticprecipitator that will remove fly ash from the flue gas prior to its release
through the stacks, and so particulates emissions will be minimal.146 (Emphasis supplied)
We agree with RP Energy that, while the EIS discusses the subjects of acid rain and asthma attacks, it goes on to
state that there are mitigating measures that will be put in place to prevent these ill effects. Quite clearly, the Casiño
Group quoted piecemeal the EIS in sucha way as to mislead this Court as to its true and full contents.
We deplore the way the Casiño Group has argued this point and we take this time to remind it that litigants should
not trifle withcourt processes. Along the same lines, we note how the Casiño Group has made serious allegations in
its Petition for Writ of Kalikasanbut failed to substantiate the same in the course of the proceedings before the
appellate court. In particular, during the preliminary conference of this case, the Casiño Group expressly abandoned
its factual claims on the alleged grave environmental damage that will be caused by the power plant (i.e., air, water
and land pollution) and, instead, limited itself to legal issues regarding the alleged non-compliance of RP Energy
with certain laws and rules in the procurement of the ECC.147 We also note how the Casiño Group failed to comment
on the subject Petitions before this Court, which led this Court to eventually dispense with its comment.148 We must
express our disapproval over the way it has prosecuted itsclaims, bordering as it does on trifling with court
processes. We deem itproper, therefore, to admonishit to be more circumspect in how it prosecutesits claims.
In sum, we agree with the appellate court that the Casiño Group failed to substantiate its claims thatthe construction
and operation of the power plant will cause environmental damage of the magnitude contemplated under the writ of
kalikasan. The evidence it presented is inadequate to establish the factual bases of its claims.
II.
Whether the ECC is invalid for lack of signature of Mr. Luis Miguel Aboitiz (Mr. Aboitiz), as representative of RP
Energy, in the Statement of Accountability of the ECC.
The appellate court ruled that the ECC is invalid because Mr. Aboitiz failed to sign the Statement of Accountability
portion of the ECC.
We shall discuss the correctness ofthis ruling on both procedural and substantive grounds. Procedurally, we cannot
fault the DENR for protesting the manner by which the appellate court resolved the issue of the aforesaid lack of
signature. We agree with the DENR that this issue was not among those raised by the Casiño Group in its Petition
for Writ of Kalikasan.149 What is more, this was not one of the triable issues specificallyset during the preliminary
conference of this case.150
How then did the issue oflack of signature arise?
A review of the voluminous records indicates that the matterof the lack of signature was discussed, developed or
surfaced only inthe course of the hearings, specifically, on clarificatory questions from the appellate court, to wit:
J. LEAGOGO:
I would also show to you your ECC, that’s page 622 of the rollo. I am showing to you this Environmental Compliance
Certificate dated December 22, 2008 issued by Sec. Jose L. Atienza, Jr. of the DENR. This is your "Exhibit "18."
Would you like to go over this? Are you familiar with this document?
MS. MERCADO:
Yes, it[’]s my Annex "3," Your Honor.
J. LEAGOGO:
I would like to refer you to page 3 of the ECC dated December 22, 2008. Page 2 refers to the Environmental
Compliance Certificate, ECC Ref. No. 0804-011-4021. That’s page 2 of the letter dated December 22, 2008. And on
page 3, Dr. Julian Amador recommended approval and it was approved by Sec. Atienza. You see that on page 3?
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Okay. On the same page, page 3, there’s a Statement of Accountability.
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Luis, who is Luis Miguel Aboitiz?
MS. MERCADO:
During that time he was the authorized representative of RP Energy,
Your Honor.
J. LEAGOGO:
Now, who is the authorized representative of RP Energy?
MS. MERCADO:
It would be Mr. Aaron Domingo, I believe.
J. LEAGOGO:
Please tell the Court why this was not signed by Mr. Luis Miguel Aboitiz, the Statement of Accountability?
Because the Statement of Accountability says, "Mr. Luis Miguel Aboitiz, Director, representing Redondo Peninsula
Energy with office address located at 110 Legaspi Street, Legaspi Village, Makati City, takes full responsibility in
complying with all conditions in thisEnvironmental Compliance Certificate [ECC][.]" Will you tell this Court why this
was not signed?
MS. MERCADO:
It was signed, Your Honor, but this copy wasn’t signed. My apologies, I was the one who provided this, I believe, to
the lawyers. This copy was not signed because during….
J. LEAGOGO:
But this is your exhibit, this is yourExhibit "18" and this is not signed. Do you agree with me that your Exhibit "18" is
not signed by Mr. Aboitiz?
MS. MERCADO:
That’s correct, Your Honor.151
We find this line of questioning inadequate to apprise the parties that the lack of signature would be a key issue in
this case; as in fact it became decisive in the eventual invalidation of the ECC by the appellate court.
Concededly, a court has the power to suspend its rules of procedure in order to attain substantial justice so that it
has the discretion, in exceptional cases, to take into consideration matters not originally within the scope of the
issues raised in the pleadings or set during the preliminary conference, in order to prevent a miscarriage of justice.
In the case at bar, the importance of the signature cannot be seriously doubted because it goes into the consent and
commitment of the project proponent to comply with the conditions of the ECC, which is vital to the protection of the
right to a balanced and healthful ecology of those who may be affected by the project. Nonetheless, the power of a
court tosuspend its rules of procedure in exceptional cases does not license it to foist a surprise on the parties in a
given case. To illustrate, in oral arguments before this Court, involving sufficiently important public interest cases,
we note that individual members of the Court, from time to time, point out matters that may not have been
specifically covered by the advisory (the advisory delineates the issues to be argued and decided). However, a
directive is given to the concerned parties to discuss the aforesaid matters in their memoranda. Such a procedure
ensures that, at the very least, the parties are apprised that the Court has taken an interest in such matters and may
adjudicate the case on the basis thereof. Thus, the parties are given an opportunity to adequately argue the issue or
meet the issue head-on. We, therefore, find that the appellate court should have, at the very least, directed RP
Energy and the DENR to discuss and elaborate on the issue of lack of signature in the presentation of their
evidence and memoranda, beforemaking a definitive ruling that the lack thereof invalidated the ECC.This is in
keeping with the basic tenets of due process.
At any rate, we shall disregard the procedural defect and rule directly on whether the lack of signature invalidated
the ECC in the interest of substantial justice.
The laws governing the ECC, i.e., PresidentialDecree No. (PD) 1151 and PD 1586, do not specifically state that the
lack of signature in the Statement of Accountability has the effect of invalidating the ECC. Unlike in wills or
donations, where failure to comply withthe specific form prescribed by law leads to its nullity,152 the applicable laws
here are silentwith respect to the necessity of a signature in the Statement of Accountability and the effect of the
lack thereof. This is, of course, understandable because the Statement of Accountability is a mere off-shoot of the
rule-making powers of the DENR relative tothe implementation of PD 1151 and PD 1586. To determine, therefore,
the effect of the lack of signature, we must look atthe significance thereof under the Environmental Impact
Assessment (EIA) Rules of the DENR and the surrounding circumstances of this case.
To place this issue in its proper context, a helpful overview of the stages of the EIA process, taken from the Revised
Manual, is reproduced below:
Figure 1-3 Overview of Stages of the Philippine EIA Process153
1.0 SCREENING Screeningdetermines if a project is covered or not covered by the PEISS.154If

a project is covered, screening further determines what document type the
project should prepare to secure the needed approval, and what the rest of
the requirements are in terms of EMB office of application, endorsing and
decision authorities, duration of processing.
2.0 SCOPING Scopingis a Proponent-driven multi-sectoral formal process of determining
the focused Terms of Reference of the EIA Study. Scoping identifies the
most significant issues/impacts of a proposed project, and then, delimits the
extent of baseline information to those necessary to evaluate and mitigate
the impacts. The need for and scope of an Environmental Risk Assessment
(ERA) is also done during the scoping session. Scoping is done with the
local community through Public Scoping and with a third party EIA Review
Committee (EIARC) through Technical Scoping, both with the participation
of the DENR-EMB. The process results in a signed Formal Scoping
Checklist by the review team, with final approval by the EMB Chief.
EIA STUDY and The EIA Studyinvolves a description of the proposed project and its
3.0 REPORT alternatives, characterization of the project environment, impact
PREPARATION identification and prediction, evaluation of impact significance, impact
mitigation, formulation of Environmental Management and Monitoring Plan,
withcorresponding cost estimates and institutional support commitment. The
study results are presented in an EIA Reportfor which an outline is
prescribed by EMB for every major document type
EIA REPORT Review of EIA Reportsnormally entails an EMB procedural screening for
4.0 REPORT compliance with minimum requirements specified during Scoping, followed
and by a substantive review of either composed third party experts
EVALUATION commissioned by EMB as the EIA Review Committee for PEIS/EIS-based
applications, or DENR/EMB internal specialists, the Technical Committee,
for IEE-based applications. EMB evaluates the EIARC recommendations
and the public’s inputs during public consultations/hearings in the process of
recommending a decision on the application. The EIARC Chair signs EIARC
recommendations including issues outside the mandate of the EMB. The
entire EIA review and evaluation process is summarized in the Review
Process Report (RPR) of the EMB, which includes a draft decision
document.
5.0 DECISION Decision Making involves evaluation of EIA recommendations and the draft
MAKING decision document, resulting to the issuance of an ECC, CNC or Denial
Letter. When approved, a covered project is issued its certificate of
Environmental Compliance Commitment (ECC) while an application of a
non-covered project is issued a Certificate of Non-Coverage (CNC).
Endorsing and deciding authorities are designated by AO 155 42, and
further detailed in this Manual for every report type. Moreover, the
Proponent signs a sworn statement of full responsibility on implementation
of its commitments prior to the release of the ECC. 156 The ECC is then
transmitted to concerned LGUs and other GAs for integration into their
decisionmaking process. The regulated part of EIA Review is limited to the
processes within EMB control. The timelines for the issuance of decision
documents provided for in AO 42 and DAO 2003-30 are applicable only
from the time the EIA Report is accepted for substantive review to the time a
decision is issued on the application.
MONITORING. Monitoring, Validation and Evaluation/Audit stage assesses performance of
6.0 the Proponent against the ECC and itscommitments in the Environmental
VALIDATION, Management and Monitoring Plans to ensure actual impacts of the project
and are adequately prevented or mitigated.
EVALUATION/
AUDIT
The signing of the Statement of Accountability takes placeat the Decision Making Stage. After a favorable review of
its ECC application, the project proponent, through its authorized representative, is made to sign a sworn statement
of full responsibility on the implementation ofits commitments prior to the official release of the ECC.
The definition of the ECC in the Revised Manual highlights the importance of the signing of the Statement of
Accountability:
Environmental Compliance Certificate (ECC) - a certificate of Environmental Compliance Commitment to which the
Proponent conforms with, after DENR-EMB explains the ECC conditions, by signing the sworn undertaking of full
responsibility over implementation of specified measures which are necessary to comply with existing environmental
regulations or to operate within best environmental practices that are not currently covered by existing laws. It is a
document issued by the DENR/EMB after a positive review of an ECC application, certifying that the Proponent has
complied with all the requirements of the EIS System and has committed to implement its approved Environmental
Management Plan. The ECC also provides guidance to other agencies and to LGUs on EIA findings and
recommendations, which need to be considered in their respective decision-making process.157 (Emphasis supplied)
As can be seen, the signing of the Statement of Accountabilityis an integral and significant component of the EIA
process and the ECC itself. The evident intention is to bind the project proponentto the ECC conditions, which will
ensure that the project will not cause significant negative environmental impacts by the "implementation of specified
measures which are necessary to comply with existing environmental regulations or tooperate within best
environmental practices that are not currently covered by existing laws." Indeed, the EIA process would be a
meaningless exercise if the project proponent shall not be strictly bound to faithfully comply withthe conditions
necessary toadequately protect the right of the people to a healthful and balanced ecology.
Contrary to RP Energy’s position, we, thus, find that the signature of the project proponent’s representative in the
Statement of Accountability is necessary for the validity of the ECC. It is not, as RP Energy would have it, a mere
formality and its absence a mere formal defect.
The question then is, was the absence of the signature of Mr. Aboitiz, as representative of RP Energy, in the
Statement of Accountability sufficient ground to invalidate the ECC?
Viewed within the particular circumstances of this case, we answer in the negative.
While it is clear that the signing of the Statement of Accountability is necessary for the validity ofthe ECC, we cannot
close oureyes to the particular circumstances of this case. So often have we ruled that this Court is not merely a
court of law but a court of justice. We find that there are several circumstances present in this case which militate
against the invalidation of the ECC on this ground.
We explain.
First, the reason for the lack of signature was not adequately taken into consideration by the appellate court. To
reiterate, the matter surfaced during the hearing of this case on clarificatory questions by the appellate court, viz:
J. LEAGOGO:
Please tell the Court why this was not signed by Mr. Luis Miguel Aboitiz, the Statement of Accountability?
Because the Statement of Accountability says, "Mr. Luis Miguel Aboitiz, Director, representing Redondo Peninsula
Energy with office address located at 110 Legaspi Street, Legaspi Village, Makati City, takes full responsibility in
complying with all conditions in this Environmental Compliance Certificate [ECC][.]" Will you tell this Court why this
was not signed?
MS. MERCADO:
It was signed, Your Honor, but this copy wasn’t signed. My apologies, I was the one who provided this, I believe, to
the lawyers. This copy was not signed because during…
J. LEAGOGO:
But this is your exhibit, this is yourExhibit "18" and this is not signed. Do you agree with me that your Exhibit "18" is
not signed by Mr. Aboitiz?
MS. MERCADO:
That’s correct, Your Honor.158 (Emphasis supplied)
Due to the inadequacy of the transcriptand the apparent lack of opportunity for the witness to explain the lack of
signature, we find that the witness’ testimony does not, by itself, indicate that there was a deliberate or malicious
intent not to sign the Statement of Accountability.
Second, as previously discussed, the concerned parties to this case, specifically, the DENR and RP Energy,
werenot properly apprised that the issue relative to the lack of signature would be decisive inthe determination of the
validity of the ECC. Consequently, the DENR and RPEnergy cannot be faulted for not presenting proof during the
course ofthe hearings to squarely tackle the issue of lack of signature.
Third, after the appellate court ruled in its January 30, 2013 Decision that the lack of signature invalidated the
ECC,RP Energy attached, to its Motion for Partial Reconsideration, a certified true copy of the ECC, issued by the
DENREMB, which bore the signature of Mr. Aboitiz. The certified true copy of the ECC showed that the Statement
of Accountability was signed by Mr. Aboitiz on December 24, 2008.159
The authenticity and veracity of this certified true copy of the ECC was not controverted by the Casiño Group in
itscomment on RP Energy’s motion for partial reconsideration before the appellate court nor in their petition before
this Court. Thus, in accordance with the presumption of regularity in the performance of official duties, it remains
uncontroverted that the ECC on file with the DENR contains the requisite signature of Mr. Aboitiz in the Statement of
Accountability portion.
As previously noted, the DENR and RPEnergy were not properly apprised that the issue relative to the lack
ofsignature would be decisive in the determination of the validity of the ECC. As a result, we cannot fault RP Energy
for submitting the certified true copy of the ECC only after it learned that the appellate court had invalidated the ECC
on the ground of lack ofsignature in its January 30, 2013 Decision.
We note, however, that, as previously discussed, the certified true copy of the Statement of Accountability was
signed by Mr. Aboitiz on December 24, 2008 or two days after the ECC’s official release on December 22, 2008.
The aforediscussed rules under the Revised Manual, however, state that the proponent shall sign the sworn
statement of full responsibility on implementation of its commitments priorto the release of the ECC. Itwould seem
that the ECC was first issued, then it was signed by Mr. Aboitiz, and thereafter, returned to the DENR to serve as its
file copy. Admittedly, there is lack of strict compliance with the rules although the signature ispresent. Be thatas it
may, we find nothing in the records to indicate that this was done with bad faith or inexcusable negligence because
of the inadequacy of the evidence and arguments presented, relative to the issue of lack of signature, in view of the
manner this issue arose in this case, as previously discussed. Absent such proof, we are not prepared to rule that
the procedure adopted by the DENR was done with bad faithor inexcusable negligence but we remind the DENR to
be more circumspect in following the rules it provided in the Revised Manual. Thus, we rule that the signature
requirement was substantially complied with pro hac vice.
Fourth, we partly agree with the DENRthat the subsequent letter-requests for amendments to the ECC, signed by
Mr. Aboitiz on behalf of RP Energy, indicate its implied conformity to the ECC conditions. In practical terms, if future
litigation should occur due to violations of the ECC conditions, RP Energy would be estopped from denying its
consent and commitment to the ECC conditions even if there was no signature in the Statement of Accountability.
However, we note that the Statement of Accountability precisely serves to obviate any doubt as to the consent and
commitment of the project proponent to the ECC conditions. At any rate, the aforesaid letter-requests do additionally
indicate RP Energy’s conformity to the ECC conditions and, thus, negate a pattern to maliciously evade
accountability for the ECC conditions or to intentionally create a "loophole" in the ECC to be exploited in a possible
futurelitigation over non-compliance with the ECC conditions.
In sum, we rule that the appellate court erred when it invalidated the ECC on the ground of lack of signature of Mr.
Aboitiz in the ECC’s Statement of Accountability relative to the copy of the ECC submitted by RP Energy to the
appellate court. While the signature is necessary for the validity of the ECC, the particular circumstances of this
case show that the DENR and RP Energy were not properly apprised of the issue of lack ofsignature in order for
them to present controverting evidence and arguments on this point, as the matter only developed during the course
of the proceedings upon clarificatory questions from the appellate court. Consequently, RP Energy cannot be faulted
for submitting the certified true copy of the ECC only after it learned that the ECC had been invalidated on the
ground of lack of signature in the January 30, 2013 Decision of the appellate court.
The certified true copy of the ECC, bearing the signature of Mr. Aboitiz in the Statement of Accountability portion,
was issued by the DENR-EMB and remains uncontroverted. Itshowed that the Statement of Accountability was
signed by Mr. Aboitiz on December 24, 2008. Although the signing was done two days after the official release of
the ECC on December 22, 2008, absent sufficient proof, we are not prepared to rule that the procedure adoptedby
the DENR was done with bad faith or inexcusable negligence. Thus, werule that the signature requirement was
substantially complied with pro hac vice.
III.
Whether the first and second amendments to the ECC are invalid for failure to undergo a new environmental impact
assessment (EIA) because of the utilization of inappropriate EIA documents.
Upholding the arguments of the Casiño Group, the appellate court ruled that the first and second amendments tothe
ECC were invalid because the ECC contained an express restriction that any expansion of the project beyond the
project description shall be the subject of a new EIA. It found that both amendments failed to comply with the
appropriate EIA documentary requirements under DAO 2003-30 and the Revised Manual. In particular, it found that
the Environmental Performance Report and Management Plan (EPRMP) and Project Description Report (PDR),
which RP Energy submitted tothe DENR, relative to the application for the first and second amendments,
respectively, were not the proper EIA document type. Hence, the appellate court ruled that the aforesaid
amendments were invalid.
Preliminarily, we must state that executive actions carry presumptive validity so that the burden of proof is on the
Casiño Group to show that the procedure adopted bythe DENR in granting the amendments to the ECC were done
with grave abuse of discretion. More so here because the administration of the EIA process involves special
technical skill or knowledge which the law has specifically vested in the DENR.
After our own examination of DAO 2003-30 and the Revised Manual as well as the voluminous EIA documents of
RP Energy appearing in the records of this case, we find that the appellate court made an erroneous interpretation
and application of the pertinent rules.
We explain.
As a backgrounder, PD 1151 set the Philippine Environment Policy. Notably, this law recognized the right ofthe
people to a healthful environment.160 Pursuant thereto, in every action, project or undertaking, which significantly
affects the quality of the environment, all agencies and instrumentalities of the national government, including
government-owned or -controlled corporations, as well as private corporations, firms, and entities were required to
prepare, file and include a statement (i.e., Environmental Impact Statement or EIS) containing:
(a) the environmental impact of the proposed action, project or undertaking;
(b) any adverse environmental effect which cannot be avoided should the proposal be implemented;
(c) alternative to the proposed action;

(d) a determination that the short-term uses of the resources of the environment are consistent with the
maintenance and enhancement of the longterm productivity of the same; and
(e) whenever a proposal involves the use of depletable or non-renewable resources, a finding must be made that
such use and commitment are warranted.161
To further strengthen and develop the EIS, PD1586 was promulgated, which established the Philippine
Environmental Impact Statement System (PEISS). The PEISS is "a systems-oriented and integrated approach to
the EIS system to ensure a rational balance between socio-economic development and environmental protection for
the benefit of present and future generations."162 The ECC requirement ismandated under Section 4 thereof:
SECTION 4. Presidential Proclamation ofEnvironmentally Critical Areas and Projects. The President of the
Philippines may, on his own initiative or upon recommendation of the National Environmental Protection Council, by
proclamation declare certain projects, undertakings or areas in the country as environmentally critical. No person,
partnership or corporation shall undertake or operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President or his dulyauthorized
representative. x x x (Emphasis supplied)
The PEISS consists of the Environmental Impact Assessment (EIA) process, which is mandatory for private orpublic
projects thatmay significantly affect the quality of the environment. It involves evaluating and predicting the likely
impacts of the project on the environment, designing appropriate preventive, mitigating and enhancement measures
addressing these consequences to protect the environment and the community’s welfare.163
PD 1586 was implemented by DAO 2003-30 which, in turn, set up a system or procedure to determine when a
project is required to secure an ECC and when it is not. When an ECC is not required, the project proponent
procures a Certificate of Non-Coverage (CNC).164 As part of the EIA process, the project proponent is required to
submit certain studies or reports (i.e., EIA document type) to the DENR-EMB, which willbe used in the review
process in assessing the environmental impact of the project and the adequacy of the corresponding environmental
management plan or program to address such environmental impact. This will then be part of the bases to grant or
deny the application for an ECC or CNC, as the case may be.
Table 1-4 of the Revised Manual summarizes the required EIA document type for each project category. It classifies
a project as belonging to group I, II, III, IV or V, where:
I- Environmentally Critical Projects (ECPs) in either Environmentally Critical Area (ECA) or Non-Environmentally
Critical Area (NECA),
II- Non-Environmentally Critical Projects (NECPs) in ECA,
III- NECPs in NECA,
IV- Co-located Projects, and
V- Unclassified Projects.
The aforesaid table then further classifies a project, as pertinent to this case, as belonging to category A,B or C,
where:
A- new;
B- existing projects for modification or re-start up; and
C- operating projects without an ECC.
Finally, the aforesaid table considers whether the project is single or co-located.165 After which, it states the
appropriateEIA document typeneeded for the application for an ECC or CNC, as the case may be.
The appropriate EIA document type vis-à-vis a particular project depends on the potential significant environmental
impact of the project. At the highest level would be an ECP, such as the subject project. The hierarchy of EIA
document type, based on comprehensiveness and detail of the study or report contained therein, insofar as single
projects are concerned, is as follows:
1. Environmental Impact Statement166 (EIS),
2. Initial Environmental Examination167 (IEE) Report,
3. Initial Environmental Examination168 (IEE) Checklist Report,
4. Environmental Performance Report and Management Plan169 (EPRMP), and
5. Project Description170 (PD) or Project Description Report (PDR).
Thus, in the course of RP Energy’s application for anECC, it was required by the DENR-EMB to submit an EIS
because the subject project is: an ECP, new and a single project.
The present controversy, however, revolves around, not an application for an ECC, but amendments thereto.
RP Energy requested the subject first amendment to its ECC due to its desire to modify the project design through
the inclusion of a barge wharf, seawater intake breakwater, subsea discharge pipeline, raw water collection system,
drainage channel improvement and a 230-kV double transmission line. The DENR-EMB determined that this was a
major amendment and, thus, required RP Energy to submit an EPRMP.
The Casiño Group argued, and the appellate court sustained, that an EPRMP is not the correct EIA document type
based on the definition of an EPRMP in DAO 2003-30 and the Revised Manual.
In DAO 2003-30, an EPRMP is defined as:
Environmental Performance Report and Management Plan (EPRMP) — documentation of the actual cumulative
environmental impacts and effectiveness of current measures for single projects that are already operating but
without ECC's, i.e., Category A-3. For Category B-3 projects, a checklist form of the EPRMP would
suffice;171(Emphasis supplied)
Further, the table in Section 5 of DAO 2003-30 states that an EPRMP is required for "A-2: Existing and to
beexpanded (including undertakings that have stopped operations for more than 5 years and plan to re-start with or
without expansion) and A-3: Operating without ECC."
On the other hand, the Revised Manual delineates when an EPRMP is the proper EIA document type, thus:
For operating projects with previous ECCs but planning or applying for clearance to modify/expand or re-start
operations, or for projects operating without an ECCbut applying to secure one to comply with PD 1586 regulations,
the appropriate document is not an EIS but an EIA Report incorporating the project’s environmental performance
and its current Environmental Management Plan. This report isx x x anx x x Environmental Performance Report and
Management Plan (EPRMP) for single project applications x x x172 (Emphasis supplied)
In its "Glossary," the Revised Manual defines an EPRMP as:
Environmental Performance Report and Management Plan (EPRMP) - documentation of the actual cumulative
environmental impacts and effectiveness of current measures for single projects that are already operating but
without ECCs.173 (Emphasis supplied)
Finally, Table 1-4, in the Revised Manual, states that an EPRMP is required for "Item I-B: Existing Projects for
Modification or Re-start up (subject to conditions in Annex 2-1c) and I-C: Operating without ECC."
From these definitions and tables, an EPRMP is, thus, the required EIA document type for an ECP-single project
which is:
1. Existing and to be expanded (including undertakings that have stopped operations for more than 5 years and plan
to re-start with or without expansion);
2. Operating but without ECCs;
3. Operating projects with previous ECCs but planning or applying for clearance to modify/expand orre-start
operations; and
4. Existing projects for modification or re-start up.
It may be observed that, based from the above, DAO2003-30 and the Revised Manual appear to use the terms
"operating"and "existing" interchangeably. In the case at bar, the subject project has not yet been constructed
although there have been horizontal clearing operations at the project site.
On its face, therefore, the theory of the Casiño Group, as sustained by the appellate court — that the EPRMP is not
the appropriate EIA document type— seems plausible because the subject project is not: (1) operating/existing with
a previous ECC but planning or applying for modification or expansion, or (2) operating but without an ECC. Instead,
the subject project is an unimplemented or a non-implemented, hence,non-operating project with a previous ECC
but planning for modification or expansion.
The error in the above theory lies in the failure to consider or trace the applicable provisions of DAO 2003-30 and
the Revised Manual on amendments to an ECC.
The proper starting point in determining the validity of the subject first amendment, specifically, the propriety of the
EIA document type (i.e., EPRMP) which RP Energy submitted in relation to its application for the aforesaid
amendment, must of necessity be the rules on amendments to an ECC.174 This is principally found in Section
8.3,Article II of DAO 2003-03, viz:
8.3 Amending an ECC
Requirements for processing ECC amendments shall depend on the nature of the request but shall be focused on
the information necessary to assess the environmental impact of such changes.
8.3.1. Requests for minor changes to ECCs such as extension of deadlines for submission of post-ECC
requirements shall be decided upon by the endorsing authority.
8.3.2. Requests for major changes to ECCs shall be decided upon by the deciding authority.
8.3.3. For ECCs issued pursuant to an IEE or IEE checklist, the processing of the amendment application shall not
exceed thirty (30) working days; and for ECCs issued pursuant to an EIS, the processing shall not exceed sixty (60)
working days. Provisions on automatic approval related to prescribed timeframes under AO 42 shall also apply for
the processing of applications to amend ECCs. (Emphasis supplied)
Implementing the afore-quoted section, the Revised Manual pertinently states in Section 2.2, paragraph 16:
16) Application Process for ECC Amendments
Figure 2-4 presents how Proponents may request for minor or major changes in their ECCs. Annex 2-1c provides a
decision chart for the determination of requirements for project modifications, particularly for delineating which
application scenarios will require EPRMP (which will be subject to Figure 2-1 process) or other support
documentations (which will be subject to Figure 2-4 process). Figure 2-4, in turn, provides:
Figure 2-4. Flowchart on Request for ECC Amendments175

Scenario 1: Request for Minor Scenario 2: Request for Major Amendments
Amendments
1. Expansion of project area w/in catchment
1. Typographical error described in EIA
2. Extension of deadlines for submission 2. Increase in production capacity or auxiliary

of post-ECC requirement/s component of the original project
3. Extension of ECC validity 3. Change/s in process flow or technology
4. Change in company name/ownership 4. Addition of new product
5. Decrease in land/project area or 5. Integration of ECCs for similar or dissimilar but

production capacity contiguous projects (NOTE: ITEM#5 IS
PROPONENT’S OPTION, NOT EMB’S)
6. Other amendments deemed
6. Revision/Reformatting of ECC Conditions
"minor" at the discretion of the
EMB CO/RO Director 7. Other amendments deemed "major" at the
discretion of the EMB CO/RO Director
1 [Start] 1[Start]
Within three (3) years from ECC issuance Within three (3) years from ECC issuance (for
(for projects not started)176 OR at any time projects not started)177 OR at any time during
during project implementation, the project implementation, the Proponent prepares
Proponent prepares and submits to the and submits to the ECC-endorsing DENR-EMB
ECC-endorsing DENR-EMB office a office a LETTER-REQUESTfor ECC amendments,
LETTER-REQUEST for ECC amendment, including data/information, reports or documents
including data/information, reports or to substantiate the requested revisions.
documents to substantiate the requested
revisions. 2
For projects that have started implementation,
EMB evaluates request based on Annex 2-1cfor
various scenarios of project modification.
Documentary requirements may range from a
Letter-Request to an EPRMP to the EMB CO/RO
2
while for those with Programmatic ECC, a
PEPRMP may need to be submitted to the EMB
CO to support the request. It is important to note
that for operating projects, the appropriate
document is not an EIS but an EIA Report
incorporating the project’s historical environmental
performance and its current EMP, subject to
specific documentary requirements detailed in
Annex 2-1cfor every modification scenario.
The ECC-endorsing EMB office assigns a For EPRMP/PEPRMP-based requests, EMB

Case Handler to evaluate the request forms a Technical/Review Committee to evaluate
the request. For other requests, a Case Handler
may solely undertake the evaluation. EMB CO and
RO will process P/EPRMP for PECC/ECC under
Groups I and II respectively. (Go to Figure 2-1)
3 4
ECC-endorsing Authority decides on the ECC-endorsing/issuing Authority (per Table 1-4)

Letter-Request, based on CH decides on Letter
recommendation Requests/EPRMP/PEPRMP/Other documents
based on EMB CH and/or Tech/Review
Committee recommendations.
Maximum Processing Time to Issuance of Max Processing Time to Issuance of Decision
Decision
EMB CO 7 workdays CO CO EPRMP RO RO
PEPRMP PEPRMP EPRMP
EMB RO 7 workdays 120 90 60 30
workdays workdays workdays workdays

Other document applications: max 30 workdays
(EMB CO and RO)
Noteworthy in the above, which is pertinent to the issue at hand, is that the amendment process squarely applies to
projects not started, such as the subject project, based on the phrase "[w]ithin three (3) years from ECC issuance
(for projects not started) x x x".
Annex 2-1c, in turn, provides a "Decision Chart for Determination of Requirements For Project Modification." We
reproduce below the first three columns of Annex 2-1c, as are pertinent to the issue at hand:
ANNEX 2-1c
DECISION CHART FOR DETERMINATION OF REQUIREMENTS FOR PROJECT MODIFICATION 178
Proposed Modifications Analysis of Proposed Resulting Decision

to the Current Project Modifications Document/Type of EIA Report
Required
Operational projects, or those
which have stopped for ≤5
years and plan to re-start
For Groups I and II EISbased
Projects with an ECC applying
for modification
1. Expansion of Since the modification will be ECC Amendment /Letter
land/project area w/in in an area already described Request with brief description
catchment or and evaluated in the original of activities in the additional
environment described EIA Report, incremental area
in the original EIA impacts from additional land
Report development will have been
addressed in the approved
EMP
2. Expansion of It is assumed the modification ECC Amendment
land/project area proposal may have significant /Environmental Performance
OUTSIDE catchment or potential impacts due to Report and Management Plan
environment described absence of prior assessment (EPRMP)
in the original EIA as to how the project may
Report affect the proposed expansion
area
3. Increase in capacity or Non-exceedance of PDR (non ECC Amendment /Letter
auxiliary component of covered project) threshold is Request with brief description
the original project assumed that impacts are not of additional capacity or
which will eithernot significant; component
entail exceedance of
PDR (non-covered Modification scenario and
project) thresholds or decision process are
EMP & ERA can still applicable to both
address impacts & risks nonimplemented and
arising from modification operating projects issued
ECCs
4. Increase in capacity or Exceedance of PDR (non- ECC Amendment
auxiliary component of covered) threshold is /Environmental Performance
the original project assumed that impacts may be Report and Management Plan
which will either exceed potentially significant, (EPRMP)
PDR (noncovered particularly if modification will
project) thresholds, or result to a next higher level of
EMP & ERA cannot threshold range
address impacts and
risks arising from Modification scenario and
modification decision process are
applicable to both
nonimplemented and
operating projects with or
without issued ECCs
5. Change/s in process EMP and ERA can still ECC Amendment /Letter
flow or technology address impacts & risks Request with brief process
arising from modification description
EMP and ERA cannot address ECC Amendment
impacts & risks arising from /Environmental Performance
modification Report and Management Plan
(EPRMP)
6. Additional component or Activity is directly lessening or ECC Amendment /Letter
products which will mitigating the project’s Request with consolidated
enhance the impacts on the environment. Project Description Report of
environment (e.g. due to However, to ensure there is new project component and
compliance to new no component in the integrated EMP
stringent requirements) modification which fall under
or lessen impacts on the covered project types, EMB
environment (e.g. thru will require disclosure of the
utilization of waste into description of the components
new products) and process with which the
new product will be
developed.
7. Downgrade project size No incremental adverse From ECC Amendment to
or area or other units of impacts; may result to lower Relief of ECC Commitments
measure of thresholds project threshold or may result (Conversion to CNC): /Letter-
limits to non-coverage Request only
8. Conversion to new Considered new application New ECC /EIS
project type (e.g. but with lesser data
bunker-fired plant to requirements since most
gas-fired) facilities are established;
environmental performance in
the past will serve as baseline;
However, for operating
projects, there may be need to
request for Relief from ECC
Commitment prior to applying
for new project type to ensure
no balance of environmental
accountabilities from the
current project
9. Integration of ECCs for No physical change in project ECC Amendment /Letter
similar or contiguous size/area; no change in Request with consolidated
projects process/technology but Project Description Report
improved management of and integrated EMP
(Note: Integration of continuous projects by having
ECCs is at the option of an integrated planning
the Proponent to document in the form or an
request/apply) integrated ECC (ECC
conditions will be harmonized
across projects; conditions
relating to requirements within
other agencies’ mandates will
be deleted)
10. Revision/ Reformatting No physical change on the ECC Amendment /Letter
of ECC Conditions project but ECC conditions Request only
relating to requirements within
other agencies’ mandates will
be deleted
We now apply these provisions to the case at bar.
To reiterate, the first amendment to the ECC was requested by RP Energy due to its planned change of project
design involving the inclusion of a barge wharf, seawater intake breakwater, subseadischarge pipeline, raw water
collection system, drainage channel improvement and a 230-kV double transmission line. The DENR-EMB
determined179 that the proposed modifications involved a major amendment because it will result in anincrease in
capacity or auxiliary component, as per Scenario 2,Item #2 of Figure 2-4:
Scenario 2: Request for Major Amendments
1. Expansion of project area w/in catchment described in EIA
2. Increase in production capacity or auxiliary component of the original project180
3. Change/s in process flow or technology
4. Addition of new product
5. Integration of ECCs for similar or dissimilar but contiguous projects (NOTE: ITEM#5 IS PROPONENT’S OPTION,
NOT EMB’S)
6. Revision/Reformatting of ECC Conditions

7. Other amendments deemed "major at the discretion of the EMB CO/RO Director
The Casiño Group does not controvert this finding by the DENR-EMB and we find the same reasonably supported
by the evidence on record considering that, among others, the construction of a 230-kVdouble transmission line
would result in major activities outside the project site which could have significant environmental impacts.
Consequently, the amendment was considered asfalling under Item#4 of Annex 2-1c, and, thus, the appropriate EIA
document typeis an EPRMP, viz:
4. Increase in capacity or Exceedance of PDR (non- ECC Amendment

auxiliary component of the covered) thresholds is /Environmental Performance
original project which will assumed that impacts may be Report and Management Plan
either exceed PDR (non- potentially significant, (EPRMP)182
covered project) particularly if modification will
thresholds, or EMP & ERA result to a next higher level of
cannot address impacts threshold range
and risks arising from
modification Modification scenario and
decision process are
applicable to both
nonimplemented and
operating projects with or
without issued ECCs181
Note that the Chart expressly states that, "[m]odification scenario and decision process are applicable to both non-
implementedand operating projects withor without ECCs."183 To recall, the subject project has not been constructed
and is not yet operational, although horizontal clearing activities have already been undertaken at the project site.
Thus, the subject project may be reasonably classified as a non-implemented project with an issued ECC, which
falls under Item#4 and, hence, an EPRMP is the appropriate EIA document type.
This lengthy explanation brings us toa simple conclusion. The definitions in DAO 2003-30 and the Revised Manual,
stating that the EPRMP is applicable to (1) operating/existing projectswith a previous ECC but planning or applying
for modification or expansion, or (2) operating projects but without an ECC, were not an exclusive list.
The afore-discussed provisions of Figure 2-4, in relation to Annex 2-1c, plainly show that the EPRMP can, likewise,
be used as an appropriate EIA document type for a single, non-implemented project applying for a major
amendment to its ECC, involving an increase in capacity or auxiliary component, which will exceed PDR (non-
covered project) thresholds, or result in the inability of the EMP and ERA to address the impacts and risks arising
from the modification, such as the subject project.
That the proposed modifications in the subject project fall under this class or type of amendment was a
determination made by the DENR-EMBand, absent a showing of grave abuse of discretion, the DENR-EMB’s
findings are entitled to great respect because it is the administrative agency with the special competence or
expertise to administer or implement the EIS System. The apparent confusion of the Casiño Group and the
appellate court is understandable. They had approached the issue with a legal training mindset or background. As a
general proposition, the definition of terms in a statute or rule is controlling as to its nature and scope within the
context of legal or judicial proceedings. Thus, since the procedure adopted by the DENR-EMB seemed to contradict
or go beyond the definition of terms in the relevant issuances, the Casiño Group and the appellate court concluded
that the procedure was infirm.
However, a holistic reading of DAO2003-30 and the Revised Manual will show that such a legalistic approach inits
interpretation and application is unwarranted. This is primarily because the EIA process is a system, not a set of
rigid rules and definitions. In the EIA process, there is much room for flexibility in the determination and use ofthe
appropriate EIA document type as the foregoing discussion has shown.184 To our mind, whatshould be controlling is
the guiding principle set in DAO 2003-30 in the evaluation of applications for amendments to ECCs, as stated in
Section 8.3 thereof: "[r]equirements for processing ECC amendments shall depend on the nature of the requestbut
shall be focused on theinformation necessary to assess the environmental impact of such changes."185
This brings us to the next logicalquestion, did the EPRMP provide the necessary information in order for the DENR-
EMB to assess the environmental impact of RP Energy’s request relative to the first amendment?
We answer in the affirmative.
In the first place, the Casiño Group never attempted to prove that the subject EPRMP, submitted by RP Energy to
the DENR-EMB, was insufficient for purposes of evaluating the environmental impact of the proposed modifications
to the original project design. There is no claim that the data submitted were falsified or misrepresented. Neither was
there an attempt to subpoena the review process documents of the DENR to establish thatthe grant of the
amendment to the ECC was done with grave abuse of discretion or to the grave prejudice of the right to a healthful
environment of those who will beaffected by the project. Instead, the Casiño Group relied solely on the definition of
terms in DAO 2003-30 and the Revised Manual, which approach, as previously discussed,was erroneous.
At any rate, we have examined the contents of the voluminous EPRMP submitted by RP Energy and wefind therein
substantial sections explaining the proposed changes as well as the adjustments that will be made in the
environmental management plan in order to address the potential environmental impacts of the proposed
modifications to the original project design. These are summarized in the "Project Fact Sheet"186 of the EPRMP and
extensively discussed in Section 4187 thereof. Absent any claim or proof to the contrary, we have no bases to
conclude that these data were insufficient to assess the environmental impact of the proposed modifications. In
accordance with the presumption of regularity in the performance of official duties, the DENR-EMB must be deemed
to have adequately assessed the environmental impact of the proposed changes, before granting the request under
the first amendment to the subject ECC.
In sum, the Revised Manual permits the use of an EPRMP, as the appropriate EIA document type, for major
amendments to an ECC, even for an unimplemented or non-implementedproject with a previous ECC, such as the
subject project. Consequently, we find that the procedure adopted by the DENR, in requiring RP Energy to submitan
EPRMP in order to undertake the environmental impact assessment of the planned modifications to the original
project design, relative to the first amendment to the ECC, suffers from no infirmity.
We apply the same framework of analysis in determining the propriety of a PDR, as the appropriate EIA document
type, relative to the second amendment to the subject ECC.
Again, the Casiño Group, as sustained by the appellate court, relied on the definitions of a PDR in DAO 2003-30
and the Revised Manual:
Project Description (PD) — document, which may also be a chapter in an EIS, that describes the nature,
configuration, use of raw materials and natural resources, production system, waste or pollution generation and
control and the activities of a proposed project. It includes a description of the use of human resources as well as
activity timelines, during the pre-construction, construction, operation and abandonment phases. It is tobe used for
reviewing co-located and single projects under Category C, aswell as for Category D projects.188
xxxx
a) For new projects: x x x For non-covered projects in Groups II and III, a x x x Project Description Report (PDR) is
the appropriate document to secure a decision from DENR/EMB. The PDR is a "must" requirement for
environmental enhancement and mitigation projects in both ECAs (Group II) and NECAs (Group III) to allow EMB to
confirm the benign nature of proposed operations for eventual issuance of a Certificate ofNon-Coverage (CNC). All
other Group III (non-covered) projects do not need to submit PDRs – application is at the option of the Proponent
should it need a CNC for its own purposes, e.g. financing pre-requisite. For Group V projects, a PDR is required to
ensure new processes/technologies or any new unlisted project does not pose harm to the environment. The Group
V PDR is a basis for either issuance of a CNC or classification of the project into its proper project group.
b) For operating projects with previous ECCs but planning or applying for clearance to modify/expand or re-start
operations, or for projects operating without an ECC but applying to secure oneto comply with PD 1586 regulations,
the appropriate document is not an EIS but an EIA Report incorporating the project’s environmental performance
and its current Environmental Management Plan. This report is either an (6) Environmental Performance Report and
Management Plan (EPRMP) for single project applications or a (7) Programmatic EPRMP (PEPRMP) for co-located
project applications. However, for small project modifications, an updating of the project description or the
Environmental Management Plan with the use of the proponent’s historical performance and monitoring records
may suffice.189
xxxx
Project Description (PD) - document, which may also be a chapter in an EIS, that describes the nature,
configuration, use of raw materials and natural resources, production system, waste or pollution generation and
control and the activities of a proposed project. It includes a description of the use of human resources as well as
activity timelines, during the pre-construction, construction, operation and abandonment phases.190
We will no longer delve intothe details of these definitions. Suffice it to state, similar to the discussion on the
EPRMP, that if we go by the strict limits of these definitions, the PDR relative to the subject second amendment
would not fall squarely under any of the above.
However, again, these are not the only provisions governing the PDR in the Revised Manual.
After the favorable grant of the first amendment, RP Energy applied for another amendment to its ECC, this time
inconsideration of its plan to change the configuration of the project from 2 x 150 MWto 1 x 300 MW. In practical
terms, this meant that the subject project will still produce 300 MW of electricity but will now make use of only one
boiler (instead of two) to achieve greater efficiency in the operations of the plant. The DENR-EMB determined191 this
amendment to be minor, under Scenario 1, Item#6 of Figure 2-4:
Scenario 1: Request for Minor
Amendments
1. Typographical error
2. Extension of deadlines for submission of post-ECC requirement/s
3. Extension of ECC validity
4. Change in company name/ownership
5. Decrease in land/project area or production capacity
6. Other amendments deemed "minor" at the discretion of the EMB CO/RO Director192
— because (1) there is no increase in capacity; (2) it does not constitute any significant impact; and (3) its EMP and
ERA as specified in the submitted EPRMP remain the same.193 Relative to Annex 2-1c, the requested amendment
was, in turn, determinedto fall under Item#3:
3. Increase in capacity or Non-exceedance of PDR (non ECC Amendment /Letter

auxiliary component of covered project) thresholds is Request with brief description
the original project which assumed that impacts are not of additional capacity or
will either not entail significant; component195
exceedance of PDR
(non-covered project) Modification scenario and
thresholds or EMP & decision process are
ERA can still address applicable to both non-
impacts & risks arising implemented and operating
from modification projects issued ECCs194
We make the same observation, as before, that the above applies to an unimplemented or non-implemented project
with a previous ECC, like the subject project. Although it may be noted thatthe proposed modification does not
squarely fall under Item#3, considering that, as previously mentioned,there will be no increase in capacity relative to
the second amendment, still, we find nothing objectionable to this classification by the DENR-EMB, for it seems
plain enough that this classification was used because the modification was deemed too minor to require a detailed
project study like an EIS or EPRMP. Since this is the classification most relevant and closely related to the intended
amendment, following the basic precept that the greater includes the lesser, the DENR-EMB reasonably exercised
its discretion in merely requiring a letter request with a brief description of the modification.
As earlier noted, the PDR is the EIA document type with the least detail, and, thus, applicable to such minor
modifications. Thus, the DENR-EMB cannot be faulted for requiring RPEnergy to submit a PDR relative to its
application for the second amendment. Consequently, as before, we findthat the Revised Manual supports the
procedure adopted by the DENR-EMB in requiring RP Energy to submit a PDR in order to assess the environmental
impact of the planned modifications relative to the second amendment.
In their Petition before this Court, the Casiño Group boldly asserts that "[t]here is nothing in the Project Description
Report that provides an environmental impact assessment of the effects of constructing and operating a single 300-
MW generating unit."196 However, to our dismay, as in their other serious allegations in their Petition for Writ
ofKalikasan, the same is, likewise, baseless. Apart from such a sweeping claim, the Casiño Group has provided no
evidence or argument to back up the same.
An examination of the PDR readily reveals that it contains the details of the proposed modifications197 and an
express finding that no significant environmental impact will be generated bysuch modifications, as in fact it is
expected that the operation of the power plant will become more efficient as a result of the change from 2 x 150 MW
to 1 x 300 MW configuration.198 Consequently, the PDR merely reiterates the same mitigating measures that will
presumably address the minor modifications to the project design. Again, no evidence was presented to show
substantial errors or misrepresentations in these data or their inadequacy for providing the bases for the DENR-
EMB to assess the environmental impact of the proposed modifications under the second amendment.
In fine, absent proof to the contrary, bearing in mind that allegations are not proof, we sustain the procedure
adoptedby the DENR-EMB in requiring RP Energy to submit a PDR and, on the basis thereof, approving the request
for the second amendment.
In another vein, we note that the appellate court proceeded from the erroneous premise that the EIA is a document,
when it repeatedly stated that the amendments to the ECC require a new EIA, and not merely an EPRMP or PDR.
The appellate court relied on the provisoin the ECC, which stated that "[a]ny expansion of the project beyond the
project description or any change in the activity or transfer of location shall besubject to a new Environmental Impact
Assessment."199
However, as correctly pointed out by the DENR and RP Energy, the EIA is not a document but a process:
Environmental Impact Assessment (EIA) — processthat involves evaluating and predicting the likely impacts of a
project (including cumulative impacts) on the environment during construction, commissioning, operation and
abandonment. It also includes designing appropriate preventive, mitigating and enhancement measures addressing
these consequences to protect the environment and the community's welfare.The process is undertaken by, among
others, the project proponent and/orEIA Consultant, EMB, a Review Committee, affected communities and other
stakeholders.200 (Emphasis supplied)
When the provisoin the ECC, therefore, states that a new EIA shall beconducted, this simply means that the project
proponent shall be required to submit such study or report, as warranted by the DENR Rules and circumstances,
which will sufficiently aid the DENR in making a new EIA and, thus, determine whether to grant the proposed
amendment (or project modification). Aswe have seen, consistent with DAO 2003-30 and the Revised Manual, the
DENR required RP Energy to submit an EPRMP and a PDR relative to the latter’s request involving the first and
second amendments, respectively, which led to the new EIA of the project in compliance with the provisoof the
ECC.
Verily, the various EIA documents, such as the EPRMP and PDR, are mere tools used by the DENR to assess the
environmental impact of a particular project. These documents are flexibly used by the DENR, as the circumstances
warrant, in order to adequately assess the impacts of a new project or modifications thereto. Being the
administrative agency entrusted with the determination of which EIA document type applies to a particular
application for an amendment to an ECC, falling as it does within its particular technical expertise, wemust accord
great respect to its determination, absent a showing of grave abuse of discretion or patent illegality.
In sum, we find that the appellate court erred when it ruled that the first and second amendments to the subject ECC
wereinvalid for failure to comply with a new EIA and for violating DAO 2003-30 and the Revised Manual. The
appellate court failed to properly consider the applicable provisions in DAO 2003-30 and the Revised Manual on
amendments to ECCs. Our examination of the provisions on amendments to ECCs, as well as the EPRMP and
PDR themselves, shows that the DENR reasonably exercised its discretion in requiring an EPRMP and a PDR for
the first and second amendments, respectively. Through these documents, which the DENR reviewed, a new EIA
was conducted relative to the proposed project modifications. Hence, absent sufficient showing of grave abuse of
discretion or patent illegality, relative to both the procedure and substance of the amendment process, we uphold
the validity of these amendments.
IV.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA Law, is a precondition to the issuance
of anECC and the lack of its prior issuance rendered the ECC invalid.
The appellate court ruled that the ECC issued in favor of RP Energy on December 22, 2008 is invalid because the
CNO covering the subject project was issued only on October 31, 2012 or almost fouryears from the timeof issuance
of the ECC. Thus, the ECC was issued in violation of Section 59 of the IPRA Law and its implementing rules which
require that a CNO be obtained prior to the issuance of a government agency of, among others, a license or permit.
In so ruling, the appellate court implicitly upheld the Casiño Group’s argument that the ECC is a form of government
license or permit pursuant to Section 4 of PD 1586 which requires all entities to securean ECC before (1) engaging
in an environmentally critical project or (2) implementing a project within an environmentally critical area.
The DENR and RP Energy, however, argue that an ECC is not the license or permit contemplated under Section 59
of the IPRA Law and its implementing rules as may be deduced from the definition, nature and scope of an ECC
under DAO 2003-03 and the Revised Manual. The DENR explains that the issuance of an ECC does not exempt the
project proponent from securing other permits and clearances as required under existing laws, including the CNO,
and that the final decision on whether a project will be implemented lies with the concerned local government unit/s
or the lead government agency which has sectoral mandate to promote the government programwhere the project
belongs.
We agree with the DENR and RP Energy.
Section 59, Chapter VIII of the IPRA Law provides:
SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly
enjoined from issuing, renewing, or granting any concession,license or lease, or entering into any production-
sharing agreement, without prior certification from the NCIP that the area affected does not overlap with any
ancestral domain.Such certification shall only be issued after a field-based investigation is conducted by the
Ancestral Domains Office of the area concerned: Provided, That no certification shall be issued by the NCIP without
the free and prior informed and written consent of ICCs/IPs concerned: Provided, further, That no department,
government agency or government-owned or -controlled corporation may issue new concession, license, lease, or
production sharing agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs
shall have the right to stop or suspend, in accordance with this Act, any project that has not satisfied the
requirement of this consultation process. (Emphasis supplied)
While Section 9, Part II, Rule VIII of National Commission on Indigenous Peoples (NCIP) Administrative Order No.
01-98201 states:
SECTION 9. Certification Precondition Prior to Issuance of any Permits or Licenses. —
a. Need for Certification. No department of government or other agencies shall issue, renew or grant
anyconcession, license, lease, permit, or enter into any production sharing agreement without a prior certification
from the NCIP that the area affected does not overlap any ancestral domain.
b. Procedure for Issuance ofCertification by NCIP.
1) The certification, above mentioned, shall be issued by the Ancestral Domain Office, only after a field based
investigation that such areas are not within any certified or claimed ancestral domains.
2) The certification shall be issued only upon the free, prior, informed and written consent of the ICCs/IPs who will
be affected by the operation of such concessions, licenses or leases or production-sharing agreements. A written
consent for the issuance of such certification shall be signed by at least a majority of the representatives of all the
households comprising the concerned ICCs/IPs. (Emphasis supplied)
As may be deduced from its subtitle, Section 59 requires as a precondition, relative to the issuance of any
concession, license, lease or agreement over natural resources, a certification issued by the NCIP that the area
subject thereof does not lie within any ancestral domain.202 This is in keeping with the State policy to protect the
rights of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral domains in order to
ensure their economic, social and cultural well-being as well as to recognize the applicability of customary laws
governing property rights or relations in determining the ownership and extent of such ancestral domain.203
The IPRA Law and its implementing rules do not define the terms "license" and "permit" so that resort to their plain
or ordinary meaning in relation to the intendment of the law is appropriate.
A "license" has been defined as "a governmental permission to perform a particular act (such as getting married),
conduct a particular business or occupation, operate machinery or vehicles after proving capacity and ability to do
so safely, or use property for a certain purpose"204 while a "permit" has been defined as "a license or other document
given by an authorized public official or agency (building inspector, department ofmotor vehicles) to allow a person
or business to perform certain acts."205
The evident intention of Section 59, in requiring the CNO prior to the issuance of a license or permit, is to prevent
the implementation of a project that may impair the right of ICCs/IPs to their ancestral domains. The law seeks to
ensure that a project willnot overlap with any ancestral domain prior to its implementation and thereby pre-empt any
potential encroachment of, and/or damage to the ancestral domains of ICCs/IPs without their prior and informed
consent.
With these considerationsin mind, we now look atthe definition, nature and scope of an ECC in order to determine if
it falls within the ambit of a "license" or "permit" to which the CNO requirement, under Section 59 of the IPRA Law
and its implementing rules, finds application. Section 4 of PD 1586 provides, in part:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. — The President of the
partnership or corporation shall undertake or operate any suchdeclared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President orhis duly authorized
representative.For the proper management of said critical project or area, the President may by his proclamation
reorganize such government offices, agencies, institutions, corporations or instrumentalities including the re-
alignment of government personnel, and their specific functionsand responsibilities. (Emphasis supplied)
While the above statutory provision reveals that the ECC is an indispensable requirement before (1) the conduct of
an environmentally critical project or (2) the implementation of a project inan environmentally critical area, it does not
follow that the ECC is the "license" or "permit" contemplated under Section 59 of the IPRA Law and its implementing
rules.
Section 3(d), Article I of DAO 2003-03 defines an ECC in this wise:
SECTION 3. Definition of Terms. —
For the purpose of this Order, the following definitions shall be applied:
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d. Environmental Compliance Certificate (ECC) — document issued by the DENR/EMB after a positive review of an
ECC application, certifying that based on the representations of the proponent, the proposed project or undertaking
will not cause significant negative environmental impact. The ECC also certifies that the proponent has complied
with all the requirements of the EIS System and has committed to implement its approved Environmental
Management Plan. The ECC contains specific measures and conditions that the project proponent has to undertake
beforeand during the operation of a project, and in some cases, during the project's abandonment phase to mitigate
identified environmental impacts.
In turn, Section 1.0, paragraphs 3 and 6 of the Revised Manual provide, in part:
3) Purpose of the EIA Process
As a basic principle, EIA is used to enhance planning and guide decisionmaking. In this Manual, EIA is primarily
presented in the context of a requirement to integrate environmental concerns in the planning process of projects at
the feasibility stage. Through the EIA Process, adverse environmental impacts of proposed actions are considerably
reduced through a reiterative review process of project siting, design and other alternatives, and the subsequent
formulation of environmental management and monitoring plans. A positive determination by the DENR-EMB results
to the issuance of an Environmental Compliance Commitment (ECC) document, to be conformed to by the
Proponent and represents the project’s Environmental Compliance Certificate. The release of the ECC allows the
project to proceed to the next stage of project planning, which is the acquisition of approvals from other government
agencies and LGUs, after which the project can start implementation.
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6) The EIA Process inRelation to Other Agencies’ Requirements It is inherent upon the EIA Process to undertake a
comprehensive and integrated approach in the review and evaluation of environment-related concerns of
government agencies (GAs), local government units (LGUs) and the general public. The subsequent EIA findings
shall provide guidance and recommendations to these entities as a basis for their decision making process.
a) An Inter-agency MOA on EIS Streamlining was entered into in 1992 by 29 government agencies wherein ECC of
covered projects was agreed to be a prerequisite of all other subsequent government approvals;
b) DENR Memo Circular No. 2007-08 issued on 13 July 2007 reiterates in effect the intent of the MOA and
reinforces the role of the ECC/CNC as a guidance document to other agencies and LGUs, as follows:
i) "No permits and/or clearances issued by other National Government Agencies and Local Government Units shall
be required in the processing of ECC or CNC applications.
ii) The findings and recommendations ofthe EIA shall be transmitted to relevant government agencies for them to
integrate in their decision making prior to the issuance of clearances, permits and licenses under their mandates.
iii) The issuance of an ECC or CNC for a project under the EIS System does not exempt the Proponent from
securing other government permits and clearances as required by other laws. The current practice of requiring
various permits, clearancesand licenses only constrains the EIA evaluation process and negates the purpose and
function of the EIA."
iv) Henceforth, all related previous instructions and other issuances shall be made consistent with the Circular.
c) "Permits, licenses and clearances" are inclusive of other national and local government approvals such as
endorsements, resolutions, certifications, plans and programs, which have to be cleared/approved or other
government documents required within the respective mandates and jurisdiction of these agencies/LGUs.
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f) The final decision whether a project will be implemented or not lies either with the LGUs who have spatial
jurisdiction over the project or with the lead government agency who has sectoral mandate to promote the
government program where the project belongs, e.g. DOE for energy projects; DENR-MGB for mining
projects.(Emphasis supplied)
As can be seen, the issuance of the ECC does not, by and of itself, authorize the implementation of the project.
Although it is indispensable before the covered project can be commenced, asper Section 4 of PD 1586,the
issuanceof the ECC does not, as of yet, result inthe implementation of the project. Rather, the ECC is intended to,
among others, provide guidance or act as a decision-making tool to other government agencies and LGUs which
have the final authority to grant licenses or permits, such as building permits or licenses to operate, that will
ultimately result in, or authorize the implementation of the project or the conduct of specific activities.
As a consequence, we find that the CNO requirement under Section 59 of the IPRA Law is not required to be
obtained prior to the issuance of an ECC. As previously discussed, Section 59 aims to forestall the implementation
of a project that may impair the right of ICCs/IPs totheir ancestral domains, by ensuring or verifying that a project will
not overlap with any ancestral domain prior to its implementation. However, because the issuance of an ECC does
not result in the implementation of the project, there is no necessity to secure a CNO prior to an ECC’s issuance as
the goal orpurpose, which Section 59 seeks to achieve, is, at the time of the issuance of an ECC, not yet applicable.
In sum, we find that the ECC is not the license or permit contemplated under Section 59 of the IPRA Law and its
implementing rules. Hence, there is no necessity to secure the CNO under Section 59 before an ECC may be
issued and the issuance of the subject ECC without first securing the aforesaid certification does not render it
invalid.
V.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA Law, is a precondition to the
consummation of the Lease and Development Agreement (LDA) between SBMA and RP Energy and the lack of its
prior issuance rendered the LDA invalid.
We now turn to the applicability of Section 59 of the IPRA Law to the LDA entered into between the SBMA and RP
Energy on June 8, 2010. Similar to the ECC, the LDA was entered into prior to the issuance ofthe CNO on October
31, 2012.
Before this Court, SBMA and RP Energy reiterate their arguments on why the CNO is no longer necessary in the
instant case, to wit:
1. Prior to entering into the LDA withRP Energy, SBMA entered into a lease agreement with HHIC206 -Philippines,
Inc. and a CNO was already issued therefor which, for all intents and purposes, is applicable to the area leased by
RP Energy being part of contiguous lots in Redondo Peninsula.
2. The site of the power plant project is very distant from the boundaries of the lone area at the Subic Bay Freeport
Zone covered by an Aeta Community’s Certificate of Ancestral Domain Title (CADT).
3. There was no indigenous community within the vicinity of the project area as stated in RP Energy’s EIS.
4. The land where the project is located was subsequently classified as industrial by the SBMA. 5. The
scoping/procedural screening checklist classified as "not relevant" the issue of indigenous people.
6. Ms. Mercado, who was part of the team which prepared the EIS, testified that she visited the project site ten or
more times and did not see any Aeta communities there.
7. Mr. Evangelista testified that the project site used to be a firing range of the U.S. Armed Forces which would
make it impossible to be a settlement area of indigenous communities.
8. Atty. Rodriguez stated that the project site is not covered by a CADT and that from the start of negotiations on the
LDA, the SBMA Ecology Center verified with the NCIP that there was no application for said area to be covered by a
CADT.
RP Energy further argues that, in any case, as a matter of prudence, it secured a CNO from the NCIP. On October
31, 2012, the NCIP issued the subject CNO over the project site, which should erase any doubt as to whether it
overlaps with an ancestral domain.
Upholding the arguments of the Casiño Group, the appellate court ruled that SBMA failed to comply with the CNO
requirement and, thus, the LDA entered into between SBMA and RP Energy is invalid. It rejected the reasons given
by SBMA and RP Energy, to wit:
1. RP Energy’s reliance on its own field investigation that no indigenous community was found within the vicinity is
unavailing because it was not the field investigation by the NCIP required by the IPRA Law.
2. RP Energy acknowledged that Aetas were among the earliest settlers in the municipality where the project will be
built. Hence, it was not clearly shown that in 2008, at the time the LDA was entered into, there were no
indigenouscommunities in the project site.
3. SBMA’s representation that the project site is industrial relies on a letter dated March 5, 2008 and the scoping
checklist, which are hearsay evidence.
4. The statements of Atty. Rodriguez have no probative value because he is not an officer of SBMA Ecology Center
oran officer of NCIP.
5. At the time the CNO was issued on October 31, 2012, and the field investigation relative thereto was conducted
by the NCIP, the project site no longer reflected the actual condition on December 22, 2008 when the LDA was
entered into because the households which occupied the site had already been relocated by then.
6. SBMA, prior to entering into a lease agreement with HHIC, secured a CNO, but oddly did not do the same with
respect to the lease agreement with RP Energy, considering that both leases cover lands located within the same
peninsula. RP Energy appears to have been accorded a different treatment.
7. The CNO issued in favor of HHIC cannot justify the lack of a CNO for the power plant project because the two
projects are situated in different locations: the HHIC project is located in Sitio Agusuhin,while the power plant project
is located in Sitio Naglatore.
While we agree with the appellate court that a CNO should have been secured prior to the consummation of the
LDA between SBMAand RP Energy, and not after, as was done here, we find that, under the particular
circumstances of this case, the subsequent and belated compliance withthe CNO requirement does not invalidate
the LDA.
For convenience, and as starting point of ouranalysis, we reproduce Section 59 of the IPRA Law below:
SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly
enjoined from issuing, renewing, or granting any concession, license or lease, or entering into any productionsharing
agreement, without prior certification from the NCIP that the area affected does not overlap with any ancestral
domain.Such certification shall only be issued after a field-based investigation is conducted by the Ancestral
Domains Office of the area concerned: Provided, That no certification shall be issued by the NCIP without the free
and prior informed and written consent of ICCs/IPs concerned: Provided, further, That no department, government
agency or government-owned or -controlled corporation may issue new concession, license, lease, or production
sharing agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have
the right to stop or suspend, in accordance with this Act, any project that has not satisfied the requirement of this
consultation process. (Emphasis supplied)
The law is clear but its actual operation or application should not be interpreted beyond the bounds of reason or
practicality.
We explain.
Indeed, a CNO is required prior to the grant of a lease by all government agencies, including the SBMA. Again, the
evident intention is to prevent the impairment of the right of ICCs/IPs to their ancestral domains. A lease, such as
the LDA under consideration, would result in, among others, granting RP Energy the right to the use and enjoyment
of the project site to the exclusion of third parties.207 As such, the lease could conceivably encroach on an ancestral
domain if the CNO is not first obtained.
However, implicit in the operation of Section 59 is the practical reality that the concerned government agency must
make a preliminary determinationon whether or not to obtain the required certification in the first place. To expound,
a government agency, which wishes to lease part of its property located near Padre Faura Street, Manila City could
not, and should not be reasonably expected to obtain the CNO, as it is obviously inapplicable to its planned lease. In
contrast, a government agency, which intends to lease a property in a valley or mountainous region, where
indigenous communities are known to reside, conduct hunting activities, perform rituals, or carry out some other
activities, should be reasonably expected to secure the CNO prior to consummating the planned lease with third
persons.
Even if the indigenous community does not actuallyreside on the proposed lease site, the government agency would
still be required to obtain the CNO preciselyto rule out the possibility that the proposed lease site encroaches upon
an ancestral domain. The reason for this is that an ancestral domain does not only cover the lands actually occupied
by an indigenous community, but all areas where they have a claim of ownership, through time immemorial use,
such as hunting, burial or worship grounds and to which they have traditional access for their subsistence and other
traditional activities.208
The wording of the law itself seems to presuppose that if the concession, lease, license or production-sharing
agreement is over natural resources, then the CNO should be first obtained. This is because the lastterm,
"production-sharing agreement," normally refers to natural resources. But the problem arises as to what should be
considered "natural resources"; for a vacant lot, nearPadre Faura Street, or a forest land, in Mt. Banahaw, could
both beconsidered as "natural resources," depending on the restrictive or expansive understanding of that term.
After due consideration, we find that the proper rule of action, for purposes of application of Section 59, is that all
government offices should undertake proper and reasonable diligence in making a preliminary determination on
whether to secure the CNO, bearing in mind the primordial State interest in protecting the rights of ICCs/IPs to their
ancestral domains. They should consider the nature and location of the areas involved; the historical background of
the aforesaid areas relative to the occupation, use or claim of ownership by ICCs/IPs; the present and actual
condition of the aforesaid areas likethe existence of ICCs/IPs within the area itself or within nearby territories; and
such other considerations that would help determine whether a CNO should be first obtained prior to granting a
concession, lease, license or permit, or entering into a production-sharing agreement.
If there are circumstances that indicate that a claim of ownership by ICCs/IPs may be present or a claim of
ownership may be asserted in the future, no matter how remote, the proper and prudent course ofaction is to obtain
the CNO. In case of doubt, the doubt should be resolved in favor of securing the CNO and, thus, the government
agency is under obligation tosecure the aforesaid certification in order to protect the interests and rights of ICCs/IPs
to their ancestral domains. This must be so if we are to accord the proper respect due to, and adequately safeguard
the interests and rights of, our brothers and sisters belonging to ICCs/IPs in consonance with the constitutional
policy209 to promote and protect the rights of ICCS/IPs as fleshed out in the IPRA Law and its implementing rules.
In the case at bar, we find, applying this rule of action, that the SBMA should have first secured a CNO before
entering into the LDA with RP Energy for the following reasons.
First, the Subic area is historicallyknown to be the home of our brothers and sisters belonging to the Aeta
communities. In particular, the EIS210 itself of RP Energy noted that Aeta communities originally occupiedthe
proposed project site of the power plant. Thus, even if we assume that, at the time of the ocular inspection of the
proposed project site in 2008, there were no Aeta communities seen thereat, as claimed by RP Energy, the exercise
of reasonable prudence should have moved SBMA and RP Energy to secure a CNO in order to rule out the
possibility that the project site may overlap with an ancestral domain. This is especially so, in view of the observation
previously made, that lack of actual occupation by an indigenous community ofthe area does not necessarily mean
that it is not a part of anancestral domain because the latter encompasses areas that are not actually occupied by
indigenouscommunities but are used for other purposes like hunting, worship or burial grounds.
Second, SBMA and RP Energy claim that the SBMA Ecology Center verified with the NCIP that the project site does
not overlap with an ancestral domain. However, the person, who allegedly did the verification, and the officer from
the NCIP, who was contacted in this alleged verification, were not presented in court. Assuming that this verification
did take place and that the SBMA Ecology Center determined that there is no pendingapplication for a CADT
covering the project site and that the presently recognized CADT of Aeta communities is too far away from the
project site, it still does not follow that the CNO under Section 59 should have been dispensed with. The acts of
individual members ofa government agency, who allegedly checked with the NCIP that the project site does not
overlap with an ancestral domain, cannot substitute for the CNO required by law. The reason is obvious. Such
posture would circumvent the noble and laudable purposes of the law in providing the CNO as the appropriate
mechanism in order to validly and officially determine whether a particular project site does not overlap with an
ancestral domain. It would open the doors to abuse because a government agency can easily claim that it checked
with the NCIP regarding any application for an ancestral domain over a proposed project site while stopping short of
securing a CNO. To reiterate, the legally mandated manner to verify if a project site overlaps with an ancestral
domain is the CNO,and not through personal verification by members of a government agency with the NCIP.
Third, that the project site was formerlyused as the firing range of the U.S. Armed Forces does not preclude the
possibility that a present orfuture claim of ancestral domain may be made over the aforesaid site. The concept of an
ancestral domain indicates that, even if the use ofan area was interrupted by the occupation of foreign forces, it may
still be validly claimed to be an ancestral domain.211
Fourth, that the project site was subsequently classified by the SBMA as forming part of an industrial zone does not
exempt it from the CNO requirement. The change in the classification of the land is not an exception to the CNO
requirement under the IPRA Law. Otherwise, government agencies can easily defeat the rights of ICCs/IPs through
the conversion of land use.
Fifth, SBMA argues that the CNO issued to HHIC should, for all intents and purposes, be applicable to RP Energy.
However, ascorrectly ruled by the appellate court, the CNO issued to HHIC’s shipyard cannot be extended to RP
Energy’s project site because they involve two different locations although found within the same land mass. The
CNO issued in favor of HHIC clearly states that the findings in the CNO are applicable only to the shipyard location
of HHIC. Last, the steps taken by SBMA, in securing a CNO prior to its lease agreement with HHIC, was the proper
and prudent course of action that should have been applied to the LDA with RP Energy. It does notmatter that HHIC
itself asked for the CNO prior to entering into a lease agreement with SBMA, as claimed by SBMA, while RP Energy
did not make such a request because, as we have discussed, SBMA had the obligation, given the surrounding
circumstances, to secure a CNO in order to rule out the possibility that the project site overlapped with an ancestral
domain.
All in all, we find, applying the foregoing rule of action,that SBMA should have secured a CNO before entering into
the LDA with RP Energy. Considering that Section 59 is a prohibitory statutory provision, a violation thereof would
ordinarily result in the nullification of the contract.212 However, we rule that the harsh consequences of such a ruling
should not be applied to the case at bar.
The reason is that this is the first time that we lay down the foregoing rule of action so much so that it would be
inequitable to retroactively apply its effects with respect to the LDA entered into between SBMA and RPEnergy. We
also note that, under the particular circumstances of this case, there is no showing that SBMA and RP Energy had a
deliberate or ill intent to escape, defeat or circumvent the mandate of Section 59 of the IPRA Law. On the contrary,
they appear to have believed in good faith, albeiterroneously, that a CNO was no longer needed because of the
afore-discussed defenses they raised herein. When the matter of lack of a CNO relative to the LDA was brought to
their attention, through the subject Petition for Writ ofKalikasan filed by the Casiño Group, RP Energy, with the
endorsement of SBMA, promptly undertook to secure the CNO, which was issued on October 31, 2012 and stated
that the project site does not overlap with any ancestral domain.213
Thus, absent proof to the contrary, weare not prepared to rule that SBMA and RP Energy acted inbad faith or with
inexcusable negligence, considering that the foregoing rule of action has not heretofore been laiddown by this Court.
As a result, we hold that the LDA should notbe invalidated due to equitable considerations present here.
By so ruling, we clarify that we reject RP Energy’s claim that the belated submission of the CNO is an "over
compliance" on its part. Quite the contrary, as we have discussed, the CNO should have been first secured given
the surrounding circumstances of this case.
In the same vein, we reject SBMA’s argument thatthe belated application for, and submission of the CNO cured
whatever defect the LDA had. We have purposely avoided a ruling to the effect that a CNO secured subsequent to
the concession, lease, license, permit or production-sharing agreement will cure the defect. Such a ruling would lead
to abuse of the CNO requirement since the defect can be cured anyway by a subsequent and belated application for
a CNO. Government agencies and third parties, either through deliberate intent or negligence, may view it as an
excuse not to timely and promptly secure the CNO, even when the circumstances warrant the application for a CNO
under the aforediscussed rule of action, tothe damage and prejudice of ICCs/IPs. Verily, once the concession,
lease, license or permit is issued, or the agreement is entered into without the requisite CNO, consequent damages
will have already occurred if it later turns out that the site overlaps with anancestral domain. This is so even if the
ICCs/IPs can have the project stopped upon discovery thatit overlapped with their ancestral domain under the last
proviso214 of Section 59. To prevent this evil, compliance with the CNO requirement should be followed through the
aforediscussed rule of action.
In sum, we rule that a CNO should have been secured prior to the consummation of the LDA between SBMA and
RP Energy. However, considering that this is the first time we lay down the rule of action appropriate to the
application of Section 59, we refrain from invalidating the LDA due to equitable considerations.
VI.
Whether compliance with Section 27, inrelation to Section 26, of the LGC (i.e., approval of the concerned
sanggunianrequirement) is necessary prior to the implementation of the power plant project.
Sustaining the arguments ofthe Casiño Group, the appellate court ruled that the subject project cannot
beconstructed and operated until after the prior approval of the concerned sanggunianrequirement, under Section
27 of the LGC, is complied with. Hence, the ECC and LDA could not be validly granted and entered into without first
complying with the aforesaid provision. It held that all the requisites for the application of the aforesaid provision are
present. As to the pertinent provisions of RA 7227 or "TheBases Conversion and Development Act of 1992," which
grants broad powers of administration to the SBMA over the Subic Special Economic Zone(SSEZ), the appellate
court ruled that RA 7227 contains a provision recognizing the basic autonomy ofthe LGUs which joined the SSEZ.
Thus, the LGC and RA 7227should be harmonized whereby the concerned sanggunian’spower to approve under
Section 27 must be respected.
The DENR impliedly agrees with the Casiño Group that compliance with Section 27 is still required but without
clearly elaborating its reasons therefor.
The SBMA and RP Energy, however, argue that the prior approval of the concerned sanggunianrequirement, under
Section 27, is inapplicable to the subject project because it is located within the SSEZ. The LGC and RA 7227
cannot be harmonized because of the clear mandate of the SBMA to govern and administer all investments and
businesses within the SSEZ. Hence, RA 7227 should be deemed as carving out an exception to the prior approval
of the concerned sanggunianrequirement insofar as the SSEZ is concerned.
We agree with the SBMA and RP Energy.
Preliminarily, we note that Sections 26 and 27 of the LGC contemplate two requirements: (1) prior consultations and
(2) prior approval of the concerned sanggunian,viz:
SECTION 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. — It shall be the
duty of every national agency or government-owned or -controlled corporation authorizing or involved in the
planning and implementation of any project or program that may cause pollution, climatic change, depletion of non-
renewable resources, loss of cropland, rangeland, or forest cover, and extinction of animal or plant species, to
consult with the local government units, non governmental organizations, and other sectors concerned and explain
the goals and objectives of the project or program, its impact upon the peopleand the community in terms of
environmental or ecological balance, and the measures that will be undertaken to prevent or minimize the adverse
effects thereof. (Emphasis supplied)
SECTION 27. Prior Consultations Required. — No project or program shall be implemented by government
authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval
of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be
implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the
provisions of the Constitution. (Emphasis supplied)
In the case at bar, the Casiño Group only questions the alleged lack of the prior approval of the concerned
sanggunians under Section 27 of the LGC. Thus, we shall limit our discussion to the resolution of this issue.
(Parenthetically, we note that prior consultations, as required by Section 26 of the LGC, appear to have been
complied with. This may begleaned from the EIS of RPEnergy which contains the documentation of the extensive
public consultations held, under the supervision of the DENR-EMB, relative to the subject project, as required by the
EIA process,215 as well as the socialacceptability policy consultations conducted by the SBMA, which generated the
document entitled "Final Report: Social Acceptability Process for RP Energy, Inc.’s 600-MW Coal Plant Project," as
noted and discussed in an earlier subsection.216)
We also note that the Casiño Group argues that the approval of the concerned sanggunian requirement was
necessary prior to the issuance of the ECC and the consummation of the LDA; the absence of which invalidated the
ECC and LDA.
We shall no longer discuss at length whether the approval of the concerned sanggunian requirement must be
complied with prior to the issuance of an ECC. As discussed in an earlier subsection, the issuance of an ECC does
not, by itself, result in the implementation of the project. Hence, the purpose or goal of Sections 26 and 27 of the
LGC,like Section 59 of the IPRA Law, does not yet obtain and, thus, the ECC may be issued evenwithout prior
compliance with Sections 26 and 27 of the LGC.
We, thus, limit the discussion as to whether the approval of the concerned sanggunian requirement should have
been complied with prior to the consummation of the LDA, considering that the LDA is part of the implementation of
the subject project and already vests in RP Energy the right to the use and enjoyment of the project site, asin fact
horizontal clearing activities were already undertaken by RP Energy at the project site by virtue of the LDA.
The prior approval of the concerned sanggunian requirement is an attribute and implementation of the local
autonomy granted to, and enjoyed by LGUs under the Constitution.217 The LGU has the duty to protect its
constituents and interests in the implementation of the project. Hence, the approval of the concerned sanggunian is
required by law to ensure thatlocal communities partake in the fruits of their own backyard.218
For Section 27, in relation to Section 26, to apply, the following requisites must concur: (1) the planning and
implementation of the project or program is vested in a national agency or government-owned and-controlled
corporation, i.e., national programs and/or projects which are to be implemented in a particular local community; and
(2) the project or program may cause pollution, climatic change, depletion of non-renewable resources, loss of
cropland, rangeland, or forest cover, extinction of animal or plant species, or call for the eviction of a particular group
of people residing in the locality where the project will be implemented.219
In the case at bar, the two requisites are evidently present: (1) the planning and implementation of the subject
project involves the Department of Energy, DENR, and SBMA; and (2) the subject project may cause pollution,
climatic change, depletion of non-renewable resources, loss of cropland, rangeland, or forest cover, and extinction
of animal or plant species,or call for the eviction of a particular group of people residing in the locality where the
project will be implemented. Hence, Section 27 of the LGC should ordinarily apply.
It is not disputed that no approval was sought from the concerned sangguniansrelative to the subject project. Whatis
1a\^/phi1
more, the affected LGUs have expressed their strong oppositions to the project through various sanggunian
resolutions.220 However, it is also undisputed that the subject project is located within the SSEZ and, thus, under the
territorial jurisdiction of the SBMA pursuant to RA 7227.
Thus, we are tasked to determine the applicability of the prior approval of the concerned sanggunian requirement,
under Section 27 of the LGC, relative to a project within the territorial jurisdiction of the SBMA under RA 7227.
RA 7227 was passed on March 13, 1992 in the aftermath of the Mount Pinatubo eruption and the closure of the
Subic Naval Base ofthe U.S. Armed Forces. It sought to revivethe affected areas by creating and developing the
SSEZ into a "self-sustaining industrial, commercial, financial and investment center to generate employment
opportunities in and around the zone and to attract and promote productive foreign investments."221 The SSEZ
covered the City of Olangapo and Municipality of Subic in the Province ofZambales and the lands and its contiguous
extensions occupied by the former U.S. Naval Base, which traversed the territories of the Municipalities of Hermosa
and Morong in the Province of Bataan. Under Section 12 of RA 7227, the creation of the SSEZ was made subject to
the concurrence by resolution of the respective sanggunians of the City of Olongapo and the Municipalities of Subic,
Morong and Hermosa, viz:
SECTION 12. Subic Special Economic Zone. — Subject to the concurrence by resolution of the sangguniang
panlungsod of the City of Olongapo and the sangguniang bayanof the Municipalities of Subic, Morong and
Hermosa, there is hereby created a Special Economic and Free-port Zone consisting of the City of Olongapo and
the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous
extensions as embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines and
the United States of America as amended, and within the territorial jurisdiction of the Municipalities of Morong and
Hermosa, Province of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and
bounds shall be delineated in a proclamation to be issued by the President of the Philippines. Within thirty (30) days
after the approval of this Act, each local government unit shall submit its resolution of concurrence to join the Subic
Special Economic Zone to the office of the President. Thereafter, the President of the Philippines shall issue a
proclamation defining the metes and bounds of the Zone as provided herein.
Subsequently, the aforesaid sanggunians submitted their respective resolutions of concurrence and the President
issued Presidential Proclamation No. 532, Series of 1995, defining the metes and bounds of the SSEZ.
In Executive Secretary v. Southwing Heavy Industries, Inc.,222 we described the concept of SSEZ as a Freeport:
The Freeport was designed to ensurefree flow or movement of goods and capital within a portion of the Philippine
territory in order to attract investors to invest their capital in a business climate with the least governmental
intervention. The concept ofthis zone was explained by Senator Guingona in this wise:
Senator Guingona. Mr. President, the special economic zone is successful in many places, particularly Hong Kong,
which is a free port. The difference between a special economic zone and an industrial estate is simply expansive in
the sense that the commercial activities, including the establishment of banks, services, financial institutions, agro-
industrial activities, maybe agriculture to a certain extent.
This delineates the activities that would have the least of government intervention, and the running of the affairs of
the special economic zone would be run principally by the investors themselves, similar toa housing subdivision,
where the subdivision owners elect their representatives to run the affairs of the subdivision, toset the policies, to set
the guidelines.
We would like to see Subic area converted into a little Hong Kong, Mr. President, where there is a hub of free port
and free entry, free duties and activities to a maximum spur generation of investment and jobs.
While the investor is reluctant to come in the Philippines, as a rule, because of red tape and perceived delays, we
envision this special economic zone to be an area where there will be minimum government interference.
The initial outlay may not only come from the Government or the Authority as envisioned here, but from them
themselves, because they would be encouraged to invest not only for the land but also for the buildings and
factories. As long as they are convinced that in such an area they can do business and reap reasonable profits,
thenmany from other parts, both local and foreign, would invest, Mr. President.223 (Emphasis in the original)
To achieve the above-mentioned purposes, the law created SBMA to administer the SSEZ. In the process, SBMA
was granted broad and enormous powers as provided for under Section 13(b) of RA 7227:
Sec. 13. The Subic Bay Metropolitan Authority. –
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic Bay Metropolitan Authority, otherwise
knownas the Subic Authority, shall have the following powers and function: (1) To operate, administer, manage and
develop the ship repair and ship building facility, container port, oil storage and refueling facility and Cubi Air Base
within the Subic Special Economic and Free-port Zone as a free market in accordance with the policies set forth in
Section 12 of this Act;
(2) To accept any local or foreign investment, business or enterprise, subject only to such rules and regulations to
be promulgated by the Subic Authority in conformity with the policies of the Conversion Authority without prejudice
to the nationalization requirements provided for in the Constitution;
(3) To undertake and regulate the establishment, operation and maintenance of utilities, other services and
infrastructure in the Subic Special Economic Zone including shipping and related business, stevedoring and port
terminal services or concessions, incidental thereto and airport operations in coordination with the Civil Aeronautics
Board, and to fix just and reasonable rates, fares charges and other prices therefor;
(4) To construct, acquire, own, lease, operate and maintain on its own or through contract, franchise, license permits
bulk purchase from the private sector and build-operate transfer scheme or joint-venture the required utilities and
infrastructurein coordination with local government units and appropriate government agencies concerned and
inconformity with existing applicable laws therefor;
(5) To adopt, alter and use a corporate seal; to contract, lease, sell, dispose, acquire and own properties; to sue and
be sued in order to carry out its duties and functions as provided for in this Act and to exercise the power of eminent
domain for public use and public purpose;
(6) Within the limitation provided by law, to raise and/or borrow the necessary funds from local and international
financial institutions and to issue bonds, promissory notes and other securities for that purpose and to secure the
same by guarantee, pledge, mortgage deed of trust, or assignment of its properties held by the Subic Authority for
the purpose of financing its projects and programs within the framework and limitation of this Act;
(7) To operate directly or indirectly or license tourism related activities subject to priorities and standards set by the
Subic Authority including games and amusements, except horse racing, dog racing and casino gambling which shall
continue to be licensed by the Philippine Amusement and Gaming Corporation (PAGCOR) upon recommendation of
the Conversion Authority; to maintain and preserve the forested areas as a national park;
(8) To authorize the establishment ofappropriate educational and medical institutions;
(9) To protect, maintain and develop the virgin forests within the baselands, which will be proclaimed as a national
park and subject to a permanent total log ban, and for this purpose, the rules and regulations of the Department of
Environment and Natural Resources and other government agencies directly involved in the above functions shall
be implemented by the Subic Authority;
(10) To adopt and implement measures and standards for environmental pollution control of all areas within its
territory, including but not limited to all bodies of water and to enforce the same. For which purpose the Subic
Authority shall create an Ecology Center; and
(11) To exercise such powers as may be essential, necessary or incidental to the powers granted to it hereunder as
well as to carry out the policies and objectives of this Act. (Emphasis supplied) The Implementing Rules of RA 7227
further provide:
Sec. 11. Responsibilities of the SBMA. Other than the powers and functions prescribed in Section 10 of these Rules,
the SBMA shall have the following responsibilities:
(a) The SBMA shall exercise authority and jurisdiction over all economic activity within the SBF224
xxxx
(f) Consistent with the Constitution, the SBMA shall have the following powers to enforce the law and these Rules in
the SBF:
xxxx
(8) to issue, alter, modify, suspend or revoke for cause, any permit, certificate, license, visa or privilege allowed
under the Act or these Rules;
xxxx
(11) to promulgate such other rules, regulations and circulars as may be necessary, proper or incidental to carry out
the policies and objectives of the Act, these Rules, as well as the powers and duties of the SBMA thereunder.225
As can be seen, the SBMA was given broad administrative powers over the SSEZ and these necessarily include the
power to approve or disapprove the subject project, which is within its territorial jurisdiction. But, as previously
discussed, the LGC grants the concerned sangguniansthe power to approve and disapprove this same project. The
SBMA asserts that its approval of the project prevails over the apparent disapproval of the concerned sanggunians.
There is, therefore, a real clash between the powers granted under these two laws.
Which shall prevail?
Section 12 of RA 7227 provides:
Sec. 12. Subic Special Economic Zone. x x x
The abovementioned zone shall be subjected to the following policies:
(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions
of the Local Government Code, the Subic Special Economic Zone shall bedeveloped into a self-sustaining,
industrial, commercial, financial and investment center to generate employment opportunities in and around the
zone and to attract and promote productive foreign investments;
xxxx
(i) Except as herein provided, the local government units comprising the Subic Special Economic Zone shall retain
their basic autonomy and identity. The cities shall be governed by their respective charters and the municipalities
shall operate and function in accordance with Republic Act No. 7160, otherwise known as the Local Government
Code of 1991. (Emphasis supplied)
This section sets out the basic policies underlying the creation of the SSEZ. Indeed, as noted by the appellate court,
Section 12(i) expressly recognizes the basic autonomy and identity of the LGUscomprising the SSEZ. However, the
clause "[e]xcept as herein provided" unambiguously provides that the LGUs do not retain their basic autonomy and
identitywhen it comes to matters specified by the law as falling under the powers, functions and prerogatives of the
SBMA.
In the case at bar, we find that the power to approve or disapprove projects within the SSEZ is one such power over
which the SBMA’s authority prevails over the LGU’s autonomy. Hence, there isno need for the SBMA to secure the
approval of the concerned sangguniansprior to the implementation of the subject project.
This interpretation is based on the broad grant of powers to the SBMA over all administrative matters relating to the
SSEZ under Section 13 of RA 7227, as afore-discussed. Equally important, under Section 14, other than those
involving defense and security, the SBMA’s decision prevails in case of conflict between the SBMA and the LGUs in
all matters concerning the SSEZ, viz.:
Sec. 14. Relationship with the Conversion Authority and the Local Government Units.
(a) The provisions of existing laws, rules and regulations to the contrary notwithstanding, the Subic Authority shall
exercise administrative powers, rule-making and disbursement of funds over the Subic Special Economic Zonein
conformity with the oversight function of the Conversion Authority.
(b) In case of conflict between the Subic Authority and the local government units concerned on matters affecting
the Subic Special Economic Zone other than defense and security, the decision of the SubicAuthority shall prevail.
(Emphasis supplied)
Clearly, the subject project does not involve defense or security, but rather business and investment to further the
development of the SSEZ. Such is in line with the objective of RA 7227 to develop the SSEZ into a self-sustaining
industrial, commercial, financial and investment center. Hence, the decision of the SBMA would prevail over the
apparent objections of the concerned sanggunians of the LGUs.
Significantly, the legislative deliberations on RA 7227, likewise, support and confirm the foregoing interpretation. As
earlier noted, Section 13 b(4) of RA 7227 provides:
Sec. 13. The Subic Bay Metropolitan Authority. –
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic Bay Metropolitan Authority, otherwise
knownas the Subic Authority, shall have the following powers and function: x x x x
(4) To construct, acquire, own, lease, operate and maintain on its own or through contract, franchise, license permits
bulk purchase from the private sector and build-operate transfer scheme or joint-venture the required utilities and
infrastructure in coordination with local government units and appropriate government agencies concerned and in
conformity with existing applicable laws therefor;
In the Senate, during the period of amendments, when the provision which would eventually become the afore-
quoted Section 13 b(4) of RA 7227 was under consideration, the following exchanges took place:
Senator Laurel. Mr. President.
The President. Senator Laurel is recognized.
Senator Laurel. Relative to line 27 up to line 31 of page 16, regarding the provision to the effect that the Authoritywill
have the following functions: "to construct, acquire, own, etcetera," that is all right.
My motion is that we amend this particular line, starting from the word "structures", by deleting the words that follow
on line 31, which states: "in coordination with local government unitsand", and substitute the following in place of
those words: "SUBJECT TO THE APPROVAL OF THE SANGGUNIAN OF THE AFFECTED LOCAL
GOVERNMENT UNITS AND IN COORDINATION WITH."
So, this paragraph will read, as follows: "to construct, own, lease, operate, and maintain on its own or through
contract, franchise, license permits, bulk purchase from the private sector and build-operate-transfer scheme or joint
venture the required utilities and infrastructure SUBJECT TO THE APPROVAL OF THE SANGGUNIAN OF THE
AFFECTED LOCAL GOVERNMENT UNITS AND IN coordination with appropriate government agencies concerned
and in conformity with existing applicable laws therefor."
The President. What does the Sponsor say?
Senator Shahani. I believe this would cripple the Authority. I would like to remind our Colleagues that in the Board of
Directors, the representatives of the local government units that agree to join with the Subic Special Economic Zone
will be members of the Board so that they will have a say, Mr. President. But if we say "subject," that is a very strong
word. It really means that they will be the ones to determine the policy.
So, I am afraid that I cannot accept this amendment, Mr. President.
Senator Laurel. May I respond or react, Mr. President.

The President. Yes.
Senator Laurel. The Constitution is there,very categorical inthe promotion and encouragement of local autonomy,
and mandating Congress to enact the necessary Local Government Code with emphasis on local autonomy.
We have now Section 27 of the new Local Government Code which actually provides that for every projectin any
local government territory, the conformity or concurrence of the Sanggunian of every such local government unit
shall be secured in the form of resolution—the consent of the Sanggunian.
The President. Well, both sides have already been heard. There is the Laurel amendment that would make the
power of the Subic Bay Metropolitan Authority to construct, acquire, own, lease, operate and maintain on its own or
through contract, franchise, license, permits, bulk purchases from private sector, buildoperate-and-transfer scheme,
or joint venture, the required utilities and infrastructure, subject to approval by the appropriate Sanggunian of the
local government concerned.
This amendment to the amendment has been rejected by the Sponsor. So, we are voting now on this amendment.
As many as are in favor of the Laurel amendment, say Aye. (Few Senators: Aye.)
Those who are against the said amendment, say Nay. (Several Senators: Nay.)
Senator Laurel. Mr. President, may I ask for a nominal voting.
The President. A nominal voting should beupon the request of one-fifth of the Members of the House, but we can
accommodate the Gentleman by asking for a division of the House. Therefore, those in favor of the Laurel
amendment, please raise their right hands. (Few Senators raised their right hands.)
Senator Laurel. I was asking, Mr. President, for a nominal voting. The President. A nominal voting can be had only
upon motion ofone-fifth of the Members of the Body. Senator Laurel. That is correct, Mr. President. But this issuch
an important issue being presented to us, because this question is related to the other important issue, which is:
May an elected public official of a particular government unit, such as a town or municipality, participate as a
member of the Board of Directors of this particular zone.
The President. The ruling of the Chair stands. The division of the House is hereby directed.
As many as are infavor of the Laurel amendment, please raised (sic) their right hands. (Few Senators raised their
right hands.)
As many as are against the said amendment, please do likewise. (Several Senators raised their right hands.)
The amendment is lost.226 (Emphasis supplied)
Indubitably, the legislature rejected the attempts to engraft Section 27’s prior approval of the concerned sanggunian
requirement under the LGC into RA 7227. Hence, the clear intent was to do awaywith the approval requirement of
the concerned sangguniansrelative to the power ofthe SBMA to approve or disapprove a project within the SSEZ.
The power to create the SSEZ is expressly recognized in Section 117 of the LGC, viz.:
TITLE VIII.
Autonomous Special Economic Zones
SECTION 117. Establishment of Autonomous Special Economic Zones. — The establishment by law of
autonomous special economic zones in selected areas of the country shall be subject to concurrence by the local
government units included therein.
When the concerned sanggunians opted to join the SSEZ, they were, thus, fully aware that this would lead to some
diminution of their local autonomy in order to gain the benefits and privileges of being a part of the SSEZ.
Further, the point of Senator Shahani that the representation of the concerned LGUs in the Board of Directors will
compensate for the diminution of their local autonomy and allow them to be represented in the decision-making of
the SBMA is not lost on us. This is expressly provided for in Section 13(c) of RA 7227, viz:
SECTION 13. The Subic Bay Metropolitan Authority. —
xxxx
(c) Board of Directors. — The powers of the Subic Authority shall be vested in and exercised by a Board of
Directors, hereinafter referred to as the Board, which shall be composed of fifteen (15) members, to wit:
(1) Representatives of the local government units that concur to join the Subic Special Economic Zone;
(2) Two (2) representatives from the National Government;
(3) Five (5) representatives from the private sector coming from the present naval stations, public works center, ship
repair facility, naval supply depot and naval air station; and
(4) The remaining balance to complete the Board shall be composed of representatives from the business and
investment sectors. (Emphasis supplied)
SBMA’s undisputed claim is that, during the board meeting when the subject project was approved, exceptfor one,
all the representatives of the concerned LGUs were present and voted to approve the subject project.227 Verily, the
wisdom of the law creating the SSEZ; the wisdom of the choice of the concerned LGUs to join the SSEZ; and the
wisdom ofthe mechanism of representation of the concerned LGUs in the decision-making process of the SBMA are
matters outside the scope of the power of judicial review. We can only interpret and apply the law as we find it.
In sum, we find that the implementation of the project is not subject to the prior approval of the concerned
sanggunians, under Section 27 of the LGC, and the SBMA’s decision to approve the project prevails over the
apparent objections of the concerned sangguniansof the LGUs, by virtue ofthe clear provisions of RA 7227. Thus,
there was no infirmity when the LDA was entered into between SBMA and RP Energy despite the lack of approval of
the concerned sanggunians. VII.
Whether the validity of the third amendment to the ECC can be resolved by the Court.
The Casiño Group argues that the validity of the third amendment should have been resolved by the appellate court
because it is covered by the broad issues set during the preliminary conference.
RP Energy counters that this issue cannot be resolved because it was expressly excluded during the preliminary
conference.
The appellate court sustained the position of RP Energy and ruled that this issue was not included in the preliminary
conference so that it cannot be resolved without violating the right todue process of RP Energy.
We agree with the appellate court.
Indeed, the issue of the validity of the third amendment to the ECC was not part of the issues set during the
preliminary conference, as it appears at that time that the application for the third amendment was still ongoing. The
following clarificatory questions during the aforesaid conference confirm this, viz.:
J. LEAGOGO:
So what are you questioning in your Petition?

ATTY. RIDON:
We are questioning the validity of the amendment, Your Honor.
J. LEAGOGO:
Which amendment?
ATTY. RIDON:
From 2 x 150 to 1 x 300, Your Honor.
J. LEAGOGO:
Your Petition does not involve the 2 x 300 which is still pending with the DENR. Because you still have remedies
there, you can make your noise there, you can question it to your heart[’]s content because it is still pending
xxxx
J. LEAGOGO:
Atty. Ridon, I go back to my question. We’re not yet talking of the legal points here. I’m just talking of what are you
questioning. You are questioning the 1 x 300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because it was 2 x 150 and then 1 x 300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Up to that point?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because there is no amended ECC yet for the 2 x 300 or 600. That’s clear enough for all of us.
ATTY. RIDON:
Yes, Your Honor.228
Given the invocation of the right to due process by RP Energy, we must sustain the appellate court’s finding that the
issue as to the validity of the third amendment cannot be adjudicated in this case.
Refutation of the Partial Dissent.
Justice Leonen partially dissents from the foregoing disposition on the following grounds:
(a) Environmental cases, such asa petition for a writ of kalikasan, should not, in general,be litigated viaa
representative, citizen or class suit because of the danger of misrepresenting the interests— and thus, barring future
action due to res judicata— of those not actually present in the prosecution of the case, either because they do not
yet exist, like the unborn generations, or because the parties bringing suit do not accurately represent the interests
ofthe group they represent or the class to which they belong. As an exception, such representative, citizen or class
suit may be allowed subject to certain conditions; and
(b) The amendments to the ECC, granted by the DENR in favor of RP Energy, are void for failure to submit a new
EIS in support of the applications for these amendments to the subject ECC, and a petition for writ of kalikasanis not
the proper remedy to raise a defect inthe ECC.
We disagree.
A.
Justice Leonen’s proposition that environmental cases should not, in general, be litigated via a representative,
citizen or class suit is both novel and ground-breaking. However, it isinappropriate to resolve such an important
issue in this case, in view of the requisites for the exercise of our power of judicial review, because the matter was
not raised by the parties so that the issue was not squarely tackled and fully ventilated. The proposition will entail, as
Justice Leonen explains, an abandonment or, at least, a modification of our ruling in the landmark case of Oposa v.
Factoran.229 It will also require an amendment or a modification of Section 5 (on citizen suits), Rule 2 ofthe Rules of
Procedure for Environmental Cases. Hence, it is more appropriate to await a case where such issues and
arguments are properly raisedby the parties for the consideration of the Court.
B.
Justice Leonen reasons that the amendments to the subject ECC are void because the applications therefor were
unsupported by anEIS, as required by PD 1151 and PD 1586. The claim is made that an EIS is required by law,
even if the amendment to the ECC is minor, because an EIS is necessary to determine the environmental impact of
the proposed modifications to the original project design. The DENR rules, therefore, which permit the modification
of the original project design without the requisite EIS, are void for violating PD 1151 and PD 1586.
We disagree.
Indeed, Section 4 of PD 1151 sets out the basic policy of requiring an EIS in every action, project or undertaking that
significantly affects the quality of the environment, viz:
SECTION 4. Environmental Impact Statements. — Pursuant to the above enunciated policies and goals, all
agencies and instrumentalities of the national government, including government-owned or -controlled corporations,
as well as private corporations, firms and entities shall prepare, file and include in every action, projector
undertaking which significantly affects the quality of the environmenta detailed statement on —
(a) the environmental impact of the proposed action, project or undertaking;
(b) any adverse environmental effect which cannot be avoided should the proposal be implemented;
(c) alternative to the proposed action;
(d) a determination that the short-term uses of the resources of the environment are consistent with the
maintenance and enhancement of the long-term productivity of the same; and
(e) whenever a proposal involves the use of depletable or nonrenewable resources, a finding must be made that
such use and commitment are warranted.
Before an environmental impact statement is issued by a lead agency, all agencies having jurisdiction over, or
special expertise on, the subject matter involved shall comment on the draft environmental impact statement made
by the lead agency within thirty (30) days from receipt of the same. (Emphasis supplied)
As earlier stated, the EIS was subsequently developed and strengthened through PD 1586 which established the
Philippine Environmental Impact Statement System. Sections 4 and 5 of PD 1586 provide:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the
1avv phi 1
partnership or corporation shall undertake or operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President or his duly authorized
representative. For the proper management of said critical project or area, the President may by his proclamation
reorganize such government offices, agencies, institutions, corporations or instrumentalities including the re-
alignment of government personnel, and their specific functions and responsibilities.
For the same purpose as above, the Ministry of Human Settlements shall: (a) prepare the proper land or water use
pattern for said critical project(s) or area(s); (b) establish ambient environmental quality standards; (c) develop a
program of environmental enhancement or protective measures against calamituous factors such as earthquake,
floods, water erosion and others, and (d) perform such other functions as may be directed by the President from
time to time.
SECTION 5. Environmentally Non-Critical Projects. — All other projects, undertakings and areas not declared by the
President as environmentally critical shall be considered as non-critical and shall not be required to submit an
environmental impact statement. The National Environmental Protection Council, thru the Ministry of Human
Settlements may however require non-critical projects and undertakings to provide additional environmental
safeguards as it may deem necessary. (Emphasis supplied)
These laws were, in turn, implemented by DAO 2003-30 and the Revised Manual.
As correctly noted by Justice Leonen,Presidential Proclamation No. 2146 was subsequently issued which, among
others, classified fossil-fueled power plants as environmentally critical projects.
In conformity with the above-quoted laws and their implementing issuances, the subject project, a coal power plant,
was classified by the DENR as an environmentally critical project, new and single. Hence, RP Energy was required
to submit an EIS in support of its application for an ECC. RP Energy thereafter complied with the EIS requirement
and the DENR, after review, evaluation and compliance with the other steps provided in its rules, issued an ECC in
favor of RP Energy. As can be seen, the EIS requirement was duly complied with.
Anent Justice Leonen’s argument thatthe subsequent amendments to the ECC were void for failure to prepare and
submit a new EIS relative to these amendments, it is important to note thatPD 1586 does not state the procedure to
be followed when there is an application for an amendment to a previously issued ECC. There is nothing in PD 1586
which expressly requires an EIS for an amendment to an ECC.
In footnote 174 of the ponencia, it is stated:
Parenthetically, we must mention that the validity of the rules providing for amendments to the ECC was challenged
by the Casiño Group on the ground that it is ultra vires before the appellate court. It argued that the laws governing
the ECC do not expressly permit the amendment of an ECC. However, the appellate court correctly ruled that the
validity of the rules cannot be collaterally attacked. Besides,the power of the DENR to issue rules on amendments of
an ECC is sanctioned under the doctrine of necessary implication. Considering that the greater power todeny or
grant an ECC is vested by law in the President or his authorized representative, the DENR, there is no obstacle to
the exercise of the lesser or implied power to amend the ECC for justifiable reasons. This issue was no longer
raised before this Court and, thus, we no longertackle the same here.
Because PD 1586 did not expressly provide the procedure to be followed in case of an application for an
amendment toa previously issued ECC, the DENR exercised its discretion, pursuant to its delegated authority to
implement this law, in issuing DAO 2003-30 and the Revised Manual.
Justice Leonen’s argument effectively challenges the validity of the provisions in DAO 2003-30 and the Revised
Manual relative to amendments to an ECC for being contrary to PD 1151 and 1586.
We disagree.
First, to repeat, there is nothing in PD 1586 which expressly requires an EIS for an amendment to an ECC.
Second, as earlier noted, the proposition would constitute a collateral attack on the validity of DAO 2003-30 and the
Revised Manual, which is not allowed under the premises. The Casiño Group itself has abandoned this claim before
this Court so that the issue is not properly before this Court for its resolution.
Third, assuming that a collateral attack on the validity of DAO 2003-30 and the Revised Manual can be allowed in
this case, the rules on amendments appear to be reasonable, absent a showing of grave abuse of discretion or
patent illegality.
Essentially, the rules take into consideration the nature of the amendment in determining the proper Environmental
Impact Assessment (EIA) document type that the project proponent will submit in support of its application for an
amendment to its previously issued ECC. A minor amendment will require a less detailed EIA document type, like a
Project Description Report (PDR), while a major amendment will require a more detailed EIA document type, like an
Environmental Performance Report and Management Plan (EPRMP) or even an EIS.230
The rules appear to be based on the premise that it would be unduly burden some or impractical to require a project
proponent to submit a detailed EIA document type, like an EIS, for amendments that, upon preliminary evaluation by
the DENR, will not cause significant environmental impact. In particular, as applied to the subject project, the DENR
effectively determined that it is impractical to requireRP Energy to, in a manner of speaking, start from scratch by
submitting a new EIS in support of its application for the first amendment to its previously issued ECC, considering
that the existing EIS may be supplemented by an EPRMP to adequately evaluate the environmental impact of the
proposed modifications under the first amendment. The same reasoning may be applied to the PDR relative to the
second amendment. As previously discussed, the Casiño Group failed to provethat the EPRMP and PDR were
inadequate to assess the environmental impact of the planned modifications under the first and second
amendments, respectively. On the contrary, the EPRMP and PDR appeared to contain the details of the planned
modifications and the corresponding adjustments to bemade in the environmental management plan or mitigating
measures inorder to address the potential impacts of these planned modifications. Hence, absent sufficient proof,
there is no basis to conclude that the procedure adopted by the DENR was done with grave abuse of discretion.
Justice Leonen’s proposition would effectively impose a stringent requirement of an EIS for each and every
proposed amendment to an ECC, no matter how minor the amendment may be. While this requirement would seem
ideal, in order to ensure that the environmental impact of the proposed amendment is fully taken into consideration,
the pertinent laws do not, however, expressly require that such a procedure be followed.As already discussed, the
DENR appear to have reasonably issued DAO 2003-30 and the Revised Manualrelative to the amendment process
of an ECC, by balancing practicality vis-à-vis the need for sufficient information in determining the environmental
impact of the proposed amendment to an ECC. In fine, the Court cannot invalidate the rules which appear to be
reasonable, absent a showing of grave abuse of discretion or patent illegality.
We next tackle Justice Leonen’s argument that a petition for certiorari,and not a writ of kalikasan,is the proper
remedy to question a defect in an ECC.
In general, the proper procedure to question a defectin an ECC is to follow the appeal process provided in DAO
2003-30 and the Revised Manual. After complying with the proper administrative appeal process, recourse may be
made to the courts in accordance with the doctrine of exhaustion of administrative remedies. However, as earlier
discussed, in exceptional cases, a writ of kalikasan may be availed of to challenge defects in the ECC providedthat
(1) the defects are causally linked or reasonably connected to an environmental damage of the nature and
magnitudecontemplated under the Rules on Writ of Kalikasan, and (2) the case does not violate, or falls under an
exception to, the doctrine of exhaustion of administrative remedies and/or primary jurisdiction.
As previously discussed, in the case at bar, only the allegation with respect to the lack of an EIA relative to the first
and second amendments to the subject ECC may be reasonably connected to such an environmental damage.
Further, given the extreme urgency of resolving the issue due to the looming power crisis, this case may be
considered as falling under an exception to the doctrine of exhaustion of administrative remedies. Thus, the
aforesaid issue may be conceivably resolved in a writ of kalikasan case.
More importantly, we have expressly ruled that this case is an exceptional case due to the looming power crisis, so
that the rules of procedure may be suspended in order to address issues which, ordinarily, the Court would not
consider proper in a writ of kalikasan case. Hence, all issues, including those not proper in a writ of kalikasan case,
were resolved here in order to forestall another round of protracted litigation relative to the implementation of the
subject project.
Conclusion
We now summarize our findings:
1. The appellate court correctly ruled that the Casiño Group failed to substantiate its claims thatthe construction and
operation of the power plant will cause environmental damage of the magnitude contemplated under the writ of
kalikasan. On the other hand, RP Energy presented evidenceto establish that the subject project will not cause
grave environmental damage, through its Environmental Management Plan, which will ensure thatthe project will
operate within the limits of existing environmental laws and standards;
2. The appellate court erred when it invalidated the ECC on the ground of lack of signature of Mr. Aboitiz in the
ECC’s Statement of Accountability relative to the copy of the ECC submitted by RP Energy to the appellate court.
While the signature is necessary for the validity of the ECC, the particular circumstances of this case show that the
DENR and RP Energy were not properly apprised of the issue of lack of signature in order for them to present
controverting evidence and arguments on this point, as the issue only arose during the course of the proceedings
upon clarificatory questions from the appellate court. Consequently, RP Energy cannot be faulted for submitting the
certified true copy of the ECC only after it learned that the ECC had been invalidatedon the ground of lack of
signature in the January 30, 2013 Decision of the appellate court. The certified true copy of the ECC, bearing the
signature of Mr. Aboitiz in the Statement of Accountability portion, was issued by the DENR-EMB, and remains
uncontroverted. It showed that the Statement of Accountability was signed by Mr. Aboitiz on December 24, 2008.
Because the signing was done after the official release of the ECC on December 22, 2008, wenote that the DENR
did not strictly follow its rules, which require that the signing of the Statement of Accountability should be done
before the official release of the ECC. However, considering that the issue was not adequately argued norwas
evidence presented before the appellate court on the circumstances at the time of signing, there is insufficient basis
to conclude that the procedure adoptedby the DENR was tainted with bad faith or inexcusable negligence. We
remind the DENR, however, to be more circumspect in following its rules. Thus, we rule that the signature
requirement was substantially complied with pro hac vice.
3. The appellate court erred when it ruled that the first and second amendments to the ECC were invalid for failure
to comply with a new EIA and for violating DAO 2003-30 and the Revised Manual. It failed to properly consider the
applicable provisions in DAO 2003-30 and the Revised Manual for amendment to ECCs. Our own examination of
the provisions on amendments to ECCs in DAO 2003-30 and the Revised Manual, as wellas the EPRMP and PDR
themselves, shows that the DENR reasonably exercised its discretion in requiring an EPRMP and a PDR for the first
and second amendments, respectively. Through these documents, which the DENR reviewed, a new EIA was
conducted relative to the proposed project modifications. Hence, absent sufficient showing of grave abuse of
discretion or patent illegality, relative to both the procedure and substance of the amendment process, we uphold
the validity of these amendments;
4. The appellate court erred when it invalidated the ECC for failure to comply with Section 59 of the IPRA Law. The 1âwphi 1
ECC is not the license or permit contemplated under Section 59 of the IPRA Law and its implementing rules. Hence,
there is no necessity to secure the CNO under Section 59 before an ECC may be issued, and the issuance of the
subject ECC without first securing the aforesaid certification does not render it invalid;
5. The appellate court erred when it invalidated the LDA between SBMA and RP Energy for failure to comply
withSection 59 of the IPRA Law. While we find that a CNO should have been secured prior to the consummation of
the LDA between SBMA and RP Energy, considering that this is the first time we lay down the rule of action
appropriate to the application of Section 59, we refrain from invalidating the LDA for reasons of equity;
6. The appellate court erred when it ruled that compliance with Section 27, in relation to Section 26, of the LGC (i.e.,
approval of the concerned sanggunian requirement) is necessary prior to issuance of the subjectECC. The issuance
of an ECC does not, by itself, result inthe implementation of the project. Hence, there is no necessity to secure prior
compliance with the approval of the concerned sanggunian requirement, and the issuance of the subject ECC
without first complying with the aforesaid requirement does not render it invalid. The appellate court also erred when
it ruled that compliance with the aforesaid requirement is necessary prior to the consummation of the LDA. By virtue
of the clear provisions of RA 7227, the project is not subject to the aforesaid requirement and the SBMA’s decision
to approve the project prevails over the apparent objections of the concerned sanggunians. Thus, the LDA entered
into between SBMA and RP Energy suffers from no infirmity despite the lack of approval of the concerned
sanggunians; and
7. The appellate court correctly ruled thatthe issue as to the validity of the third amendment to the ECC cannot be
resolved in this case because it was not one of the issues set during the preliminary conference, and would, thus,
violate RP Energy’s right to due process. WHEREFORE, the Court resolves to:
1. DENY the Petition in G.R. No. 207282; and
2. GRANT the Petitions in G.R.Nos. 207257, 207366 and 207276:
2.1. The January 30, 2013 Decision and May 22, 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 00015
are reversed and set aside;
2.2. The Petition for Writ of Kalikasan, docketed as CA-G.R. SP No. 00015, is denied for insufficiency of evidence;
2.3. The validity of the December 22, 2008 Environmental Compliance Certificate, as well as the July 8, 2010 first
amendment and the May 26, 2011 second amendment thereto, issued by the Department of Environment and
Natural Resources in favor of Redondo Peninsula Energy, Inc., are upheld; and
2.4. The validity of the June 8, 2010 Lease and Development Agreement between Subic Bay Metropolitan Authority
and Redondo Peninsula Energy, Inc. is upheld.
SO ORDERED
SECOND DIVISION
G.R. No. 191060 February 2, 2015

vs.
TOMAS DIMACUHA, JR., EDGARALLEN ALVAREZ, ROD EL CABALLERO, LUIS EVANGELISTA, RICKY
BARRIAO, LITO GUALTER, TESS GUALTER, BOGS EVANGELISTA, alias THEO, alias NONONG, alias
JOHNY and JOHN DOES, Accused,
EDGAR ALLEN ALVAREZ and RODEL CABALLERO, Accused-Appellants.
RESOLUTION
DEL CASTILLO, J.:
Appellants Edgar Allen Alvarez (Alvarez) and Rodel Caballero (Caballero), together with the accused who remain
at-large, were charged with the crime of murder1 for the fatal shooting of Nicanor Morfe Agon (Agon).2 During the
arraignment, appellants entered separate pleas of not guilty.3 After trial, the Regional Trial Court (RTC) of Batangas
City, Branch 2, rendered a Decision4 dated May 11, 2007 finding the appellants guilty beyond reasonable doubt of
the crime charged, viz:
WHEREFORE, in view of all the foregoing, accused EDGAR ALLEN ALVAREZ and RODEL CABALLERO, are
hereby found guilty of the crime of Murder defined and penalized under Article 248 of the Revised Penal Code, with
the qualifying and/or aggravating circumstance of treachery and evident premeditation and both accused are hereby
sentenced to suffer the penalty of RECLUSION PERPETUA. Theyare further ordered to pay the heirs of Nicanor
Agon y Morpe jointly and severally the amount of ₱100,000.00 as civil liability and to pay the costs. Considering that
accused Tomas Dimacuha, Jr., Luis Evangelista, Ricky Barriao, Alias Joey, Alias Theo, Alias Nonong, Alias Johny
and John Does are still at large, let the charges against them be archived subject to revival upon their apprehension.
Let a copy of this decision be furnished the Secretary of Justice for his information of the procedural lapses in the
selection of George Vitan as prosecution witness and for his appropriate action.
SO ORDERED.5
Aggrieved, appellants appealed to the Court of Appeals (CA). In a Decision6 dated October 8, 2009, the CA affirmed
withmodifications the ruling of the RTC, viz:
WHEREFORE, the appeal is DENIED. The assailed decision is AFFIRMED insofar as the Accused-Appellants
Edgar Allen Alvarez and Rodel Caballero are found guilty beyond reasonable doubt of Murder and are penalized
with imprisonment of reclusion perpetua. However, the award of civil indemnity is REDUCED from One Hundred
Thousand Pesos (Php100,000.00) to Fifty Thousand Pesos (Php50,000.00). In addition, the Accused-Appellants are
ORDERED to pay, jointly and severally,the heirs of Nicanor Morfe Agon the amounts of Fifty Thousand Pesos
(Php50,000.00) as moral damages and Twenty Five Thousand Pesos (Php25,000.00) as exemplary damages.
Costs against the Accused-Appellants.
SO ORDERED.7
Hence, this appeal.
In a Resolution8 dated August 16, 2010, the Court directed the parties to file their respective supplemental briefs, if
they so desire. Both, however, opted to adopt the briefs they submitted before the CA as their supplemental briefs.9
Appellants insist that the evidencewas insufficient to warrant their conviction. First, the witnesses for the prosecution
did not testify on the material allegations stated in the complaint sheet and the sworn statements, thereby depriving
them of the opportunity to cross-examine said witnesses. Second, there was no proof that Agon and the person
referred to in the death certificate are one and the same. Third, the prosecution failed to present in court the murder
weapons, as well as the slugs. Fourth, there was no testimony proffered on the caliber of the gun used in shooting
Agon. And lastly, appellants maintainthat they were denied due process when the RTC ordered the discontinuance
of their presentation of additional witnesses.
The Court is not convinced.
The elements of the crime of murder are: (1) a person was killed; (2) the accused killed him orher; (3) the killing was
attended by any of the qualifying circumstances mentioned in Article 248 of the Revised Penal Code (RPC); and (4)
that the killing is not parricide or infanticide.10 These requisites have been established by the prosecution.
The gunman himself who testified for the prosecution, George Vitan (Vitan), testified that his group "Black Shark"
killed Agon. One of the responding policemen PO2 Arnold Abdon, for his part, testified that he went to the hospital
where Agon was taken and the latter was already dead when he arrived. Further, the Medico-Legal Officer, Dr.
Antonio S. Vertido, testified on the post-mortem examination he conducted upon Agon which showed that the latter
sustained six gunshot wounds, two of which were fatal. The element therefore that a person was killed is obtaining
in this case.
That appellants killed Agon was established through the prosecution witnesses composed of Vitan and two other
self-confessed former members of "Black Shark", Arnel Balocon and Romulo Gasta. Their testimonies pointed to
appellants as among those who planned and executed the killing of Agon.
The fatal shooting of Agon was attended by treachery, a qualifying circumstance listed under Article 248 and
notably, alleged in the Information. For treachery to be properly appreciated, two conditions must be present: (1) at
the time of the assault, the victim was not in a position to defend himself; and (2) the offender consciously adopted
the particular means, methods, or forms of attack employed by him.11 These conditions were present in the killing of
Agon. The assault upon Agon was deliberate, swift and sudden, denying him the opportunity to protect or
defendhimself. He was unarmed and unaware of the plot of appellants to kill him. Moreover, the means, method or
manner of execution of the attack was deliberately and consciously adopted by appellants, the same being in
accordance with their group’s plan to liquidate Agon. As aptly ruled by the RTC:
The prosecution evidence show that herein accused, together with their group deliberately executed their
aggression without any risk arising from their victim, who was caught unaware, helpless and defenseless. At the
time the group commenced their aggression, Nick Agon was entirely unsuspecting, as he was on board his
Mitsubishi Pajero traversing a narrow street leading to the highway. He (Agon) was surprised when Theo and
George Vitan suddenly approached from the right side of his vehicle and promptly fired at him successively. This
manner purposely adopted by the duo coupled with the help given by their comrades to ensure the commission of
the crime clearly constitutes treachery; x x x.12
Finally, the killing of Agon was neither parricide nor infanticide.
All the elements of the crime of murder being present in this case, the RTC and the CA thus correctly ruled in finding
appellants guilty of the said crime.
It must be noted as wellthat the evidence adduced by the prosecution is also sufficient to establish the presence of
the aggravating circumstance of evident premeditation, which has the following elements: (1) the time when the
offender determined to committhe crime; (2) an act manifestly indicating that the accused clung to his determination;
and (3) a sufficient lapse of time between determination and execution to allow himself time to reflect upon the
consequences of his act.13 Vitan testified that the plan to kill Agon was conceived a day before the victim was fatally
shot. Appellants and their cohorts therefore, had adequate time to reflect on the consequences of their
contemplated crime prior to its execution. The period of time when appellants planned tokill Agon and the time when
they implemented such plan afforded them the opportunity for meditation and reflection on the consequences of the
murder they committed.
The lower courts’ finding of conspiracy must also be sustained. There is conspiracy "when two or more persons
come to an agreement concerning the commission of a felony and decide to commit it. It arises on the very instant
the plotters agree, expressly or impliedly, to commit the felony and forthwith decide to pursue it."14 Here, the
evidence is sufficient to prove that appellants conspired to murder Agon. Vitan testified that onFebruary 21, 2004,
he, the accused and appellants agreed to murder Agon. In accordance with their plan, they proceeded the next day,
February 22, 2004, to the cockpit arena, a place which they knew that Agon would be at on that particular day. Upon
their arrival thereat, the members of the group which included appellants positioned themselves according to their
plan and waited for Agon to leave. Later on, Caballero signaled Vitan and the other alleged gunman, accused Theo
(Theo), that the target had left the arena and that his vehicle was already approaching their position. When Agon’s
vehicle came, Vitan and Theo fired at him. Vitan, Caballero, Alvarez, who acted as one of the back-ups, and the rest
of the group then fled the scene of the crime. Clearly, there was unity of action and purpose among the members of
"Black Shark," which include appellants in killing Agon. Conspiracy having been established, evidence as to who
delivered the fatal blow is no longer indispensable. Hence, it is immaterial if Caballero’s role was merely to signal
the gunmen and Alvarez’s, to act as back-up. Each of the offender is equally guilty of the criminal act since in
conspiracy the act of one is the act of all.15
Anent appellants’ claim of denial of due process since their presentation of additional witnesses was disallowed by
the RTC, the Court finds that the CA had already amply and correctly addressed this issue, thus:
x x x We find that the RTC had every reason to discontinue the presentation of evidence by the Accused-Appellants.
They sought postponements, to reiterate, not only once or twice, but on many instances. Considering that the RTC
and its entire staff had to travel outside the province of Batangas, and the fact that the Accused-Appellants intended
to present other witnesses, they should have therefore been more discerning in seeking the resetting of the trial
proceedings to avoid unreasonable delay.
As the RTC correctly held, the concept of speedy trial is available not only to the accused but also the State
because, while an accused does have rights, let it not be forgotten that the aggrieved also have the same rights.
Thus, the Accused-Appellants were not denied due process considering that they were able to testify on their own
behalf and thatit is within their power, which they miserably failed, to ensure that they are able to present their case
without delay16
In the same vein, appellants’ other arguments, i.e., that there was no testimony respecting the complaint sheet; that
the murder weapons and the slugs were not presented in evidence; and that the medico-legal officer who conducted
the post-mortem examination on Agon did not testify on the identity and caliber of the firearms used in the killing, do
not deserve credence. The non-presentation of such items and testimonies is not indispensable to the successful
prosecution of the appellants since they are not elements of the crime of murder.17
As to the alleged failure of the prosecution witnesses to testify on their sworn statements, suffice it to say that the
failure of the prosecution witnesses to reiterate the contents of their sworn statements during trial does not affect
their credibility and render the sworn statementsuseless and insignificant, as long as they are presented as
evidence in open court. The sworn statements and the open court declarations must be evaluated and examined
together to obtain a thorough determination of the merits of the case. The presentation of these sworn statements
during the trial and the attestation of the prosecution witnesses thereto render the same admissible in evidence.
Moreover, appellants’ contention that they were denied the opportunity to cross-examine the prosecution witnesses
on the contents of their sinumpaang salaysay(s) has no factual basis. The records reveal that they cross-examined
the witnesses after the prosecution’s direct examination.
It must be noted that in the face of the glaring evidence against them, appellants could only muster the defenses of
denial and alibi.As consistently ruled by the Court, denial and alibi are disfavored on account of the facility with
which they can be concocted to suit the defense of an accused. Being negative defenses, they must be
corroborated and substantiated by clear and convincing evidence; otherwise, they would merit no weight in law and
cannot be given greater value in evidence than the testimony of credible witnesses who testified on affirmative
matters.18 In this case, appellants failed to proffer corroborative evidence in spite of the opportunities providedto
them. Hence,their self-serving testimonies of denial and alibi cannot prevail over Vitan’s positive identification of
them as perpetrators of the crime. Indeed, their defenses do not deserve any weight in evidence.
Going now to the imposable penalty, the crime of murder is punished by reclusion perpetuato death. The RTC and
1âwphi 1
the CA were correct in ruling that the attendant circumstance of treachery qualified the killing to murder. However,
with the aggravating circumstance of evident premeditation also found to be present, the greater penalty of death is
the imposable penalty pursuant to Article 6319 of the RPC. Nevertheless, in lieu of death penalty, the imposition upon
appellants of the penalty of reclusion perpetuain this case is proper pursuant to Republic Act No. 9346.20 It must also
be added that appellants are not eligible for parole.21
With respect to damages, the amounts of civil indemnity, moral damages and exemplary damages awarded by the
CA must be µicreased to ₱100,000.00 each in line with prevailing jurisprudence.22 Moreover, temperate damages in
the amount of ₱25,000.00 must also be awarded in view of the absence of evidence of burial· and funeral expenses.
Lastly, interest of 6% per annum shall be imposed on all the awards of damages from the date of finality of this
judgment until fully paid.23
WHEREFORE, the October 8, 2009 Decision of the Court of Appeals in CA-GR. CR-H.C. No. 03048 affirming the
conviction by the Regional Trial Court of Batangas City, Branch 2 of appellants Edgar Allen Alvarez and Rodel
Caballero of the crime of murder for which they were sentenced to suffer the penalty of reclusion perpetua, is
AFFIRMED with MODIFICATIONS that (1) appellants are not eligible for parole; (2) the awards of civil indemnity,
moral damages and exemplary damages to the victim's heirs are each increased to ₱100,000.00; (3) appellants are
further ordered to pay the victim's heirs temperate damages in the amount of ₱25,000.00; and, (4) all damages
awarded shall earn interest at the rate of 6% per annum from date of finality of this judgment until fully paid .
SO ORDERED.
SECOND DIVISION
G.R. No. 200169 January 28, 2015

RODOLFO S. AGUILAR, Petitioner.
vs.
EDNA G. SIASAT, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the August 30, 2006 Decision2 and December 20, 2011
Resolution3 of the Court of Appeals (CA) in CA-G.R. CEB-CV No. 64229 affirming the August 17, 1999 Decision4 of
the Regional Trial Court (RTC) of Bacolod City, Branch 49 in Civil Case No. 96-9591 and denying petitioner's Motion
for Reconsideration.5
Factual Antecedents
Spouses Alfredo Aguilar and Candelaria Siasat-Aguilar (the Aguilar spouses) died, intestate and without debts, on
August 26, 1983 and February 8, 1994, respectively. Included in their estate are two parcels of land (herein subject
properties) covered by Transfer Certificates of Title Nos. T-25896 and T-(15462) 1070 of the Registries of Deeds of
Bago and Bacolod (the subject titles).6
In June 1996, petitioner Rodolfo S. Aguilar filed with the RTC of Bacolod City (Bacolod RTC) a civil case for
mandatory injunction with damages against respondent Edna G. Siasat. Docketed as Civil Case No. 96-9591 and
assigned to Branch 49 of the Bacolod RTC, the Complaint7 alleged that petitioner is the only son and sole surviving
heir of the Aguilar spouses; that he (petitioner) discovered that the subject titles were missing, and thus he
suspected that someone from the Siasat clan could have stolen the same; that he executed affidavits of loss of the
subject titles and filed the same with the Registries of Deeds of Bacolod and Bago; that on June 22, 1996, he filed
before the Bacolod RTC a Petition for the issuance of second owner’s copy of Certificate of Title No. T-25896,which
respondent opposed; and that during the hearing of the said Petition, respondent presented the two missing owner’s
duplicate copies of the subject titles. Petitioner thus prayed for mandatory injunctive relief, in that respondent be
ordered to surrender to him the owner’s duplicate copies of the subject titles in her possession; and that damages,
attorney’s fees, and costs of suit be awarded to him.
In her Answer,8 respondent claimed that petitioner is not the son and sole surviving heir of the Aguilar spouses, but
a mere stranger who was raised by the Aguilar spouses out of generosity and kindness of heart; that petitioner is not
a natural or adopted child of the Aguilar spouses; that since Alfredo Aguilar predeceased his wife, Candelaria
Siasat-Aguilar, the latter inherited the conjugal share of the former; that upon the death of Candelaria Siasat-Aguilar,
her brothers and sisters inherited her estate as she had no issue; and that the subject titles were not stolen, but
entrusted to her for safekeeping by Candelaria Siasat-Aguilar, who is her aunt. By way of counterclaim, respondent
prayed for an award of moral and exemplary damages, and attorney’s fees.
During trial, petitioner testified and affirmed his relationship to the Aguilar spouses as their son. To prove filiation, he
presented the following documents, among others:
1. His school records at the Don J.A. Araneta Elementary School, Purok No. 2, Bacolod-Murcia Milling Company
(BMMC), Bacolod City (Exhibit "C" and submarkings), wherein it is stated that Alfredo Aguilar is petitioner’s parent;
2. His Individual Income Tax Return (Exhibit "F"), which indicated that Candelaria Siasat-Aguilar is his mother;
3. Alfredo Aguilar’s Social Security System (SSS) Form E-1 dated October 10, 1957 (Exhibit "G"), a public
instrument subscribed and made under oath by Alfredo Aguilar during his employment with BMMC, which bears his
signature and thumb marks and indicates that petitioner, who was born on March 5, 1945, is his son and dependent;
4. Alfredo Aguilar’s Information Sheet of Employment with BMMC dated October 29, 1954 (Exhibit "L"), indicating
that petitioner is his son;
5. Petitioner’s Certificate of Marriage to Luz Abendan (Exhibit "M"), where it is declared that the Aguilar spouses are
his parents; and
6. Letter of the BMMC Secretary (Exhibit "O") addressed to a BMMC supervisor introducing petitioner as Alfredo
Aguilar’s son and recommending him for employment.
7. Certification dated January 27, 1996 issued by the Bacolod City Civil Registry to the effect that the record of births
during the period 1945 to 1946 were "all destroyed by nature," hence no true copies of the Certificate of Live Birth of
petitioner could be issued as requested (Exhibit "Q").9
Petitioner also offered the testimonies of his wife, Luz Marie Abendan-Aguilar (Abendan-Aguilar), and Ester Aguilar-
Pailano (Aguilar-Pailano), his aunt and sister of Alfredo Aguilar. Abendan-Aguilar confirmed petitioner’s identity, and
she testified that petitioner is the son of the Aguilar spouses and that during her marriage to petitioner, she lived with
the latter in the Aguilar spouses’ conjugal home built on one of the subject properties. On the other hand, 81-year
old Aguilar-Pailano testified that she is the sister of Alfredo Aguilar; that the Aguilar spouses have only one son –
herein petitioner – who was born at BMMC; that after the death of the Aguilar spouses, she and her siblings did not
claim ownership of the subject properties because they recognized petitioner as the Aguilar spouses’ sole child and
heir; that petitioner was charged with murder, convicted, imprisoned, and later on paroled; and that after he was
discharged on parole, petitioner continued to live with his mother Candelaria Siasat-Aguilar in one of the subject
properties, and continues to live there with his family.10
For her evidence, respondent testified among others that she is a retired teacher; that she does not know petitioner
very well, but only heard his name from her aunt Candelaria Siasat-Aguilar; that she is not related by consanguinity
or affinity to petitioner; that she attended to Candelaria Siasat-Aguilar while the latter was under medication in a
hospital until her death; that Candelaria Siasat-Aguilar’s hospital and funeral expenses were paid for by Nancy
Vingno; that Candelaria Siasat-Aguilar executed an affidavit to the effect that she had no issue and that she is the
sole heir to her husband Alfredo Aguilar’s estate; that she did not steal the subject titles, but that the same were
entrusted to her by Candelaria Siasat-Aguilar; that a prior planned sale of the subject properties did not push
through because when petitioner’s opinion thereto was solicited, he expressed disagreement as to the agreed
price.11
Respondent likewise offered the testimony of Aurea Siasat-Nicavera (Siasat-Nicavera), 74 years old, who stated
that the Aguilar spouses were married on June 22, 1933 in Miag-ao, Iloilo; that she is the sister of Candelaria
Siasat-Aguilar; that she does not know petitioner, although she admitted that she knew a certain "Rodolfo" whose
nickname was "Mait"; that petitioner is not the son of the Aguilar spouses; and that Alfredo Aguilar has a sister
named Ester Aguilar-Pailano.12
Respondent also offered an Affidavit previously executed by Candelaria Siasat-Aguilar (Exhibit "2")announcing
among others that she and Alfredo have no issue, and that she is the sole heir to Alfredo’s estate.
On August 17, 1999, the Bacolod RTC issued its Decision, decreeing as follows:
From the evidence thus adduced before this Court, no solid evidence attesting to the fact that plaintiff herein is
either a biological son or a legally adopted one was ever presented. Neither was a certificate of live birth of plaintiff
ever introduced confirming his biological relationship as a son to the deceased spouses Alfredo and Candelaria S.
Aguilar. As a matter of fact, in the affidavit of Candelaria S. Aguilar (Exhibit 2) she expressly announced under oath
that Alfredo and she have no issue and that she is the sole heir to the estate of Alfredo is (sic) concrete proof that
plaintiff herein was never a son by consanguinity nor a legally adopted one of the deceased spouses Alfredo and
Candelaria Aguilar.
This being the case, Petitioner is not deemed vested with sufficient interest in this action to be considered qualified
or entitled to the issuance of the writ of mandatory injunction and damages prayed for.
WHEREFORE, judgment is hereby rendered dismissing plaintiff’s complaint with cost.
The counterclaim of the defendant is likewise dismissed for lack of legal basis.
SO ORDERED.13
Petitioner filed an appeal with the CA.14 Docketed as CA-G.R. CEB-CV No. 64229, the appeal essentially argued
that petitioner is indeed the Aguilar spouses’ son; that under Article 172 of the Family Code,15 an admission of
legitimate filiation in a public document or a private handwritten instrument signed by the parent concerned
constitutes proof of filiation; that through the documentary evidence presented, petitioner has shown that he is the
legitimate biological son of the Aguilar spouses and the sole heir to their estate. He argued that he cannot present
his Certificate of Live Birth as all the records covering the period 1945-194616 of the Local Civil Registry of Bacolod
City were destroyed as shown by Exhibits "Q" to "Q-3"; for this reason, he presented the foregoing documentary
evidence to prove his relationship to the Aguilar spouses. Petitioner made particular reference to, among others,
Alfredo Aguilar’s SSS Form E-1 (Exhibit "G"), arguing that the same was made under oath and thus sufficient under
Article 172 of the Family Code to establish that he is a child and heir of the Aguilar spouses. Finally, petitioner
questioned the trial court’s reliance upon Candelaria Siasat-Aguilar’s affidavit (Exhibit "2") attesting that she and
Alfredo have no children and that she is the sole heir to the estate of Alfredo, when such piece of evidence has been
discarded by the trial court in a previous Order dated April 1, 1998, stating thus:
Except for defendant’s Exhibit "2", all other Exhibits, Exhibits "1", "3", "4" and "5", together with their submarkings,
are all admitted in evidence.17
On August 30, 2006, the CA issued the assailed Decision affirming the trial court’s August 17, 1999 Decision,
pronouncing thus:
The exhibits relied upon by plaintiff-appellant to establish his filiation with the deceased spouses Aguilar deserve
scant consideration by this Court. The Elementary School Permanent Record of plaintiff-appellant cannot be
considered as proof of filiation. As enunciated by the Supreme Court in the case of Reyes vs. Court of Appeals, 135
SCRA 439:
"Student record or other writing not signed by alleged father do not constitute evidence of filiation."
As regards the Income Tax Return of plaintiff-appellant filed with the Bureau of Internal Revenue, WE hold thatit
cannot be considered as evidence of filiation. As stated by the Supreme Court in the case of Labagala vs. Santiago,
371 SCRA 360:
"A baptismal certificate, a private document is not conclusive proof of filiation. More so are the entries made in an
income tax return, which only shows that income tax has been paid and the amount thereof."
With respect to the Certificate of Marriage x x x wherein it is shown that the parents of the former are Alfredo and
Candelaria Siasat Aguilar does not prove filiation. The Highest Tribunal declared that a marriage contract not signed
by the alleged father of bride is not competent evidence of filiation nor is a marriage contract recognition in a public
instrument.
The rest of the exhibits offered x x x, except the Social Security Form E-1 (Exhibit "G") and the Information Sheet of
Employment of Alfredo Aguilar (Exhibit "L"), allegedly tend to establish that plaintiff-appellant has been and is
presently known as Rodolfo Siasat Aguilar and he has been bearing the surname of his alleged parents.
WE cannot sustain plaintiff-appellant’s argument. Use of a family surname certainly does not establish pedigree.
Insofar as the SSS Form E-1 and Information Sheet of Employment of Alfredo Aguilar are concerned, WE cannot
accept them as sufficient proof to establish and prove the filiation of plaintiff-appellant to the deceased Aguilar
spouses. While the former is a public instrument and the latter bears the signature of Alfredo Aguilar, they do not
constitute clear and convincing evidence to show filiation based on open and continuous possession of the status of
a legitimate child. Filiation is a serious matter that must be resolved according to the requirements of the law. All
told, plaintiff-appellant’s evidence failed to hurdle the "high standard of proof" required for the success of an action
to establish one’s legitimate filiation when relying upon the provisions regarding open and continuous possession or
any other means allowed by the Rules of Court and special laws.
Having resolved that plaintiff-appellant is not an heir of the deceased spouses Aguilar, thereby negating his right to
demand the delivery of the subject TCTs in his favor, this Court cannot grant the writ of mandatory injunction being
prayed for.
xxxx
In the present case, plaintiff-appellant failed to show that he has a clear and unmistakable right that has been
violated. Neither had he shown permanent and urgent necessity for the issuance of the writ.
With respect to the damages prayed for, WE sustain the trial court in denying the same. Aside from the fact that
plaintiff-appellant failed to show his clear right over the subject parcels of land so that he has not sustained any
damage by reason of the withholding of the TCTs from him, there is no clear testimony on the anguish or anxiety he
allegedly suffered as a result thereof. Well entrenched in law and jurisprudence is the principle that the grant of
moral damages is expressly allowed by law in instances where proofs of the mental anguish, serious anxiety and
moral shock were shown.
ACCORDINGLY, in line with the foregoing disquisition, the appeal is hereby DENIED. The impugned Decision of the
trial court is AFFIRMED IN TOTO.
SO ORDERED.18
Petitioner filed a Motion for Reconsideration,19 but in a December 20, 2011 Resolution, the CA held its ground.
Issues
In an August 28, 2013 Resolution,20 this Court resolved to give due course to the Petition, which raises the following
issues:
In issuing the assailed DECISION affirming in toto the Decision of RTC Branch 49, Bacolod City, and the Resolution
denying petitioner’s Motion for Reconsideration, the Honorable Court of Appeals committed reversible error [in] not
taking into consideration petitioner’s Exhibit "G" (SSS E-1 acknowledged and notarized before a notary public,
executed by Alfredo Aguilar, recognizing the petitioner as his son) as public document that satisfies the requirement
of Article 172 of the [Family] Code in the establishment of the legitimate filiation of the petitioner with his father,
Alfredo Aguilar.
The herein [P]etition raises the issue of pure question of law with respect to the application of Article 172 of the
Family Code particularly [paragraph] 3 thereof in conjunction with Section 19 and Section 23, Rule 132 of the Rules
of Court relating to public document which is substantial enough to merit consideration of this Honorable Court as it
will enrich jurisprudence and forestall future litigation.21
In his Petition and Reply22 seeking to reverse and set aside the assailed CA dispositions and praying that judgment
be rendered ordering respondent to surrender the owner’s duplicates of Transfer Certificates of Title Nos. T-25896
and T-(15462) 1070, petitioner argues that Alfredo Aguilar’s SSS Form E-1 (Exhibit "G") satisfies the requirement for
proof of filiation and relationship to the Aguilar spouses under Article 172 of the Family Code. Petitioner contends
that said SSS Form E-1 is a declaration under oath by his father, Alfredo Aguilar, of his status as the latter’s son;
this recognition should be accorded more weight than the presumption of legitimacy, since Article 172 itself declares
that said evidence establishes legitimate filiation without need of court action. He adds that in contemplation of law,
recognition in a public instrument such as the SSS Form E-1 is the "highest form of recognition which partake (sic)
of the nature of a complete act of recognition bestowed upon" him as the son of the late Alfredo Aguilar; that
respondent has no personality to impugn his legitimacy and cannot collaterally attack his legitimacy; that the action
to impugn his legitimacy has already prescribed pursuant to Articles 170 and 171 of the Family Code;23 and that
having proved his filiation, mandatory injunction should issue, and an award of damages is in order.
In her Comment24 and Memorandum,25 respondent simply echoes the pronouncements of the CA, adding that the
Petition is a mere rehash of the CA appeal which has been passed upon succinctly by the appellate court.
Our Ruling
This Court, speaking in De Jesus v. Estate of Dizon,26 has held that –
The filiation of illegitimate children, like legitimate children, is established by (1) the record of birth appearing in the
civil register or a final judgment; or (2) an admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned. In the absence thereof, filiation shall be proved by (1)
the open and continuous possession of the status of a legitimate child; or (2) any other means allowed by the Rules
of Court and special laws. The due recognition of an illegitimate child in a record of birth, a will, a statement before a
court of record, or in any authentic writing is, in itself, a consummated act of acknowledgment of the child, and no
further court action is required. In fact, any authentic writing is treated not just a ground for compulsory recognition; it
is in itself a voluntary recognition that does not require a separate action for judicial approval. Where, instead, a
claim for recognition is predicated on other evidence merely tending to prove paternity, i.e., outside of a record of
birth, a will, a statement before a court of record or an authentic writing, judicial action within the applicable statute
of limitations is essential in order to establish the child’s acknowledgment.
A scrutiny of the records would show that petitioners were born during the marriage of their parents. The 1âwphi1
certificates of live birth would also identify Danilo de Jesus as being their father. There is perhaps no presumption of
the law more firmly established and founded on sounder morality and more convincing reason than the presumption
that children born in wedlock are legitimate. This presumption indeed becomes conclusive in the absence of proof
that there is physical impossibility of access between the spouses during the first 120 days of the 300 days which
immediately precedes the birth of the child due to (a) the physical incapacity of the husband to have sexual
intercourse with his wife; (b) the fact that the husband and wife are living separately in such a way that sexual
intercourse is not possible; or (c) serious illness of the husband, which absolutely prevents sexual intercourse. Quite
remarkably, upon the expiration of the periods set forth in Article 170, and in proper cases Article 171, of the Family
Code (which took effect on 03 August 1988), the action to impugn the legitimacy of a child would no longer be
legally feasible and the status conferred by the presumption becomes fixed and unassailable.27 (Emphasis supplied)
Thus, applying the foregoing pronouncement to the instant case, it must be concluded that petitioner – who was
born on March 5, 1945, or during the marriage of Alfredo Aguilar and Candelaria Siasat-Aguilar28 and before their
respective deaths29 – has sufficiently proved that he is the legitimate issue of the Aguilar spouses. As petitioner
correctly argues, Alfredo Aguilar’s SSS Form E-1 (Exhibit "G") satisfies the requirement for proof of filiation and
relationship to the Aguilar spouses under Article 172 of the Family Code; by itself, said document constitutes an
"admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent
concerned."
Petitioner has shown that he cannot produce his Certificate of Live Birth since all the records covering the period
1945-1946 of the Local Civil Registry of Bacolod City were destroyed, which necessitated the introduction of other
documentary evidence – particularly Alfredo Aguilar’s SSS Form E-1 (Exhibit "G") – to prove filiation. It was
erroneous for the CA to treat said document as mere proof of open and continuous possession of the status of a
legitimate child under the second paragraph of Article 172 of the Family Code; it is evidence of filiation under the
first paragraph thereof, the same being an express recognition in a public instrument.
To repeat what was stated in De Jesus, filiation may be proved by an admission of legitimate filiation in a public
document or a private handwritten instrument and signed by the parent concerned, and such due recognition in any
authentic writing is, in itself, a consummated act of acknowledgment of the child, and no further court action is
required. And, relative to said form of acknowledgment, the Court has further held that:
In view of the pronouncements herein made, the Court sees it fit to adopt the following rules respecting the
requirement of affixing the signature of the acknowledging parent in any private handwritten instrument wherein an
admission of filiation of a legitimate or illegitimate child is made:
1) Where the private handwritten instrument is the lone piece of evidence submitted to prove filiation, there should
be strict compliance with the requirement that the same must be signed by the acknowledging parent; and
2) Where the private handwritten instrument is accompanied by other relevant and competent evidence, it suffices
that the claim of filiation therein be shown to have been made and handwritten by the acknowledging parent as it is
merely corroborative of such other evidence. Our laws instruct that the welfare of the child shall be the "paramount
consideration" in resolving questions affecting him. Article 3(1) of the United Nations Convention on the Rights of a
Child of which the Philippines is a signatory is similarly emphatic:
Article 3
1. In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of
law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.
It is thus "(t)he policy of the Family Code to liberalize the rule on the investigation of the paternity and filiation of
children, especially of illegitimate children x x x." Too, "(t)he State as parens patriae affords special protection to
children from abuse, exploitation and other conditions prejudicial to their development."30 (Emphasis supplied)
This case should not have been so difficult for petitioner if only he obtained a copy of his Certificate of Live Birth
from the National Statistics Office (NSO), since the Bacolod City Civil Registry copy thereof was destroyed. He
would not have had to go through the trouble of presenting other documentary evidence; the NSO copy would have
sufficed. This fact is not lost on petitioner; the Certification dated January 27, 1996 issued by the Bacolod City Civil
Registry (Exhibit "Q") contained just such an advice for petitioner to proceed to the Office of the Civil Registrar
General at the NSO in Manila to secure a copy of his Certificate of Live Birth, since for every registered birth in the
country, a copy of the Certificate of Live Birth is submitted to said office.
As to petitioner's argument that respondent has no personality to impugn his legitimacy and cannot collaterally
attack his legitimacy, and that the action to impugn his legitimacy has already prescribed pursuant to Articles 170
and 171 of the Family Code, the Court has held before that -Article 26331 refers to an action to impugn the legitimacy
of a child, to assert and prove that a person is not a man's child by his wife. However, the present case is not one
impugning petitioner's legitimacy. Respondents are asserting not merely that petitioner is not a legitimate child of
Jose, but that she is not a child of Jose at all.32
Finally, if petitioner has shown that he is the legitimate issue of the Aguilar spouses, then he is as well heir to the
latter's estate. Respondent is then left with no right to inherit from her aunt Candelaria Siasat-Aguilar's. estate, since
succession pertains, in the first place, to the descending direct line.33
WHEREFORE, the Petition is GRANTED. The August 30, 2006 Decision and December 20, 2011 Resolution of the
Court of Appeals in CA-G.R. CEB-CV No. 64229, as well as the August 17, 1999 Decision of the Regional Trial
Court of Bacolod City, Branch 49 in Civil Case No. 96-9591 are REVERSED and SET ASIDE. Respondent Edna G.
Siasat is hereby ordered to SURRENDER to the petitioner Rodolfo S. Aguilar the owner's duplicates of Transfer
Certificates of Title Nos. T-25896 and T-(15462) 1070.
SO ORDERED.
SECOND DIVISION
G.R. No. 199648 January 28, 2015
FIRST OPTIMA REALTY CORPORATION, Petitioner,

vs.
SECURITRON SECURITY SERVICES, INC., Respondent.
DECISION
DEL CASTILLO, J.:

In a potential sale transaction, the prior payment of earnest money even before the property owner can agree to sell
his property is irregular, and cannot be used to bind the owner to the obligations of a seller under an otherwise
perfected contract of sale; to cite a well-worn cliche, the carriage cannot be placed before the horse. The property
owner-prospective seller may not be legally obliged to enter into a sale with a prospective buyer through the latter's
employment of questionable practices which prevent the owner from freely giving his consent to the transaction; this
constitutes a palpable transgression of the prospective seller's rights of ownership over his property, an anomaly
which the Court will certainly not condone.
This Petition for Review on Certiorari1 seeks to set aside: 1) the September 30, 2011 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 93715 affirming the February 16, 2009 Decision' of the Regional Trial Court (RTC)
of Pasay City, Branch 115 in Civil Case No. 06-0492 CFM; and 2) the CA’s December 9, 2011 Resolution4 denying
the herein petitioner’s Motion for Reconsideration5 of the assailed judgment.
Factual Antecedents
Petitioner First Optima Realty Corporation is a domestic corporation engaged in the real estate business. It is the
registered owner of a 256-square meter parcel of land with improvements located in Pasay City, covered by
Transfer Certificate of Title No. 125318 (the subject property).6 Respondent Securitron Security Services, Inc., on
the other hand, is a domestic corporation with offices located beside the subject property.
Looking to expand its business and add toits existing offices, respondent – through its General Manager, Antonio
Eleazar (Eleazar) – sent a December 9, 2004 Letter7 addressed to petitioner – through its Executive Vice-President,
Carolina T. Young (Young) – offering to purchase the subject property at ₱6,000.00 per square meter. A series of
telephone calls ensued, but only between Eleazar and Young’s secretary;8 Eleazar likewise personally negotiated
with a certain Maria Remoso (Remoso), who was an employee of petitioner.9 At this point, Eleazar was unable to
personally negotiate with Young or the petitioner’s board of directors.
Sometime thereafter, Eleazar personally went to petitioner’s office offering to pay for the subject property in cash,
which he already brought with him. However, Young declined to accept payment, saying that she still needed to
secure her sister’s advice on the matter.10 She likewise informed Eleazar that prior approval of petitioner’s Board of
Directors was required for the transaction, to which remark Eleazar replied that respondent shall instead await such
approval.11
On February 4, 2005, respondent sent a Letter12 of even date to petitioner. It was accompanied by Philippine
National Bank Check No. 24677 (the subject check), issued for ₱100,000.00 and made payable to petitioner. The
letter states thus:
Gentlemen:
As agreed upon, we are making a deposit of ONE HUNDRED THOUSAND PESOS (Php 100,000.00) as earnest
money for your property at the corner of Layug St., & Lim-An St., Pasay City as per TCT No. 125318 with an area of
256 sq. m. at 6,000.00/ sq. m. for a total of ONE MILLION FIVE HUNDRED THIRTY SIX THOUSAND PESOS (Php
1,536,000.00).
Full payment upon clearing of the tenants at said property and signing of the Deed of Sale.
(signed)
ANTONIO S. ELEAZAR13
Despite the delicate nature of the matter and large amount involved, respondent did not deliver the letter and check
directly to Young or her office; instead, they were coursed through an ordinary receiving clerk/receptionist of the
petitioner, who thus received the same and therefor issued and signed Provisional Receipt No. 33430.14 The said
receipt reads:
Received from x x x Antonio Eleazar x x x the sum of Pesos One Hundred Thousand x x x
IN PAYMENT OF THE FOLLOWING x x x

Earnest money or Partial payment of
Pasay Property Layug & Lim-an St. x x x.
Note: This is issued to transactions not

yet cleared but subsequently an OfficialReceipt will be issued. x x x15
The check was eventually deposited with and credited to petitioner’s bank account.
Thereafter, respondent through counsel demanded in writing that petitioner proceed with the sale of the property.16In
a March 3, 2006 Letter17 addressed to respondent’s counsel, petitioner wrote back:
Dear Atty. De Jesus:
Anent your letter dated January 16, 2006 received on February 20, 2006, please be informed of the following:
1. It was your client SECURITRON SECURITY SERVICES, INC. represented by Mr. Antonio Eleazar who offered to
buy our property located at corner Layug and Lim-An St., Pasay City;
2. It tendered an earnest money despite the fact that we are still undecided to sell the said property;
3. Our Board of Directors failed to pass a resolution to date whether it agrees to sell the property;
4. We have no Contract for the earnest money nor Contract to Sell the said property with your client;
Considering therefore the above as well as due to haste and demands which we feel [are forms] of intimidation and
harassment, we regret to inform you that we are now incline (sic) not to accept your offer to buy our property. Please
inform your client to coordinate with us for the refund of this (sic) money.
Very truly yours,
(signed)
CAROLINA T. YOUNG
Executive Vice[-]President18
Ruling of the Regional Trial Court of Pasay City
On April 18, 2006, respondent filed with the Pasay RTC a civil case against petitioner for specific performance with
damages to compel the latter to consummate the supposed sale of the subject property. Docketed as Civil Case No.
06-0492 CFM and assigned to Branch 115 of the Pasay RTC, the Complaint19 is predicated on the claim that since a
perfected contract of sale arose between the parties after negotiations were conducted and respondent paid the
₱100,000.00 supposed earnest money – which petitioner accepted, the latter should be compelled to sell the
subject property to the former. Thus, respondent prayed that petitioner be ordered to comply with its obligation as
seller, accept the balance of the purchase price, and execute the corresponding deed of sale in respondent’s favor;
and that petitioner be made to pay ₱200,000.00 damages for its breach and delay in the performance of its
obligations, ₱200,000.00 by way of attorney's fees, and costs of suit.
In its Answer with Compulsory Counterclaim,20 petitioner argued that it never agreed to sell the subject property; that
its board of directors did not authorize the sale thereof to respondent, as no corresponding board resolution to such
effect was issued; that the respondent’s ₱100,000.00 check payment cannot be considered as earnest money for
the subject property, since said payment was merely coursed through petitioner’s receiving clerk, who was forced to
accept the same; and that respondent was simply motivated by a desire to acquire the subject property at any cost.
Thus, petitioner prayed for the dismissal of the case and, by way of counterclaim, it sought the payment of moral
damages in the amount of ₱200,000.00; exemplary damages in the amount of ₱100,000.00; and attorney’s fees and
costs of suit.
In a Reply,21 respondent countered that authorization by petitioner’s Board of Directors was not necessary since it is
a real estate corporation principally engaged in the buying and selling of real property; that respondent did not force
nor intimidate petitioner’s receiving clerk into accepting the February 4, 2005 letter and check for ₱100,000.00; that
petitioner’s acceptance of the check and its failure – for more than a year – to return respondent’s payment amounts
to estoppel and a ratification of the sale; and that petitioner is not entitled to its counterclaim.
After due proceedings were taken, the Pasay RTC issued its Decision dated February 16, 2009, decreeing as
follows:
WHEREFORE, defendant First Optima Realty Corporation is directed to comply with its obligation by accepting the
remaining balance of One Million Five Hundred Thirty-Six Thousand Pesos and Ninety-Nine Centavos
(₱1,536,000.99), and executing the corresponding deed of sale in favor of the plaintiff Securitron Security Services,
Inc. over the subject parcel of land.
No costs.
SO ORDERED.22
In ruling for the respondent, the trial court held that petitioner’s acceptance of ₱100,000.00 earnest money indicated
the existence of a perfected contract of sale between the parties; that there is no showing that when respondent
gave the February 4, 2005 letter and check to petitioner’s receiving clerk, the latter was harassed or forced to accept
the same; and that for the sale of the subject property, no resolution of petitioner’s board of directors was required
since Young was "free to represent" the corporation in negotiating with respondent for the sale thereof. Ruling of the
Court of Appeals
Petitioner filed an appeal with the CA. Docketed as CA-G.R. CV No. 93715, the appeal made out a case that no
earnest money can be considered to have been paid to petitioner as the supposed payment was received by a mere
receiving clerk, who was not authorized to accept the same; that the required board of directors resolution
authorizing the sale of corporate assets cannot be dispensed with in the case of petitioner; that whatever
negotiations were held between the parties only concerned the possible sale, not the sale itself, of the subject
property; that without the written authority of petitioner’s board of directors, Young cannot enter into a sale of its
corporate property; and finally, that there was no meeting of the minds between the parties in the first place.
On September 30, 2011, the CA issued the assailed Decision affirming the trial court’s February 16, 2009Decision,
pronouncing thus:
Article 1318 of the Civil Code declares that no contract exists unless the following requisites concur: (1) consent of
the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation
established.
A careful perusal of the records of the case show[s] that there was indeed a negotiation between the parties as
regards the sale of the subject property, their disagreement lies on whether they have arrived on an agreement
regarding said sale. Plaintiff-appellee avers that the parties have already agreed on the sale and the price for it and
the payment of earnest money and the remaining balance upon clearing of the property of unwanted tenants.
Defendant-appellant on the other hand disputes the same and insists that there was no concrete agreement
between the parties.
Upon a careful consideration of the arguments of the parties and the records of the case, we are more inclined to
sustain the arguments of the plaintiff-appellee and affirm the findings of the trial court that there was indeed a
perfected contract of sale between the parties. The following instances militate against the claim of the defendant-
appellant: First. The letter of the plaintiff-appellee dated February 4, 2005 reiterating their agreement as to the sale
of the realty for the consideration of Php 1,536,000.00 was not disputed nor replied to by the defendant-appellant,
the said letter also provides for the payment of the earnest money of Php 100,000.00 and the full payment upon the
clearing of the property of unwanted tenants, if the defendant-appellant did not really agree on the sale of the
property it could have easily replied to the said letter informing the plaintiff-appellee that it is not selling the property
or that the matter will be decided first by the board of directors, defendant-appellant’s silence or inaction on said
letter shows its conformity or consent thereto; Second. In addition to the aforementioned letter, defendant-
appellant’s acceptance of the earnest money and the issuance of a provisional receipt clearly shows that there was
indeed an agreement between the parties and we do not subscribe to the argument of the defendant-appellant that
the check was merely forced upon its employee and the contents of the receipt was just dictated by the plaintiff-
appellee’s employee because common sense dictates that a person would not issue a receipt for a check with a
huge amount if she does not know what that is for and similarly would not issue [a] receipt which would bind her
employer if she does not have prior instructions to do [so] from her superiors; Third. The said check for earnest
money was deposited in the bank by defendant-appellant and not until after one year did it offer to return the same.
Defendant-appellant cannot claim lack of knowledge of the payment of the check since there was a letter for it, and
it is just incredible that a big amount of money was deposited in [its] account [without knowing] about it [or]
investigat[ing] what [it was] for. We are more inclined to believe that their inaction for more than one year on the
earnest money paid was due to the fact that after the payment of earnest money the place should be cleared of
unwanted tenants before the full amount of the purchase price will be paid as agreed upon as shown in the letter
sent by the plaintiff-appellee.
As stated above the presence of defendant-appellant’s consent and, corollarily, the existence of a perfected contract
between the parties are evidenced by the payment and receipt of Php 100,000.00 as earnest money by the
contracting parties’ x x x. Under the law on sales, specifically Article 1482 of the Civil Code, it provides that
whenever earnest money is given in a contract of sale, it shall be considered as part of the price and proof of the
perfection of the contract. Although the presumption is not conclusive, as the parties may treat the earnest money
differently, there is nothing alleged in the present case that would give rise to a contrary presumption.
We also do not find merit in the contention of the defendant-appellant that there is a need for a board resolution for
them to sell the subject property since it is a corporation, a juridical entity which acts only thru the board of directors.
While we agree that said rule is correct, we must also point out that said rule is the general rule for all corporations
[but] a corporation [whose main business is buying and selling real estate] like herein defendant-appellant, is not
required to have a board resolution for the sale of the realty in the ordinary course of business, thus defendant-
appellant’s claim deserves scant consideration.
Furthermore, the High Court has held that "a corporate officer or agent may represent and bind the corporation in
transactions with third persons to the extent that the authority to do so has been conferred upon him, and this
includes powers which have been intentionally conferred, and also such powers as, in the usual course of the
particular business, are incidental to, or may be implied from, the powers intentionally conferred, powers added by
custom and usage, as usually pertaining to the particular officer or agent, and such apparent powers as the
corporation has caused persons dealing with the officer or agent to believe that it was conferred."
In the case at bench, it is not disputed and in fact was admitted by the defendant-appellant that Ms. Young, the
Executive Vice-President was authorized to negotiate for the possible sale of the subject parcel of land. Therefore,
Ms. Young can represent and bind defendant-appellant in the transaction.
Moreover, plaintiff-appellee can assume that Ms. Young, by virtue of her position, was authorized to sell the property
of the corporation. Selling of realty is not foreign to [an] executive vice[-]president’s function, and the real estate sale
was shown to be a normal business activity of defendant-appellant since its primary business is the buy and sell of
real estate. Unmistakably, its Executive Vice-President is cloaked with actual or apparent authority to buy or sell real
property, an activity which falls within the scope of her general authority.
Furthermore, assuming arguendo that a board resolution was indeed needed for the sale of the subject property, the
defendant-appellant is estopped from raising it now since, [it] did not inform the plaintiff-appellee of the same, and
the latter deal (sic) with them in good faith. Also it must be stressed that the plaintiff-appellee negotiated with one of
the top officer (sic) of the company thus, any requirement on the said sale must have been known to Ms. Young and
she should have informed the plaintiff-appellee of the same.
In view of the foregoing we do not find any reason to deviate from the findings of the trial court, the parties entered
into the contract freely, thus they must perform their obligation faithfully. Defendant-appellant’s unjustified refusal to
perform its part of the agreement constitutes bad faith and the court will not tolerate the same.
WHEREFORE, premises considered, the Decision of the Regional Trial Court of Pasay City Branch 115, in Civil
Case No. 06-0492 CFM is hereby AFFIRMED.
SO ORDERED.23
Petitioner moved for reconsideration,24 but in a December 9, 2011 Resolution, the CA held its ground. Hence, the
present Petition.
Issues
In an October 9,2013 Resolution,25 this Court resolved to give due course to the Petition, which raises the following
issues:
THE HONORABLE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE
MONEY RESPONDENT DELIVERED TO PETITIONER WAS EARNEST MONEY THEREBY PROVIDING A
PERFECTED CONTRACT OF SALE.
II
THE HONORABLE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE TIME
THAT LAPSED IN RETURNING THE MONEY AND IN REPLYING TO THE LETTER IS PROOF OF
ACCEPTANCE OF EARNEST MONEY.
III
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS AND GRAVE ERROR WHEN IT
IGNOREDTHE RESERVATION IN THE PROVISIONAL RECEIPT – "Note: This is issued to transactions not yet
cleared but subsequently an Official Receipt will be issued."26
In its Petition and Reply27 seeking to reverse and set aside the assailed CA dispositions and in effect to dismiss Civil
Case No. 06-0492 CFM, petitioner argues that respondent failed to prove its case that a contract of sale was
perfected between the parties. It particularly notes that, contrary to the CA’s ruling, respondent’s delivery of the
February 4, 2005 letter and check; petitioner’s failure to respond to said letter; petitioner’s supposed acceptance of
the check by depositing the same in its account; and its failure to return the same after more than one year from its
tender – these circumstances do not at all prove that a contract of sale was perfected between the parties. It claims
that there was never an agreement in the first place between them concerning the sale of the subject property,
much less the payment of earnest money therefor; that during trial, Eleazar himself admitted that the check was
merely a "deposit";28 that the February 4, 2005 letter and check were delivered not to Young, but to a mere receiving
clerk of petitioner who knew nothing about the supposed transaction and was simply obliged to accept the same
without the prerogative to reject them; that the acceptance of respondent’s supposed payment was not cleared and
was subject to approval and issuance of the corresponding official receipt as noted in Provisional Receipt No.
33430; that respondent intentionally delivered the letter and check in the manner that it did in order to bind petitioner
to the supposed sale with or without the latter’s consent; that petitioner could not be faulted for receiving the check
and for depositing the same as a matter of operational procedure with respect to checks received in the course of its
day-to-day business.
Petitioner argues that ultimately, it cannot be said that it gave its consent to any transaction with respondent or to
the payment made by the latter. Respondent’s letter and check constitute merely an offer which required petitioner’s
acceptance in order to give rise to a perfected sale; "[o]therwise, a buyer can easily bind any unsuspecting seller to
a contract of sale by merely devising a way that prevents the latter from acting on the communicated offer."29
Petitioner thus theorizes that since it had no perfected agreement with the respondent, the latter’s check should be
treated not as earnest money, but as mere guarantee, deposit or option money to prevent the prospective seller
from backing out from the sale,30 since the payment of any consideration acquires the character of earnest money
only after a perfected sale between the parties has been arrived at.31
In its Comment,32 respondent counters that petitioner’s case typifies a situation where the seller has had an undue
change of mind and desires to escape the legal consequences attendant to a perfected contract of sale. It reiterates
the appellate court’s pronouncements that petitioner’s failure to reply to respondent’s February 4, 2005 letter
indicates its consent to the sale; that its acceptance of the check as earnest money and the issuance of the
provisional receipt prove that there is a prior agreement between the parties; that the deposit of the check in
petitioner’s account and failure to timely return the money to respondent militates against petitioner’s claim of lack of
knowledge and consent. Rather they indicate petitioner’s decision to sell subject property as agreed. Respondent
adds that contrary to petitioner’s claim, negotiations were in fact held between the parties after it sent its December
9, 2004 letter-offer, which negotiations precisely culminated in the preparation and issuance of the February4, 2005
letter; that petitioner’s failure to reply to its February 4, 2005 letter meant that it was amenable to respondent’s
terms; that the issuance of a provisional receipt does not prevent the perfection of the agreement between the
parties, since earnest money was already paid; and that petitioner cannot pretend to be ignorant of respondent’s
check payment, as it involved a large sum of money that was deposited in the former’s bank account.
Our Ruling
The Court grants the Petition. The trial and appellate courts erred materially in deciding the case; they overlooked
important facts that should change the complexion and outcome of the case.
It cannot be denied that there were negotiations between the parties conducted after the respondent’s December 9,
2004 letter-offer and prior to the February 4, 2005 letter. These negotiations culminated in a meeting between
Eleazar and Young whereby the latter declined to enter into an agreement and accept cash payment then being
tendered by the former. Instead, Young informed Eleazar during said meeting that she still had to confer with her
sister and petitioner’s board of directors; in turn, Eleazar told Young that respondent shall await the necessary
approval.
Thus, the trial and appellate courts failed to appreciate that respondent’s offer to purchase the subject property was
never accepted by the petitioner at any instance, even after negotiations were held between them. Thus, as
between them, there is no sale to speak of. "When there is merely an offer by one party without acceptance of the
other, there is no contract."33 To borrow a pronouncement in a previously decided case,
The stages of a contract of sale are: (1) negotiation, starting from the time the prospective contracting parties
indicate interest in the contract to the time the contract is perfected; (2) perfection, which takes place upon the
concurrence of the essential elements of the sale; and (3) consummation, which commences when the parties
perform their respective undertakings under the contract of sale, culminating in the extinguishment of the contract.
In the present case, the parties never got past the negotiation stage. Nothing shows that the parties had agreed on
any final arrangement containing the essential elements of a contract of sale, namely, (1) consent or the meeting of
the minds of the parties; (2) object or subject matter of the contract; and (3) price or consideration of the sale.34
Respondent’s subsequent sending of the February 4, 2005 letter and check to petitioner – without awaiting the
approval of petitioner’s board of directors and Young’s decision, or without making a new offer – constitutes a mere
reiteration of its original offer which was already rejected previously; thus, petitioner was under no obligation to reply
to the February 4, 2005 letter. It would be absurd to require a party to reject the very same offer each and every time
it is made; otherwise, a perfected contract of sale could simply arise from the failure to reject the same offer made
for the hundredth time. Thus, said letter cannot be considered as evidence of a perfected sale, which does not exist
1âwphi1
in the first place; no binding obligation on the part of the petitioner to sell its property arose as a consequence. The
letter made no new offer replacing the first which was rejected.
Since there is no perfected sale between the parties, respondent had no obligation to make payment through the
check; nor did it possess the right to deliver earnest money to petitioner in order to bind the latter to a sale. As
contemplated under Art. 1482 of the Civil Code, "there must first be a perfected contract of sale before we can
speak of earnest money."35 "Where the parties merely exchanged offers and counter-offers, no contract is perfected
since they did not yet give their consent to such offers. Earnest money applies to a perfected sale."36
This Court is inclined to accept petitioner’s explanation that since the check was mixed up with all other checks and
correspondence sent to and received by the corporation during the course of its daily operations, Young could not
have timely discovered respondent’s check payment; petitioner’s failure to return the purported earnest money
cannot mean that it agreed to respondent’s offer.
Besides, respondent’s payment of supposed earnest money was made under dubious circumstances and in
disregard of sound business practice and common sense. Indeed, respondent must be faulted for taking such a
course of action that is irregular and extraordinary: common sense and logic dictate that if any payment is made
under the supposed sale transaction, it should have been made directly to Young or coursed directly through her
office, since she is the officer directly responsible for negotiating the sale, as far as respondent is concerned and
considering the amount of money involved; no other ranking officer of petitioner can be expected to know of the
ongoing talks covering the subject property. Respondent already knew, from Eleazar’s previous meeting with
Young, that it could only effectively deal with her; more than that, it should know that corporations work only through
the proper channels. By acting the way it did – coursing the February 4, 2005 letter and check through petitioner’s
mere receiving clerk or receptionist instead of directly with Young’s office, respondent placed itself under grave
suspicion of putting into effect a premeditated plan to unduly bind petitioner to its rejected offer, in a manner which it
could not achieve through negotiation and employing normal business practices. It impresses the Court that
respondent attempted to secure the consent needed for the sale by depositing part of the purchase price and under
the false pretense that an agreement was already arrived at, even though there was none. Respondent achieved
the desired effect up to this point, but the Court will not be fooled.
Thus, as between respondent’s irregular and improper actions and petitioner’s failure to timely return the
₱100,000.00 purported earnest money, this Court sides with petitioner. In a manner of speaking, respondent cannot
fault petitioner for not making a refund since it is equally to blame for making such payment under false pretenses
and irregular circumstances, and with improper motives. Parties must come to court with clean hands, as it were.
In a potential sale transaction, the prior payment of earnest money even before the property owner can agree to sell
his property is irregular, and cannot be used to bind the owner to the obligations of a seller under an otherwise
perfected contract of sale; to cite a well-worn cliché, the carriage cannot be placed before the horse. The property
owner-prospective seller may not be legally obliged to enter into a sale with a prospective buyer through the latter’s
employment of questionable practices which prevent the owner from freely giving his consent to the transaction; this
constitutes a palpable transgression of the prospective seller’s rights of ownership over his property, an anomaly
which the Court will certainly not condone. An agreement where the prior free consent of one party thereto is
withheld or suppressed will be struck down, and the Court shall always endeavor to protect a property owner’s rights
against devious practices that put his property in danger of being lost or unduly disposed without his prior
knowledge or consent. As this ponente has held before, "[t]his Court cannot presume the existence of a sale of land,
absent any direct proof of it."37
Nor will respondent's supposed payment be 'treated as a deposit or guarantee; its actions will not be dignified and
must be called for what they are: they were done irregularly and with a view to acquiring the subject property against
petitioner's consent.
Finally, since there is nothing in legal contemplation which petitioner must perform particularly for the respondent, it
should follow that Civil Case No. 06-0492 CFM for specific performance with damages is left with no leg. to stand
on; it must be dismissed.
With the foregoing view, there is no need to resolve the other specific issues and arguments raised by the petitioner,
as they do not materially affect the rights and obligations of the parties - the Court having declared that no
agreement exists between them; nor do they have the effect of altering the outcome of the case.
WHEREFORE, the Petition is GRANTED. The September 30, 2011 Decision and December 9, 2011 Resolution of
the Court of Appeals in CA-G.R. CV No. 93715, as well as the February 16, 2009 Decision of the Regional Trial
Court of Pasay City, Branch 115 in Civil Case No. 06-0492 CFM are REVERSED and SET ASIDE. Civil Case No.
06-0492 CFM is ordered DISMISSED. , Petitioner First Optima Realty Corporation is ordered to REFUND the
amount of ₱100,000.00 to respondent Securitron Security Services, Inc. without interest, unless petitioner has done
so during the course of the proceedings.
SO ORDERED.
SECOND DIVISION
G.R. No. 192270 January 26, 2015
IRENE D. OFILADA, Petitioner,

vs.
SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the July 13, 2009 Decision2 of the Court of Appeals (CA) in CA-GR.
CV3 No. 101603 which: (1) granted the Petition for Review4 filed therein; (2) reversed and set aside the August 28,
2007 Decision5 of the Regional Trial Court (RTC), Lucena City, Branch 56 in SPEC. CIV. ACTION 2007-01-A,
affirming in toto the February 27, 2007 Decision6 of the Municipal Trial Court (MTC) of San Antonio, Quezon in Civil
Case No. 188 which, in tum, ordered the ejectment of respondents spouses Ruben Andal and Miraflor Andal
(spouses Andal) from the properties of petitioner Irene Ofilada (Irene); and, (3) declared the said MTC Decision null
and void for lack of jurisdiction.
Also questioned in this Petition isthe CA’s May 6, 2010 Resolution7 denying Irene’s Motion for Reconsideration of
the assailed CA Decision.
Factual Antecedents
Irene, together with her husband Carlos Ofilada (Carlos), bought from the heirs of Teresita Liwag (Teresita) a
27,974-square meter parcel of land principally planted with rambutan, a number of coconut trees and other fruit-
bearing plants located in Barrio Puri, Tiaong, Quezon. The sale is evidenced by a February 13, 1997 Extra-Judicial
Settlement of Estate with Absolute Sale8 wherein respondent Miraflor Andal (Miraflor), who brokered the sale of the
property, signed as ‘tenant.’ Apparently, ten days prior to the sale, Miraflor appeared before Anastacio Lajara
(Anastacio), the then Barangay Agrarian Reform Council (BARC) Chairman of Barangay Puri, San Antonio, and
executed a Pagpapatunay9 stating that:
Sa kinauukulan:
Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na dumulog sa aking tanggapan upang ipagbigay[-]alam
na ang lupa na pag-aari ni TERESITA LIWAG x x x ay walang "tenant"o magtatrabaho at hiniling niya na ang
nasabing lupa ay mapalipat sa pangalan ng mga bumili na walang iba kundi sina Carlos at Irene Ofilada.
Pinagtitibay nya na wala na siyang paghahabol na ano man laban sa may-ari o kahalili nito sa karapatan sapagkat
siya ay tumanggap na ng kaukulang halaga hinggil sa naging pagtatrabaho niya sa nasabing lupa at gayon din ang
kanyang mga magulang.
SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng pahintulot na ang nasabing lupa ay mapagbili na at
mapatala sa bagong may-ari na ligtas sa ano mang pananagutan.10
Two weeks after the sale or on February 27, 1997, Miraflor, with the consent of her husband, respondent Ruben
Andal (Ruben), executed a Sinumpaang Salaysay11 wherein she acknowledged Irene and Carlos as the new owners
of the property. While it was stated therein that she will continue to take care of the property, she nevertheless
waived any tenancy rights that she and her husband might haveover the land, viz.:
1. NA AKO ang [n]agtatrabaho o "tenant" sa lupang pag-aari ni TERESITA LIWAG at ang nasabing lupa ay
matatagpuan sa Brgy. Puri, San Antonio, Quezon x x x
2. NA AKO ay kusang loob na nag-alok sa tagapagmana ng may-ari ng lupa na pinangatawanan ni Ginoong JOSE
LIWAG na ipagbili na ang nasabing lupa sa mag-asawang CARLOS OFILADA at IRENE OFILADA sapagkat
magpapatuloy naman ang aking pangangalaga sa nasabing lupa;
3. NA AKO at ang aking asawa ay kusang loob na sumang[-]ayon na ang Titulo ng [na]sabing lupa ay mapalipat sa
mga bumili at simula sa araw na ito ay matahimik kong isinusulit ang pamomosesyon samga bagong mayari;
4. NA kami ay kusang[-]loob na tumatalikod na sa karapatan ko bilang "tenant" na kahit kailan [ay] hindi na
maghahabol laban sa dating may-ari o sa kaniyang mga tagapagmana sapagkat walasilang ano mang pananagutan
sa amin at gayon[din] ang bagong may-ari na mag-asawang CARLOS OFILADA at IRENE OFILADA;12
Eventually, the land was registered in the names of Irene and Carlos.13
Eight years later or in October 2005, Irene filed against the spouses Andal a Complaint14 for Ejectment and
Damages before the MTC of San Antonio, Quezon. She averred that aside from the aforementioned property, she
and Carlos also acquired an 8,640-square meter ricefield located in Pulo, San Antonio, Quezon. For humanitarian
reasons, she acceded to the spouses Andal’s request to take care of her two parcels of land, provided that they
would not be considered as tenants. To stress the factthat neither she nor the spouses Andal intended that the latter
be deemed as tenants, Irene pointed to the following: (1) the condition for her purchase of the property in Tiaong
that the same should not have any tenants; and (2) Miraflor’s execution of a Sinumpaang Salaysay wherein she
waived any tenancy rights that she and her husband might have over the said property.
In their Answer,15 the spouses Andal denied Irene’s allegations and claimed that they were tenants of Irene’s
predecessor-in-interest and continued to be such despite the transfer of ownership of the properties to Irene. They
likewise contended that since the suit is an action to dispossess themas tenants, it is not the MTC which has
jurisdiction over the complaint but the Department of Agrarian Reform Adjudication Board (DARAB).
Rejecting the tenancy claim, Irene averred in her Memorandum16 that her real properties are not covered by agrarian
reform laws as they are within the retention limit allowed by law. She again stressed that the spouses Andal had
already voluntarily surrendered their rights as tenants way back in 1997 as evidenced by the Pagpapatunay and the
Sinumpaang Salaysay. She added the said spouses voluntarily waived their rights and received ₱1.1 million as
commission for brokering the sale of the Tiaong property to her. This was after Irene made clear that the sale would
not materialize and, consequently spouses Andal would not get the commission, if the property has tenants. Irene
averred that the spouses Andal’s receipt of the said amount of money, being advantageous to them, is a valid
ground for termination of tenancy relations. Ruling of the Municipal Trial Court
Prior to the preliminary conference, the MTC heard the respective sides of the parties for a preliminary
determination of the existence of tenancy.
The spouses Andal, in support of their claim that the controversy should be resolved by the DARAB because of the
issue of tenancy, submitted the following evidence to prove their status as Irene’s tenants:(1) their December 19,
2005 Affidavit17 attesting that: a) they agreed to act as agents for the sale of the lands on the condition that they
would remain as tenants; b) they personally cultivated Irene’s lands and; c) they have been receiving ¼ shares of
the proceeds of the sales of the coconut, rambutan, and harvested palay; (2) the December 19, 2005 Affidavit18 of
Anastacio corroborating the spouses Andal’s statements in their affidavit of even date; (3) a receipt19 dated July 27,
2005 showing that Irene received from the spouses Andal ₱9,694.00 as her share in the harvest equivalent to 30
sacks of palayand; 4) a February 27,1997 Affidavit of Landholding20 executed by Irene and Carlos, the second
paragraph of which provides:
2. That we hereby testify that said parcel of land containing an area of 27,974 Square Meters is the only parcel of
agricultural land registered in our names; and we hereby agree that the same tenant Miraflor Andal, will continue as
a tenant, over the said parcel of land. (Emphasis supplied) On the other hand, Irene insisted that the spouses Andal
are not tenants but mere caretakers of her lands. She disputed the documentary evidence of the said spouses as
follows: (1) it is the Pagpapatunay issued by Anastacio in 1997 and furnished the Registry of Deeds of Lucena City
and Department of Agrarian Reform (DAR) which must be considered as more credible evidence over his
apparently fabricated affidavit executed at a later time (2005); (2) the share in the produce of the lands as reflected
in the receipt was the only share given to her by the spouses Andal throughout the eight years that they took care of
her properties; and, (3) the copy of the Affidavit of Landholding presented by the spouses Andal contained in the
second paragraph thereof an insertion made through a manual typewriter. Irene claimed that the said insertion
which reads "and we [Irene and Carlos] hereby agree, that the same tenant Miraflor Andal, will continue as a tenant,
over the said parcel of land," was made without her knowledge and consent. In fact, her copy21 of the said document
does not contain such inserted portion.
In its August 14, 2006 Order,22 the MTC found no prima facie showing of tenancy relations between the parties and
proceeded with the case.
On February 27, 2007, the MTC rendered its Decision23 holding that spouses Andal failed to adduce proof that they
are tenants. It gave weight to the Pagpapatunay issued by Anastacio in 1997 as against the affidavit he executed in
2005 which it found ambivalent as to whether spouses Andal are working as tenants on the lands of Irene. The MTC
did not also accord any evidentiary weight to the copy of the Affidavit of Landholding presented by spouses Andal
because of the doubtful insertion. Hence, it concluded that the spouses Andal were in possession of the properties
by mere tolerance of Irene. It ultimately ruled:
WHEREFORE, on the basis of the foregoing findings, the Court hereby renders judgment in favor of the plaintiff and
against the defendants, ordering:
a) Defendants and all other persons living in said premises without permission of the plaintiff, to vacate and restore
to the plaintiff the peaceful possession and occupation of the landholdings in question;
b) Defendants to pay the plaintiff the amount of ₱30,000.00 as attorney’s and appearance fees[;]
c) Defendants to pay the plaintiff the amount of ₱80,000.00 as actual damages.
SO ORDERED.24
Resolving the appeal of the spouses Andal, the RTC in its August 28, 2007 Decision25 affirmed in toto the MTC
ruling. The motion for reconsideration thereto was also denied in the RTC Resolution26 dated November 22, 2007.
The CA, on the other hand, took a different view of the case. In its assailed Decision27 of July 13, 2009, the CA
ratiocinated that since the existence of tenancy relations between the previous owners of the properties and the
spouses Andal is undisputed, the question of whether the said spouses may be dispossessed therefrom constitutes
an agrarian dispute despite the severance of such relations. This is considering that severance of the tenurial
arrangement does not render the action beyond the ambit of an agrarian dispute and, hence, jurisdiction over the
same remains with the DARAB. In support of its conclusion, the CA cited the cases of Rivera v. David28 and
Spouses Amurao v. Spouses Villalobos.29
WHEREFORE, the instant petition for review is GRANTED. The assailed Decision of the Regional Trial Court of
Lucena City, Branch 56, in Special Civil Case No. 2007-01-A, is hereby REVERSED and SET ASIDE. The Decision
dated 27 February 2007 of the Municipal Trial Court of San Antonio, Quezon in Civil CaseNo. 188, is declared NULL
and VOID for lack of jurisdiction. SO ORDERED.30
Irene filed a Motion for Reconsideration,31 which was denied in the CA Resolution32 dated May 6, 2010.
The Issue
Forcible entry and unlawful detainer cases fall under the exclusive original jurisdiction of the metropolitan trial courts,
municipal trial courts, and the municipal circuit trial courts.33 On the other hand, the DARis vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and has exclusive original jurisdiction over all
matters involving the implementation of agrarian reform.34 As DAR’s adjudicating arm,35 it is the DARAB thathas
exclusive and original jurisdiction involving all agrarian disputes. Republic Act (RA) No. 6657, Section 3(d) defines
an ‘agrarian dispute’ as follows:
(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers’
associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms
or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired
under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and
other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.
The term also "refers to any controversy relating to, among others, tenancy over lands devoted to agriculture."36
Significantly, Rule II of the 2009 DARAB Rules of Procedure reads:
SECTION 1. Primary and Exclusive Original and Appellate Jurisdiction.– The Board shall have primary and
exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Program (CARP) under R.A. No. 6657, as amended by R.A.
No. 9700, E.O. Nos. 228, 229, and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, Presidential Decree No. 27
and other agrarian laws and their Implementing Rules and Regulations. Specifically, such jurisdiction shall
includebut not be limited to cases involving the following:
a. The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation, and
use of all agricultural lands covered by R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law (CARL), as amended, and other related agrarian laws; x x x
xxxx
d. Those cases involving the ejectment and dispossession of tenants and/or leaseholders;
With the above points on jurisdictions having been laid, the Court now resolves the crucial issue in the case of
whether tenancy relationship between Irene and the spouses Andal exists as to strip off the MTC of its jurisdiction
over Irene’s suit for unlawful detainer.
Our Ruling
The factual circumstances in Rivera and

Amurao clearly make out cases involving
agrarian dispute.
As the CA relied on Rivera and Amurao,it is wise to revisit the factual milieu of the said cases.
In its assailed Decision, the CA quoted the following pronouncement which was restated37 in Rivera, viz:
Even if the tenurial arrangement has been severed, the action still involves an incident arising from the landlord and
tenant relationship. Where the case involves the dispossession by a former landlord of a former tenant of the land
claimed to have been given as compensation in consideration of the renunciation of the tenurial rights, there clearly
exists an agrarian dispute. On this point the Court has already ruled:
Indeed, Section 21 of Republic Act No. 1199, provides that ‘all cases involving the dispossession of a tenant by the
landlord or by a third party and/or the settlement and disposition of disputes arising from the relationship of landlord
and tenant … shall be under the original and exclusive jurisdiction of the Court of Agrarian Relations.’ This
jurisdiction does not require the continuance of the relationship of landlord and tenant – at the time of the dispute.
The same may have arisen, and of ten times arises, precisely from the previous termination of such relationship. If
the same existed immediately, or shortly, before the controversy and the subject matter thereof is whether or not
said relationship has been lawfully terminated, or if the dispute otherwise springs or originates from the relationship
of landlord and tenant, the litigation is (then) cognizable only by the Court of Agrarian Relations…38
In the said case, Agustin Rivera (Agustin) was in possession of a 1.8-hectare portion of the 5-hectare lot owned in
common by the heirs of Cristino and Consolacion David, and these heirs demanded that hevacate the premises.
Thus, Agustin filed a Complaint to Maintain Peaceful Possession before the Provincial Agrarian Reform Adjudication
Board (PARAB). He averred that his possession of the property was, originally, as registered tenant of the said
heirs’ predecessor-ininterest, Cristino, as evidenced by the certification issued by the Municipal Agrarian Reform
Office (MARO). Subsequently in 1957, he became the lot owner because the spouses Cristino and Consolacion
David gave him the 1.8-hectare land as his ‘disturbance compensation,’ in exchange for the renunciation of his
tenurial rights. On the other hand, Nemesio David (Nemesio), oneof the heirs, argued that the DAR has no
jurisdiction over the case asthe same only involves the issue of ownership of the land.
The DAR (thru the PARAB and the DARAB) assumed jurisdiction over the case and went on to render judgments in
favor of Agustin. The CA, however, ruled that the DAR no longer had any jurisdiction on the ground that the alleged
tenancy, per Agustin’s own admission, had already ended in 1957. Thus, it set aside the respective decisions of the
PARAB and the DARAB. The Court, though, did not agree with the CA on the issue of jurisdiction. Although it
denied Agustin’s appeal because he was not able to sufficiently prove his ownership of the land, DAR’s jurisdiction
over the case was nevertheless upheld. And it was at that point that the above-quoted pronouncement was restated.
Indeed in Rivera, the severance of the tenancy relations when the suit was filed did not matter because the prior
agricultural tenancy served as the juridical tie which compelled the characterization of the controversy as an
agrarian dispute. This is due to the fact that the land from which Agustin was being dispossessed was claimed to
have beenowned by him by way of disturbance compensation given to him as a former tenant by his former
landlord.
On the other hand, in Amurao, the spouses Amurao bought in 1987 from a certain Ruperto Endozo a parcel of land
which was then tenanted by the spouses Villalobos. The spouses Amurao allowed the spouses Villalobos to
continue working on the land until such time that their need for the same arises. In 1994, the therein parties
executed a Kasulatan in which the spouses Villalobos promised to surrender the possession of the lot should the
spouses Amurao need it, while the latter, in return, bound themselves to give the spouses Villalobos a 1,000-sqm.
portion of the land. But because the spouses Villalobos reneged on their promise in accordance with the Kasulatan,
the spouses Amurao filed an ejectment case against them before the Municipal Circuit Trial Court (MCTC). On the
defense that the issue concerns an agrarian dispute, the spouses Villalobos questioned the trial court’s jurisdiction.
Both the MCTC and the RTC upheld their jurisdiction over the case but the CA ruled otherwise.
Before this Court, the spouses Amurao argued that the tenancy relationship between them and the spouses
Villalobos was terminated upon the execution of the Kasulatan. Hence, there can be no agrarian dispute between
them over which the DAR can take cognizance of. The Court held: The instant case undeniably involves a
controversy involving tenurial arrangements because the Kasulatan will definitely modify, nay terminate the same.
Even assuming that the tenancy relationship between the parties had ceased due to the Kasulatan, there still exists
an agrarian dispute because the action involves an incident arising fromthe landlord and tenant relationship. x x x x
In the case at bar, petitioners’ claim that the tenancy relationship has been terminated by the Kasulatan is of no
moment. As long as the subject matter of the dispute is the legality of the termination of the relationship, or if the
dispute originates from such relationship, the case is cognizable by the DAR, through the DARAB. The severance of
the tenurial arrangement will not render the action beyond the ambit of an agrarian dispute.39
To restate, what brought Rivera under the ambit of an agrarian dispute is the fact that the land from which Agustin
was being dispossessed of by the heirs of his former landlord is claimed to have been given to him by the said
former landlord as consideration for the renunciation of his tenurial rights. While in Amurao, it was the issue of
whether the Kasulatan entered into by the parties terminated the landlord-tenant relationship between them. Clearly,
asthe action in both cases involved an incident arising from landlord-tenant relationship, the severance or alleged
severance of such relationship did not take them beyond the ambit of an agrarian dispute and, consequently, it is
DAR which has jurisdiction over the said cases.
Rivera and Amurao are not on all fours

with the present case.
Here, Irene claims that there can be no agrarian dispute since there exists no landlord-tenant relationship between
her and the spouses Andal. If ever such a relationship existed, it was between the former owner of the properties
and the spouses Andal and the same had already been renounced by Miraflor prior to Irene’s acquisition of the
properties. The CA, however, ruled that even if the landlord-tenant relationship between the previous owner and the
spouses Andal had already ceased, the action to dispossess the latter from the subject properties still involves an
agrarian dispute, as held in Rivera and Amurao.
Suffice it to say, however, that the present case is not on all fours with Rivera and Amurao.
As already discussed, in Rivera, the land involved is claimed to have been given to the former tenant by the former
landlord by way of disturbance compensation. Hence, even if the landlord-tenant relationship was asserted to have
been severed as early as 1957, the Court considered the action as arising from an agrarian dispute, the rightful
possession of the land being an incident of such previous landlord-tenant relationship. In the present case, there is
no claim that the subject properties were given to the spouses Andal by their former landlord as a form of
disturbance compensation. While the spouses Andal in this case refuse to surrender the properties to Irene on the
ground that they are tenants of the same just like in Amurao, it cannot be gain said that in Amurao, the tenancy
relations between the former owners of the property involved therein and the spouses Villalobos, had, undisputedly,
been continued by and between the said spouses and the spouses Amurao when the latter acquired the property.
And it was on that supposition that the Court held that even if the Kasulatan executed by the spouses Amurao and
the spouses Villalobos terminated the tenancy relationship between them, the action of the former to dispossess the
latter from the property tenanted involved an agrariandispute. However, in this case, unlike in Amurao the severance
of the tenancy relations between the former owners of the properties and the spouses Andal, as well as the non-
existence of a similar relationship between the said spouses and Irene as the new owner, were sufficiently shown as
will be discussed below. Hence, the said pronouncement made in Amurao finds no application in this case.
The tenancy relationship between the

former owners of the properties and the
spouses Andal was clearly severed prior
to Irene’s purchase of the same; no such
relationship was subsequently created
between Irene and the spouses Andal.
Certainly telling are the Pagpapatunay and the Sinumpaang Salaysay which were voluntarily executed and never
impugned by the spouses Andal. Both contain express declarations that at the time Irene and her husband bought
the property, the tenancy then existing between the heirs of Teresita as former owners and the spouses Andal as
tenants had already ceased, and that no tenancy relations would continue between the latter and the new owner,
Irene. Notably, the Sinumpaang Salaysay, being a public document, is evidence of the facts in the clear unequivocal
manner therein expressed and has in its favor the presumption of regularity.40 The spouses Andal are bound by their
admissions against their own interest.
Indeed, while a tenancy relationship cannot be extinguished by the sale, alienation, or transfer of the legal
possession of the landholding,41 the same may nevertheless be terminated due to circumstances more
advantageous to the tenant and his/her family.42 Here, records show that Miraflor, who brokered the sale between
the heirs of Teresita and Irene, voluntarily executed, days prior to the Extrajudicial Settlement of Estate with
Absolute Sale, her Pagpapatunay before the BARC Chairman stating that she and her parents have already
received a ‘sufficient consideration’ for her to release her former landlord and the purchaser of the lot from liability.
As later disclosed by Irene during trial, such ‘sufficient consideration’ amounted to ₱1.1 million by way of
disturbance compensation, a factual allegation which was again never refuted by the spouses Andal before the
lower court and was found to be an uncontroverted fact by the CA. To the Court, the said amount is adequate
enough for the spouses Andal to relinquish their rights as tenants. In fine, it can be reasonably concluded that the
tenancy relationship between the previous ownersand the spouses Andal had already been severed.
The next question now is whether a new tenancy relationship between Irene and the spouses Andal was
subsequently formed. This becomes crucial because for the DARAB to have jurisdiction over the case, there must
be a tenancy relationship between the parties.43 Evidence is necessary to prove the allegation of tenancy."The
principal factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual
relationship dependent on what the alleged tenant does upon the land. It is alsoa legal relationship."44
An allegation of tenancy before the MTC does not automatically deprive the court of its jurisdiction. Basic is the rule
1âwphi 1
that:
x x x the material averments in the complaint determine the jurisdiction of a court. x x x a court does not lose
jurisdiction over an ejectment suit by the simple expedient of a party raising as a defense therein the alleged
existence of a tenancy relationship between the parties. The court continues to have the authority to hear and
evaluate the evidence, precisely to determine whether or not it has jurisdiction, and, if, after hearing, tenancy is
shown to exist, it shall dismiss the case for lack of jurisdiction.45
The Court agrees with the conclusion of both the MTC and the RTC that for dearth of evidence, tenurial relationship
between the parties was not sufficiently shown. Thus, the said courts correctly assumed jurisdiction over the
ejectment case.
The fact alone of working on another’s landholding does not raise a presumption of the existence of agricultural
tenancy. For tenancy to be proven, all indispensable elements must be established, the absence of one or more
requisites will not make the alleged tenant a de facto one. These are: 1)the parties are the landowner and the
tenant; 2) the subject is agricultural land; 3) there is consent by the landowner; 4) the purpose is agricultural
production; 5) there is personal cultivation; and 6) there issharing of the harvests.46
The Pagpapatunay and the Sinumpaang Salaysay both support Irene’s claim that she purchased the landholdings
only on the condition that there will be no tenants. Her refusal to give her consent to any tenancy relationship is
glaring. On the other hand, the spouses Andal, in their attempt toprove tenancy, submitted their copy of the
February 27, 1997 Affidavit of Landholding, which contains an inserted statement that Irene and Carlos agree "that
the same tenant Miraflor Andal, will continue astenant, over the said parcel of land." However, serious doubt is cast
on the authenticity of said inserted statement considering that it does not bear the respective initials/signatures of
Carlos and Irene attesting their conformity thereto. More importantly, Irene’s copy of the said document does not
contain the same insertion.
Anent the proof of sharing of harvest, what the spouses Andal merely presented was a single receipt dated July 27,
2005 representing Irene’s ‘share’ in the harvest. This even militates against the spouses Andal’s claim of tenancy
considering that they did not present the receipts for the alleged sharing system prior to 2005 or from 1997, the year
when Irene purchased the land. Notably, the receipt they submitted is dated July 27, 2005 or just a few months
before the filing of the complaint. To the Court’s mind, such act of the spouses Andal to give Irene a share is a mere
afterthought, the same having been done during the time that Irene was already making serious demands for them
to account for the produce of the lands and vacate the properties. Be that as it may, the Court stresses "that it is not
unusual for a landowner toreceive the produce of the land from a caretaker who sows thereon. The fact of receipt,
without an agreed system of sharing, does not ipso facto create a tenancy."47
In sum, the Court holds that absent any tenurial relationship between them, the spouses Andal 's possession of
Irene's properties was by mere tolerance of the latter. The action to dispossess the spouses Andal there from is
therefore a clear case of summary action for ejectment cognizable by the regular courts.
WHEREFORE, the Petition is GRANTED. The July 13, 2009 Decision and May 6, 2010 Resofotion of the Court of
Appeals in CA-GR. CV No. 101603 are REVERSED and SET ASIDE. The August 28, 2007 Decision of the
Regional Trial Court, Lucena City, Branch 56 in SPEC Crv. ACTION 2007-01-A affinning in toto the February 27,
2007 Decision of the Municipal Trial Court of San Antonio, Quezon in Civil Case No. 188, is REINSTATED and
AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 200333, January 21, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. DOMINGO DILLA Y PAULAR, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:

Appellant Domingo Dilla y Paular was charged with the crime of murder for the death of his brother, Pepito Dilla y Paular
(Pepito). Based on the evidence presented by the prosecution, it was shown that at around 5:30 in the afternoon of July 22,
2003, at Sitio Ilaud, Himaao, Pili, Camarines Sur, Pepito was working on his farm when appellant suddenly appeared and
shot the victim with a gun hitting him on his left thigh. The victim managed to run but was overtaken by appellant who then
stabbed him with a bolo. The son of the victim, Pepito Jr., and Mary Jane Renegado (Renegado), witnessed the incident.
Appellant presented a different version. He claimed that it was Pepito who was the aggressor. He narrated that Pepito went
to his (appellant’s) house and challenged him to a fight. Dismissing the challenge, he went out of his house and proceeded
to his farm to get his carabao but the victim pursued him. They grappled for possession of the gun and bolo. In the ensuing
struggle, he struck the victim with a wrench. He denied having fired the gun. He pointed to somebody allegedly wearing a
hat who could have shot and stabbed Pepito.
In a Decision1 dated July 13, 2009, the Regional Trial Court (RTC) of Pili, Camarines Sur, Branch 32, found appellant guilty of
murder. Lending credence to the testimonies of the prosecution witnesses, the trial court held that the attack on the victim
was perpetrated by no other than appellant; that the attack was treacherous as the appellant suddenly appeared and shot
the victim, and after having wounded him, stabbed him with a bolo. The RTC found appellant’s tale incredible and self-
serving especially in view of his positive identification by the prosecution witnesses.
The dispositive portion of the trial court’s Decision reads: chan roblesv irtuallawl ib rary
WHEREFORE, judgment is hereby rendered, finding the accused guilty beyond reasonable doubt of the crime of murder and
sentences him to suffer the penalty of Reclusion Perpetua, together with its accessory penalties, condemning him to pay
actual damages of P35,448.00, moral damages of P50,000.00 and P50,000.00 as indemnity for the death of Pepito Dilla; the
accused is credited in full for his preventive detention should he agree in writing to abide by the rules for convicted prisoners,
otherwise to 4/5 of the same; costs against the accused.
SO ORDERED.2
Aggrieved, appellant appealed to the Court of Appeals (CA) arguing in the main that the trial court erred in finding him guilty
of the charge. He contended that there was no direct proof showing that he actually killed the victim.
The CA, however, was not persuaded. Thus, in its June 9, 2011 Decision,3 it affirmed with modification the findings of the
RTC, viz:chanrob lesvi rtua llawli bra ry
WHEREFORE, premises considered, the Decision of the Regional Trial Court, Branch 32, Pili, Camarines Sur, in Crim. Case
No. P-3466 for Murder, convicting Domingo Dilla y Paular is AFFIRMED with MODIFICATION. Accordingly, accused is hereby
sentenced to suffer Reclusion Perpetua together with its accessory penalties, and is further ORDERED to pay the victim’s
heirs P35,448.00, as actual damages, P50,000.00, as moral damages, and P75,000.00, as civil indemnity for the death of the
victim.
SO ORDERED.4
Hence, this appeal. In a Resolution5 dated April 18, 2012, we required both parties to file their Supplemental Briefs.
However, both parties opted not to file the same.6 Hence, we will resolve this appeal based on the briefs submitted by the
parties before the CA.
After a careful review of the records of the case, the Court finds the appeal to be lacking in merit. The records belie
appellant’s contention that there was no direct proof identifying him as the perpetrator of the crime. The testimonies of
prosecution witnesses Pepito, Jr. and Renegado established without a shadow of doubt that it was appellant who mercilessly
killed his brother, Pepito.
Pepito, Jr. was categorical in his testimony that -
Q Pepito Dilla, Jr., what is your relation to the victim in this case?
A He is my father.
Q How about to the accused in this case[,] Domingo Dilla?
A He is my uncle.
xx
xx
Q On July 22, 2003 at around 5:30 in the afternoon do you remember where you were?
A Yes, sir.
Q Where were you?
A I was at the side of the road in sitio Ilawod, Himaao, Pili, Camarines Sur.
Q x x x [W]hat were you doing there?
A None, sir.
xx
xx
Q While thereat, do you remember x x x any unusual incident?
A Yes, sir.
Q What was that all about?
A I saw my father being chased by uncle Ingo.
Q [Where did] this incident [happen]?
A In sitio Ilawod, Himaao, Pili, Camarines Sur.
Q While your father was being chased by Domingo Dilla how far were you from where
you are seated now will you please point to an object outside this [courtroom]
representing the distance similar to the distance from where you were to the place
where your father [was] being chased by Domingo Dilla?
A That my uncle was angry.
Q Will you please tell us the distance at the time you saw your father was being chased
by your uncle Domingo Dilla, what was the distance of your father to Domingo Dilla?
A Three arms length.
Q After you saw Domingo Dilla chasing your father, what happened next?
A He shot him[,] sir.
Q Of your own knowledge, was your father hit by the shot?
A Yes, sir.
Q Why, what happened to your father?
A He [limped,] sir.
Q Will you please tell us or illustrate to us, as you have said your father was shot by
Domingo Dilla, please indicate to us the gun used by Domingo Dilla?
INTERPRETER:
Witness indicate[d] a length of about 8 inches.
Q After your father was shot by Domingo Dilla, what happened next?
A He stabbed him.
Q Why, what was the position of your father when Domingo Dilla stab[bed] your
father?
INTERPRETER:
Witness illustrate[s] in standing position.
Q What was the position of your father when Domingo Dilla stab[bed] your father?
A He was standing[,] sir and his 2 hands were [at] his side.
Q While your father was being stabbed by Domingo Dilla, where was the relative
position of Domingo Dilla in relation to your father?
A Domingo Dilla was in front.
Q How many times [was] your father x x x stabbed?
A One[,] sir.
Q Considering that you [are] the son of Pepito Dilla, Sr., what did you do?
A I told my grandfather that the two of them were fighting, after I told my grandfather
x x x I went back and approached them but at that time Domingo Dilla was running.
xx
xx
Q What happened to your father?
A He was already lying on the ground[,] sir.
Q What did you do when you [saw] your father x x x already lying on the ground?
A I asked help from the other people who also witness[ed] the incident to bring him to
the hospital.
Q What happened to your father?
A He did not reach the hospital because he died.7
Pepito, Jr.’s testimony was corroborated in all material points by the testimony of Renegado.8chanRoblesv irt ual Lawlib rary
In fine, both the RTC and the CA correctly found appellant guilty beyond reasonable doubt of the crime of murder and
properly sentenced him to suffer the penalty of reclusion perpetua. Moreover, appellant is not eligible for parole pursuant to
Section 3 of Republic Act No. 9346 or the Act Prohibiting the Imposition of Death Penalty in the Philippines. The awards of
civil indemnity in the amount of P75,000.00 and moral damages in the amount of P50,000.00 are proper. In addition, the
heirs of the victim are entitled to exemplary damages in the amount of P30,000.00.
Anent the award of actual damages in the amount of P35,448.00, we find that only the amount of P15,000.00 was duly
receipted.9 The amount of P20,448.0010 which supposedly pertained to expenses incurred during the wake was not
supported by receipts but consisted only of handwritten entries. As we held in People v. Villanueva,11 “when actual damages
proven by receipts during the trial amount to less than P25,000.00, as in this case, the award of temperate damages of
P25,000.00 is justified in lieu of actual damages of a lesser amount.” Accordingly, we grant temperate damages in the
amount of P25,000.00 in lieu of actual damages. In addition, all damages awarded shall earn interest at the rate of 6% per
annum from date of finality of judgment until fully paid.
cha nro bleslaw
WHEREFORE, the assailed June 9, 2011 Decision of the Court of Appeals in CA-G.R.-CR-HC. No. 04088 finding appellant
Domingo Dilla y Paular guilty beyond reasonable doubt of the crime of murder and sentencing him to suffer the penalty
of reclusion perpetua and to pay the heirs of Pepito Dilla y Paular the amounts of P75,000.00 as civil indemnity and
P50,000.00 as moral damages, is AFFIRMED with MODIFICATIONS that appellant is not eligible for parole; appellant is
further ordered to pay the heirs of the victim P30,000.00 as exemplary damages, and P25,000.00 as temperate damages, all
with interest at the rate of 6% per annum from date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 191540 January 21, 2015
SPOUSES JOSE O. GATUSLAO and ERMILA LEONILA LIMSIACO-GATUSLAO, Petitioners,

vs.
LEO RAY V. YANSON, Respondent.
DECISION
DEL CASTILLO, J.:
Petitioners spouses Jose O. Gatuslao and Ermila Leonila Limsiaco Gatuslao (petitioners) are assailing the
December 8, 20091 Order of the Regional Trial Court (RTC) of Bacolod City, Branch 49 in Cad. Case No. 09-2802
which granted respondent Leo Ray2 Yanson's (respondent) Ex Parte Motion for the Issuance of Writ of Possession
over the properties being occupied by petitioners, as well as the February 26, 2010 RTC Order3 denying petitioners'
motion for reconsideration thereto.
Factual Antecedents
Petitioner Ermila Leonila Limsiaco-Gatuslao is the daughter of the late Felicisimo Limsiaco (Limsiaco) who died
intestate on February 7, 1989. Limsiaco was the registered owner of two parcels of land with improvements in the
City of Bacolod described as Lots 10 and 11, Block. 8 of the subdivision plan Psd-38577 and covered by Transfer
Certificates of Title (TCT) Nos. T-334294 and T-24331.5
Limsiaco mortgaged the said lots along with the house standing thereon to Philippine National Bank (PNB). Upon
Limsiaco’s failure to pay, PNB extrajudicially foreclosed on the mortgageand caused the properties’ sale at a public
auction on June 24, 1991 where it emerged as the highest bidder. When the one-year redemption period expired
without Limsiaco’s estate redeeming the properties, PNB caused the consolidation of titles in its name. Ultimately,
the Registry of Deeds of Bacolod City cancelled TCT Nos. T-33429 and T-24331 and in lieu thereof issued TCT
Nos. T-3088186 and T-3088197 in PNB’s name on October 25, 2006.
On November 10, 2006, a Deed of Absolute Sale8 was executed by PNB conveying the subject properties in favor of
respondent. As a consequence thereof, the Registry of Deeds of Bacolod City issued TCT Nos. T-3111259 and T-
31112610 in respondent’s name inlieu of PNB’s titles.
Then, as a registered owner in fee simple of the contested properties, respondent filed with the RTC an Ex-Parte
Motion for Writ of Possession11 pursuant to Section 7 of Act No. 3135,12 as amended by Act No. 4118 (Act No. 3135,
as amended),13 docketed as Cad. Case No. 09-2802.
In their Opposition,14 petitioners argued that the respondent is not entitled to the issuance of an ex-partewrit of
possession under Section 7 of Act No. 3135 since he was not the buyer of the subject properties at the public
auction sale and only purchased the same through a subsequent sale made by PNB. Not being the purchaser at the
public auction sale, respondent cannot file and be granted an ex parte motion for a writ of possession. Petitioners
also asserted that the intestate estate of Limsiaco has already instituted an action for annulment of foreclosure of
mortgage and auction sale affecting the contested properties.15 They argued that the existence of the said civil suit
bars the issuance of the writ of possession and that whatever rights and interests respondent may have acquired
from PNB by virtue of the sale are still subject to the outcome of the said case.
The RTC granted the issuance of the writ of possession in an Order16 dated December 8, 2009. It cited the Court’s
pronouncement in China Banking Corporation v. Lozada,17 viz:
The Court recognizes the rights acquired by the purchaser of the foreclosed property at the public auction sale upon
the consolidation of his title when no timely redemption of the property was made, x x x.
It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is
not redeemed during the period of one year after the registration of the sale. Assuch, he is entitled to the possession
of the said property and can demand it at any time following the consolidation of ownership in his name and the
issuance to him of a new transfer certificate of title. x x x Possession of the land then becomes an absolute right of
the purchaser as confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court.
The purchaser, therefore, in the public auction sale of a foreclosed property is entitled to a writ of possession x x x.18
PNB, therefore, as the absolute owner of the properties is entitled to a writ of possession. And since respondent
purchased the properties from PNB, the former has necessarily stepped into the shoes of the latter. Otherwise
stated, respondent, by subrogation, has the right to pursue PNB’s claims against petitioners as though they were his
own.
The dispositive portion of the above Order reads:
WHEREFORE, premises considered, the Court hereby issues a writ of possession in favor of movant Leo Ray V.
Yanson ordering Spouses Jose and Mila Gatuslao, their heirs, assigns, successors-in-interest, agents,
representatives and/or any and all other occupants or persons claiming any interest or title of the subject property to
deliver the possession of said property to the herein movant/ petitioner.
SO ORDERED.19
Petitioners moved for reconsideration20 which was denied in an Order21 dated February 26, 2010, thus:
WHEREFORE, the Motion for Reconsideration filed by Oppositors is hereby DENIED. Thus, the Order dated
December 8, 2009 stands.
SO ORDERED.22
Respondent on March 19, 2010 moved to execute the possessory writ23 while petitioners on April 15, 2010 filed with
this Court the present Petition for Review on Certiorari.
On September 30, 2010, the RTC issued an Order24 directing the implementation of the writ. And per Sheriff’s
Return of Service,25 the same was fully implemented on March 14, 2011. Issues
1. According to petitioners, the pending action for annulment of foreclosure of mortgage and the corresponding sale
at public auction of the subject properties operates as a bar to the issuance of a writ of possession;
2. Claiming violation of their right to due process, petitioners likewise assert that as they were not parties to the
foreclosure and are, thus, strangers or third parties thereto, they may not be evicted by a mere ex partewrit of
possession; and
3. Lastly, petitioners argue that respondent, a mere purchaser of the contested properties by way of a negotiated
sale between him and PNB, may not avail of a writ of possession pursuant to Section 7 of Act No. 3135, as
amended, as he is not the purchaser at the public auction sale. Petitioners further contend that respondent has no
right to avail of the writ even by way of subrogation.
Our Ruling
Preliminarily, we note that petitioners’ direct resort to this Court from the assailed Orders of the RTC violates the rule
on hierarchy of courts. Their remedy lies with the Court of Appeals. Considering however the length of time this case
has been pending and in view ofour January 26, 2011 Resolution26 giving due course to the Petition, we deem it
proper to adjudicatethe case on its merits.
The Petition is denied.
It is settled that the issuance of a Writ of

Possession may not be stayed by a
pending action for annulment of
mortgage or the foreclosure itself.
It is petitioners’ stand that the pending action for annulment of foreclosure of mortgage and of the corresponding
sale at public auction of the subject properties operates asa bar to the issuance of a writ of possession.
The Court rules in the negative. BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc.27reiterates
the long-standing rule that:
[I]t is settled that a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of the
writ of possession. The trial court, where the application for a writ of possession is filed, does not need to look into
the validity of the mortgage or the manner of its foreclosure. The purchaser is entitled to a writ of possession without
prejudice to the outcome of the pending annulment case.
This is in line with the ministerial character of the possessory writ. Thus, in Bank of the Philippine Islands v.
Tarampi,28 it was held:
To stress the ministerial character of the writ of possession, the Court has disallowed injunction to prohibit its
issuance, just as it has held that its issuance may not be stayed by a pending action for annulment of mortgage or
the foreclosure itself.
Clearly then, until the foreclosure sale of the property in question is annulled by a court of competent jurisdiction, the
issuance of a writ of possession remains the ministerial duty of the trial court. The same is true with its
implementation; otherwise, the writ will be a useless paper judgment – a result inimical to the mandate of Act No.
3135 to vest possession in the purchaser immediately.29 (Emphases supplied)
Clearly, petitioners’ argument is devoid of merit.
Petitioners are not strangers or third

parties to the foreclosure sale; they were
not deprived of due process.
Section 7 of Act No. 3135, as amended, sets forth the following procedure in the availment of and issuance of a writ
of possession in cases of extrajudicial foreclosures, viz:
SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First
Instance (Regional Trial Court) of the province or place where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the
property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without
violating the mortgage or without complying with the requirements ofthis Act. Such petition shall be made under oath
and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in
special proceedings in the case of property registered under the Mortgage Law or under section one hundred and
ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in
the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall,
upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of
Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and
the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the
province in which the property is situated, who shall execute said order immediately.
Although the above provision clearly pertains to a writ of possession availed of and issued within the redemption
period of the foreclosure sale, the same procedure also applies to a situation where a purchaser is seeking
possession of the foreclosed property bought at the public auction sale afterthe redemption period has expired
without redemption having been made.30 The only difference is that in the latter case, no bond is required therefor,
as held in China Banking Corporation v. Lozada,31 thus:
It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is
not redeemed during the period of one year after the registration of the sale. Assuch, he is entitled to the possession
of the said property and can demand it at any time following the consolidation of ownership in his name and the
issuance to him of a new transfer certificate of title. The buyer can in fact demand possession of the land even
during the redemption period except that he has to post a bond inaccordance with Section 7 of Act No. 3135, as
amended. No such bond is required after the redemption period if the property is not redeemed. x x x32 (Emphasis
supplied)
Upon the expiration of the period to redeem and no redemption was made, the purchaser, as confirmed owner, has
the absolute right to possess the land and the issuance of the writ of possession becomes a ministerial duty of the
court upon proper application and proof of title.33
Nevertheless, where the extrajudicially foreclosed real property is in the possession of a third party who is holding
the same adversely to the judgment debtor or mortgagor, the RTC’s duty to issue a writ of possession in favor of the
purchaser of said real property ceases to be ministerial and, as such, may no longer proceed ex parte.34 In such a
case, the trial court must order a hearing to determine the nature of the adverse possession.35 For this exception to
apply, however, it is not enough that the property is in the possession of a third party, the property must also be held
by the third party adversely to the judgment debtor or mortgagor,36 such as a co-owner, agricultural tenant or
usufructuary.37
In this case, petitioners do not fall under any of the above examples of such a third party holding the subject
properties adversely to the mortgagor; nor is their claim to their right of possession analogous to the foregoing
situations. Admittedly, they are the mortgagor Limsiaco’s heirs. It was precisely because of Limsiaco’s death that
petitioners obtained the right to possess the subject properties and, as such, are considered transferees or
successors-in-interest of the right of possession of the latter. As Limsiaco’s successors-in-interest, petitioners
merely stepped into his shoes and are, thus, compelled not only to acknowledge but, more importantly, to respect
the mortgage he had earlier executed in favor of respondent.38 They cannot effectively assert that their right of
possession is adverse to that of Limsiaco as they do not have an independent right of possession other than what
they acquired from him.39 Not being third parties who have a right contrary to that of the mortgagor, the trial court
was thus justified in issuing the writ and in ordering its implementation.
Petitioners’ claim that their right to due process was violated by the mere ex-parte issuance of the writ of possession
must likewise fail. As explained, petitioners were not occupying the properties adversely to the mortgagor, hence, a
writ of possession may be issued ex parte.And precisely because of this ex parte nature of the proceedings no
notice is needed to be served40 upon them. It has been stressed time and again that "the ex parte nature of the
proceeding does not deny due process to the petitioners because the issuance of the writ of possession does not
prevent a separate case for annulment of mortgage and foreclosure sale."41 Consequently, the RTC may grant the
petition even without petitioners’ participation. Nevertheless, even if the proceedings in this case was supposed to
be ex parte, the records of the casewould show that petitioners’ side on this controversy was actuallyheard as
evidenced by the numerous pleadings42 filed by them in the lower court. In fact, in its July 27, 2009 Order,43 the RTC
expressly directed respondent, "in observance of equity and fair play x x x to furnish [petitioners] with a copy of his
motion/petition and toshow x x x proof of compliance thereof x x x."44 Then and now, the Court holds that a party
cannot invoke denial of due process when he was given an opportunity to present his side.45
Respondent is entitled to the issuance of

writ of possession.
Petitioners insist that respondent is not entitled to the issuance of the writ of possession under Section 7 of Act No.
3135 as he is only a buyer of the subject properties in a contract of sale subsequently executed in his favor by the
actual purchaser, PNB. To them, it is only the actual purchaser of a property at the public auction sale who can ask
the court and be granted a writ of possession.
This argument is not tenable. Respondent, as a transferee or successor-ininterest of PNB by virtue of the contract of
sale between them, is considered to have stepped into the shoes of PNB. As such, he is necessarily entitled to avail
of the provisions of Section 7 of Act No. 3135, as amended, as if he isPNB. This is apparent in the Deed of Absolute
Sale46 between the two, viz:
1. The Vendor hereby sells, transfer[s] and convey[s] unto[, and] in favor of the Vendee, and the latter’s assigns and
successors-in-interest, all of the former’s rights and title to, interests and participation in the Propertyon an "AS IS,
WHERE IS" basis.It is thus understood that the Vendee has inspected the Property and has ascertained its
condition.
xxxx
3. The Vendor is selling only whatever rights and title to, interests and participation it has acquired over the
Property, and the Vendee hereby acknowledges full knowledge of the natureand extent of the Vendor’s rights and
title to, [and] interests and participation in the Property.
4. x x x The Vendee further agrees to undertake, at its/his/her expense, the ejectment of any occupant of the
Property.47 (Emphases in the original)
Verily, one of the rights that PNB acquired as purchaser of the subject properties at the public auction sale, which it
could validly convey by way of its subsequent sale of the same to respondent, is the availment of a writ of
possession. This can be deduced from the above-quoted stipulation that "[t]he [v]endee further agrees to undertake,
at xxx his expense, the ejectment of any occupant of the [p]roperty." Accordingly, respondent filed the contentious
ex partemotion for a writ of possession to eject petitioners therefrom and take possession of the subject properties.
Further, respondent may rightfully take possession of the subject properties through a writ of possession, even if he
was not the actual buyer thereof at the public auction sale, in consonance with our ruling in Ermitaño v. Paglas.48 In
the said case, therein respondent was petitioner’s lessee ina residential property owned by the latter. During the
lifetime of the lease, respondent learned that petitioner mortgaged the subject property in favor of Charlie Yap (Yap)
who eventually foreclosed the same. Yap was the purchaser thereof in an extrajudicial foreclosure sale. Respondent
ultimately bought the property from Yap. However, it was stipulated in the deedof sale that the property was still
subject to petitioner’s right of redemption. Subsequently and despite written demands to pay the amounts
corresponding to her monthly rental of the subject property, respondent did not anymore pay rents. Meanwhile,
petitioner’s period to redeem the foreclosed property expired on February 23, 2001. Several months after, petitioner
filed a case for unlawful detainer against respondent. When the case reached this Court, it ruled that therein
respondent’s basis for denying petitioner’s claim for rent was insufficient as the latter, during the period for which
payment of rent was being demanded, was still the owner of the foreclosed property. This is because at that time,
the period of redemption has not yet expired. Thus, petitioner was still entitled to the physical possession thereof
subject, however, to the purchaser’s right to petition the court to give him possession and to file a bond pursuant to
the provisions of Section 7 ofAct No. 3135, as amended. However, after the expiration of the redemption period
without redemption having been made by petitioner, respondent became the owner thereof and consolidation of title
becomes a right. Being already then the owner, respondent became entitled to possession. Consequently,
petitioner's ejectment suit was held to have been rendered moot by the expiration of the period of redemption
without petitioner redeeming the properties. This is considering that petitioner already lost his possessory right over
the property after the expiration of the said period.
Although the main issue in Ermitano was whether respondent was correct in refusing to pay rent to petitioner on the
basis of her having bought the latter's foreclosed property from whom it was mortgaged, the case is enlightening as
it acknowledged respondent's right, as a subsequent buyer of the properties from the actual purchaser of the same
in the public auction sale, to possess the property after the expiration of the period to redeem sans any redemption.
Verily, Ermitano demonstrates the applicability of the provisions of Section 7 of Act No. 313 5 to such a subsequent
purchaser like respondent in the present case.
All told, the Court affirms the RTC's issuance of the Writ of Possession in favor of respondent. WHEREFORE, the
1âw phi 1
Petition is hereby DENIED. The December 8, 2009 and February 26, 2010 Orders of the Regional Trial Court of
Bacolod City, Branch 49 in Cad. Case No. 09-2802 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 191710, January 14, 2015
DEMETRIA DE GUZMAN, AS SUBSTITUTED BY HER HEIRS OLGA C. BARBASO AND NOLI G. CEMENTTNA;* LOLITA
A. DE GUZMAN; ESTHER G.MILAN; BANAAG A. DE GUZMAN; AMOR G. APOLO, AS SUBSTITUTED BY HIS HEIRS
ALBERTO T. APOLO, MARK APOLO AND GEORGE APOLO;* HERMINIO A. DE GUZMAN; LEONOR G. VTVENCIO;
NORMA A. DE GUZMAN; AND JOSEFINA G. HERNANDEZ, Petitioners, v. FBLINVEST DEVELOPMENT
CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
In this Petition for Review on Certiorari,1 petitioners question the extent of the easement of right of way granted to them and
the indemnity for the same as fixed by the Court of Appeals (CA) in its September 25, 2009 Decision2 and March 1, 2010
Resolution3 in CA-G.R. CV No. 87920.
Factual Antecedents
Petitioners Demetria de Guzman, Lolita A. de Guzman, Esther G. Milan, Banaag A. de Guzman, Amor G. Apolo, Herminio A.
de Guzman, Leonor G. Vivencio, Norma A. de Guzman and Josefina G. Hernandez (petitioners)4 were co-owners in fee simple
of a parcel of land measuring 15,063 square meters and situated in Barrio Bulao, Cainta, Rizal, which was later subdivided
among them and for which individual titles were issued. The property is enclosed and surrounded by other real properties
belonging to various owners. One of its adjoining properties is Filinvest Home Subdivision Phase IV-A, a subdivision owned
and developed by respondent Filinvest Development Corporation (respondent) which, coming from petitioners' property, has
a potential direct access to Marcos highway either by foot or vehicle. As such, petitioners filed on August 17, 1988 a
Complaint for Easement of Right of Way5 against respondent before the Regional Trial Court (RTC) of Antipolo.
Unwilling to grant petitioners a right of way within its subdivision, respondent alleged in its Answer that petitioners have an
access to Sumulong Highway through another property adjoining the latter's property. In fact, the distance from petitioners'
property to Sumulong Highway using the said other property is only 1,500 meters or shorter as compared to the 2,500-
meter distance between petitioners' property and Marcos Highway using respondent's subdivision.6
On April 30, 1993, the RTC rendered a Decision7 granting petitioners the right of way across respondent's subdivision,
ratiocinating as follows: chan roble svirtuallaw lib rary
The Court holds that a right of way as prayed in the complaint can be granted.
The adverted route by [respondent] is unfeasible and unavailing. The route, aside from being hilly, has to traverse raw lands
[denominated] 3043-A which belong to different owners with no designated road lot thus the impossibility of free access
thereon. Aside from that fact it is not passable by vehicular means.
Whereas if [petitioners] would pass through the [respondent's] road lot particularly Lot 15 access to the Marcos Highway is
readily available to [petitioners'] property. Only a fence [separates] the Filinvest Subdivision and the [petitioners'] property
[which] could be removed x x x anytime.
While in the survey of the property of the [petitioners] it is shown that the distance from the subject lot to the Marcos
Highway is approximately 2,350 meters and the distance from Sumulong Highway to the subject lot is 1,400 meters, such
short distance could not be used as absolute basis to deny the [petitioners] the relief prayed for.
As held in Bacolod-Murcia Milling Co. vs. Capitol Subd., Inc., L-25887, July 26, 1966 and by express provision of [A]rticles
649 and 650 of the Civil Code, a compulsory right of way cannot be obtained unless four requisites are first shown to exist,
namely: (1) that it is surrounded by other immovables and has no adequate outlet to a public highway; (2) that there is
payment of proper indemnity; (3) that the isolation is not due to the dominant estate's own acts; and (4) that the right of
way claimed is at the point least prejudicial to the servient estate and in so far as consistent with this rule where the distance
from the dominant estate to a public highway may be the shortest.
The foregoing requirements are present in this case.
As already stated even if it appears that the distance from the subject property to Sumulong Highway is the shortest route,
yet it is prejudicial to the [petitioners].
The road in said route is undeveloped, owned by several owners, a raw lot, hilly, while if it would be [respondent's] property
which would be the [servient] estate it only takes the removal of the fence in order that [petitioners] could have access to
the public highway.8 cralaw lawlib rary
As to the indemnity, the RTC said: chanrob lesvi rtual lawlib rary
Lastly, as a requirement for the granting of the easement indemnity is hereby placed at P400,000.00 considering x x x the
benefits derived by the dominant estate and the type of the road therein which is concrete.9 cralawlaw lib rary
Upon respondent's appeal, the CA, in its February 13, 1996 Decision,10 affirmed petitioners' entitlement to legal easement of
right of way. However, it set aside the P400,000.00 indemnity fixed by the RTC considering that the exact area of the right of
way, as well as its value per square meter, had not yet been determined. The CA thus remanded the case to the RTC for the
determination thereof and the corresponding amount of indemnity.
As none of the parties appealed the said CA Decision, the same became final and executory.
Established during the remand proceedings was the fair market value of respondent's property which was pegged by the
Municipal Assessor's Office of Cainta at P1,620.00 per square meter. Anent the extent of the property affected by the right of
way granted by virtue of the April 30, 1993 RTC Decision as affirmed by the CA, the parties were, however, in
disagreement, viz: c hanro blesvi rt uallawl ibra ry
[Counsel for Petitioners]

Atty. Barbaso: x x x But if we are going to [take it from] this affirmed decision
of the trial court[,] it made [particular] mention of x x x Road Lot 15 access as
found in page 4 of the said decision and the said decision also mentioned
about a statement and [I] quote x x x: "and it only takes the removal of the
fence in order [that] the [petitioners] could have access on the highway.["]
So, this is [the] decision. I am quoting it from the decision. So if the decision
says it [would] only take the removal of the fence, [it is only] the fence that
we are going to remove. It's found on page 4 of the decision of the lower
court.
[Counsel for Respondent]
Atty. [Ma'am], may I?
Tolentino:
Atty. There is no other decision. This is the only decision we are referring to. [It is]
Barbaso: one and the same decision.
Court: Decision of the Court of Appeals.
Atty. Court of Appeals decision, page 12, states: ["]regrettably the lower court did
Tolentino:not adequately explain the basis for fixing the indemnity at P400,000.00.
There was no finding as to the exact measurement of the right of way, its area
in square meters, its value by square meters, the cost of the construction.["]
So...
xxxx
Atty. Where the easement is established in such a manner that its use may be
Tolentino:continuous by the dominant [e]state [by] establishing a permanent passage
the indemnity will consist [of] the value of the land occupied and the amount
of damage.
Atty. We are not occupying the whole of the entrance up to this very point [Road
Barbaso: Lot 15].
Atty. But you cannot reach this point [Road Lot 15] if you don't pass the entrance.
Tolentino:
Atty. Only passing that's why the servitude was granted. That's why the easement
Barbaso: was granted.
Atty. We will submit, your honor, whatever ruling you make.
Tolentino:
Atty. Your honor...
Barbaso:
Court: The claim of [respondent] is from the gate up to here [Road Lot 15].
Atty. Yes, your honor.
Tolentino:
Court: [To Atty. Barbaso] And your claim is from that portion to here [from
petitioners' property to Road Lot 15].
xxxx
Court: Do it in writing including the jurisprudence in support of your respective
claim[s].11
As can be gleaned from the above, petitioners insisted that the right of way pertains only to Road Lot 15 where the fence
separating their property from respondent's subdivision, which was supposed to be removed to grant them access thereto, is
located. On the other hand, it was respondent's contention that the right of way covers the whole stretch from petitioners'
property all the way to its subdivision's gate leading to Marcos Highway.
In resolving the same in its Order12 of June 1, 2005, the RTC deduced, from the April 30, 1993 RTC Decision and the
February 13, 1996 CA Decision, that the right of way granted pertains only to Road Lot 15, viz: chan roble svirtuallaw lib rary
Based on the records of the case, the Decision of this Court and that of the Court of Appeals are pointing to Road Lot 15 as
the subject lot of the right of way granted to the [petitioners]. The said Decisions had long attained finality with respect to
the subjectlot which should be the basis for the determination of just compensation.13 cralaw lawlib rary
Hence, it ruled:
chan roble svirtual lawlib rary
In view of the foregoing, the Court so holds that the appropriate amount of indemnity due to the [respondents] from the
[petitioners] for the right of way granted to the latter shall be assessed at One Thousand Six Hundred Twenty Pesos
(P1,620.00) per square meter of Road Lot 15 which consists of 264 square meters and the [petitioners] to contribute
proportionately to the costs of the construction of the right of way on Road Lot 15 to be determined by both parties.
Aggrieved, respondent appealed the said Order to the CA. It contended that under Articles 64915 and 65016 of the Civil Code,
the measurement of the land comprising a right of way should be the distance of the dominant estate to the public highway.
Thus, respondent argued that the right of way should not pertain only to Road Lot 15 as held by the RTC, but should also
include Road Lots 3, 10, 6, 4, 2 and 1 which petitioners would likewise use or traverse before they could reach Marcos
Highway. It thus contended that the total area to be indemnified is 23,500 square meters and not the mere 264-square
meter area of Road Lot 15. Respondent likewise insisted that petitioners should also share in the costs of the construction
and maintenance of these road lots.
The CA agreed with respondent and granted the appeal through its Decision17 of September 25, 2009. It held that the RTC
erred in concluding that the right of way pertains only to Road Lot 15. It gathered from the April 30,1993 RTC Decision that
what was actually granted to petitioners as a right of way from their property all the way to Marcos Highway had an
approximate distance of 2,350 meters. This fact was not disputed by petitioners when they appealed the said RTC Decision.
And as per evidence, such distance of 2,350 meters covers not only Road Lot 15 but also Road Lots 3, 10, 6, 4, 2, and 1.
Hence, the proper indemnity, per the case of Woodridge School, Inc. v. ARB Construction Co., Inc.,18 should consist of the
value of the entire stretch of the right of way, which measures 2,350 meters in length and 10 meters in width or of a total
area of 23,500 square meters at a price of P1,620.00 a square meter, plus damages caused to the servient estate.
As regards the amount of damages, the appellate court held that petitioners cannot be held liable for the cost of the
construction of the road lots as they are already existing road lots in respondent's subdivision. Neither is there a need for the
construction of new road lots. What it would take for petitioners to have access to Marcos Highway is merely the removal of a
fence that separates their property from respondent's subdivision. At the most, the only damage that petitioners may cause
in the establishment of the right of way is the wear and tear of the affected road lots.
Thus, the dispositive portion of the CA's Decision: chanrob lesvi rtua llawli bra ry
WHEREFORE, premises considered, the Order dated 1 June 2005 issued by the Regional Trial Court of Antipolo City, Branch
72, is MODIFIED. Plaintiffs-appellees are ordered to pay defendant-appellant the proper amount of indemnity for the legal
easement of right of way consisting of (1) the value of the road lots affected, which has an area of 23,500 square meters
assessed at PI,620.00 per square meter and (2) the contribution to be made by plaintiffs-appellees in the maintenance of
said road lots, to be determined by both parties.
Petitioners moved for reconsideration.20 The CA, however, denied the same in its March 1, 2010 Resolution21 for having been
filed out of time.
Hence, this Petition. chanRoble svi rtual Lawli bra ry
Issues
The essential questions to be answered in this Petition are the following: (1) What is the extent of the right of way granted to
petitioners under the April 30, 1993 RTC Decision as affirmed by the CA in its February 13, 1996 Decision? (2) Assuming that
the subject right of way pertains to the road network in respondent's subdivision, is the CA correct in its assessment of
indemnity?
Our Ruling
There is partial merit in the Petition.
The liberality rule must be observed in this case.
The Court notes the attendance of some procedural issues in this case which it deems proper to first pass upon.
The Petition is denominated as a petition for certiorari. However, under the subheading "IV. BRIEF STATEMENT OF MATTERS
INVOLVED" of the Petition, it was alleged that: chanroble svi rtual lawlib rary
This is an action brought by the plaintiffs-petitioners pursuant to Rule 45 of the Rules of Court against the assailed
decision and resolution of the Court of Appeals which are both not in accord with law as will be shown in the
discussion hereinafter.22 (Emphases supplied)
The main issue then assigned for resolution is whether the CA was correct in ruling that the property subject of the right of
way pertains not only to Road Lot 15 but to the whole stretch of road network commencing from Road Lot 15, then passing
through Road Lots 3, 10, 6, 4, 2 and 1, all the way to Marcos Highway. The Court notes that this matter is a proper
allegation found in a petition for review on certiorariunder Rule 4523 of the Rules of Court.
Yet, in petitioners' Prefatory Statement, they anchor their Petition on the alleged grave abuse of discretion committed by the
CA. Thus: chanroblesvi rt uallawl ibra ry
Plaintiffs-petitioners are left with no appeal, nor is there any plain, speedy, and adequate remedy in the ordinary
course of law after the respondent Court of Appeals incorrectly den[ied] their motion for reconsideration24 x x x
Respondent Court of Appeals gravely abused its discretion amounting to lack of jurisdiction not only in reversing a
final ruling of the trial Court, but also on the award of indemnity x x x.25 cralawlawl ibra ry
Then in their Arguments/Discussion, petitioners alleged that: chanroble svi rtual lawlib rary
The Court of Appeals whimsically and capriciously reversed the final ruling of the Regional Trial Court, Branch 72,
Antipolo City x x x.26 (Emphasis supplied)
Furthermore, petitioners impleaded the appellate court as public respondent. These, on the other hand, are salient features
of a petition for certiorari under Rule 65.
In the case of Bicol Agro-Industrial Producers Cooperative, Inc. (BAPCI) v. Obias,27 citing Active Realty and Development
Corporation v. Fernandez,28 the Court revisited the difference between a petition for review on certiorari (under Rule 45) and
a petition for certiorari (under Rule 65), to wit: chan roblesv irtuallawl ib rary
A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction committed by the lower court, or grave abuse
of discretion which is tantamount to lack of jurisdiction. This remedy can be availed of when "there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law."
Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a mode of appeal available to a party desiring
to raise only questions of law from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law.
xxx The general rule is that the remedy to obtain reversal or modification of judgment on the merits is appeal. Thus, the
proper remedy for the petitioner should have been a petition for review on certiorari under Rule 45 of the Rules of Court
since the decision sought to be reversed is that of the CA. The existence and availability of the right of appeal proscribes a
resort to certiorari, because one of the requisites for availment of the latter is precisely that there should be no appeal. The
remedy of appeal under Rule 45 of the Rules of Court was still available to the petitioner.29 cralaw lawlib rary
It likewise stated in Bicol Agro-Industrial Producers Cooperative, Inc. (BAPCI) that: chanrobl esvirt uallawl ibra ry
Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of
the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a
continuation of the appellate process over the original case.
Moreover, it is basic that one cannot avail of the remedy provided for under Rule 65 when an appeal is still available. x x
x30
cralaw lawlib rary
Sifting through the issues and other matters raised in the present petition, it becomes apparent that the crucial question
calling for this Court's Resolution pertains to the CA's appreciation of the issue and evidence presented by the parties, and
not the alleged grave abuse of discretion committed by the appellate court in rendering its Decision. Therefore, the issue in
the present controversy clearly falls under the classification of errors of fact and law - questions which may be passed upon
by this Court only via a petition for review on certiorari under Rule 45. Albeit it must be made clear that questions of fact
may only be reviewed by this Court under exceptional circumstances like when the findings of facts of the CA are at variance
with those of the trial court,31 as in this case.
While the Court agrees with respondent's observation that based on the allegations, issues and other matters contained in
the Petition, there seems to be a general confusion on the part of petitioners' counsel in ascertaining which remedy is more
appropriate under the given circumstances, it shall nevertheless treat the petition as one filed under Rule 45, especially since
it was filed well within the reglementary period provided under the said rule.32 It was held in Sanchez v. Court of
Appeals:33 Cha nRobles Vi rtua lawlib rary
The Rules of Court should be liberally construed in order to promote their object of securing a just, speedy and inexpensive
disposition of every action or proceeding.
The rules of procedure should be viewed as mere tools designed to aid the courts in the speedy, just and inexpensive
determination of the cases before them. Liberal construction of the rules and the pleadings is the controlling principle to
effect substantial justice. Litigations should, as much as possible, be decided on their merits and not on mere
technicalities.34 c ralawlawl ibra ry
Besides and as already mentioned, the conflicting findings of fact and conclusions arrived at by the RTC and CA,35 as well as
the fact that this case has been awaiting resolution for close to three decades now, are ample reasons for this Court to rule
on the issues raised herein without much resort to technicalities.
Finally, we note that in its March 1, 2010 Resolution, the CA denied petitioners' motion for reconsideration for having been
filed out of time. According to the CA, petitioners had until October 21, 2009 within which to file their motion for
reconsideration; yet, they filed the same on October 22, 2009.
We do not concur with the CA on this matter. We perused the records of the case and find that the petitioners timely filed
their motion for reconsideration. In the envelop attached to the dorsal portion of petitioners' transmittal letter,36 it was
shown that petitioners filed by registered mail their motion for reconsideration on October 21, 2009 at the Broadway
Centrum Post Office, Quezon City. It was thus timely filed.
Now the substantive issues.
The right of way granted to petitioners covers the network of roads within respondent's subdivision and not merely Road Lot
15.
Petitioners aver that the right of way granted them under the April 30, 1993 RTC Decision pertains only to Road Lot 15 based
on the following portion thereof: chan roble svirtuallaw lib rary
Whereas if [petitioners] would pass through the [respondent's] road lot particularly Lot 15 access to the Marcos Highway is
readily available to [petitioners'] property. Only a fence [separates] the Filinvest Subdivision and the [petitioners'] property
[which] could be removed x x x anytime.37 cralawlawlib rary
They argue that the CA in effect improperly reversed and set aside the above final ruling of the RTC when it declared instead
that the right of way is composed of the road network within respondent's subdivision.
Petitioners' argument is untenable.
To the Court's mind, the cause of confusion as regards the extent of the right of way granted to petitioners is the absence in
the said RTC Decision of any categorical statement with respect thereto. Be that as it may, it is not difficult to conclude
therefrom that what was intended to serve as petitioners' right of way consisted of the road network within respondent's
subdivision and not merely of Road Lot 15. As may be recalled, the RTC then in resolving the complaint for easement of right
of way was confronted with the contentious issue as to which between the two routes from petitioners' property, i.e., the one
passing through respondent's subdivision leading to Marcos Highway or the one passing through another property leading to
Sumulong Highway, is the more adequate and less prejudicial route pursuant to the requirement of the law. Thus, when it
made the following comparison and eventually concluded that the route passing through respondent's subdivision is the more
adequate and the less prejudicial way, what it obviously had it mind was the road network in respondent's subdivision since
the measurement thereof in meters corresponds with that mentioned by the RTC, viz: chan roble svirtual lawlib rary
While in the survey of the property of the [petitioners] it is shown that the distance from the subject lot to the
Marcos Highway is approximately 2350 metersand the distance from Sumulong Highway to the subject lot is 1,400
meters, such short distance could not be used as absolute basis to deny the [petitioners] the relief prayed for.38 c ralawlawl ibra ry
On the other hand, the portion of the RTC Decision relied upon by petitioners can in no way be taken to mean that Road Lot
15 alone comprises the right of way granted. By its context, it was only intended to support the RTC's conclusion that the
route within respondent's subdivision is the less prejudicial between the two considered routes because it would only take the
removal of the fence therein for petitioners to have access to respondent's network of roads which, in turn, would make
Marcos Highway accessible to them.
Also, the fact that the CA in its February 13, 1996 Decision observed that the RTC failed to provide in its April 30, 1993
Decision the exact measurement of the right of way does not negate the conclusion that the said right of way refers to
respondent's network of roads. It must be remembered that the RTC Decision merely mentioned the distance between
Marcos Highway and petitioners' property passing through respondent's subdivision as 2,350 meters. There was no mention
with respect to the width of the affected roads which is needed in order to come up with the total area in square meters. This
is why the CA also directed the determination of the exact measurement of the right of way when it remanded the case to
the RTC. During trial, evidence was received that the roads have a width of 10 meters. Multiplying these factors, i.e., length
of 2,350 meters x width of 10 meters, the total area of the roads affected is 23,500 square meters.
Moreover, petitioners already admitted during the remand proceedings that that the right of way granted to them affects
several road lots within respondent's subdivision. As borne out by the records, respondent formally offered as part of its
exhibits a scale map of its subdivision for the purpose of proving the identity of the road lots affected by the right of
way.39 In their Comment on the Formal Offer of Exhibits,40petitioners did not proffer any objection to the said exhibit, but
merely averred that they find irrelevant respondent's submission of the fair market value of the said roads and that the same
were also being used in common by the subdivision dwellers.
Section 4, Rule 129 of the Rules of Court provides: chan rob lesvi rtual lawlib rary
SEC. 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.
"A party may make judicial admissions in (a) the pleadings; (b) during the trial, either by verbal or written manifestations or
stipulations; or (c) in other stages of the judicial proceeding. It is an established principle that judicial admissions cannot be
contradicted by the admitter who is the party himself and binds the person who makes the same, and absent any showing
that this was made thru palpable mistake, no amount of rationalization can offset it."41 Since petitioners already judicially
admitted that the right of way affects a number of road lots, they cannot not now claim that it only comprises Road Lot 15.
Their admission is binding on them.
Besides and logically speaking, if petitioners would indemnify respondent only for Road Lot 15, it follows then that said
particular road lot should be the only road lot for which they shall be allowed access. They cannot be allowed access to the
other road lots leading to and from the highway as they are not willing to pay indemnity for it. In such a case, the purpose of
the right of way, that is, for petitioners to have access to the highway, would thus be defeated.
The ruling in Woodridge is applicable to the present case.
The CA in assessing the indemnity in this case relied on the case of Woodridge. Petitioners, however, question the
applicability of Woodridge to present case. According to them, Woodridge is not in point since in the said case the right of
way granted is for the exclusive occupation by the dominant estate. Unlike in this case, the road network is not for the
exclusive use by the dominant estate but for the common use together with the residents of respondent's subdivision.
For discussion purposes, a short background on Woodridge is needed. In the said case, the adjacent lots of co-petitioners
Woodridge School, Inc. and Miguela Jimenez-Javier were bounded in the west by a road in respondent ARB Construction Co.,
Inc's (ARB) Soldier Hills Subdivision IV, which leads to Marcos Alvarez Avenue, a public highway. There is no existing
adequate outlet to and from petitioners' properties except through the said road which was being used by the general public.
Subsequently, ARB fenced the perimeter of the road fronting the properties of petitioners, thus, effectively cutting off the
latter's access to and from the public highway. Petitioners thus filed a complaint before the trial court to enjoin ARB from
depriving them of the use of the subject subdivision road. The trial court rendered judgment in favor of petitioners but this
was reversed by the CA on appeal. The appellate court held that the road is private property; hence, ARB can exclude
petitioners from the use thereof. Nevertheless, it declared that a compulsory right of way exists in favor of petitioners and
awarded P500,000.00 indemnity to ARB for the use of the road lot. When the case reached this Court, it affirmed the grant of
right of way. With respect to the indemnity awarded, the Court said: chanroble svi rtual lawlib rary
In the case of a legal easement, Article 649 of the Civil Code prescribes the parameters by which the proper indemnity may
be fixed. Since the intention of petitioners is to establish a permanent passage, the second paragraph of Article 649 of the
Civil Code particularly applies:
Art. 649 xxx
Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant
estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage caused to the servient estate. xxx
On that basis, we further hold that the appellate court erred in arbitrarily awarding indemnity for the use of the road lot.
The Civil Code categorically provides for the measure by which the proper indemnity may be computed: value of the land
occupied plus the amount of the damage caused to the servient estate. Settled is the rule in statutory construction that
'when the law is clear, the function of the courts is simple application.' Thus, to award indemnity using factors different from
[those] given by the law is a complete disregard of these clear statutory provisions and is evidently arbitrary. This the Court
cannot countenance. The Civil Code has clearly laid down the parameters and we cannot depart from them. Verba legis non
est recedendum.42 (Emphases and italics in the original)
But since the metes and bounds of the property covered by the easement were not yet defined, the Court
in Woodridge remanded the case to the trial court for the determination of the same and of the corresponding indemnity,
hinting that the trial court may take into consideration the fact that the affected road lot is being used by the general public
in mitigating the amount of damage that the servient estate is entitled to.
The above summary of Woodridge shows that petitioners' understanding of the said case is misplaced. Contrary to their
assertion, the right of way in the said case was not for the exclusive use or occupation of the dominant estate. It was
actually undisputed there that the road covered by the right of way was being used by the general public such that the Court
even advised the trial court that in fixing the amount of damages, it may take into consideration the said fact. Hence, the
alleged difference between Woodridgeand this case is merely perceived by petitioners.
On the other hand, the Court notes the following factual similarities between the two cases: (1) the servient estates are both
subdivisions; (2) the easements of right of way consist of existing and developed road/roads; (3) the right of way would be
used in common by the dominant estates and the residents of the subdivisions; and (4) the intention of petitioners in both
cases is to establish a permanent passage. Indeed, Woodridge is on all fours with the present case. Hence, as held therein
and pursuant to the second paragraph of Article 649, the proper indemnity in this case shall consist of the value of the land
plus the damages caused to the servient estate.
It is the needs of the dominant estate which ultimately determines the width of the passage.
The Court, however, deems it necessary to modify the width of the easement which would serve as basis in fixing the value
of the land as part of the proper indemnity.
Article 651 of the Civil Code provides:

c han roblesv irt uallawl ibra ry
Art. 651. The width of the easement of right of way shall be that which is sufficient for the needs of the dominant estate, and
may accordingly be changed from time to time.
According to Senator Arturo M. Tolentino, a noted civilist, it is the needs of the dominant tenement which determine the
width of the passage.43
As mentioned, the right of way constituting the easement in this case consists of existing and developed network of roads.
This means that in their construction, the needs of the dominant estate were not taken into consideration precisely because
they were constructed prior to the grant of the right of way. During the remand proceedings, it was established that the
width of the affected roads is 10 meters. Multiplied by the distance of 2,350 meters, the total area to be indemnified is
23,500 square meters and at a price of P1,620.00 per square meter, petitioners must pay respondent the whopping amount
of P38,070,000.00 for the value of the land. Under the circumstances, the Court finds it rather iniquitous to compute the
proper indemnity based on the 10-meter width of the existing roads. To stress, it is the needs of the dominant estate which
determines the width of the passage. And per their complaint, petitioners were simply asking for adequate vehicular and
other similar access to the highway. To the Court's mind, the 10-meter width of the affected road lots is unnecessary and
inordinate for the intended use of the easement. At most, a 3-meter wide right of way can already sufficiently meet
petitioners' need for vehicular access. It would thus be unfair to assess indemnity based on the 10-meter road width when a
three-meter width can already sufficiently answer the needs of the dominant estate. Therefore bearing in mind Article 651,
the Court finds proper a road width of 3 meters in computing the proper indemnity. Thus, multiplying the road length of
2,350 meters by a road width of 3 meters, the total area to be indemnified is 7,050 square meters. At a value of P1,620.00
per square meter, the total value of the land to form part of the indemnity amounts to P11,421,000.00. It must be made
clear, however, that despite their payment of the value of the land on the basis of a three-meter road width or basically for a
one-way traffic road only, petitioners must be allowed to use the roads within respondent's subdivision based on the existing
traffic patterns so as not to disrupt the traffic flow therein.
In addition, petitioners must bear as part of damages the costs for the removal of the fence in Road Lot 15. Also, the Court
takes judicial notice that subdivision residents are paying monthly dues for purposes of road maintenance, security, garbage
collection, use and maintenance of other subdivision facilities, etc. In view of the fact that the road lots affected would be
used by the dominant estate in common with the subdivision residents, the Court deems reasonable to require petitioners to
pay the homeowner's association in respondent's subdivision, by way of monthly dues, an amount equivalent to half of the
rate of the monthly dues that the subdivision residents are being assessed. This shall serve as petitioners' share in the
maintenance of the affected road lots.
In easement of right of way, there is no alienation of the land occupied.
Petitioners argue that it is unfair to require them to pay the value of the affected road lots since the same is tantamount to
buying the property without them being issued titles and not having the right to exercise dominion over it. The argument is
untenable. Payment of the value of the land for permanent use of the easement does not mean an alienation of the land
occupied.44 In fact under the law and unlike in purchase of a property, should the right of way no longer be necessary
because the owner of the dominant estate has joined it to another abutting on a public highway, and the servient estate
demands that the easement be extinguished, the value of the property received by the servient estate by way of indemnity
shall be returned in full to the dominant estate.45 This only reinforces the concept that the payment of indemnity is merely
for the use of the right of way and not for its alienation. cralawred
WHEREFORE, the Petition is hereby PARTLY GRANTED. The September 25, 2009 Decision and March 1, 2010 Resolution
of the Court of Appeals in CA-G.R. CV No. 87920 are AFFIRMED with MODIFICATIONSwith respect to the proper
indemnity in that petitioners shall: (1) pay respondent the amount of P11,421,000.00 representing the value of the road lots
constituting the right of way; (2) bear the cost of the removal of the fence located in respondent's Road Lot 15 as well as the
cost for the maintenance of such opening; and, (3) pay the homeowner's association in respondent's subdivision, by way of
monthly dues, an amount equivalent to half of the rate of the monthly dues that the subdivision residents are being
assessed. However, the Court of Appeal's ruling that petitioners' motion for reconsideration was filed out of time
is REVERSED and SET ASIDE.
G.R. No. 200797 January 12, 2015

vs.
MANOLITO OPIANA Y TANAEL, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Manolito Opiana y Tanael was charged with the crimes of violations of Section 5 (sale of illegal drugs;
0.05 gram) and Section 11 (possession of dangerous drugs; 0.74 gram), both of Article II, Republic Act No. 9165
(RA 9165) or the Comprehensive Dangerous Drugs Act of 2002. The facts of the case showed that on April 8, 2008,
the Makati police officers and Makati Anti-Drug Abuse Council (MADAC) operatives conducted an entrapment/buy-
bust operation on appellant who was reportedly engaged in illegal drug trade in Brgy. Guadalupe Viejo, Makati City.
MADAC operative Sherwin Sydney Serrano (Serrano) acted as poseur-buyer. After having been introduced by the
informant as a "scorer" of shabu, appellant and Serrano negotiated for the sale of ₱300.00 worth of shabu. Serrano
gave appellant the ₱300 marked money and in exchange, appellant handed to Serrano a heat-sealed sachet
containing white crystalline substance. After making the pre-arranged signal, appellant was apprehended and when
bodily frisked, 19 heat-sealed sachets were recovered from his possession. Laboratory examination revealed that all
20 heat-sealed sachets yielded positive results for shabu.
Appellant denied the charges against him. He claimed that on April 8, 2008, he was repairing a vehicle infront of his
house when a green van arrived and three (3) men alighted. When he affirmatively answered to their query whether
he is "Noli," he was immediately arrested. He asserted that the policeofficers mistook him as the "Noli" who was
known to be a drug peddler in their area. He argued that he is known in their placeas "Noli Mekaniko,"and not the
drug peddler. Ruling of the Regional Trial Court (RTC)
In a Decision dated May 26, 2009, the Regional Trial Court of Makati City, Branch 65, convicted appellant of
violations of Sections 5 (sale ofillegal drugs) and 11 (possession of dangerous drugs), Article II of RA 9165.It
ratiocinated thus:
In order to successfully prosecute anaccused for illegal sale of dangerous drugs, the prosecution must be able
toprove the following elements: (1) identities of the buyer and seller, the object, and the consideration; and 2) the
delivery of the thing sold and the payment therefor. x x x The delivery of the illegal drugs subject of the sale and the
receipt of the marked money consummate the buy-bust transaction between the entrapping officers and the
accused. It is therefore important to prove only that the transaction or sale actually took place, coupled with the
presentation in court of the dangerous drugs. x x x
xxxx
After a prudent consideration, the court finds that the prosecution succeeded in proving the guilt of the accused for
the crime of violation of Section 5, Article II of Republic Act No. 9165 beyond reasonable doubt. Indeed, the
collective evidence presented during the trial by the prosecution adequately established that a valid buy-bust
operation was conducted by the operatives of the MADAC as well as the SAID-SOTF, Makati City on April 8, 2008
after proper coordination with the PDEA was made x x x. During the operation, 0.05 gram of shabu x x x was
purchased by MADAC operative Serrano from accused Manolito Opiana in consideration of ₱300.00. The results of
the laboratory test confirmed that the item contained in the said plastic sachet which was bought from the accused
was indeed methylamphetamine hydrochloride or shabu x x x. There can be no gain saying the credibility of the
forensic chemist who conducted the laboratory examination on the specimen. In fact, nothing was adduced or
intimated that the said prosecution witness had reason to fabricate or concoct her findings.
Likewise, there can be no question about the identity of the corpus delicti in the instant case for sale of illegal drugs.
The small plastic sachet containing shabu marked as "WIN"which was brought to and identified in court was found
to be the same plastic sachet of shabu which the prosecution witness, MADAC operative Serrano, purchased
fromthe accused during the buy-bust operation. Brgy. Capt. Ernesto Bobier testified and confirmed having signed
the inventory sheet x x x of the items seized from the accused in his presence. Therefore, the integrity and
evidentiary value of the items confiscated and/or purchased from the accused had been well safeguarded as to be
reliable.
Needless to state, the identity of the accused was positively established in open court by the witnesses for the
prosecution who pointed to him as the same person who was apprehended during the buy-bust operation.
Moreover, the prosecution adequately established the existence of all the elements for the offense of illegal
possession of dangerous drugs under Section 11, Article II of the same Act, to wit: (1) the accused is in possession
of the object identified as a prohibited or regulated drug; (2) such possession is not authorized by law; and (3) the
accused freely and consciously possessed the said drug x x x.
It has been ruled that there can be no conviction for the subject offense unless the prosecution shows that the
accused knowingly possessed the prohibited articles in his person, or that animus possidendi is shown to be present
together with his possession or control of such article x x x. Based on the testimony of the prosecution witnesses,
however, it was clearly shown that nineteen (19) plastic sachets containing shabu x x x were recovered from the
accused. The contents thereof were later examined at the PNP Crime Laboratory and were found to be in fact
methylamphetamine hydrochloride or shabu. The accused had no authority to possess or otherwise use said
dangerous drugs; neither did he have any license or prescription to possess the same. The intention of the accused
to possess the said plastic sachets containing shabu was patent considering that these were found in his person
after a routine body search was conducted. It is also beyond cavil thathe possessed the said plastic sachets
containing shabu freely and consciously.
The inventory of the items seized from the accused and the testimony in open court of Brgy. Capt. Ernesto Bobier,
an elected official, bolstered the claim of the prosecution that a buy-bust operation was conducted by operatives of
the MADAC as well as SAID-SOTF, Makati City, which operation resulted in the arrest of the accused. It is settled
that in cases involving violations of the Comprehensive Dangerous Drugs Act, credence is given to prosecution
witnesses who are police officers for they are presumed to have performed their duties in a regular manner, unless
there is evidence to the contrary. x x x1
The dispositive portion of the trial court's Decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

1. In Criminal Case No. 08-542, the court finds the accused, MANOLITO OPIANA y TANAEL, GUILTY beyond
reasonable doubt of the charge for violation of Section 5, Article II, R.A. No. 9165 and sentences him to suffer the
penalty of life imprisonment and to pay a fine of Five Hundred Thousand Pesos (₱500,000.00);
2. In Criminal Case No. 08-543, the court finds the same accused, MANOLITO OPIANA y TANAEL, GUILTY
beyond reasonable doubt of the charge for violation of Section 11, ArticleII, R.A. No. 9165 and sentences him to
suffer the penalty of imprisonment of twelve (12) years and one (1) day as minimum to fourteen (14) years and eight
(8) months as maximum and to pay a fine of Three Hundred Thousand Pesos (₱300,000.00).
The period of detention of the accused should be given full credit.
Let the dangerous drugs subject matter of these cases be disposed of in the manner provided by law.
SO ORDERED.2
Aggrieved, appellant appealed to the Court of Appeals (CA). In his Brief, appellant alleged that the buy-bust team
did not observe the proper procedure governing the handling, custody and disposition of the illegal drugs. In
particular, he contended that there was a gap in the chain of custody as it was unclear what happened to the
specimen after it was delivered to the crime laboratory and examined by the forensic chemist or how it was brought
tothe court. The defense also lamented the failure of the police officers to secure a search warrant or warrant of
arrest despite ample time to do the same.
Unpersuaded, the CA, in its June 30,2011 Decision, ruled as follows:
WHEREFORE, PREMISES CONSIDERED, the instant appeal is DENIED. The Decision dated 26 May 2009 is
hereby AFFIRMED IN TOTO.
SO ORDERED.3
The CA opined that based on the testimony of MADAC operative Serrano, all the elements for the illegal sale of
dangerous drugs, i.e., that a sale transaction took place and the illicit drug was presented in court, were
satisfactorily proved. More important, the integrity and evidentiary value of the illicit drug were properly preserved,
viz:
x x x [T]he marking of the evidence was testified to by Serrano whereas the testimony of the investigator x x x was
stipulated upon by the prosecution and the defense. The recovered items were turned over to PO1 Randy C. Santos
upon his conduct of investigation. The request for laboratory examination was delivered by PO1 Gimena on 08 April
2008 at 2125H and the same was received by PSI Jocelyn J. Belen whose testimony was likewise stipulated upon.
Although there has been no photographs taken and no testimony as to what happened with the evidence after the
same was submitted for laboratory examination, the same was positively identified by Serrano during trial. x x x4
Anent the charge for illegal possession of dangerous drugs, the CA also found that the prosecution satisfactorily
established all the elements thereof, to wit: 1) that the accused is in possession of a prohibited drug;2) such
possession is not sanctioned by law; and 3) the accused freely and consciously possessed the illegal drugs. In
addition, the CA found no ill-motives on the part of the police operatives.
In an April 25, 2012 Resolution,5 we required both parties to file their respective supplemental briefs. However, both
optedto adopt the briefs they submitted before the CA.
Our Ruling
After a careful review of the records of the case, the Court finds the appeal to be lacking in merit. Both the RTC of
1âwphi 1
Makati City, Branch 65 and the CA correctly found appellant guilty beyond reasonable doubt of violations of
Sections 5 and 11, Article II of RA 9165, as amended by RA 9346.6 For the violation of Section 5, the prosecution
satisfactorily established the following elements: "(1) the identity of the buyer and the seller, the object and the
consideration; and (2) the delivery of the thing sold and the payment therefor. What is material in a prosecution for
illegalsale of dangerous drugs is the proof that the transaction or sale actually took place, coupled with the
presentation in court of the corpus delicti or the illicit drug in evidence."7 Similarly, the prosecution satisfactorily
established the following elements for the illegal possession of dangerous drugs in violation of Section 11, to wit:
appellant was shown to have been inpossession of 0.74 gram of shabu, a prohibited drug; his possession was not
authorized by law; and that hefreely and consciously possessed the said illegal drug.
Under the law, the penalty for the unauthorized sale of shabu, regardless of its quantity and purity, is life
imprisonment to death and a fine ranging from ₱500,000.00 to ₱10 million. However, with the enactment of RA
9346, only life imprisonment and fine shall be imposed. Thus, the penalty imposed by the trial court and affirmed by
the CA, i.e., life imprisonment and a fine of ₱500,000.00, is proper. However, appellant is not eligible for parole
pursuant to Section 2 of the Indeterminate Sentence Law. The penalty for illegal possession of dangerous drugs, on
the other hand, is imprisonment of twelve (12)years and one (1) day to twenty (20) years and a fine ranging from
₱300,000.00 to ₱400,000.00, if the quantity of the dangerous drug is less than five (5) grams. In this case, appellant
was found to have been in illegal possession of 0.74 gram of shabu. Thus, he was properly meted the penalty of
imprisonment ranging from twelve (12) years and one (1) day to 14 years and eight (8) months and a fine of
1,000,000.00.
WHEREFORE, the June 30, 2011 Decision of the Court of Appeals is AFFIRMED with MODIFICATION. Appellant
Manolito Opiana y Tanael is hereby found guilty beyond reasonable doubt of the crime of violations of Sections 5
and 11, Article II of Republic Act No. 9165, as amended by Republic Act No. 9346, and sentencing him to suffer the
penalty of life imprisonment without eligibility for parole and ordering him to pay the fine of ₱500,000.00, for violation
of Section 5, Article II, Republic Act No. 9165, and imprisonment of twelve (12) years and one (1) day to fourteen
(14) years and eight (8) months and a fine of ₱300,000.00, for violation of Section 11, Article II, Republic Act No.
9165.
SO ORDERED.
SECOND DIVISION
G.R. No. 192232 December 10, 2014

vs.
JOSE ESTALIN PRODENCIADO, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
On appeal is the February 4, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02861 affirming
with modification the May 25, 2007 Decision2 of the Regional Trial Court (RTC), Branch 13, Malolos, Bulacan, in
Criminal Case Nos, 3206-M-2000 to 3209-M-2000 which found appellant Jose Estalin Prodenciado (Prodenciado)
guilty of two counts of Statutory Rape and two counts of Simple Rape.
Factual Antecedents
Prodenciado was charged with two counts each of Statutory Rape and Simple Rape committed his own daughter,
"AAA."3 The Informations for the charges narrate:
Crim. Case No. 3208-M-2000 for Statutory Rape
That in or about the year 1993, in the municipality of Baliuag, province of Bulacan, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, armed with a bolo, did then and there willfully,
unlawfully and feloniously, by means of threats, force and intimidation and with lewd designs, have carnal
knowledge of his daughter "AAA," a girl 8 years of age, against her will and consent.
Contrary to law.4
Crim. Case No. 3209-M-2000 for Statutory Rape
That in or about the year 1995, in the municipality of Baliuag, province of Bulacan, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, armed with a bolo, did then and there willfully,
unlawfully and feloniously, by means of threats, force and intimidation and with lewd designs, have carnal
knowledge ofhis daughter "AAA," below 12 years old, against her will and consent.
Contrary to law.5
Crim. Case No. 3206-M-2000 for Simple Rape
That on or about the 13th day of August, 2000 at about 11:00 o’clock in the morning, in the municipality of Baliuag,
province of Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
armed with a bolo, did then and there willfully, unlawfully and feloniously, by means of threats, force and intimidation
and with lewd designs, have carnal knowledge of his daughter "AAA," a girl14 years of age, against her will and
consent.
Contrary to law.6
Crim. Case No. 3207-M-2000 for Simple Rape
That on or about the 13th day of August 2000 at about 11:30 in the morning, in the municipality of Baliuag, province
of Bulacan, Philippines, and within the Jurisdiction of this Honorable Court, the above-named accused, armed with a
bolo, did then and there willfully, unlawfully and feloniously, by means of threats, force and intimidation and with
lewd designs, have carnal knowledge of his daughter "AAA," a girl 14 years of age, against her will and consent.
Contrary to law.7
Upon arraignment, Prodenciado, assisted by counsel, entered separate pleas of not guilty to the crimes charged.
The Prosecution’s Case
As summarized in the Appellee’s Brief,8 the prosecution’s case is premised on the following facts:
"AAA" was born on December 13, 19859 to common[-]law spouses "BBB", a housewife, and Jose E. Prodenciado
(a.k.a. Rommel), a fisherman. The couple has five (5) children[,] with "AAA" being the eldest. At the time the rape
incidents took place, appellant and "AAA"resided at Sta. Barbara, Baliuag, Bulacan.
xxxx
Sometime in 1993[,] at around noon, "AAA" brought food for appellant at the hut by the river where her father
usually rests after fishing. Suddenly, appellant pulled out a knife, poked it at her and told her to go upthe hut with
him. As soon as they reached the hut, appellant removed both their clothes and told "AAA" to lie down on the floor.
Appellant lowered himself atop "AAA" and inserted his penis into her vagina.
After satiating his lust, appellant dressed and warned "AAA" not to tell anybody what happened[,] or else[,] he would
kill her mother. At that time, "AAA" was only eight (8) years old.
xxxx
The incident was repeated sometime in 1995 when "AAA" was then [10] years old and was in Grade III.
While appellant was fishing near their place in Sta. Barbara, Baliuag, Bulacan, he told "AAA" to go with him to the
hut. "AAA" obeyed and once there, she was instructed to take off her clothes. She was made to lie down on the floor
and while [in] that position, appellant [laid] on top of her. Appellant then inserted his penis inside her vagina and
raped her. There were no other people in the hut that day.
Afterwards, appellant told her to put on her clothes and go home. "AAA" did as she was told and upon reaching their
house, she prepared to go to school. She did not report the incident to her mother. She could not recall the exact
date when she was raped the second time.
xxxx
On August 13, 2000, appellant repeated his dastardly acts. This time, "AAA" was sexually violated not once but
twice that same day.
At around 11:00 o’clock in the morning, "AAA," was doing the laundry by the river while appellant was sharpening
his bolo nearby. Suddenly, appellant, clutching his bolo, approached "AAA" and dragged her towards the hut. At that
time, the victim’s mother[,] "BBB," who was then cooking by their stove outside the house about two (2) meters
away[,] and two younger siblings saw appellant pulling "AAA" towards the house. As appellant climbed the stairs, he
warned "BBB" not to follow them.
Inside the hut, appellant raised "AAA’s" blouse and forcibly took off her shorts and underwear. Appellant kissed
"AAA’s" lips and breasts then mounted her and consummated his bestial desires. After satisfying his lust, appellant
told "AAA" to dress up and go downstairs. "AAA" did as she was told and resumed doing her laundry chores.
A few minutes thereafter, or at around 11:30 o’clock that same day, appellant, still holding his bolo, called "AAA" and
told her to go upstairs again to fix the clothes. "AAA" obeyed and, once again, she was sexually ravished by her
father.
On both times that "AAA" went down the hut with appellant, "BBB" noticed her daughter to be crying. At that point,
"BBB" suspected that "AAA" was being sexually abused by appellant. "BBB" wanted to ask her daughter what
appellant did to her, but she could not since they were constantly being watched by appellant who was always
armed with a bolo.
When Edwin, a neighbor, dropped by their place and talked with appellant, "BBB" took advantage of the opportunity
and advised "AAA" to report the incidents to the police. Subsequently, "BBB" devised a plan to report the matter to
the police authorities. "BBB" asked appellant’s permission to leave the house on the pretext of buying medicines.
Before she left, appellant warned her not to do anything behind his back ("walang traiduran"). "BBB" then
immediately proceeded to the police station where she and the police officers plotted appellant’s arrest.
The following day, appellant was fishing by the river when the policemen arrived. "BBB" guided the police towards
the river and on their way thereto, she destroyed the fence so that the police would be able to pass by without being
noticed by appellant.
"BBB" called out [to] her husband and told him to come over as there was a snake. Knowing that "BBB" was scared
of snakes, appellant rushed to her side. The police immediately closed in on appellant and effected his arrest.
Thereafter, "AAA" and "BBB" executed a complaint and caused the investigation of the rapes committed against the
victim. The victim was referred to the Bulacan Provincial Crime Laboratory Office, Philippine National Police (PNP)
in Malolos, Bulacan. Police Senior Inspector Ivan Richard A. Viray, a Medico-Legal Officer, performed a physical
examination on the victim. His Medico-Legal Report No. MR-146-2000 disclosed his findings, thus:
GENERAL AND EXTRAGENITAL:
PHYSICAL BUILT - Light built
PHYSICAL STATUS - Coherent female subject
BREAST[S] - Are conical in shape with light brown areola and nipples from which no secretion could be pressed out
ABDOMEN - Is flat/soft
PHYSICAL INJURIES - No external signs of application of any form of trauma
GENITAL:
PUBIC HAIR - Scanty growth
LABIA MAJORA - Are full, convex and coaptated
LABIA MINORA - In between labia majora, pinkish brown in color
HYMEN - Elastic fl[e]shy type with the presence of deep healed laceration at 2 and 3 o’clock positions
POSTERIOR FOURCHETTE - V-shaped or sharp
EXTERNAL VAGINAL
ORIFICE - Offers strong resistance to the examining index finger
VAGINAL CANAL - Narrow with prominent rugosities
CERVIX - Is firm/close[d]
PERI-URETHRAL &
PERI-VAGINAL SMEARS - Are negative for spermatozoa and negative for gram (-) diplococci.
During the trial, [Dr.] Viray elucidated on the procedureshe undertook in examining the child and gave his
impressions on his findings, viz: (1) subject is in non-virgin state physically; and (2) there are no external signs of
application of any form of trauma.10
Appellant’s Defense
As set forth in his Accused-Appellant’s Brief,11 Prodenciado alleged that he could not have committed the rape in
1993 as he was then a construction worker with a project in Pulilan, Bulacan and that the nipahut where the alleged
rape took place was built only in 1994. Anent the alleged rape in 1995, he contended that "AAA" and "BBB" lived
with his mother-in-law during that year and that "AAA" never visited him in the nipahut by the river at any timethen.
With regard the alleged rape on August 13, 2000, Prodenciado averred that "AAA" was already working in a factory
at that time and she likewise did not pay him any visit during that period.
Prodenciado asserted that "AAA" must have been impelled by anger in filing the cases against him as he used to
scold her for accepting suitors at a very young age. There were even occasions that he hit her for coming home late.
However, as "AAA" later on admitted to him that the suitors were not hers but her mother’s, Prodenciado likewise
surmised thathis wife wanted toget rid of him so she can live-in with one of her suitors. In fact, immediately upon his
detention, "BBB" already started living-in with another man.
On May 25, 2007, the RTC rendered a Decision, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the Court finds [the] accused guilty beyond reasonable doubt of the crime of
Statutory Rape thru carnal knowledge on two (2) counts in Crim. Case Nos. 3208-M-2000 and 3209-M-2000, and
hereby sentences him to suffer the penalty of reclusion perpetua, for each count (Total: Two (2) reclusion perpetua).
The accused is likewise directed to indemnify the private complainant in the amount of ₱100,000.00 for each count
(Total: ₱200,000.00).
The Court likewise finds the accused guilty beyond reasonable doubt of the crime of Rape thru carnal knowledge on
two (2) counts in Crim. Case Nos. 3206-M-2000 and 3207-M-2000, and hereby sentences him to suffer the penalty
of reclusion perpetua for each count (Total: Two (2) reclusion perpetua).
The accused is likewise directed to indemnify the private complainant in the amount of ₱50,000.00 for each count
(Total: ₱100,000.00).
SO ORDERED.12
On appeal, the CA issued the assailed Decision, the dispositive portion of which reads: WHEREFORE, in view of
the foregoing, the appeal is DISMISSED. The appealed decision is AFFIRMED but MODIFIED by reducing the
amount of civil liability from ₱100,000.00 to ₱75,000.00 for each count in Criminal Case Nos. 3208-M-2000 and
3209-M-2000, increasing the civil liability from ₱50,000.00 to ₱75,000.00 for each count in Criminal Case Nos.
3206-M-2000 and 3207-M-2000; and for appellant to pay private complainant the sums of ₱75,000.00 and
₱25,000.00 as moral and exemplary damages, respectively[,] for each count of rape against her.
SO ORDERED.13
Issues
Thus, this appeal. Both parties manifested that they were adopting the briefs they filed with the CA.14 Hence, the
Court shall resolve the assigned errors contained in Prodenciado’s Accused-Appellant’s Brief, to wit:
THE TRIAL COURT GRAVELY ERRED IN GIVING FULL WEIGHT AND CREDENCE TO THE TESTIMONY OF
THE PRIVATE COMPLAINANT.
II
THE TRIAL COURT GRAVELY ERRED IN FINDING [PRODENCIADO] GUILTY BEYOND REASONABLEDOUBT
OF THE CRIME[S] CHARGED.15
Our Ruling
We sustain Prodenciado’s conviction.
"AAA’s" testimony deserves full weight and credence.
In People v. Sanchez,16 we reiterated the guidelines laid down by this Court in addressing the issue of credibility of
witnesses on appeal, viz:
First, the Court gives the highest respect to the RTC’s evaluation of the testimony of the witnesses, considering its
unique position in directly observing the demeanor of a witness on the stand. From its vantage point, the trial court is
in the best position to determine the truthfulness of witnesses.
Second, absent any substantial reason which would justify the reversal of the RTC’s assessments and conclusions,
the reviewing court is generally bound by the lower court’s findings, particularly when no significant facts and
circumstances, affecting the outcome of the case, are shown to have been overlooked or disregarded.
And third, the rule is even more stringently applied if the CA concurred with the RTC.17
Here, the trial court found "AAA’s" testimony to becredible as it was made in a simple and consistent manner.
Notably, the CA agreed with the RTC on this point and saw no reason to overturn the same. And upon perusal of
the records of this case, this Court likewise sees no reason to depart from the lower courts’ assessment of "AAA’s"
testimony. Indeed, her statements pertaining to the identity of Prodenciado as her violator and the perverseacts he
visited upon her were straightforward and categorical. Moreover, "[t]estimonies of child-victims are normally given
full weight and credit, since when a girl, particularly if she is a minor, says that she has been raped, she says in
effect all that is necessary to show that rape has in fact been committed. When the offended party is of tender age
and immature, courts are inclined to give credit to her account of what transpired, considering not only her relative
vulnerability but also the shame to which she would be exposed if the matter to which she testified is not true. Youth
and immaturity are generally badges of truth and sincerity."18
In rape cases, the date of commission is not an essential element of the offense.
Prodenciado, however, makes much of"AAA’s" failure to pinpoint the dates when she was raped. According to him,
this does not only render "AAA’s" credibility suspect, but likewise deprived him of the full opportunity to defend
himself thereby violating his right to due process.
Time and again, the Court has repeatedly held that it isnot incumbent upon the victim to establish the date when she
was raped for purposes of convicting the perpetrator. This is because "[i]n rape cases, the dateof commission is not
an essential element of the offense; what is material is its occurrence,"19 which in this case, was sufficiently
established by "AAA."
Moreover, Prodenciado’s assertion that he was deprived of the full opportunity to defend himself by reason of
"AAA’s" failure to disclose when the alleged rapes were committed was raised only during his appeal. In People v.
Aboganda,20 the Court declared that:
[I]f the accused really believed in the allegedly defective information and the prejudice to his rights, he should have
filed a motion for bill of particulars before his arraignment. We, thus, also rule in the instant case that it is too late for
accused-appellant to protest the [unspecified] dates found in the informations against him.21
What is telling here instead is that despite his insistence that his right to due process was violated, Prodenciado
entered pleas of not guilty, went on to deny raping "AAA" and, in the process, even offered a number of excuses to
extricate himself from the consequences of his transgressions.
It is understandable that "AAA" has no clear memory on when the alleged rapes were committed as she was still a
minor when the incidents occurred and when she took the witness stand to testify against her father. Yet, despite
her age, and as the Court likewise foundin the similar case of People v. Dominguez,22 she was "able to narrate the
incidents, albeit not exactly with the same coherence as a fully capacitated adult witness would."23 Thus, just as in
the said case, "[l]eeway should be given to witnesses who are minors, especially when they are relating past
incidents of abuse."24
"AAA’s" failure to immediately report

the rape incidents does not detract from
the fact that they were committed;
neither does "AAA’s" resumption of a
normal life after the incidents negate rape.
Prodenciado also finds fault in AAA’s failure to report the alleged rape incidents. He avers that if "AAA" was indeed
sexually abused, she should have wasted no time in reporting the matter to her mother, brothers and sisters, other
relatives and/or to the police considering that she was neither pushed against the wall nor under Prodenciado’s
watch 24 hours a day.
The Court notes, however, that "AAA" was able to satisfactorily explain why she kept silent about the rapes for years
and why, even if she had the chance, she did not run away or shout for help. She testified, viz:
Q: x x x [A]ccording to you, appearing on page 5 of the transcript, [o]n August 13, 2000[,] allegedly the accused in
this case raped you at 11:00 in the morning?
A: Yes, sir.
Q: Can you still recall where you proceeded after 11:00 in the morning of that date?
A: Yes, sir. I just remained there.
Q: You did not go anywhere?
A: [No], sir.
Q: As a matter of fact, you did not leave the house because, according to you, at 11:30[,] you were again raped, is
that correct?
A: Yes, sir.
Q: There is a difference of 30 minutes. Do you want to impress to this Honorable Court that after the first incident
you just stayed there and waited for the other incident to occur?
A: No, sir, because he did not allow us to proceed to my lola’s house, sir.
Q: You made mention of the word "us[.]" When you mentioned the word "us[,]" you were with somebody then and
you were not alone?
A: Yes, sir.
Q: As a matter of fact, on that very date of August 13, 2000[,] you were with a person name[d] [BBB]?
A: Yes, sir.
Q: And this [BBB] is your mother
A: Yes, sir.25
xxxx
Q: Do you want to impress before this Honorable Court that the incident occurred in 1993 and you k[ept] quiet about
[it] until the year 2000?
A: Because the accused kept on telling me that if I report the matter he would kill me and my mother, sir.
Q: Do you want to impress before this Honorable Court that in the year 2000 the accused did not threaten you
anymore because you already went to the police authorities and you were not afraid anymore?
A: He warned me not to report the incident, sir.
Q: But you still reported the same?
A: Yes, sir.26
xxxx
Q: x x x [Y]ou will agree with me when I say that you had all the time to run away from the hut?
xxxx
A: I was nervous at that time, sir.
xxxx
I was afraid to run, sir.27
xxxx
Q: The only reason why[,] according to you[,] you did not shout in your answer[,] and I quote [from page] 10, [of the
February 21, 2002 transcript], "even [if I] shout[,] nobody can hear me," am I correct?
A: Yes, sir.
Q: Nobody can hearyou considering the fact that your mother was there?
A: My mother can hear me, sir, but [she] cannot do anything.28
xxxx
Q: Ms. Witness, x x x you said thatwhen you were raped by your father your mother was around and you said you
did not ask for help because your mother could not do anything, what do you mean by that?
A: Because (referring to the accused) he was armed with [a] bolo (itak), sir.
Q: Are you afraid of itak?
A: I am afraid "baka patayin po ako[,"] sir.29
Clearly, "AAA" did not reveal to anyone what Prodenciado was doing to her out of fear that he might make good his
threats to kill her and her family. Indeed, in one case, we have recognized that "[t]he fear of [the victim] that her
father would kill her and the other members of her family, should she report the incident to her mother or the police,
is not so unbelievable nor is it contrary to human experience."30 Besides, "the failure of the victim to immediately
report the rape is not an indication of a fabricated charge and does not detract from the fact that rape was
committed."31
Prodenciado also questions the facilitywhereby "AAA" was able to resume her life despite the supposed rape
incidents. He avers, viz:
Not only did "AAA" fail to mention what ought to have been a traumatic experience to her older sister, brothers and
to her mother much earlier than she did, but she had apparently been able to resume her life, as wellas her role as
the obedient daughter to the accused-appellant, despite the alleged rape. Most notable was her revelation during
her direct testimony on February 21, 2002, about the alleged rape that happened in 1995.
"AAA" recalled that after she was allegedly sexually molested by the accused, she was in fact sent home, to which
she obeyed and even mustered the courage to go to school after what could have been a harrowing experience. x x
x32 (Emphases supplied)
This hardly convinces. It has been held that "different people react differently to different situations and there is no
standard form of human behavioral response when one is confronted with a strange, startling or frightful
experience,"33 such as rape. Verily, some victims choose to suffer in silence; while others may be moved to action
out of a need to seek justice for what was done to them. Then there are those who opt not to dwell on their
experience and try to live as though it never happened. To the Court’s mind, thisis how "AAA" tried to cope with the
harrowing experience that befell her. Moreover, since she was just a young girl when all these rapes were
committed against her, "AAA" simply knew no other way of life than what she was accustomed to.
A medical report is merely corroborative to a claim of rape.

Prodenciado also points out that the result34 of the medical examination done on "AAA" merely confirms the fact that
she had already engaged in sexual intercourse and this does not necessarily mean that it was with him.
While it is true that the result of "AAA’s" medical examination only supports the fact that "AAA" has already had
sexual intercourse and does not by itself establish that it was her father, Prodenciado, with whom she had sex, this
does not divest the results of medical examination of any relevance. In People v. Cial35 it was explained that:
[T]he examining physician was presented to testify only on the fact that he examined the victim and on the results of
such examination. He is thus expected to testify on the nature, extent and location of the wounds. Dr. Arnulfo
Imperial (Dr. Imperial) found, among others, that "AAA" suffered hymenal lacerations. This refers to the location and
nature of the wounds suffered by the victim. Dr. Imperial could not be expected to establish the cause of such
lacerations with particularity because he has no personal knowledge of how these hymenal lacerations were inflicted
on "AAA." He could only surmise that the lacerations could have been caused "by activities like cycling, horseback
riding x x x or the insertion ofa hard object into the vagina of the victim x x x such as the penis."36 (Emphases
supplied)
Clearly, the result of the medical examination and the testimony of the examining physician thereon are essential to
establish only the nature, extent and locations of the wounds and not the cause thereof. Verily, "AAA’s" medical
certificate reveals that she sustained hymenal lacerations. The examining physician, Dr. Viray, testified as to the
location and nature of the same. However, Dr. Viray did not state on the said medical certificate or in his testimony
the exact cause of said lacerations as he has no personal knowledge as to how they were inflicted on "AAA." He
could only theorize that they may have been caused by the insertion of a hard object, such as an erected penis.37 It
is only "AAA" herself who can positively state the source of her hymenal lacerations. And as shown by the
overwhelming evidence for the prosecution, she has sufficiently demonstrated that it was her own father,
Prodenciado, who caused the same when he repeatedly raped her.
In any case, this Court has already concluded that a medical report is not even material for purposes of proving rape
as itis merely corroborative in character and, thus, can be dispensed with accordingly.38 In fact, the Court has
consistently maintained that:
x x x The medical report is by no means controlling. This Court has repeatedly held that a medical examination of
the victim is not indispensable in the prosecution for rape, and no law requires a medical examination for the
successful prosecution thereof. The medical examination of the victim or the presentation of the medical certificate
is not essential to prove the commission of rape as the testimony of the victim alone, ifcredible, is sufficient to
convict the accused of the crime. The medical examination of the victim as well as the medical certificate is merely
corroborative in character.39 (Emphasis supplied)
Prodenciado’s defenses of denial and alibi do not deserve credence.
Prodenciado would also have this Court believe that"AAA" and "BBB" had an axe to grind against him, thus, the
filing of the rape cases. He claims "AAA" may have harbored ill-feelings against him for his having hit her
("napagbuhatan ng kamay") a number of times for entertaining suitors at a young age and for coming home lateat
night. "BBB," on the other hand, wanted him incarcerated as she wanted to live-in with another man.
The Court, however, finds Prodenciado’s theory not only flimsy but also unsupported by any proof, and, thus,
unworthy of credence.
In People v. Amistoso,40 the Court had the opportunity to discuss that:
Alleged motives of family feuds, resentment, or revenge are not uncommon defenses, and have never swayed the
Court from lending full credence to the testimony of a complainant who remained steadfast throughout her direct
and cross-examinations, especially a minor as in this case.
Moreover, the Court finds it difficult to believe that a young girl would fabricate a rape charge against her own father
as revenge for previous maltreatment, ruling in People v. Canoyas follows:
We must brush aside as flimsy the appellant[‘]s insistence that the charges were merely concocted by his daughter
to punish him for bringing in his illegitimate daughters to live with themand for maltreating her. It is unthinkable for a
daughter to accuse her own father, to submit herself for examination of her most intimate parts, put her life to public
scrutiny and expose herself, along with her family, to shame, pity or even ridicule not just for a simple offense but for
a crime so serious that could mean the death sentence to the very person to whom she owes her life, had she really
not have been aggrieved. Nor do we believe that the victim would fabricate a story of rape simply because she
wanted to exact revenge against her father, appellant herein, for allegedly scolding and maltreating her. (Citations
omitted.)
Neither is the Court convinced that BBB would use and manipulate her own daughter, "AAA," to wrongfully accuse
Amistoso, her husband and "AAA’s" father, of rape, just to cover-up her alleged affair with another man. It is
unthinkable that a mother would sacrifice her daughter[‘]s honor to satisfy her grudge, knowing fully well that such
an experience would certainly damage her daughter’s psyche and mar her entire life. A mother would not subject
her daughter to a public trial with its accompanying stigma on her as the victim of rape, if said charges were not true.
(Emphases supplied)
On the contrary, more telling is the fact that Prodenciado, in his testimony before the trial court, first stated that he
never hit the victim. Later and in an apparent effort to discredit "AAA" by imputing that she was unduly resentful of
him, he admitted that he hit her several times for returning home late.41
Anent Prodenciado’s other averments, i.e., that the nipahut where he allegedly raped "AAA" in 1993 was built only in
1994; that in 1995, "AAA" and "BBB" lived with the latter’s mother and the former never visited him in the hut; and,
that "AAA" was already working at a factory on August 13, 2000 and did not pay him any visit during the said period,
suffice it to say that these are mere allegations without proof. Moreover, it has been held that the defense of denial
is inherently weak and self-serving, especially if uncorroborated.42
Neither does Prodenciado’s alibi hold water. In order for the Court to consider the defense of alibi, it must be shown
that "it was physically impossible for him to have been at the scene of the crime when it was committed."43 A perusal
of Prodenciado’s testimony would show that despite his adamant position that he could not have committed the rape
in 1993 as he was then employed as a construction worker in Pulilan, Bulacan, he was, however, unable to
demonstrate that it was physically impossible for him to have been present at the scene of the crime when the rape
incidents occurred. Consequently, Prodenciado’s defense of alibi must fail. Moreover, alibi "cannot prevail over
["AAA’s"] positive identification of [Prodenciado] asthe perpetrator of the crime."44
Appellant is liable for one count of
statutory rape and three counts of
qualified rape.
Coming now to the proper designation of the crimes committed, we are mindful of the fact that "AAA" was born on
December 13, 1985. Thus, she was only 8 years old when she was first raped by her father in 1993; 10 years of age
during the second rape which took place in 1995; and 14 years old when the last two rapes were committed in the
year 2000. It must also be pointed out that different laws on rape are applicable to the rape cases subject of this
appeal. During the commission of the rape in 1993 (first rape), Article 335(3) of the RPC was the prevailing statute
for the crime of rape, viz:
Art. 335. When and how rapeis committed. - Rape is committed by having carnal knowledge ofa woman under any
of the following circumstances:
1. By using force or intimidation;
2. When the woman is deprived ofreason or otherwise unconscious; and
3. When the woman is under twelve years of age or is demented.
The crime of rape shall be punished by reclusion perpetua.

x x x x (Emphasis supplied)
As such, the CA was correct in upholding Prodenciado’s conviction for statutory rape and imposing upon him the
penalty of reclusion perpetua.45 However, in view of Republic Act No. 934646 (RA 9346), he is not eligible for parole.
For the rape in 1995 (second rape), Article 335 of the RPC as amended by RA 7659 was already the pertinent law
in rapecases. The relevant portions thereof provide:
Art. 335. When and how rape iscommitted. - Rape is committed by having carnal knowledge of a woman under any
of the following circumstances:
1. By using force or intimidation;
2. When the woman is deprived ofreason or otherwise unconscious; and
3. When the woman is under twelve years of age or is demented.
The crime of rape shall be punished by reclusion perpetua.
xxxx
The death penalty shall x x x be imposed if the crime of rape is committed with any of the following attendant
circumstances:
1. When the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-parent,
guardian, relative by consanguinity or affinity within the third civil degree, or the common-law-spouse of the parent of
the victim
x x x x47 (Emphases supplied)
Here, the Information for the second rape subject of Criminal Case No. 3209-M-2000 alleges that the rape was
committed by appellant upon his own minor daughter "AAA," who was then 10 years old. These were eventually
proved during trial. Thus, it was correct for the trial court to hold Prodenciado liable for rape under Article 335(3) of
the RPC, albeit with the modification that it is qualified by the attendant circumstances of minority and
relationship48which, as mentioned, were sufficiently alleged in the Information and ultimately proved by the
prosecution in the course of the proceedings below. Accordingly, and in view of RA 9346,49 we impose upon
appellant the penalty of reclusion perpetua, in lieu of the death penalty, without eligibility for parole.
Similarly, in the last two rape cases committed in 2000,the prosecution properly alleged in their corresponding
Informations and duly proved during trial that they were committed through force and intimidation; that the victim
"AAA" is a minor; and, that appellant as the offender is the victim’s father. Hence, the trial court should have also
found Prodenciado guilty beyond reasonable doubt of qualified rape, not simple rape, under the now prevailing
provisions on rape cases which is Article 266-A of the RPC, in relation to Article 266-B thereof. Pertinent portions of
which provide:
Article 266-A. Rape: When And How Committed.- Rape is committed:
1) By a man who shall have carnal knowledge of a woman under any of the following circumstances:
a) Through force, threat, or intimidation;
xxxx
Article 266-B. Penalty. - x x x
xxxx
The death penalty shall also be imposed if the crime of rape is committed with any of the following
aggravating/qualifying circumstances:
l) When the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-parent,
guardian, relative by consanguinity or affinity within the third civil degree, or the common-law spouse of the parent of
the victim;
x x x x (Emphases supplied)
As such, his penalty therefor shall also be reclusion perpetuawithout eligibility for parole for each of the two counts
of qualified rape.
Damages awarded
For the statutory rape committed by Prodenciado against "AAA," we affirm the CA’s award of ₱75,000.00 as civil
indemnity. However, the award of moral damages must be reduced to ₱50,000.00 while the award of exemplary
damages must be increased to ₱30,000.00.
As regards the three counts of qualified rape, "AAA" is entitled to the following awards: ₱100,000.00 as civil
indemnity for each count; ₱100,000.00 as moral damages for each count; and ₱100,000.00 as exemplary damages
for each count.50
Finally, all damages awarded shall earn interest at the rate of 6% per annum from date of finality of this judgment
until fully paid.
WHEREFORE, the February 4, 2010 Decision of the Court of Appeals in CA-G.R. CR-HC No. 02861 is AFFIRMED
with MODIFICATIONS in that appellant Jose Estalin Prodenciado is: (1) hereby found guilty beyond reasonable
doubt of one count of STATUTORY RAPE and three counts of QUALIFIED RAPE; (2) sentenced to suffer the
penalty of reclusion perpetua without eligibility for parole, for the statutory rape and for each count of qualified rape;
(3) ordered to pay the victim "AAA" ₱50,000.00 as moral damages, and ₱30,000.00 as exemplary damages, in
addition to ₱75,000.00 as civil indemnity, in Criminal Case No. 3208-M-2000 (statutory rape), and (4) ordered to pay
"AAA" ₱100,000.00 as civil indemnity, ₱100,000.00 as moral damages, and ₱100,000.00 as exemplary damages,
for each count of qualified rape in Criminal Case Nos. 3209-M-2000, 3206-M-2000 and 3207-M-2000 (qualified
rape). Appellant is also ordered to pay interest at the legal rate of 6% per annum on all damages awarded from the
date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 190349 December 10, 2014

vs.
FRANCASIO DELFIN, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
On appeal is the January 27, 2009 Decision1 of the Court of Appeals (CA) in CA-GR. CR-H.C. No. 00077, which
affirmed with modification the Decision2 of the Regional Trial Court (RTC) of Naval, Biliran, Branch 16 by (1) finding
appellant Francasio Delfin (appellant) guilty beyond reasonable doubt of the crime of simple rape instead of
statutory rape in Criminal Case No. N-2130 and sentencing him to suffer the penalty of reclusion perpetua and pay
the victim "AAA"3 civil indemnity and moral damages at ₱75,000.00 each; and, (2) acquitting him of statutory rape in
Criminal Case No. N-2131.
Factual Antecedents
Appellant was charged in two separate Informations of statutory rape, the accusatory portions of which read:
Crim. Case No. N-2130
That on or about the 27th day of May, 2001, between 10:00 and 11:00 o’clock in the evening, more or less, in the
Municipality of Naval, Biliran Province, Philippines and within the jurisdiction of this Honorable Court, said accused,
with lewd designs, [summoned]"AAA," an 11-year old lass on her way to a bakery after [watching] a video show,
through hand signal but as she was about to run, accused picked up a stone soshe approached him. [He then] held
her right hand and pulled her towards the second floor of the new commercial building of Naval, and while thereat,
did then and there willfully, unlawfully and feloniously slap her, [take] off her panty as well as his pants and [order]
her to lie down on top of cartons, [cover] her mouth and [succeed] in having carnal knowledge of said "AAA," to her
damage and prejudice.
CONTRARY TO LAW.4
Crim. Case No. N-2131
That on or about the 30th day of June, 2001, in the evening, in the Municipality of Naval, Biliran Province,
Philippines, and within the jurisdiction of this Honorable Court, one "AAA," an 11-year old lass, after watching a
billiard game in front of the new municipal building of said municipality went to a jeep parked near the back of said
building, closed its windows and slept thereat but was awakened when herein accused, who was then carrying a
nightstick beamed his flashlight towards her, did then and there willfully, unlawfully and feloniously by means of
force and intimidation [go] inside the vehicle and there, [take] off her panty and his short pants and [succeed] in
having carnal knowledge [of] the said "AAA," to her damage and prejudice. CONTRARY TO LAW.5
Upon arraignment on December 6, 2001, appellant, assisted by counsel de parte, entered a plea of not guilty to both
charges. After pre-trial was terminated, trial on the merits followed.
The first rape incident happened on May 27, 2001. At around 10:00 to 11:00 p.m., "AAA," then an 11-year old girl,
was watching television in a store at the public market in Naval, Biliran. When she went outside the public market,
appellant summoned her. "AAA" tried to run away, but appellant threatened to shoot her with a slingshot. She thus
approached appellant hesitantly. When already near him, appellant suddenly grabbed "AAA’s" hand and dragged
her to the second floor of a newly-constructed commercial building facing the public market.
When they were already in a secluded portion, appellant undressed "AAA," spread her thighs, and inserted his penis
into her vagina, causing her pain and horror. Once satiated, appellant gave "AAA" ₱100.00 and told her not to tell
anyone about the incident or her family will be harmed.
The second rape incident happened during the evening of June 30, 2001. At about 11:00 p.m., "AAA" was sleeping
inside a jeepney parked outside a billiard hall when appellant focused a flashlight on her face. He then went inside
the jeepney and removed "AAA’s" panty and again raped her by inserting his penis into her vagina which caused
"AAA" pain.
After having difficulty in urinating and experiencing pain and swelling in her abdomen, "AAA" told her aunt, "BBB,"
about the rape incidents and pointed to appellant as her rapist. Suspecting that "AAA" was suffering from vaginal
infection due to the rape, "BBB" brought "AAA" to the hospital. Accordingly, "AAA" was examined and the results
thereof as stated in the medical certificate6 issued by Dr. Gabriel P. Edano (Dr. Edano) on July 5, 2001 are as
follows:
MEDICAL CERTIFICATE
NAME: "AAA"
AGE: 11 years old
ADDRESS: x x x, Naval, Biliran
Nature of incident: Allegedly raped by unknown person.
Time of incident: Around 10:00-11:00 p.m.
Date of incident: May 27, 2001
Place of incident: Commercial building, near Land Bank Naval Branch.
Findings: (+) lacerated hymenat 6:00 o’clock position.
(+) Corrugated hymen.
Introitus: Nulliparous
= Admits one finger with slight pain.
Vaginal smear result: Negative for the presence of spermatozoa.
Thereafter, "AAA’s" familyreported the incident to the Department of Social Welfare and Development.
Consequently, complaints were filed against appellant.
Five witnesses, including the appellant, testified for the defense.
Maximo Ombing (Ombing), a neighbor and friend of appellant, testified that on May 27, 2001, he was at appellant’s
house from 7:00 in the evening until 12:00 midnight watching television. He further statedthat appellant was with him
the whole time and did not leave the house.
Ending Matugas, the owner of the store where "AAA" allegedly watched television the night she was raped, claimed
that it was nottrue that "AAA" stayed at her store to watch movies that night. Aside from the fact that she does not
allow children to watch television in her store late at night, said store was closed at that time as she was then on her
way to Cebu.
Eduardo Borrinaga, the Chief Tanod of Barangay P. Inocentes Garcia, stated that on June 30, 2001,he was at the
billiard hall having a drinking spree from 2:00 p.m. until 3:00 a.m. of the following day. However, he neither saw
appellant nor any parked vehicle outside the billiard hall. Appellant, for his part, denied the rape charges against
him. With regard to the first rape incident, he claimed that he was at home watching television with Ombing up to 12
midnight. Thereafter, he went to sleep. And as he did not leave the house that night, it was impossible for him to
have raped "AAA." As to the second rape incident, appellant averred that he was again at home on the night of June
30, 2001.
Appellant contended that "AAA’s" allegations against him were fabricated. He surmised that "AAA’s" aunt, "CCC,"
instigated the filing of the charges since he once reported to a police officer that "CCC" was involved in illegal drug
activities after he saw her and her live-in partner Violeto Oral (Violeto) alias "Akid" packing shabu. To bolster his
claim, appellant presented the testimony of Police Superintendent Victoriano R. Naces (P/Supt. Naces), who
declared in open court that appellant indeed reported to him such incident during the first week of May, 2001.
Because of appellant’s report, a surveillance on "CCC," Violeto and two other persons was conducted where it was
confirmed that they were indeed involved in illegal drug activities. However, P/Supt. Naces did not know what
happened afterwards since he was relieved from his post in June 2001.

In a Decision7 dated November 19, 2003, the RTC gave weight and credence to "AAA’s" testimony. Hence,
itdeclared appellant guilty of two counts of statutory rape, viz:
WHEREFORE, premises considered, this Court finds the accused Francasio Delfin y Suan alias ‘Aying’ GUILTY in
both Criminal Case No. N-2130 and Criminal Case No. N-2131; hereby imposing upon him the penalty of Reclusion
Perpetua for each case.
The accused shall pay "AAA" the amount of ₱50,000.00 in civil indemnity for each rape committed.
SO ORDERED.8
On appeal, the CA held that the prosecution was not able to satisfactorily prove that "AAA" was under 12 years of
age at the time of the alleged rape since no independent evidence of her age such asher birth certificate was
presented. It thus concluded that appellant could not be held liable for statutory rape. However, it noted that in
Criminal Case No. N-2130, force, threat and intimidation were properly alleged in the Information as having attended
the commission of the crime9 and was also duly established by evidence. In view thereof, the CA held appellant
liable for simple rape under par. 1(a), Article 266-A of the Revised Penal Code (RPC). However, the existence
offorce, threat or intimidation was found wanting with respect to Criminal Case No. N-2131, thus, appellant’s
acquittal in the said case.
The dispositive portion of the January 27, 2009 Decision10 of the CA reads:
WHEREFORE, the appealed Decision dated November 19, 2003 of the RTC of Naval, Biliran, is hereby AFFIRMED
with MODIFICATION.
In Criminal Case No. N-2130, appellant Francasio Delfin alias ‘Aying’, is found GUILTY beyond reasonable doubt of
the crime of RAPE under Article 266-A, 1(a) of the Revised Penal Code, and is hereby sentenced to suffer the
penalty of reclusion perpetua. He is also ordered to pay ₱75,000.00 as civil indemnity and ₱75,000.00as moral
damages.
Appellant is ACQUITTED of the charge in Criminal Case No. N-2131 for failure of the prosecution to prove his guilt
beyond reasonable doubt.
SO ORDERED.11
Hence, this appeal. As earlier mentioned, appellant was acquitted in Crim. Case No. N-2131. Thus, the only subject
of this appeal is his conviction for simple rape in Criminal Case No. N-2130.
When required to file their respective supplemental briefs,12 both parties manifested that they would just adopt the
briefs they filed with the CA.13 And since the CA had already conceded to appellant’s argument in the Brief for
Accused-Appellant14 that the prosecution failed to prove that "AAA" was 11 years old at the time of the alleged rape,
the matters left for this Court to consider, as argued by appellant in the said brief, are (1) the failure of the
prosecution to prove that appellant used force, threat or intimidation in the commission of the crime of rape; and, (2)
the alleged material inconsistencies in "AAA’s" testimony and her ill-motive in filing the charges. Our Ruling
The elements of rapeunder par. 1(a),
Article 266-A of the RPC are present in this case.
Under par. 1(a) Article 266-A of the RPC, rape iscommitted as follows:
ART. 266-A. Rape, When and How Committed. – Rape is committed –

xxxx
"Pertinently, the elements of rape under [the above-mentioned provision] are the following: (1) that the offender is a
man; (2) that the offender had carnal knowledge of a woman; and, (3) that such act is accomplished by using force
or intimidation"15 These elements are present in this case.
"AAA’s" testimony established that appellant, a man, had carnal knowledge of her, a young lass. She positively
identified appellant asthe one who raped her. Aside from being clear and straightforward, her recollection of the
material details of her harrowing experience at the hands of the appellant is consistent. Moreover, the medical
findings of Dr. Edano corroborated "AAA’s" testimony as the same showed that her hymen was lacerated at 6
o’clock position. There is sufficient basis, therefore, to conclude that carnalknowledge in facttook place.
Further, appellant, in committing the crime used force, threat, and intimidation. Per "AAA’s" testimony, she was
forced to approach appellant because he threatened to shoot her with his slingshot. When "AAA" was already near
the appellant, he suddenly grabbed her and dragged her to the second floor of a commercial building near the
market. He then took off her panty, forcefully laid her down on top of folded cartons, spread her thighs apart and
inserted his penis into her vagina. After ravishing "AAA," appellant threatened to kill her and her family should she
tell anyone about the incident. Verily, these satisfy the third element, that is, that the carnal knowledge was
accomplished by using force, threat or intimidation.
In view of the foregoing, the Court sustains appellant’s conviction for simple rape under par. 1(a), Article 266-A of
the RPC.
Minor inconsistencies in the testimony of "AAA" do not detract from the actual fact of rape; Factual findings of the
trial court on the credibility of witness are accorded great weight and respect especially if affirmed by the CA, as in
this case.
In an attempt to discredit his accuser, appellant points to several supposed inconsistencies in "AAA’s" statements,
to wit: (1) "AAA" stated on separate occasions three different amounts of money, i.e., ₱40.00, ₱20.00, or ₱100.00,
that the appellant allegedly gave her after the first rape incident; and, (2) she first stated that appellant threatened to
hit her with a stone if she would not comenear him, yet at another time, she mentioned that the threat was that he
would hit her with a slingshot. Appellant avers that these inconsistencies render the prosecution’s evidence
unreliable and insufficient to supporta conviction.
The Court is notpersuaded.
The CA correctly ruled on this matter when it held:
The alleged inconsistencies on matters relating to the amount that was given to AAA after she was raped and as to
whether it was a stone or a slingshot that was used by appellant to force AAA to go near him concern only minor
and collateral matters. It has been held that where the inconsistency is not an essential element of the crime, such
inconsistency is insignificant and cannot have any bearing on the essential fact testified to.16
Indeed, the inconsistencies in "AAA’s" statements are trivial matters that do not involve the essential elements of the
crime. It has been held "that inconsistencies on matters ofminor details do not detract from the actual fact of rape."17
Besides, said inconsistencies cannot affect "AAA’s" credibility especially so when the RTC and the CA have already
held that her testimony was straightforward, credible, and spontaneous. The rule is well-settled that factual findings
of the trial court regarding the credibility of witnesses are accorded great weight and respect especially if affirmed by
the CA.18 The reason behind this is that trial courts have first hand account of the witnesses’ demeanor and
deportment in court during trial.19 "The Court shall notsupplant its own interpretation of the testimonies for that of the
trial judge since he is in the best position to determine the issue of credibility"20 of witnesses being the one who had
face-to-face interaction with the same. "[I]n the absence of misapprehension of facts or grave abuse of discretion of
the court a quo, and especially whenthe findings of the judge have been adopted and affirmed by the CA, [as in this
case,] the factual findings of the trial court shall not be disturbed."21
There is nothing sufficient to show that "AAA" was impelled by improper motive in filing the case.
Appellant imputes improper motive on the part of "AAA" as he surmises that her aunt "CCC" instigated her to falsely
testify against him. Appellant claims that the accusations of rape were prompted by "CCC" who had every reason to
instigate the filing of the criminal case since he reported to the police that she was engaged in illegal drugs.
Contrary to appellant’s claim, however, "CCC" appears to have no knowledge of the rape incidents. "AAA" testified
1âwphi1
that prior to the filing of the case, "AAA" and "CCC" did not speak with each other. In her cross-examination, "AAA"
was questioned about her aunt "CCC," to wit: ATTY. VILLORDON:
Q: Do you have an auntie by the name of [CCC]?
A: Yes, Sir.
Q: Does she know about this rape done to you by Aying?
A: No, Sir.
Q: You did not tell her even [if] she is your [a]untie?
A: I did not tell her.
Q: Have you talk[ed] to [CCC]before you filed these cases?
A: No, Sir.22
Moreover, appellant’s claim of instigation on the part of "CCC" is not supported by evidence. While P/Supt. Naces
was presented as witness and testified that appellant indeed made a report about "CCC’s" alleged involvement in
illegal drug activities, there was no showing thatprior to the filing of the complaints, "CCC" came to know about such
fact for her to harbor a grudge against appellant. Also, it was not even known if "CCC" was incarcerated due to
appellant’s report. The claim, therefore, that"CCC" merely instigated "AAA" to claim rape against appellant is not
worthy of credence. As things stand, no illmotive can be imputed upon "AAA". "It is a settled rule that where there is
no evidence, and nothing to indicate that the principal witness for the prosecution was actuated by improper motive,
the presumption is that [she] was not so actuated and [her] testimony is entitled to full faith and credit."23
Penalties
Article 266-B in relation to Article 266-A (1)(a) of the RPC provides that the penalty for simple rape is reclusion
perpetua. There being no qualifying circumstances, the CA is correct in imposing the said penalty. "It must be
emphasized, however, that [appellant] shall not be eligible for parole pursuant to Section 3 of RepublicAct No. 9346
which states that ‘[p]ersons convicted of offenses punished with reclusion perpetua, or whose sentences will be
reduced to reclusion perpetua, by reason of this Act, shall not be eligible for parole under Act No. 4180, otherwise
known as the Indeterminate Sentence Law, as amended."24
With regard to the award of civil indemnity in the amount of ₱75,000.00, the same is proper and in consonance with
the prevailing policy of the Court. The award of moral damages in the amount of ₱75,000.00 must however be
reduced to ₱50,000.00 in line with prevailing jurisprudence. In addition, exemplary damages in the amount of
₱30,000.00 is awarded to the victim "AAA."25 Prevailing jurisprudence on simple rape likewise awards exemplary
damages in order to set a public example and to protect hapless individuals from sexual molestation.26 Finally, all
damages awarded shall earn interest at the rate of 6% per annum from date of finality of this judgment until fully
paid.27
WHEREFORE, the January 27, 2009 Decision of the Court of Appeals in CA-GR. CR-H.C. No. 00077 finding
appellant Francasio Delfin guilty beyond reasonable doubt of the crime of simple rape and sentencing him to suffer
the penalty of reclusion perpetua is AFFIRMED with the following modifications:
(1) appellant Francasio Delfin shall not be eligible for parole;
(2) the award of moral damages is decreased from ₱75,000.00 to ₱50,000.00;
(3) appellant Francasio Delfin is ORDERED to pay "AAA" the amount of ₱30,000.00 as exemplary damages; and,
(4) appellant Francasio Delfin is ORDERED to pay "AAA" interest at the legal rate of six percent (6%) per annum on
all the amounts of damages awarded, commencing from the date of finality of this Resolution until fully paid.
Costs against appellant.
SO ORDERED.
SECOND DIVISION
G.R. No. 193670 December 3, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff Appellee,

vs.
VENERANDO DELA CRUZ y SEBASTIAN, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
Assailed in this appeal is the June 25, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 01025
that affirmed the March 15, 2005 Judgment2 of the Regional Trial Court (RTC) of Naga City, Branch 28, in Criminal
Case No. RTC'03-0289 convicting Venerando Dela Cruz y Sebastian (appellant) of Violation of Section 5, Article II
of Republic Act No. 9165 (RA 9165) or the Comprehensive Dangerous Drugs Act of 2002.
Factual Antecedents
On July 25, 2003, police asset Warren Ebio (Ebio) received information from another asset that he could purchase
shabu by calling a certain person. He thus called the said person through cellular phone and agreed to meet with
him in front of the barangay hall of Lerma, Naga City. Accordingly, a pre-operation plan to entrap the alleged seller
was immediately drawn up in coordination with the Philippine Drug Enforcement Agency. SPO1 Ruben Antonio
(SPO1 Antonio), SPO1 Cornelio Morano (SPO1 Morano), PO3 Raul Bongon (PO3 Bongon) and SPO3Julio Tuason
(SPO3 Tuason) then formed themselves into a buy-bust team. Ebio was designated as the poseur-buyer and was
given three ₱500.00 bills as buy-bust money, while PO3 Bongon was tasked to apprehend the seller after the
consummation of the transaction. Upon their arrival at the designated area, Ebio, SPO3 Tuason and SPO1 Morano
alighted from their vehicle. Ebio proceeded towards the meeting place while the other two positioned themselves
nearby. A few minutes later, a man riding a motorcycle arrived. The buy-bust team recognized him asthe seller
based on his attire as described by him to Ebio. Ebio introduced himself asthe buyer. When the man asked for
payment, he gave him the buy-bust money. The man then took out two transparent plastic sachets containing white
crystalline substance from his right pocket and gave them to Ebio. Thereupon, Ebio took off his hat, the pre-
arranged signal that the transaction was already consummated. Immediately, PO3 Bongon, SPO1 Morano and
SPO1 Antonio rushed towards the man and apprehended him. They recovered from him the buy-bust money and
another plastic sachet containing white crystalline substance. Immediately after Ebio turned over to him the two
sachets subject of the sale, PO3 Bongon marked the same with "RSB-1" and "RSB-2." On the other hand, he
marked the third sachet recovered from the seller after he conducted a search on him with "RSB-3." PO3 Bongon
thereafter turned over these seized items together with the marked money to SPO1 Antonio for proper disposition. A
police investigation followed where the person arrested was identified as the appellant. Afterwards, SPO1 Antonio
brought the sachets to the Philippine National Police Crime Laboratory for examination, during which Forensic
Chemist Josephine Macura Clemen (Clemen) found their contents positive for shabu.Thus, an Information3 for
Violation of Section 5, Article II of RA 9165 was filed against appellant.
Appellant denied the accusation against him and claimed that he was merely a victim of frame-up. In his version of
the incident, appellant alleged that he was riding his motorcycle towards the Panganiban Bridge near the Barangay
Hall of Lerma, Naga City in the evening of July 25, 2003. He was going to his parents’ house located in the
boundary of Lerma and Triangulo Streets to inform them that he and his family would leave early morning of the
next day for Camarines Sur to attend the wake of his father-in-law who died a few days earlier. As he was
descending the bridge, however, two individuals grabbed his hands. A police officer then suddenly came out ofa car
and told him to get off his motorcycle. PO3 Bongon frisked him and took his cellphone and telephone directory that
contained money. After that, he was madeto board a mobile car and was brought to a police station. Thereat, police
officers threatened to charge him if he would not cooperate in the arrest of a certain "Habagat," who engaged his
services as a computer technician. He did not accede since he knew nothing about the case of "Habagat." Hence,
the police officers instead filed a case against him.
In the RTC Judgment dated March 15, 2005, appellant was found guilty as charged and sentenced to suffer the
penalty of life imprisonmentwith a fine of ₱500,000.00. On appeal, the CA rendered its Decision on June 25, 2010
affirming the said RTC Judgment.
Hence, this appeal.
The Issue
Appellant points out the following: (1) it was not made clear by the prosecution where the markings of the three
sachets of shabuwere made; and (2) the prosecution failed to show whether there was already a clear
understanding between appellant and the poseur-buyer with respect to the quantity of shabu allegedly being
purchased. In view of these, appellant asserts that the presumption of innocence in his favor must be upheld.
"In a prosecution for illegal sale of dangerous drugs, [such as shabu], the following elements must be duly
established: (1) the identity of the buyer and seller, the object, and the consideration, and (2) the delivery of the
thing sold and the payment therefor. The delivery of the illicit drug to the poseur-buyer and the receipt by the seller
of the marked money successfully consummate the buy-bust transaction."4 Here, the prosecution submitted
evidence that duly established the elements of illegal sale of shabu. It positively identified appellant as the seller of
the seized illegal substance which turned out to be positive for methamphetamine hydrochloride commonly known
as shabu, a dangerous drug. Appellant sold and delivered the drug for ₱1,500.00 to Ebio, a police asset who acted
as poseur-buyer. Verily, all the elements of the sale of illegal drugs were established to support appellant’s
conviction of the said offense.
We cannot give credence to appellant’s argument that failure to mention the place where the three plastic sachets of
shabu were marked constitutes a gap in the chain of custody of evidence. Chain of custody is "the duly recorded
authorized movements and custody of seized drugs or controlled chemicals or plant sources of dangerous drugs or
laboratory equipment of each stage, from the time of seizure/confiscation to receipt in the forensic laboratory to
safekeeping to presentation in court for destruction."5 It eliminates doubts concerning the proper preservation of the
identity and integrity of the corpus delicti or the shabu in this case. Marking of the seized shabuis the initial stage
inthe chain of custody in buy-bust operations. As requisites, the marking must be made in the presence of the
apprehended offender and upon immediate confiscation, and this contemplate seven marking at the nearest police
station or office of the apprehending team.6
In this case, Ebio turned over to PO3 Bongon the two sachets of shabusold to him by the appellant. Together with
another sachet of shabuhe recovered from appellant, PO3 Bongon immediately marked each sachet with "RSB-1,"
"RSB-2" and "RSB-3," respectively, before giving them to SPO1 Antonio. While it is true that the exact location
where the markings were made was not mentioned, it can reasonably be concluded that the same happened during
appellant’s apprehension, in transit to the police station or before the sachets were turned over to SPO1 Antonio in
the police station. Upon receipt, SPO1 Antonio then submitted the sachets to the crime laboratory. PO2 Henry
Escalora, Sr. received the three sachets and handed them to Forensic Chemist Clemen whose examination of the
contents thereof revealed that they were positive for shabu. During trial, Forensic Chemist Clemen presented and
identified the specimens. Clearly, the prosecution was able to establish the chain of custody of the shabu from its
possession by the police officers, testing in the laboratory to determine its composition, until the same was
presented as evidence in court. Hence, even if there was no statement as to where the markings were made, what
isimportant is that the seized specimen never left the custody of PO3 Bongon until he turned over the same to SPO1
Antonio and that thereafter, the chain of custody was shown to be unbroken.7 Indeed, the integrity and evidentiary
value of the seized shabuis shown to have been properly preserved and the crucial links in the chain of custody
unbroken.
We also cannot give credence to appellant’s argument that the absence of relevant testimony on any agreement
between him and Ebio with respect to the quantity of shabu sought to be purchased casts doubt on the existence of
a legitimate buy-bust operation. The existence of the illegal sale of the shabudoes not depend on an agreement
about its quantity and price since the offense is consummated after the exchange of the illegal drug for the marked
money. Hence, Ebio’s testimony that appellant asked for the money before handing over the shabu and that he
received the sachets of shabuafter giving appellant the ₱1,500.00, is by itself sufficient.
Anent appellant’s defense of frame-up, such is inherently weak and viewed with disfavor for it can be easily
concocted.8 For this defense to succeed, it must be proven with strong and convincing evidence.9 Appellant failed in
this regard.
In view of the foregoing discussion,we uphold appellant’s conviction of the offense charged. The penalty for
unauthorized sale of shabu under Section 5, Article II of RA 9165,10 regardless of its quantity and purity,is life
imprisonment to death and a fine ranging from ₱500,000.00 to ₱10,000,000.00. However, with the enactment of RA
9346,11 only life imprisonment and fine shall be imposed. We therefore find the penalty of life imprisonment and
payment of fine in the amount of ₱500,000.00 imposed by the RTC and affirmed by the CA to be proper. It must be
emphasized, however, that appellant shall not be eligible for parole.12
WHEREFORE, the Decision dated June 25, 2010 of the Court of Appeals in CA-G.R. CR-HC No. 01025, which
affirmed the conviction of appellant Venerando Dela Cruz y Sebastian for Violation of Section 5, Article II of Republic
Act No. 9165 by the Regional Trial Court of Naga City, Branch 28 in its March 15, 2005 Judgment, is AFFIRMED
with the modification that appellant shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 193385 December 1, 2014

vs.
DATSGANDAWALI y GAPAS and NOL PAGALAD y ANAS, Accused-Appellants.
RESOLUTION
DEL CASTILLO, J.:
For final review is the June 21, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 03736, which
affirmed the November 18, 2008 Decision2 of the Regional Trial Court (RTC), Branch 82 of Quezon City in Criminal
Case No. Q-03-118597 finding appellants Dats Gandawali y Gapas (Gandawali) and Nol Pagalad3 y Anas (Pagalad)
guilty beyond reasonable doubt of Violation of Section 5, Article II of Republic Act No. 9165 (RA 9165) or the
Comprehensive Dangerous Drugs Act of 2002.
Factual Antecedents
On July 3, 2003, an Information4 for Violation of Section Article II of RA 9165 was filed against Gandawali and
Pagalad, viz:
That on or about the 30th day of June 2003, in Quezon City, Philippines, the said accused, conspiring together,
confederating with and mutually helping each other, not being authorized by law tosell, dispense, deliver[,] transport,
or distribute any dangerous drug, did then and there, willfully and unlawfully sell, dispense, deliver, transport,
distribute or act as broker inthe said transaction, zero point twenty four (0.24) gram of white crystalline substance
containing methylamphetamine hydrochloride[,] a dangerous drug.
CONTRARY TO LAW.5
When arraigned on September 3,2003, both Gandawali and Pagalad pleaded "not guilty"6 to the charge. Pre-trial
and trial ensued.
On June 30, 2003, a confidential informant informed the Baler Police Station 2 that a possible drug deal would take
place at the corner of Sto. Niño St. and Roosevelt Avenue, San Francisco Del Monte, Quezon City. A buy-bust team
was thereupon created composed of P/Insp. Joseph de Vera (P/Insp. DeVera), as team leader; PO2 Sofjan Soriano
(PO2 Soriano), as the poseur-buyer who was given a ₱500.00 bill as buy-bust money; and PO1 Alvin Pineda (PO1
Pineda), PO1 Ernesto Sarangaya (PO1 Sarangaya), PO2 John John Sapad (PO2 Sapad), and PO2 Eric Jorgensen
(PO2Jorgensen), as members.
The team along with the informant proceeded to the target area and arrived there at at around 1:30 p.m. In
accordance with the plan, PO2 Soriano and the informant approached Gandawali and Pagalad, while the rest of the
team positioned themselves strategically. The informant introduced PO2 Soriano to appellants as a drug dependent
who wanted to buy shabuworth ₱500.00. As Pagalad first asked for payment, PO2 Soriano gave the ₱500.00 billto
Gandawali. Gandawali, in turn, gavethe money to Pagalad who took a small heat-sealed transparent plastic sachet
from his pocket. Pagalad gave the plastic sachet containing white crystalline substance to Gandawali, who then
handed the same to PO2 Soriano. Thereupon, PO2 Soriano signaled to his team members by taking off his cap. He
then arrested appellants together with PO1 Sarangaya, and the latter recovered from Pagalad the ₱500.00 bill used
as buy-bust money. Appellants were thereafter brought to the Baler Police Station 2.
PO2 Soriano marked the plastic sachetwith the initials "ES-6-30-03" (the initials of PO1 Sarangaya) and together
with the ₱500.00 bill, turned them over to the desk officer for proper disposition. Thereafter, P/Insp. De Vera
prepared a Request for Laboratory Examination.7 On the same day, PO2 Soriano and the other team members
submitted the plastic sachet to P/Insp. Bernardino M. Banac, Jr. (P/Insp. Banac) at the Central Police District Crime
Laboratory Office where a qualitative examination of its contents was made. The specimen, as found by P/Insp.
Banac, tested positive for methylamphetamine hydrochloride or shabu, a dangerous drug.8 Version of the Defense
Appellants denied the accusation against them and claimed extortion. Their version of the incident is as follows:
At about 6:35 a.m. of June 30, 2003,while waiting for a bus at Litex, Fairview, Quezon City, Pagalad was arrested
for unknown reason by PO1 Sarangaya. When questioned, he told the arresting officer that he has a companion
Gandawali, who was likewise later arrested. Both were then brought to Police Station 2 at Baler, Quezon City where
PO1 Sarangaya demanded from them ₱15,000.00 in exchange for their release. Unfortunately, they were unable to
produce the money, hence,their incarceration.
Gandawali and Pagalad explained that despite their wrongful apprehension and the police’s act of extortion, they did
not file any case against them because they were afraid and were also unfamiliar with the procedures in filing a
case.
Finding sufficient evidenceto sustain a finding of guilt, the RTC convicted appellants through a Decision9 dated
November 18, 2008, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered finding accused DATS GANDAWALI y GAPAS
and NOL PAGALAD y ANAS guilty beyond reasonable doubt of x x x violation of Section 5, Article II of R.A. 9165.
Accordingly, they are hereby sentencedto suffer the penalty of LIFE IMPRISONMENT and each to pay a fine in the
amount of Five Hundred Thousand (₱500,000.00) Pesos.
xxxx
SO ORDERED.10
On appeal, the CA found no reason to overturn appellants’ conviction.
Thus, the dispositive portion ofits June 21, 2010 Decision11 reads:
WHEREFORE, premises considered, the judgment promulgated by Branch 82, Regional Trial Court of Quezon City,
inCriminal Case No. Q-03-118597 is hereby AFFIRMED in toto.
SO ORDERED.12
Issues
Appellants argue that all the elements of the offense charged were not proven and that the police officers failed to
preserve the integrity and evidentiary value of the seized item.
The Court's Ruling
All the elements of the offense charged were duly established by the prosecution.
The essential requirements for a successful prosecution of illegal sale of dangerous drugs, such as shabuare: "(1)
the identity ofthe buyer and the seller, the object and consideration ofthe sale; and (2) the delivery of the thing sold
and the payment therefor."13 Equally settled is the rule that "[t]he delivery of the illicit drug to the poseur-buyer and
the receipt by the seller of the marked money successfully consummate the buy-bust transaction."14 Here, the Court
is satisfied that the prosecution discharged its burden of establishing all the aforesaid elements. The prosecution
positively identified appellants as the sellers of the seized substance which was later found to be positive for
methamphetamine hydrochloride, a dangerous drug. Appellants sold the drug to PO2 Soriano, the police officer who
acted asthe poseur-buyer, and received from the latter the ₱500.00 buy-bust money aspayment therefor.
Appellants’ contention that the consideration of the sale was not established since the buy-bust money was
notpresented as evidence is unavailing. Suffice it to say that "[n]either law nor jurisprudence requires the
presentation of any of the money used in a buy-bust operation x x x."15 "It is sufficient to show that the illicit
transaction did take place, coupled with the presentation in court of the corpus delictiin evidence. These weredone,
and were proved by the prosecution’s evidence."16
The integrity and evidentiary value of the dangerous drug seized from appellants were duly proven by the
prosecution to have been properly preserved; its identity, quantity and quality remained untarnished.
Appellants persistently argue that the prosecution failed to establish with moral certainty the identity of the
substance seized and the preservation of its integrity. They assert that the apprehending officers failed to observe
the procedures for the custody and disposition of the seized drug as laid down in Section 21(1), Article II of RA
9165, particularly the conduct of physical inventory and taking of photograph of the seized item.
The Court finds appellants’ contentions unconvincing.
Section 21(1),17 Article II of RA 9165 clearlyoutlines the post-seizure procedure for the custody and disposition of
seized drugs. The law mandates that the officer taking initial custody of the drug shall, immediately after seizure and
confiscation, conduct the physical inventory of the same and take a photograph thereof in the presence of the
accused or the person/s from whom such items were confiscated and/or seized or his/her representative or counsel,
a representative from the media and the Department of Justice (DOJ),and any elected public official, who shall be
required to sign the copies of the inventory and be given a copy thereof. The explicit directive of the above statutory
provision notwithstanding, the Implementing Rules and Regulations of the said law provide a saving clause
whenever the procedures laid down in the law are not strictly complied with, to wit:
x x x Provided, further, that non-compliance with these requirements under justifiable grounds, as long as the
integrity and the evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall
not render void and invalid such seizures of and custody over said items.18
Thus, gleaned from a plain reading of the implementing rules, the most important factor is the preservation of the
integrity and the evidentiary value of the seized items as they will be used to determine the guilt orinnocence of the
accused.19 As long as the evidentiary value and integrity of the illegal drug are properly preserved, strict compliance
of the requisites under Section 21 of RA 9165 may be disregarded.20
In this case, while it was admitted by PO1 Sarangaya that no physical inventory of the seized item was madeand no
photograph thereof was taken as mandated by law, and also while the reason given for such failure appears to be
unsatisfactory, i.e., PO1 Sarangaya was not familiar with Section 21, Article II of RA 9165 since the said law was
just then newly implemented,21 it was nonetheless shown that the integrity and evidentiary value of the seized item
had been preserved and kept intact. The crucial links in the chain of custody of the seized drug subject matter of the
case, from the time Gandawali handed it to the poseurbuyer up to its presentation as evidence in court, were duly
accounted for and shown to have not been broken.
To recap, the prosecution established that after the seizure of the small plastic sachet containing white crystalline
substance and of the buy-bust money from appellants’ possession, PO2 Soriano marked the sachet with "ES 6-30-
03," the initials of PO1 Sarangaya. The police officers thereafter took appellants and the recovered items to the desk
officer who investigated the case. After the investigation, a request for laboratory examination was prepared by
P/Insp. De Vera. On the same day, the confiscated small plastic sachet bearing the same marking, "ES-06-30-03,"
and the request were thereupon brought by PO2 Sapad, a member of the team, together with PO2 Soriano and
some others to the Central Police District Crime Laboratory Office and were received by P/Insp. Banac for
examination. P/Insp. Banac conducted a laboratory examination of the 0.24 gram of white crystalline substance
found inside the plastic sachet marked with "ES-06-30-03," which per Chemistry Report No. D-555-03 tested
positive for methylamphetamine hydrochloride. During trial, and based on the marking he placed, PO2 Soriano
identified the seized item as the very same sachet containing shabuthat he bought and recovered from appellants.
He also identified appellants to be the same persons who sold the shabu to him. Moreover, as gleaned from the
Pre-Trial Order, P/Insp. Banac, the chemist, brought the specimen himself to the court during the scheduled
hearing.
Following the above sequence of events, the Court entertains no doubt that the sachet containing white crystalline
substance sold by appellants to the poseurbuyer was the same one marked with "ES-06-30-03," which was
submitted for laboratory examination, found positive for shabu,and later presented to the court during the trial as the
corpus delicti. Contrary therefore to appellants’ claim, "the totality of evidence presented by the prosecution leads to
an unbroken chain of custody of the confiscated item from [appellants]. Though there were deviations from the
required procedure, i.e., making physical inventory and taking of photograph of the seized item, still, the integrity
and evidentiary value of the dangerous drug seized from [appellants] were duly proven by the prosecution to have
been properly preserved; its identity, quantity and quality remained untarnished."22
Appellants’ defense of extortion and/or frame-up must fail.
"The defense of extortion and/or frame up is often put up in drug cases in order to cast doubt on the credibility of
police officers. This is a serious imputation of a crime hence clear and convincing evidencemust be presented to
support the same. There must also be a showing that the police officers were inspired by improper motive."23 In this
case, appellants claim that PO1 Sarangaya tried to extort from them ₱15,000.00 in exchange for their release after
they were arrested. However, they failed to substantiate this allegation with clear and convincing evidence. Neither
1âw phi1
were they able to show that the said police officer was impelled by improper motive in imputing the offense against
them. Consequently, appellants’ defense of extortion and/or frame-up must fail.
Conspiracy between appellants in the sale of illegal drug was likewise duly established by the prosecution.
In line with the principle that an appeal in a criminal case throws wide open the whole case for review whether
raised as an issue or not, the Court finds it imperative to make a brief discussion on the conspiracy angle of this
case considering that the courts below failed to pass uponthe same.
"To establish the existence of conspiracy, direct proof is not essential. Conspiracy may be inferred from the acts of
the accused before, during and after the commission of the crime which indubitably point to and are indicative of a
joint purpose, concert of action and community of interest."24 The series of overt acts as recounted by the
prosecution witnesses unmistakably show that appellants were in concert and shared a common interest in selling
the shabu. Thus, when P02 Soriano gave the ₱500.00 bill to Gandawali, the latter handed the money to Pagalad;
when Pagalad took a small heat-sealed transparent plastic sachet from his pocket, he gave it to Gandawali who, in
tum, gave the same to P02 Soriano; and when P02 Soriano announced their arrest, both appellants tried to escape.
Clearly, there was conspiracy between them to sell and deliver a dangerous drug. In view thereof, they are liable as
co-principals regardless of their participation in the commission of the offense.
Appellants are not eligible for parole.
The Court agrees with the penalty of life imprisonment and payment of fine of ₱500,000.00 imposed by the lower
courts upon appellants. It must be emphasized, however, that appellants are not eligible for parole.25
WHEREFORE, the June 21, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 03736 is AFFIRMED
with the MODIFICATION that appellants DATS GANDAWALI y GAPAS and NOL PAGALAD y ANAS shall not be
eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 196102 November 26, 2014
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,

vs.
AURELIA Y. CALUMPIANO, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are 1) the October 30, 2009 Decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 85908 which set aside the June 24, 2004 Decision3 of the Employees' Compensation
Commission (ECC) in ECC Case No. GM-16174-0209-04 and ordered the payment of disability benefits to the
herein respondent Aurelia Y. Calumpiano; and 2) the CA's February 23, 2011 Resolution4 denying reconsideration of
the assailed CA Decision.
Factual Antecedents
As determined by the CA, the facts are as follows:
x x x Aurelia Y. Calumpiano5 was employed as Court Stenographer at the then Court of First Instance ofSamar from
January 5, 1972 until her retirement on March 30, 2002.
On March 7, 2002, shortly before her retirement, [respondent] filed before the Supreme Court, an application for
disability retirement on account of her ailment[s], Hypertensive Cardiovascular Disease [and] Acute Angle Closure
Glaucoma. To bolster her claim, [respondent] submitted the medical certificates issued by her attending physicians,
Dr. Alfred I. Lim and Dr. Elmer Montes, both of whom are Op[h]thalmologists [at] Eastern Samar Provincial Hospital.
She submitted them together with the results of her perimetry test, [a certificate of] which x x x was issued by Dr.
Lim. On September 30, 2002, the Supreme Court approved [respondent’s] application for disability retirement, under
Republic Act No. 8291 (New GSIS Act of 1997).
[Respondent’s] disability claim was forwarded to GSIS,6 but the latter denied her claim for the reason that
hypertension and glaucoma, which were her illnesses, were not work[-]related. Her motion for reconsideration was
likewise denied by the GSIS.
Petitioner filed an appeal [with] the ECC, which rendered the assailed Decision,7 the dispositive portion of which
stated:
WHEREFORE, in view of the foregoing, the decision appealed from is hereby AFFIRMED and the instant appeal
dismissed for want of merit.
SO ORDERED.8
In dismissing respondent’s appeal, the ECC held:
"Glaucoma is characterized by an intraocular pressure sufficiently elevated to produce intraocular damage. The
three major categories of glaucoma are: (1) angle-closure glaucoma, (2) open-angle glaucoma, and (3) congenital
and juvenile glaucoma. Eyes that develop primary angle glaucoma are anatomically predisposed to the condition. In
primary open-angle glaucoma, [the] angle appears open [and] does notseem to function properly. The exact nature
of obstruction has not yet been elucidated. Congenital glaucoma and juvenile glaucoma are thought to be hereditary
inmost cases, although infectious causes are possible (rubella).["] (Pathologic Basis of Disease by Cotran, 6th
edition, pages 1374-1375)
"Hypertension is an increase in the blood pressure within the normal of less than 120/80 mm Hg as defined by the
Joint National Committee VII. Primary risk factor for developing hypertension is smoking. Other important risk
factors are excess body weight, high salt intake, nutritional factors, high alcohol consumption, physical inactivity and
psychological factors, including stress." (Principles of Internal Medicine)
To warrant compensability of ailment and its resulting sickness, disability or death under P.D. 626, as amended,
Rule III, Section 1(b) thereof, specifically provides that the ailment must be listed by the Commission as an
occupational disease with the conditions set forth therein satisfied, otherwise, the conditions imposed under the
Increased Risk Theory must be complied with.
Appellant9 worked as a Court Stenographer III of the Supreme Court for thirty (30) years. Her duties were no doubt
stressful and the same may have caused her to develop her ailment, hypertension. However, to make the same
compensable, it is necessary that there must be impairment of function of her body organs like kidneys, heart, eyes
and brain resulting in her permanent disability. An examination of the appellant’s records would show that she was
not suffering from end[-]organ damage. This was shown in the x x x report [of the ECG] that was taken on the
appellant on January 21, 2002. Thus, the same cannot be considered compensable and work-connected.
Likewise, her other ailment, Glaucoma[,] cannot also be considered work-connected. Medical science has explained
that it is characterized by an intraocular pressure sufficiently elevatedto produce intraocular glaucoma. Here, there
was nothing in her duties that would cause or increase her risk of contracting the said ailment.10
In a Petition for Review11 filed with the CA and docketed therein as CAG.R. SP No. 85908, respondent sought to set
aside the aboveECC Decision, arguing that her illness is work-connected which thus entitles her to disability
compensation.
On October 30, 2009, the CA issued the herein assailed Decision containing the following decretal portion:
WHEREFORE, the petition is GRANTED. Accordingly, the assailed Decision is SET ASIDE. Let this case be
REMANDED to the Employees’ Compensation Commission for the payment of the disability benefits due the
Petitioner.
SO ORDERED.12
The CA held that while respondent’s hypertension and glaucoma are not listed as occupational diseases under the
implementing rules of the Employee Compensation Program under Presidential Decree No. 62613 (PD 626), they
were nonetheless contracted and became aggravated during her employment as court stenographer; that under the
"increased risk theory," a "non-occupational disease" is compensable as long as proof of a causal connection
between the work and the ailment is established;14 that respondent’s illnesses are connected to her work, given the
nature of and pressure involved in her functions and duties as a court stenographer; that the certifications issued by
the attending physicians certifying to respondent’s illnesses should begiven credence; that the ECC itself conceded
that respondent’s duties were "no doubt stressful and the same may have caused her to develop her ailment,
hypertension;" and that while the presumption of compensability has been abrogated with the issuance of PD 626,
employees’ compensation laws nevertheless constitute social legislation which allows for liberality in interpretation
to the benefit of the employee, and the policy has always been to extend the applicability of said laws to as many
employees who can avail of the benefits thereunder.15
Petitioner filed a Motion for Reconsideration, but the CA denied the same in its February 23, 2011 Resolution.
Issues
Petitioner submits the following issues for resolution:
1. WHETHER THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENT’S DISEASES

(HYPERTENSION AND GLAUCOMA) ARE COMPENSABLE UNDER THE INCREASED RISK THEORY; AND
2. WHETHER THE COURT OF APPEALS ERRED IN REVERSING THE FINDINGS OF FACTS OF THE ECC.16
Praying that the assailed CA pronouncements be set aside and that the June 24, 2004 Decision of the ECC be
reinstated, petitioner argues in its Petition and Reply17 that respondent’s hypertension and glaucoma are not
compensable under the principle of increased risk; that although essential hypertension is listed as an occupational
disease, it is not compensable per seas the conditions under Section 1, Rule III of the Amended Rules on
Employees’ Compensation18 should be satisfied; that hypertension is compensable only "if it causes impairment of
function of body organs like kidneys, heart,eyes and brain, resulting in permanent disability;"19 that since respondent
did not suffer "end-organ damage" to or impairment of her kidneys, heart, eyes and brain which resulted in
permanent disability, her illness is not compensable; that respondent’s other illness – glaucoma – is not
compensable;20 and that the findings of the ECC should be accorded respect and finality, as it has the expertise and
knowledge on account of its specialized jurisdiction overemployee compensation cases. Respondent’s Arguments
In her Comment,21 respondent seeks the denial of the Petition, arguing relevantly that the "increased risk theory,"
which applies to her, has been upheld in several decided cases;22 that in disability compensation cases, it is not the
injury which is compensated for but rather the incapacity to work resulting in the impairment of the employee’s
earning capacity;23 and that while the ECC has the expertise and knowledge relative to compensation cases, the CA
isnot precluded from making its own assessment of the case which goes against that of the ECC’s. Our Ruling
In resolving this case, the case of Government Service Insurance System v. Baul24 comes into mind and lays the
groundwork for a similar ruling. In said case, the Court held:
Cerebro-vascular accident and essential hypertension are considered as occupational diseases under Nos. 19 and
29, respectively, of Annex "A" of the Implementing Rules of P.D. No. 626, as amended. Thus, it is not necessary
that there be proof of causal relation between the work and the illness which resulted in the respondent’s disability.
The open-ended Table of Occupational Diseases requires no proof of causation. In general, a covered claimant
suffering from an occupational disease is automatically paid benefits.
However, although cerebro-vascular accident and essential hypertension are listed occupational diseases, their
compensability requires compliance with all the conditions set forth inthe Rules. In short, both are qualified
occupational diseases. For cerebro-vascular accident, the claimant must prove the following: (1) there must be a
history, which should be proved, of trauma at work (to the head specifically) due to unusual and extraordinary
physical or mental strain or event, or undue exposure to noxious gases in industry; (2) there must be a direct
connection between the trauma or exertion in the course of the employment and the cerebro-vascular attack; and
(3) the trauma or exertion then and there caused a brain hemorrhage. On the other hand, essential hypertension is
compensable only if it causes impairment of function of body organs like kidneys, heart, eyes and brain, resultingin
permanent disability, provided that, the following documents substantiate it: (a) chest X-ray report; (b) ECG report;
(c) blood chemistry report; (d) funduscopy report; and (e) C-T scan.
The degree of proof required to validate the concurrence of the above-mentioned conditions under P.D. No. 626 is
merely substantial evidence, that is, such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion. What the law requires is a reasonable work connection and not direct causal relation. It is
enough that the hypothesis on which the workmen’s claim isbased is probable. As correctly pointed out by the CA,
probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings. For, in interpreting
and carrying out the provisions of the Labor Code and its Implementing Rules and Regulations, the primordial and
paramount consideration is the employee’s welfare. To safeguard the worker’s rights, any doubt as to the proper
interpretation and application must be resolved in [his] favor.
In the instant case, medical reports and drug prescriptions of respondent’s attending physicians sufficiently support
her claim for disability benefits. Neither the GSIS nor the ECC convincingly deny their genuineness and due
execution. The reports are made part of the record and there is no showing that they are false or erroneous, or
resorted to [for the purpose] of deceiving the Court, hence, are entitled to due probative weight. The failure of
respondent to submit to a full medical examination, as required by the rules, to substantiate her essential
hypertension, is of no moment. The law is that laboratory reports such as X-ray and ECG are not indispensable
prerequisites to compensability, the reason being that the strict rules of evidence need not be observed in claims for
compensation. Medical findings of the attending physician may be received in evidence and used as proof[s] of the
fact in dispute. The doctor’s certification as to the nature of claimant’s disability may begiven credence as he orshe
normally would not make untruthful certification. Indeed, no physician inhis right mind and who is aware of the far[-
]reaching and serious effect that his or her statements would cause on a money claim against a government agency
would vouch indiscriminately without regarding his own interests and protection.
Significantly, evenmedical authorities have established that the exact etiology of essential hypertension cannot be
accurately traced:
The term essential hypertension has been employed to indicate those cases of hypertension for which a specific
endocrine or renal basis cannot befound, and in which the neural element may be only a mediator ofother
influences. Since even this latter relationship is not entirely clear, it is more properly listed for the moment in the
category of unknown etiology. The term essential hypertension defines simply by failing to define; hence, it is of
limited use except as an expression of our inability to understand adequately the forces at work.25
It bears stressing, however, that medical experiments tracing the etiology of essential hypertension show that there
is a relationship between the sickness and the nature and conditions of work. In this jurisdiction, we have already
ruled in a number of cases the strenuous office of a public school teacher. The case of Makabali v. Employees’
Compensation Commission, which we have re-affirmed in the subsequent cases of De Vera v. Employees’
Compensation Commission, Antiporda v. Workmen’s Compensation Commission, and De la Torre v. Employees’
Compensation Commission, amply summarized, thus:
xxxx
The fact that the essential hypertension of respondent worsened and resulted in a CVA at the time she was already
out of service is inconsequential. The main consideration for its compensability is that her illness was contracted
during and by reason ofher employment, and any non-work related factor that contributed to its aggravation is
immaterial.
Indeed, an employee’s disability may not manifest fully at one precise moment in time but rather over a period of
time. It is possible that an injury which at first was considered to be temporary may later on become permanent or
one who suffers a partial disability becomes totally and permanently disabled from the same cause. The right to
compensation extends to disability due to disease supervening upon and proximately and naturally resulting from a
compensable injury. Where the primary injury is shown to have arisen in the course of employment, every natural
consequence that flows from the injury likewise arises out of the employment, unless it is the result of an
independent intervening cause attributable to claimant’s own negligence or misconduct. Simply stated, all medical
consequences that flow fromthe primary injury are compensable.
P.D. No. 626, as amended, is said to have abandoned the presumption of compensability and the theory of
aggravation prevalent under the Workmen’s Compensation Act. Nonetheless, we ruled in Employees’
Compensation Commission v. Court of Appeals, that:
Despite the abandonment of the presumption of compensability established by the old law, the present law has not
ceased to be an employees’ compensation law or a social legislation; hence, the liberality of the law in favor of the
working man and woman still prevails, and the official agency charged by law to implement the constitutional
guarantee of social justice should adopt a liberal attitude in favor of the employee in deciding claims for
compensability, especially in light of the compassionate policy towards labor which the 1987 Constitution vivifies and
enhances. Elsewise stated, a humanitarian impulse, dictated by no less than the Constitution itself under the social
justice policy, calls for a liberal and sympathetic approach to legitimate appeals of disabled public servants; or that
all doubts to the right to compensation must be resolved in favor of the employee or laborer. Verily, the policy is to
extend the applicability of the law on employees’ compensation to as many employees who can avail of the benefits
thereunder.26 (Emphasis supplied)
Also, in Government Service Insurance System v. De Castro,27 this Court made the following pronouncement:
Other than the given facts, another undisputed aspect of the case is the status of the ailments that precipitated De
Castro’s separation from the military service – CAD and hypertensive cardiovascular disease. These are
occupational diseases. No less than the ECC itself confirmed the status of these ailments when it declared that
"Contrary to the ruling of the System, CAD is a form of cardiovascular disease which is included in the list of
Occupational Diseases." Essential hypertension is also listed under Item 29 in Annex "A" of the Amended ECC
Rules as an occupational disease.
Despite the compensable character of his ailments, both the GSIS and the ECC found De Castro’s CAD to be non-
work related and, therefore, noncompensable. To use the wording of the ECC decision, it denied De Castro’s claim
"due to the presence of factors which are not work-related, such as smoking and alcohol consumption." De Castro’s
own military records triggered this conclusion ashis Admitting Notes, made when he entered the V. Luna General
Hospital due to chest pains and hypertension, were that he was a smoker and a drinker.
As the CA did, we cannot accept the validity of this conclusion at face value because it considers only one side – the
purely medical side – of De Castro’s case and even then may not be completely correct. The ECC itself, in its
decision, recites that CAD is caused, among others, by atherosclerosis of the coronary arteries that in turn, and lists
the following major causes: increasing age; male gender; cigarette smoking; lipid disorder due to accumulation of
too much fats in the body; hypertension or high blood pressure; insulin resistance due to diabetes; family history
ofCAD. The minor factors are: obesity; physical inactivity; stress; menopausal estrogen deficiency; high
carbohydrate intake; and alcohol.
We find it strange that both the ECC and the GSIS singled out the presence of smoking and drinking as the factors
that rendered De Castro’s ailments, otherwise listed as occupational, to be non-compensable. To be sure, the
causes of CAD and hypertension that the ECC listed and explained in its decision cannot be denied; smoking and
drinking are undeniably among these causes. However, they are not the sole causes of CAD and hypertension and,
at least, not under the circumstances of the present case. For this reason, we fear for the implication of the ECC
ruling if it will prevail and be read as definitive on the effects of smoking and drinkingon compensability issues, even
on diseases that are listed as occupational in character. The ruling raises the possible reading that smoking and
drinking, by themselves, are factors that can bar compensability.
We ask the question of whether these factors can be sole determinants of compensability as the ECC has
apparently failed to consider other factors such as age and gender from among those that the ECC itself listed as
major and minor causes of atherosclerosis and, ultimately, of CAD. While age and gender are characteristics
inherent in the person (and thereby may be considered nonwork related factors), they also do affect a worker’s job
performance and may in this sense, together with stresses of the job, significantly contribute to illnesses such as
CAD and hypertension. To cite an example, some workplace activities are appropriate only for the young (such as
the lifting of heavy objects although these may simply be office files), and when repeatedly undertaken by older
workers, may lead to ailments and disability. Thus, age coupled with an age-affected work activity may lead to
compensability. From this perspective, none of the ECC’s listed factors should be disregarded to the exclusion of
others in determining compensability.
In any determination of compensability, the nature and characteristics of the job are as important as raw medical
findings and a claimant’s personal and social history. This is a basic legal reality in workers’ compensation law. We
are therefore surprised that the ECC and the GSIS simply brushed aside the disability certification that the military
issued with respect to De Castro’s disability, based mainly on their primacy as the agencies with expertise on
workers’ compensation and disability issues.28 (Emphasis supplied)
This case should not have been difficult for the petitioner to resolve on its own, given that so many cases have been
decided in the past which should have provided it the guiding hand to decide disability cases on its own rightly –
instead of putting claimants in the unfortunate position of having to chase the benefits they are clearly entitled to,
and waste years prosecuting their claims in spite of their adverse circumstances in life. This Court should not have
to parrot over and over again what clearly has been the settled rule; in many ways, this is a waste of time, and it
only indicates that petitioner has eithernot learned its lesson, or it refuses to realize it.
Applying Bauland De Castro to the instant case and looking at the factual milieu, the Court agrees with the CA’s
conclusion and so declares that respondent’s illness is compensable. Respondent served the government for 30
long years; veritably, as the ECC itself said, "[h]er duties were no doubt stressful and the same may have caused
her to develop her ailment, hypertension"29 – which is a listed occupational disease, contrary to the CA’s
pronouncement that itis not. And because it is a listed occupational disease, the "increased risk theory" does not
apply – again, contrary to the CA’s declaration; no proof of causation is required.
It can also be said that given respondent’s age at the time, and taking into account the nature, working conditions,
and pressures of her work as court stenographer – which requires her to faithfully record each and every day
virtually all of the court’s proceedings; transcribe these notes immediately in order to make them available to the
court or the parties who require them; take down dictations by the judge, and transcribe them; and type in final form
the judge’s decisions, which activities extend beyond office hours and without additional compensation or overtime
pay30 – all these contributed to the development of her hypertension – or hypertensive cardiovascular disease, as
petitioner would call it.31 Consequently, her age, work, and hypertension caused the impairment of vision in both
eyes due to "advanced to late stage glaucoma",which rendered her "legally blind."32
Contrary to petitioner’s submissions, there appears to be a link between blood pressure and the development of
glaucoma, which leads the Court to conclude that respondent’s glaucoma developed as a result of her hypertension.
Although intra ocular pressure (IOP) remains an important risk factor for glaucoma, it is clear that other factors can
also influence disease development and progression. More recently, the role that blood pressure (BP) has in the
genesis of glaucoma has attracted attention, as it represents a clinically modifiable risk factor and thus provides the
potential for new treatment strategies beyond IOP reduction. The interplay between blood pressure and IOP
determines the ocular perfusion pressure (OPP), which regulates blood flow to the optic nerve. If OPP is a more
important determinant of ganglion cell injury than IOP, then hypotension should exacerbate the detrimental effects of
IOP elevation, whereas hypertension should provide protection against IOP elevation. Epidemiological evidence
provides some conflicting outcomes of the role of systemic hypertension in the development and progression of
glaucoma. The most recent study showed that patients at both extremes of the blood pressure spectrum show an
increased prevalence of glaucoma. Those with low blood pressure would have low OPP and thus reduced blood
flow; however, that people with hypertension also show increased risk is more difficult to reconcile. This finding may
reflect an inherent blood flow dysregulation secondary to chronic hypertension that would render retinal blood flow
less able to resist changes in ocular perfusion pressure.33 x x x (Emphasis and underscoring supplied)
In recent years, we’ve learned a lot about ocular perfusion pressure (OPP), i.e., the pressure difference between
blood entering the eye and IOP. It’s clear that three forces — OPP, IOP and blood pressure — are interconnected in
the glaucoma disease process. The mechanics of that relationship, however, remain ambiguous.
xxxx
The ties between hypertension and glaucoma are less well established but the data, in addition to my involvement in
a new study (discussed below), have convinced me they probably do exist. Therefore, I believe potential
hypertension, along with potential low blood pressure, should be investigated in patients whose glaucoma continues
to progress despite what appears to be well controlled IOP.
xxxx
We suspect there is a close relationship among IOP, OPP, blood pressure and glaucoma, but the exact nature of
these associations remains elusive. Complicating matters is the physiological phenomenon known as
autoregulation.34
Abstract
Aims: To determine whether systemic hypertension and glaucoma might coexist more often than expected, with
possible implications for treatment.
Methods: Case-control study using general practitioner database of patients with glaucoma matched with controls
for age and sex.
Results: Hypertension was significantly more common in the 27[,]080 patients with glaucoma (odds ratio 1.29, 95%
confidence intervals 1.23 to 1.36, p<0.001) than in controls. x x x35
While some of the above conclusions are not definitive, it must be stressed that probability, not certainty, is the test
of proof in compensation cases."36 It does not preclude the Court from concluding that respondent’s hypertension –
apart from her age, work, and working conditions – impaired her vision as a result.
The Court likewise disregards the ECC’s finding, which petitioner relies upon, that the primary and important risk
factors for developing hypertension are smoking, excess body weight, high salt intake, nutritional factors, high
alcohol consumption, physical inactivity and psychological factors, including stress. As the Court held in De Castro,
these are not the sole causes of hypertension; age, gender, and work stress significantly contribute to its
development, and the nature and characteristics of the employment are as important as raw medical findings and a
claimant’s personal and social history.
Finally, while the ECC possesses the requisite expertise and knowledge in compensation cases, its decision in
respondent’s caseis nonetheless erroneous and contrary to law. The Court cannot uphold its findings; its specialized
training, experience and expertise did not serve justice well in this case. The medical certificates and relevant
1âwphi 1
reports issued by respondent’s attending physicians – Drs. Alfred I. Lim, Elmer Montes, and Salvador R. Salceda –
as well as hospital records,37 deserve credence. The identical findings of these three eye specialists simply cannot
be ignored.
In arriving at the above conclusions, the Court is well guided by the principles, declared in Bauland De Castro, that
probability, not certainty, is the test of proof in compensation cases;that the primordial and paramount consideration
is the employee’s welfare; that the strict rules of evidence need not be observed in claims for compensation; that
medical findings of the attending physician may be received in evidence and used as proof of the facts in dispute;
that in any determination of compensability, the nature and characteristics of the job are as important as raw
medical findings and a claimant’s personal and social history; that where the primary injury is shown to have arisen
in the course of employment, every natural consequence that flows from the injury likewise arises out of the
employment, unless it is the result of an independent intervening cause attributable to claimant’s own negligenceor
misconduct; and that the policy is to extend the application of the law on employees’ compensation to as many
employees who can avail of the benefits thereunder.
WHEREFORE, the Petition is DENIED. The assailed October 30, 2009 Decision and February 23, 2011 Resolution
of the Court of Appeals in CA-G.R. SP No. 85908 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 190322 November 26, 2014

vs.
VIRGILIO AMORA y VISCARRA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
The qualifying circumstance of treachery does not require that the perpetrator attack his victim from behind. "Even a
frontal attack could be treacherous when une)(pected and on an unarmed victim who would be in no position to
repel the attack or avoid it."1
On appeal is the August 28, 2009 Decision2 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 03294, which
affirmed with modification the February 21, 2008 Decision3 of the Regional Trial Court (RTC), Branch 84, Malolos
City, Bulacan. The RTC convicted Virgilio Amora y Viscarra (appellant) of the crime of murder and sentenced him to
suffer the penalty of reclusion perpetua and to pay the heirs of the victim Romeo Gibaga (Romeo) ₱50,000.00 as
civil indemnity, ₱35,000.00 for funerale) (penses, and ₱16,770.69 for medical expense.
Factual Antecedents
On November 30, 2004, appellant was charged with murder defined and penalized under Article248 of the Revised
Penal Code (RPC). Pertinent portions of the Information4 filed against him read:
That on or about the 12th day of September 2004, in San Jose Del Monte City, province of Bulacan, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, armed with a deadly weapon and with
intent to kill one Romeo Gibaga, with treachery and evident premeditation, did then and there willfully, unlawfully
and feloniously attack, assault and stab with the said deadly weapon the said Romeo Gibaga, hitting him on the
trunk, thereby inflicting upon him mortal wound[s] which directly caused his death.
Contrary to law.5
Upon arraignment on January 18, 2006, appellant entered a plea of not guilty to the offense charged. Thereafter,
pre-trial and trial on the merits followed.
The prosecution presented the testimonies of eyewitnesses Maricris Alidon (Maricris), Anselmo Benito (Anselmo),
and Aurelio Amora (Aurelio). Linda Gibaga (Linda), the wife of the victim Romeo, and Dr. Felimon C. Porciuncula,
Jr. (Dr. Porciuncula), the Medico-Legal officer who conducted the autopsy on the body of the victim, also testified for
the prosecution. Their testimonies are summarized below.
On September 12, 2004 at around 5:45 p.m., Anselmo, Aurelio, and the victim Romeo were walking on their way to
Sampol Market in San Jose Del Monte City. Maricris and her son were tailing them about four meters behind. As
they were making their way to the market, they saw appellant in his store located on the right side of the street.
Suddenly, appellant rushed towards them and stabbed Romeo twice - one on the chest and another on the
abdomen. They were all caught by surprise due to the suddenness of the attack. Romeo fell to the ground while
appellant quickly ran away from the scene. Aurelio chased appellant but failed to catch up with him. Maricriswent to
Romeo’s house to inform his wife Linda about what had just happened.
Upon hearing the news from Maricris, Linda rushedto the scene of the crime but did not find her husband there as
Romeo was already brought by Anselmo to the Sapang Palay District Hospital. Later on, he was transferred to East
Avenue Medical Center where he died after three days. Linda testified that before Romeo passed away, he told her
that appellant was his assailant.6
Due to Romeo’s injuries and eventualdeath, Linda spent ₱16,770.69 for hospital expenses, ₱35,000.00 for funeral
expenses, and ₱50,000.00 as expenses for the wake.
Dr. Porciuncula testified that Romeo died due to two fatal stab wounds. The first stab wound penetrated his chest
and pierced his heart while the wound on his abdomen pierced the pancreas and his small intestines. Both stab
wounds appeared to have been caused by a single-bladed weapon.7
The appellant was the lone witness presented by the defense.He declared on the witness stand that on September
12, 2004, at around 5:45 p.m., he was working as a construction worker in a site 8 to 9 kilometers away from his
residence. On his way home, Nestor Basco, his neighbor, informed him about a stabbing incident that had just taken
place near his home. Upon arriving at his house, his wife and his parents told him that the stabbing incident took
place in front of their store and that the alleged assailant passed through their yard to the street at the back. The
alleged assailant managed to escape, and the stabbing was wrongly imputed against appellant. On December 9,
2004, appellant was arrested. He claimed that he does not know Romeo, whom henever met before the stabbing
incident. The only reason he could think of why he is being falsely accused was that he turned down Anselmo’s
request for ₱200.00 to buy shabu. This happened when they were having a drinking spree with Aurelio the day
before the stabbing incident. According to appellant, Anselmo got infuriated by his refusal and threw a bottle of gin
at him.
On February 21, 2008, the RTC rendered its Decision convicting appellant of the crime of murder. Itfound that the
stabbing of Romeo was attended by the qualifying circumstance of treachery as it was "sudden and unexpected
such that [Romeo] was unable to react or defend himself from the assault of [appellant]"8
The dispositive part of the RTC Decision reads:
WHEREFORE, finding the accused guilty beyond a reasonable doubt of the crime of Murder under Article 248 of the
Revised Penal Code, he is hereby sentenced to suffer the penalty of imprisonment of reclusion perpetuaand to
indemnify the family of the deceased Romeo Gibaga the following amounts:
1. Php16,770.69 for medical expenses;
2. Php35,000.00 for funeral services; and
3. Php50,000.00 for civil indemnity.
SO ORDERED.9
On appeal, the CA affirmed with modification the Decision of the RTC. It held in its August 28,2009 Decision, thus:
WHEREFORE, the Decision dated February 21, 2008 of the Regional Trial Court, Branch 84, Malolos City is hereby
AFFIRMED with modification in that the heirs of the victim are additionally awarded Php25,000.00 as temperate
damages and ₱50,000.00 as moral damages.
SO ORDERED.10
Faulting the Decision of the CA, appellant now appeals to this Court advancing the same issues he raised before
the CA.
Appellant asserts that:
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF MURDER DESPITE
THE PROSECUTION’S FAILURE TO PROVE HIS GUILTBEYOND REASONABLE DOUBT.
II
GRANTING ARGUENDOTHAT THE ACCUSED-APPELLANT IS CRIMINALLY LIABLE, THE TRIAL COURT

GRAVELY ERRED IN APPRECIATING THE QUALIFYING CIRCUMSTANCE OF TREACHERY.11
Our Ruling
Appellant argues that the prosecution has failed to establish his guilt beyond reasonable doubt. Citing the
testimony12 of prosecution witness Aurelio, appellant posits that the eye witnesses could not have possibly identified
the true assailant because it was already 5:45 p.m. and the place where the stabbing incident occurred was almost
shrouded in darkness. Appellant also stresses that witness Aurelio, by his own statement, was drunk at the time of
the incident, thereby impairing his perception and making his judgment in identifying the assailant unreliable.
Because there is uncertainty as to the identity of the true malefactor, appellant asserts that he is entitled toan
acquittal.
The RTC is correct in giving weight and credence tothe testimonies of the prosecution witnesses, viz:
x x x the Court finds the testimonies of the former ([Maricris, Anselmo, and Aurelio]) straightforward and credible,
hence, [deserving] recognition and respect as truthful account of what actually transpired during the incident in
question. The Court likewise noted the assertions of [Maricris, Anselmo, and Aurelio] that they are familiar with or
know the accused and the victim well since they are neighbors in Sapang Palay, San Jose del Monte City, Bulacan.
The Court therefore does not doubt [Maricris, Anselmo, and Aurelio] in identifying the accused as the attacker and
assailant of [Romeo]. Besides, no evidence was offered to show ulterior motive on the part of [Maricris, Anselmo,
and Aurelio] to testify falsely against the accused.13
It bears stressing that the RTC Decision finding appellant guilty of the charge was not based solely on the testimony
of Aurelio. Two other eyewitnesses positively identified the appellant as the person who stabbed Romeo. Anselmo
and Maricris were consistent in their testimonies identifying appellant as the perpetrator of the crime. Excerpts of
their testimonies are reproduced below:
[FISCAL ROQUE:]
Q: You said that you were walking together with Aurelio Amora and Romeo Gibaga. [W]hile you were walking, what
happened if any?
[ANSELMO BENITO:]
A: Romeo Gibaga was suddenly stabbed, sir.
Q: In relation to you, where was this Romeo Gibaga before he was stabbed?
A: He was at myleft side, sir.
Q: How about this Aurelio Amora, where was he?

A: Aurelio was at my right side, sir.
Q: While this Aurelio Amora was on your right and this Romeo Gibaga on your left, you mentioned that somebody
came and stabbed this Romeo Gibaga[. W]ere you able to see or notice where this assailant came from before he
stabbed Romeo Gibaga?
A: Yes, sir.
Q: Where?
A: He came from behind, sir.
xxxx
Q: Considering your position, are you in a position to tell us whether this Romeo Gibaga actually saw the assailant
before he was stabbed?
A: Yes, sir.
Q: What did he do?
A: None, sir.
Q: Why was he not able to react before he was stabbed?
A: Because he was not aware, sir.
Q: Mr. Witness[,] you mentioned that you were able to see this person who stabbed Romeo Gibaga[. I]f he is now
present, can you identify him?
A: Yes, sir.
Q: Kindly look around and point him out?
THE INTERPRETER:
Witness pointed to a person x x x wearing a detainee’s t-shirt who identified himself as Virgilio Amora.
Q: And you mentioned that Romeo Gibaga was stabbed by this accused whom you [have just] identified[. W]ere you
able to see the weapon that was used in stabbing Romeo Gibaga?
A: No, sir.14
xxxx
[FISCAL ROQUE :]
Q: And while you were there going toSampol Market, do you still recall x x x any unusual incident that transpired?
[MARICRIS ALIDON:]
A: Yes, sir.
Q: And what was this unusual incident, Madam witness?

A: The stabbing incident thathappened to Romeo Gibaga, sir.
Q: And were you able to see who stabbed him?
A: Yes, sir.
Q: Who was he?
A: Virgilio Amora, sir.
Q: If he is present today, will you be able to identify him?
A: Yes, sir.
Q: Kindly look around and point him out?
THE INTERPRETER:
The witness pointed to a person who identified himself as Virgilio Amora.15
It is clear that the witnesses have properly identified the appellant as the perpetrator of the crime. Astestified to by
the witnesses and correctly ruled by the RTC and the CA, he was the person who attacked, stabbed and killed
Romeo.
Appellant tried to impeach the testimonies of Anselmo and Aurelio claiming that their motive for falsely testifying
against him was because of his refusal to give them money for shabu.
The Court finds that appellant’s assertion is a mere speculation that deserves scant consideration. His explanation
is neither supported by evidentiary proof nor buttressed by established facts. We have consistently ruled that
positive identification by credible witnesses prevails over self-serving statements of the accused. Such statements
cannot be given greater evidentiary weight over affirmative declarations of eyewitnesses.
Finally, appellant claims that at the time of the commission of the crime, he was working at a construction site 8 to 9
kilometers away from the scene of the crime. He argues that it was thus impossible for him to be the person who
stabbed and killed Romeo.
Appellant’s defenses of denial and alibi must likewise fail.
For the defense of alibi to prosper, "the accused must prove(a) that he was present at another place at the time of
the perpetration of the crime, and (b) that it was physically impossible for him tobe at the scene of the crime"16during
its commission. "Physical impossibility refers to distance and the facility of access between the situs criminisand the
location of the accused when the crime was committed. He must demonstrate that he was so far away and could not
have been physically present at the scene of the crime and its immediate vicinity when the crime was committed."17
In this case, the appellant failed to satisfy these requirements. While a distance of 8 to 9 kilometersis quite far,
appellant was not able to satisfactorily substantiate his claims regarding his whereabouts. Aside from his own
testimony, appellant did not bother to present the testimony of other witnesses or any other proof to support his
defense. Since he claimed that his parents and wife saw the stabbing incident and that the assailant allegedly even
entered their yard, it is puzzling why he did not present them as witnesses to bolster his denial.
In any case, eyewitnesses positively identified the appellant to be present at the scene of the crime. "Time and
again, this Court has consistently ruled that positive identification prevails over alibi since the latter can easily be
fabricated and is inherently unreliable."18
The Court finds no reason to disturb the factual findings of the RTC. The rule is well-settled that factual findings of
the trial court regarding the credibility of witnesses are accorded great weight and utmost respect given that trial
courts have firsthand observation of the witnesses’ demeanor while testifying in court. We shall not supplant our
own interpretation of the witnesses’ testimonies for that of the trial judge since he is in the best position to determine
the issue of credibility of witnesses. Moreover, in the absence of misapprehension of facts or grave abuse of
discretion, and especially when the CA, asin this case, has affirmed the findings of the trial judge, the assessments
and conclusions of the trial court shall not be overturned.
Treachery
Paragraph 16, Article 14 of the RPC provides that"[t]here is treachery when the offender commits any of the crimes
against the person, employing means, methods or forms in the execution thereof which tend directly and specially to
ensure its execution, without risk to himself arising from the defense which the offended party might make." Thus in
order for the qualifying circumstance of treachery to be appreciated, the following requisites must be shown: (1) the
employment of means, method, or manner of execution would ensure the safety of the malefactor from the
defensive or retaliatory acts of the victim, no opportunity being given to the latter to defend himself or to retaliate,
and (2) the means, method, or manner of execution was deliberately or consciously adopted by the offender. "The
essence of treachery is that the attack comes without a warning and in a swift,deliberate, and unexpected manner,
affording the hapless, unarmed, and unsuspecting victim no chance to resist or escape."19
In this case, the appellant’s suddenattack on Romeo amply demonstrates that treachery was employed in the
commission of the crime. The eyewitnesses were all consistent in declaring that the appellant in such a swift motion
1âw phi 1
stabbed Romeo such that the latter had no opportunityto defend himself or to fight back.20 The deliberate swiftness
of the attack significantly diminished the risk to himself that may be caused by the retaliation of the victim.
It is of no consequence that appellant was in front of Romeo when he thrust the knife to his torso. Records show
that appellant initially came from behind and then attacked Romeo from the front. In any event, "[e]ven a frontal
attack could be treacherous when unexpected and on an unarmed victim who would be in no position to repel the
attack or avoid it,"21 as in this case. Undoubtedly, the RTC and CA correctly held that the crime committed was
murder under Article 248 of the RPC by reason of the qualifying circumstance of treachery.
Penalties and Awards of Damages
The penalty for the crime of murder is reclusion perpetuato death. The RTC, as affirmed by the CA, is correct in
holding that the appellant must suffer the penalty of reclusion perpetua, the lower of the two indivisible penalties, by
reason of the absence of any aggravating circumstance. "It mustbe emphasized, however, that [appellant is] not
eligible for parole pursuant to Section 3 of Republic Act No. 9346 which states that ‘persons convicted of offenses
punished with reclusion perpetua, or whose sentences will be reduced to reclusion perpetua, by reason of this Act,
shall not be eligible for parole under Act No. 4180, otherwise known as the Indeterminate Sentence Law, as
amended."22
With regard to the award of civil indemnity ex delicto, the same must be increased from ₱50,000.00 to ₱75,000.00 in
line with prevailing jurisprudence.23 Civil indemnity is mandatory and is granted without need of evidence other than
the commission of the crime.24 We uphold the CA in awarding moral damages to the heirs of Romeo in the amount
of ₱50,000.00. "As borne out by human nature and experience, a violent death invariably and necessarily brings
about emotional pain and anguish on the part of the victim’s family."25 We likewise award exemplary damages in the
amount of ₱30,000.00 since the qualifying circumstance of treachery was proven by the prosecution. When a crime
is committed with an aggravating circumstance, whether qualifying or generic, an award of exemplary damages is
justified under Article 2230 of the New Civil Code.26 The CA however erred in awarding temperate damages in lieu of
actual damages in the amount of ₱25,000.00. Records show that the RTC already awarded the heirs of the victim
actualdamages consisting of ₱16,770.69 as medical expenses and ₱35,000.00 as funeral expenses. These
expenses were fully supported by receipts.27
Lastly, all damages awarded shall be subject to 6% per annuminterest from the finality of this Resolution until fully
paid, also in line with prevailing jurisprudence.
WHEREFORE, the appeal is DISMISSED. The August 28, 2009 Decision of the Court of Appeals in CA-G.R. CR.-
H.C. No. 03294, which affirmed with modification the Decision of the Regional Trial Court, Branch 84, Malolos,
Bulacan, finding appellant Virgilio Amora y Viscarra guilty beyond reasonable doubt of the crime of murder and
sentencing him to suffer the penalty of reclusion perpetuais AFFIRMED with the following modifications:
(1) the appellant is not eligible for parole;
(2) the award of civil liability ex delictois increased from ₱50,000.00 to ₱75,000.00;
(3) the appellant is ORDERED to pay the heirs of Romeo Gibaga the amount of ₱30,000.00 as exemplary damages;
(4) the award of ₱25,000.00 as temperate damages is DELETED; and
(5) the appellant is ORDERED to pay the heirs of Romeo Gibaga interest at the legal rate of 6% per annumon all the
amounts ofdamages awarded, commencing from the date of finality of this Resolution until fully paid.
Costs against appellant.
SO ORDERED.
SECOND DIVISION
G.R. No. 197590 November 24, 2014
BUREAU OF INTERNAL REVENUE, as represented by the COMMISSIONER OF INTERNAL

REVENUE,Petitioner,
vs.
COURT OF APPEALS, SPOUSES ANTONIO VILLAN MANLY, and RUBY ONG MANLY, Respondents.
DECISION
DEL CASTILLO, J.:
There is grave abuse of discretion when the determination of probable cause is exercised in an arbitrary or despotic
manner, due to passion or personal hostility, 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.1 This Petition for Certiorari2 under Rule 65 of the Rules of Court
assails the Decision3 dated October 28, 2010 and the Resolution4 dated May 10, 2011 of the Court of Appeals (CA)
in CA-G.R. SP No. 112479.
Factual Antecedents
Respondent Antonio Villan Manly (Antonio) is a stockholder and the Executive Vice-President of Standard Realty
Corporation, a family-owned corporation.5 He is also engaged in rental business.6 His spouse, respondent Ruby Ong
Manly, is a housewife.7
On April 27, 2005, petitioner Bureau of Internal Revenue (BIR) issued Letter of Authority No. 2001
000123878authorizing its revenue officers to investigate respondent spouses’ internal revenue tax liabilities for
taxable year 2003 and prior years.
On June 6, 2005, petitioner issued a letter9 to respondent spouses requiring them to submit documentary evidence
to substantiate the source of their cash purchase of a 256-square meter log cabin in Tagaytay City worth
₱17,511,010.00. Respondent spouses, however, failedto comply with the letter.10
On June 23, 2005, the revenue officers executed a Joint Affidavit11 alleging that respondent Antonio’s reported or
declared annual income for the taxable years 1998-2003 are as follows:
Net Profit
Taxable Rental Business
Total sources
Compensation (1169-73 G. Tax Due/paid CASH
of Funds
Income Masangkay St.,
Tondo, Manila
1998 [P]133,532.36 [P] 191,915.10 [P] 325,447.46 [P]55,834.00< [P] 269,613.46
1999 142,550.50 260,961.78 403,512.28 79,254.00 324,258.28
2000 141,450.00 213,740.67 355,190.67 64,757.21 290,433.46
2001 151,500.00 233,396.62 384,896.62 73,669.00 311,227.62
2002 148,500.00 186,106.62 334,606.62 58,581.00 276,025.62
2003 148,100.00 152,817.53 300.917.93 48,729.00 252,188.93
[Total] ₱865,633.26 ₱1,238,938.32 ₱2,104,571.58 ₱380,824.21 ₱1,723,747.3712
and that despite his modestincome for the said years, respondent spouses were able to purchase in cash the
following properties:
1) a luxurious vacation house in Tagaytay City valuedat ₱17,511,010.0013 in the year 2000, evidenced by a Deed of
Absolute Sale14 dated October 24, 2000;
2) a Toyota RAV4 for ₱1,350,000.00 in the year 2001, evidenced by a Sales Invoice15 dated June 28, 2001; and
3) a Toyota Prado for ₱2,000,000.00 in 2003, evidenced by a Deed of Sale16 dated July 9, 2003.17
Since respondent spouses failed to showthe source of their cash purchases, the revenue officers concluded that
respondent Antonio’s Income Tax Returns (ITRs) for taxable years 2000, 2001,and 2003 were underdeclared.18 And
since the under declaration exceeded 30% of the reported or declared income, it was considered a prima facie
evidence of fraud with intent to evade the payment of proper taxes due to the government.19 The revenue officers,
thus, recommended the filing of criminal cases against respondent spouses for failing to supply correct and accurate
information intheir ITRs for the years 2000, 2001, and 2003, punishable under Sections 25420 and 25521 in relation to
Section 248(B)22 of Republic Act No. 8424 or the "Tax Reform Act of 1997," hereinafter referred to as the National
Internal Revenue Code (NIRC).23
Respondent spouses, in their Joint Counter-Affidavit,24 denied the accusations hurled against them and alleged that
they used their accumulated savings from their earnings for the past24 years in purchasing the properties.25 They
also contended that the criminal complaint should be dismissed because petitioner failed to issue a deficiency
assessment against them.26
In response, the revenue officers executed a Joint Reply-Affidavit.27 Respondent spouses, in turn, executed a Joint
Rejoinder-Affidavit.28
Ruling of the State Prosecutor
On August 31, 2006, State ProsecutorMa. Cristina A. Montera-Barot issued a Resolution29 in I.S. No. 2005-573
recommending the filing of criminal charges30 against respondent spouses, to wit:
WHEREFORE, premises considered, it is respectfully recommended that [respondent] spouses ANTONIO VILLAN
MANLY and RUBY ONG MANLY be charged [with] the following:
(1) Three (3) counts of Violation of Section 254 – Attempt to Evade or Defeat Tax of the NIRC for taxable years
2000, 2001, and 2003;
(2) Three (3) counts for Violation of Section 255 of the NIRC – Failure to Supply Correct and Accurate Information
for taxable years 2000, 2001 and 2003;
(3) Three counts of Violation ofSection 255 of the NIRC – Failure to Pay, as a consequence of [respondent
spouses’] failure to supply correct and accurate information on their tax returns for taxable years 2000, 2001, and
2003.31
Respondent spouses moved for reconsideration32 but the State Prosecutor denied the same in a Resolution33 dated
November 29, 2007.
Ruling of the Secretary of Justice
On appeal to the Secretary of Justice via a Petition for Review,34 Acting Justice Secretary Agnes VST Devanadera
(Devanadera) reversed the Resolution of the State Prosecutor. She found no willfulfailure to pay or attempt to evade
or defeat the tax on the part of respondent spouses as petitioner allegedly failed to specify the amount of tax due
and the likely source of income from which the same was based.35 She also pointed out petitioner’s failure to issue a
deficiency tax assessment against respondentspouses which is a prerequisite to the filing of a criminal case for tax
evasion.36 The dispositive portion of the Resolution37 dated July 27, 2009 reads:
WHEREFORE, the assailed Resolution is hereby REVERSED and SET ASIDE. The Chief State Prosecutor
ishereby directed to withdraw the Information filed against [respondent spouses] Antonio Villan Manly and Ruby Ong
Manly, if one has been filed, and report the action taken thereon within ten (10) days from receipt hereto.
SO ORDERED.38
Petitioner sought reconsideration39 but Acting Justice Secretary Devanadera denied the same in a Resolution40dated
November 5, 2009.
Unfazed, petitioner filed a Petition for Certiorari41 with the CA imputing grave abuse of discretion on the part of Acting
Justice Secretary Devanadera in finding no probable cause to indict respondent spouses for willfulattempt to evade
or defeat tax and willful failure to supply correct and accurate information for taxable years 2000, 2001 and 2003.
On October 28, 2010, the CA rendered the assailed Decision42 dismissing the Petition for Certiorari. Although it
disagreed that anassessment is a condition sine qua nonin filing a criminal case for tax evasion, the CA,
nevertheless, ruled that there was no probable cause to charge respondent spouses as petitioner allegedly failed to
state their exact tax liability and to show sufficient proof of their likely source of income.43 The CA further said that
before one could be prosecuted for tax evasion,the fact that a tax is due must first be proved.44 Thus:
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED, and the assailed Resolution of the
Secretary of Justice dated July 27, 2009 dismissing I.S. No. 2005-573 against private respondents, AFFIRMED.
However, the dismissal of the instant case is without prejudice to the refiling by the BIR of a complaint sufficient in
form and substance before the appropriate tribunal.
SO ORDERED.45
The CA likewise denied petitioner’s Motion for Reconsideration46 in its Resolution47 dated May 10, 2011.
Issues
Hence, petitioner filed the instant Petition contending that the CA committed grave abuse of discretion amounting to
lackor excess of jurisdiction in holding that:
I. A CATEGORICAL FINDING OF THE EXACT AMOUNT OF TAX DUE FROM THE PRIVATE RESPONDENT
SHOULD BE SPECIFICALLY ALLEGED [AND THAT] SINCE THE BIR FAILED TO MAKE SUCH FINDINGS
THEYCONSEQUENTLYFAILED TO BUILD A CASE FOR TAX EVASION AGAINST [RESPONDENT SPOUSES]
DESPITE THE WELL ESTABLISHED DOCTRINE THAT IN TAX EVASION CASES, A PRECISE COMPUTATION
OF THE [TAX] DUE IS NOT NECESSARY.
II. THE BIR FAILED TO SHOW SUFFICIENT PROOF OF A LIKELY SOURCE OF [RESPONDENT SPOUSES’]
INCOME DESPITE THE FACT THAT THE BIR WAS SUFFICIENTLY ABLE TO SHOW PROOF OF SUCH
INCOME.48
Petitioner imputes grave abuse of discretion on the part of the CA in affirming the dismissal of the criminal cases
against respondent spouses. Petitioner contends that in filing a criminal case for tax evasion, a prior computation or
assessment of tax is not required because the crime is complete when the violator knowingly and willfully filed a
fraudulent return with intentto evade a part or all of the tax.49 In this case, an analysis of respondent spouses’ income
and expenditure shows that their cash expenditure is grossly disproportionate to their reported or declared income,
leading petitioner to believe that they under declared their income.50 In computing the unreported or undeclared
income, which was likely sourced from respondent Antonio’s rental business,51 petitioner used the expenditure
method of reconstructing income, a method used to determine a taxpayer’s income tax liability when his records are
inadequate or inaccurate.52 And since respondent spouses failed to explain the alleged unreported or undeclared
income, petitioner asserts that criminal charges for tax evasion should be filed against them.
Respondent spouses’ Arguments
Respondent spouses, on the other hand, argue that the instant Petition should be dismissed as petitioner availed of
the wrong remedy in filing a Petition for Certiorari under Rule 65 of the Rules of Court.53 And even if the Petition is
given due course, the same should still be dismissed because no grave abuse of discretion can be attributed to the
CA.54 They maintain that petitioner miserably failed to prove that a tax is actually due.55 Neither was it able to show
the source of the alleged unreported or undeclared income as required by Revenue Memorandum Order No. 15-95,
Guidelines and Investigative Procedures in the Development of Tax Fraud Cases for Internal Revenue Officers.56 As
to the method used by petitioner, they claim that it completely ignored their lifetime savings because it was limited to
the years 1998-2003.57
Our Ruling
Before discussing the merits of thiscase, we shall first discuss the procedural matter raised by respondent spouses
that petitioner availed of the wrong remedy in filing a Petition for Certiorari under Rule 65 of the Rules of Court,
instead of a Petition for Review on Certiorari under Rule 45.
Indeed, the remedy of a party aggrieved by a decision, final order, or resolution of the CA is to file a Petition for
Review on Certiorari under Rule 45 of the Rules of Court, which is a continuation of the appellate process over the
original case.58 And as a rule, if the remedy of an appeal is available, an action for certiorari under Rule 65 of the
Rules of Court, which is anoriginal or independent action based on grave abuse of discretion amounting to lack or
excess of jurisdiction, will not prosper59 because it is not a substitute for a lost appeal.60
There are, however, exceptions to this rule, to wit: 1) when public welfare and the advancement of public policy
dictate; 2) when the broader interest of justice so requires; 3) when the writs issued are null and void; 4) when the
questioned order amounts to an oppressive exercise of judicial authority; 5) when, for persuasive reasons, the rules
may be relaxed to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed
procedure; 6) when the judgment or order is attended by grave abuse of discretion; or 7) in other meritorious
cases.61
In this case, after considering the arguments raised by the parties, we find that there is reason to give due course to
the instant Petition for Certiorari as petitioner was able to convincingly show that the CA committed grave abuse of
discretion when it affirmed the dismissal of the criminal charges against respondent spouses despite the fact that
there isprobable cause toindict them.
Although the Court has consistently adopted the policy of non-interference in the conduct and determination of
probable cause,62 which is exclusively within the competence of the Executive Department, through the Secretary of
Justice,63 judicial intrusion, in the form of judicial review, is allowed when there is proof that the Executive
Department gravely abused its discretion in making its determination and in arriving atthe conclusion it reached.64
Grave abuse of discretion is defined as a capricious and whimsical exercise of judgment tantamount to lack or
excess of jurisdiction, a blatant abuse of authority so grave and so severe as to deprive the court of its very power to
dispense justice, or an exercise of powerin an arbitrary and despotic manner, due to passion, prejudice or personal
hostility, sopatent and gross as to amount to an evasion or to a unilateral refusal to perform the duty enjoined or to
act in contemplation of the law.65 Such is the situation in this case.
Having resolved the foregoing procedural matter, we shall now proceed to determine the main issue in this case.
Sections 254 and 255 of the NIRC pertinently provide:
SEC. 254. Attempt to Evade or Defeat Tax. – Any person who willfully attempts in any manner to evade or defeat
any tax imposed under this Code or the payment thereof shall, in addition to other penalties provided by law, upon
conviction thereof, be punished by a fine of not less than Thirty thousand pesos (₱30,000.00) but not more than One
hundred thousand pesos (₱100,000.00) and suffer imprisonment of not less than two (2) years but not more than
four (4) years: Provided, That the conviction or acquittal obtained under this Section shall not be a bar to the filing of
a civil suit for the collection of taxes.
SEC. 255. Failure to File Return, Supply Correct and Accurate Information, Pay Tax, Withhold and Remit Tax and
Refund Excess Taxes Withheld on Compensation. – Any person required under this Code or by rules and
regulations promulgated thereunder to pay any tax, make a return, keep any record, or supply correct and accurate
information, who willfully fails to pay such tax, make such return, keep such record, or supply such correct and
accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation at the
time or times required by law or rules and regulations shall, in addition to other penalties provided by law, upon
conviction thereof, be punished by a fine of not less than Ten thousand pesos (₱10,000.00) and suffer imprisonment
of not less than one (1) year but not more than ten (10) years.
In Ungab v. Judge Cusi, Jr.,66 we ruled that tax evasion is deemed complete when the violator has knowingly and
willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax.67 Corollarily, an assessment of
the tax deficiency is notrequired in a criminal prosecution for tax evasion.68 However, in Commissioner of Internal
Revenue v. Court of Appeals,69 we clarified that although a deficiency assessment is not necessary, the fact that a
tax is due must first be proved before one can be prosecuted for tax evasion.70
In the case of income, for it to be taxable, there must be a gain realized or received by the taxpayer, which is not
excluded by law or treaty from taxation.71 The government is allowed to resort to all evidence or resources available
to determine a taxpayer’s income and to use methods to reconstruct his income.72 A method commonly used by the
government isthe expenditure method, which is a method of reconstructing a taxpayer’s income by deducting the
aggregate yearly expenditures from the declared yearly income.73 The theory of this method is that when the amount
of the money that a taxpayer spends during a given year exceeds his reported or declared income and the source of
such money is unexplained, it may be inferred that such expenditures represent unreported or undeclared income.74
In the case at bar, petitioner used this method to determine respondent spouses’ tax liability. Petitioner deducted
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respondent spouses’ major cash acquisitions from their available funds. Thus:
Cash Loans Withdrawal Funds Major Unexplained

(business) of Capital available Acquisitions Sources of
Funds
1998 P 269,613.46 900,000.00 130,638.98 1,300,252.44
1999 324,258.28 (400,000.00) 39,281.87 1,263,792.59
2000 290,433.46 - 102,024.97 1,656,251.02 17,511,010.00 (15,854,758.98)

2001 311,227.62 - 406,309.70 717,537.32 1,350,000.00 (632,462.68)
2002 276,025.62 (100,000.00) 184,092.03 360,117.65
2003 252,188.93 - 245,167.97 857,474.55 2,000,000.00 (1,142,525.45)
[Total:] ₱1,723,747.37
75
20,861,010.00 (17,629,747.11)
2000 2001 2003
Unexplained funds – under declaration [P]15,854,758.98 [P]632,462.68 [P] 1,142,525.45
Taxable income [P]15,854,758.98 [P]632,462.68 [P] 1,142,525.45

Income Tax due thereon:
First Php500,000.00 125,000.00 125,000.00 125,000.00

In excess of Php500,000.00 4,913,522.87 42,388.06 205,608.14
Total income tax due (net tax paid) 4,973,765.66 93,719.06 281,879.14
Add: 50% Surcharge 2,486,882.83 46,859.53 165,304.07

20% Interest (up to 5/31/2005) - 825 4,104,376.29 77,337.43 272,751.72
Total Tax Due inclusive of Increments [P]11,565,024.79 [P]217,916.02 [P] 655,369.01 76
Particulars 2000 2001 2003

Unexplained Funds [Underdeclaration] [P]15,854,758.98 [P]632,462.68 [P]1,142,525.45
Sources of Funds as per Financial [P]1,656,251.02 [P]717,537.32 [P]817,474.55
Statements as attached to the Income
Tax Return
Percentage of underdeclaration 957.27% 88.14% 133.24%77
And since the underdeclaration is more than 30%of respondent spouses’ reported or declared income, which under
Section 248(B) of the NIRC constitutes as prima facie evidence of false or fraudulent return, petitioner
recommended the filing of criminal cases against respondent spouses under Sections 254 and 255, in relation to
Section 248(B) of the NIRC.
The CA, however, found no probable cause to indict respondent spouses for tax evasion. It agreed with Acting
Justice Secretary Devanadera that petitioner failed to make "a categorical finding of the exact amount of tax due
from [respondent spouses]" and "to show sufficient proof of a likely source of [respondent spouses’] income that
enabled them to purchase the real and personal properties adverted to x x x."78 We find otherwise.
The amount of tax due from respondent spouses was specifically alleged in the Complaint-Affidavit.79 The
computation, as wellas the method used in determining the tax liability, was also clearly explained. The revenue
officers likewise showed that the under declaration exceeded 30% of the reported or declared income.
The revenue officers alsoidentified the likely source of the unreported or undeclared income intheir Reply-Affidavit.
The pertinent portion reads:
7. x x x x
[Respondent spouses] are into rental business and the net profit for six (6) years before tax summed only to
₱1,238,938.32 (an average of more or less Php200,000.00 annually). We asked respondent [Antonio] if we can
proceed to his rented property to [appraise] the earning capacity of the building [for] lease/ rent, but he declined our
proposition. Due to such refusal made by the respondent, [petitioner], thru its examiners,took pictures of the subject
property and came up with the findings that indeed the unexplained funds sought to have been used in acquiring the
valuable property in Tagaytay x x x came from the underdeclaration of rental income.80
Apparently, the revenue officers considered respondent Antonio’s rental business to be the likely source of their
unreported or undeclared income due to his unjustified refusal to allow the revenue officers to inspect the building.
Respondent spouses’ defense that they had sufficient savings to purchase the properties remains self-serving at
thispoint since they have not yet presented any evidence to support this. And since there is no evidence yet to
suggest that the money they used to buy the properties was from an existing fund, it is safe to assume that that
money is income or a flowof wealth other than a mere return on capital. It is a basic concept in taxation that income
denotes a flow of wealth during a definite period of time, while capital is a fund or property existing at one distinct
point in time.81
Moreover, by just looking at the tables presented by petitioner, there is a manifest showing that respondent spouses
had under declared their income. The huge disparity between respondent Antonio’s reported or declared annual
income for the past several years and respondent spouses’ cash acquisitions for the years 2000, 2001, and 2003
cannot be ignored. Infact, it makes uswonder how they were able to purchase the properties in cash given
respondent Antonio’s meager income.
In view of the foregoing,we are convinced that there is probable cause to indict respondent spouses for tax evasion
aspetitioner was able to show that a tax is due from them. Probable cause, for purposes of filing a criminal
information, is defined as such facts that are sufficient to engender a well-founded belief that a crime has been
committed, that the accusedis probably guilty thereof, and that he should be held for trial.82 It bears stressing that the
determination of probable cause does not require actual or absolute certainty, nor clear and convincing evidence of
guilt; it only requires reasonable belief or probability that more likely than not a crime has been committed by the
accused.83
In completely disregarding the evidence presented and in affirming the ruling of the Acting Justice Secretary
Devanadera that no probable cause exists, we find that the CA committed grave abuse of discretion amounting to
lack or excess of jurisdiction. As we have said, ifthere is grave abuse of discretion, the court may step in and
proceed to make its own independent determination of probable cause as judicial review is allowed to ensure that
the Executive Department acts within the permissible bounds of its authority or does not gravely abuse the same.84
We must make it clear, however, that we are only here to determine probable cause. As to whether respondent
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spouses are guilty of tax evasion is an issue that must be resolved during the trial of the criminal case, where the
quantum of proof required is proof beyond reasonable doubt.
Before we close, we must stress that our ruling in this case should not be interpreted as an unbridled license for our
tax officials to engage in fishing expeditions and witch-hunting. They should not abuse their investigative powers,
instead they should exercise the same within the bounds of the law. They must properly observe the guidelines in
making assessments and investigative procedures to ensure that the constitutional rights of the taxpayers are well
protected as we cannot allow the floodgates to be opened for frivolous and malicious tax suits.
WHEREFORE, the Petition is hereby GRANTED. The Decision dated October 28, 2010 and the Resolution dated
May 10, 2011 of the Court of Appeals in CA-G.R. SP No. 112479 are hereby REVERSED and SET ASIDE. The
Resolutions dated August 31, 2006 and November 29, 2007 of State Prosecutor Ma. Cristina A. Montera-Barot in
LS. No. 2005-573 finding probable cause to indict respondent spouses Antonio Villan Manly and Ruby Ong Manly
for Violation of Sections 254 and 255 of the National Internal Revenue Code are hereby REINSTATED.
SO ORDERED.
SECOND DIVISION
G.R. No. 191260 November 24, 2014

vs.
MELCHOR D. BRITA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
This is an appeal from the November 18, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
03561 that denied the appeal filed therewith and affirmed the April 15, 2008 Decision2 of the Regional Trial Court
(RTC), Branch 70, Taguig City finding appellant Melchor D. Brita alias "Boboy" (appellant) guilty beyond reasonable
doubt of violation of Section 5, Article II of Republic Act (RA) No. 9165 and sentencing him to suffer the penalty of
life imprisonment and to pay a fine of ₱500,000.00.
Factual Antecedents
On October 24, 2002, two separate Informations3 were filed against appellant before the RTC of Pasig City. One
was for selling 0.19 gram of shabu, in violation of Section 5, Article II of RA 9165, as amended, and the other for
illegal possession of 1.56 grams of shabu, in violation of Section 11, Article II of the same law. The cases were
raffled to Branch 165 of the said RTC (RTC-Pasig, Branch 165).
Immediately after his arraignment on February 11, 2003 wherein he pleaded not guilty to both charges, appellant
filed a Petition for Bail.4 During the bail hearing, the prosecution presented PO2 Archibald Tejero (PO2 Tejero) and
PO3 Edgar Orias (PO3 Orias). Their testimonies5 revealed that in the afternoon of October 23, 2002, upon being
told by a confidential informant that a certain "Boboy" (later identified as the appellant) was engaged in rampant
selling of illegal drugs in Western Bicutan, Taguig, Police Inspector Eduardo Paningbatan (P/Insp. Paningbatan),
Chief of the Taguig Police Station, Drug Enforcement Unit, set up a buy-bust team. PO2 Tejero was designated
asthe poseur-buyer and was given ₱500.00 as buy-bust money marked with "AT."
At about 4:30 p.m. of the same day, the buy-bust team went to the house of appellant. The informant, together with
PO2 Tejero, called appellant who thereupon came out of his house and approached them. After having been
introduced by the informant to the appellant as a potential buyer of shabuworth ₱500.00, PO2 Tejero gave appellant
the marked money. In return, appellant took from his right pocket a plastic sachet containing white crystalline
substance and handed the same to PO2 Tejero. PO2 Tejero then executed the pre-arranged signal by lighting a
cigarette. Thereupon, PO3 Orias and the rest of the team rushed to the scene. Alarmed, appellant went inside his
house but was caught by the police officers. After he was placed under arrest, PO2 Tejero recovered from appellant
the buy-bust money. Anent the white crystalline substance he bought from appellant, PO2 Tejero marked the plastic
sachet thereof with "MDB-1."
Meanwhile, PO3 Orias frisked appellant and found in his possession two plastic sachets containing suspected
shabu. PO3 Orias marked the recovered plastic sachets with "MDB-2" and "MDB-3."
Thereafter, the team brought appellant and the confiscated items to the Taguig Police Station. The seized items
were turned over to P/Insp. Paningbatan, who in turn gave the same to the investigator/evidence custodian. After
preparing the request for laboratory examination of the specimen, PO2 Tejero and the investigator brought the
specimen to the PNP Crime Laboratory. Per Physical Science Report No. D-1542-02,6 the substance tested positive
for methamphetamine hydrochloride or shabu.
In support of his Petition for Bail, appellant offered the testimonies of Maygene Fernandez (Fernandez), the
daughter-in-law of appellant’s common-law wife, and Olivia Duhaylongsod (Duhaylongsod), a neighbor. Their
testimonies aimed to establish that when appellant was arrested, no buy-bust operation was actually conducted and
that no shabuwas recovered from him.
Fernandez testified that at the time of the alleged buy-bust operation, appellant was actually sleeping in a roomat
the second floor of their house. Suddenly, police officers entered their house. When appellant emerged from the
room and saw them, he asked for a searchwarrant. The police officers, however, did not respond and instead
immediately handcuffed appellant. Fernandez further testified that appellant was not frisked and that she did not see
any sachet of drugs at the time of the incident.7
For her part, Duhaylongsod testified that she saw two men enter an opening in the back portion of appellant’s
house. She did not see appellant or his commonlaw wife when the men made their entry.8
The RTC-Pasig, Branch 165, however, did not resolve the Petition for Bail until after the prosecution rested its
case9and appellant filed a Demurrer to Evidence10 with prior leave.11 In an Omnibus Order12 dated December 28,
2004, RTC-Pasig, Branch 165 denied both appellant’s Petition for Bail and Demurrer to Evidence as it found the
evidence against appellant for the charge of violation of Section 5, Article II of RA 9165 strong. However, it
dismissed the case for violation of Section 11, Article II of the same law as itfound that the guilt of the accused was
not proven beyond reasonable doubt.
Subsequently, the parties filed a Joint Motion for Transfer/Re-Raffle13 which was granted by RTC-Pasig, Branch 165
in an Order14 dated October 12, 2005. Accordingly, the casewas re-raffled to RTC-Taguig, Branch 70. RTC Taguig,
Branch 70, after finding that the evidence of the prosecution was not that strong, reconsidered and set aside the
RTC-Pasig, Branch 165’s Omnibus Order of December 28, 2004 and allowed appellant to post bail in an
Order15dated October 31, 2006.
Meanwhile, appellant, for his defense, proffered denial. He claimed that there was no buy-bust operation and that
hewas – merely a victim of frame-up.
In a Decision16 dated April 15, 2008, RTC-Taguig, Branch 70 adjudged appellant guilty beyond reasonable doubt of
violating Section 5, Article II of RA 9165 and sentenced him to suffer the penalty of life imprisonment and to pay a
fine of ₱500,000.00. It gave credence to the testimonies of the police officers who were presumed to have
performed their duties in a regular manner. RTC-Taguig, Branch 70 ruled that the positive testimonies of the
prosecution witnesses, coupled with the object evidence consisting of the seized substance that tested positive for
shabu, sufficiently established the elements of illegal sale of dangerous drugs.
On appeal, the CA affirmed the said RTC Decision through a Decision17 dated November 18, 2009.
Appellant claims that the presumption of innocence cannot be overcome by the disputable presumption of regularity
in the performance of official duty. Besides, there is reason to doubt the credibility of the police officers as
prosecution witnesses since there were inconsistencies in their testimonies. He further argues that the grant of bail
in his favor means that the evidence of guilt is not strong. He also questions the chain of custody of the seized
specimen.
The contentions of appellant deserve scant consideration.
The Court agrees with the CA that the testimonies of PO2 Tejero and PO3 Orias established beyond reasonable
doubtappellant’s culpability. Their narrations of what really transpired inthe afternoon of October 23, 2002, from the
moment the confidential informant disclosed to their chief the illegal activities of appellant up to the time ofhis arrest,
deserve great respect and credence as the same emanated from the direct account of law enforcement officers who
enjoy the presumption of regularity in the performance of their duties. It should be noted that "[u]nless there is clear
and convincing evidence that the members of the buybust team were inspired by any improper motive or [did] not
properly [perform] their duty, their testimonies on the operation deserve full faith and credit."18 Moreover, while
appellant iscorrect that the presumption of regularity should not by itself prevail over the presumption of innocence,
still, he must be able to present a viable defense. Here, what appellant interposed is merely denial and a claim of
frame-up. "[F]or the claim of frame-up to prosper, the defense must be able to present clear and convincing
evidence to overcome [the] presumption of regularity,"19 which it failed to do. Hence, the Court finds no error on the
part of the courts below in upholding the presumption of regularity in the performance of duty of the police officers
who conducted the buy-bust operation. Anent the alleged inconsistencies20 pointed out by appellant, the same were
too trivial and inconsequential. They did not deal with the central fact of the crime. It has been repeatedly held that
"a few discrepancies and inconsistencies in the testimonies of witnesses referring to minor details and not actually
touching upon the central fact of the crime do not impair their credibility."21
Appellant asserts that the grant of bail bolsters his claim that the evidence of the prosecution is not strong enough
toprove his guilt. The Court is not convinced. "[A] grant of bail does not prevent [thetrial court, as] the trier of facts, x
x x from making a final assessment of the evidenceafter full trial on the merits."22 As the Court ruled in People v.
Baldoz,23 "[s]uch appreciation [of evidence] is at best preliminary and should not prevent the trial judge from making
a final assessment of the evidence beforehim after full trial. It is not an uncommon occurrence that anaccused
person granted bail is convicted in due course."24
Finally, appellant makes much of the factthat the police operatives failed to comply with the requirements of the law
with regard the handling of evidence, specifically the absence of the required physical inventory and photograph of
the evidence confiscated pursuant to Section 21, par. 1, Article II of RA 9165 as implemented by Section 21(a),
Article II of its Implementing Rules and Regulations.25 However, it must be pointed out that it was only during appeal
that appellant raised these alleged breaches in the custody and handling of the seized evidence. During trial, the
item object of the sale was duly marked, subjected to rigid examination, and eventually offered as evidence. Yet, at
no instance did appellant manifest or even hint that there were lapses in its safekeeping which affected its
admissibility, integrity and evidentiary value. Indeed, such failure to raise this issue during trial is fatal to the case of
the defense as held by this Court in People v. Sta. Maria26 and in subsequent cases.27 Besides, mere lapses in
procedures need not invalidate a seizure if the integrity and evidentiary value of the seized items can be shown to
have been preserved.28 In this regard, the Court quotes with favor the CA' s disquisition on chain of custody, viz:
Appellant sold one (1) sachet of shabu to P02 Archibald Tejero in the buy-bust operation. P02 Tejero, after the
1âwphi 1
arrest of appellant, marked the sachet "MDB-1" before turning it over to Police Inspector Eduardo Paningbatan.
Back at the station, Police Inspector Paningbatan prepared the necessary documents for the transmittal of the
sachet, particularly the letter-request for laboratory examination. He then handed the request and the sachet to PO
1 Saez who, together with P02 Archibald Tejero, delivered them to the PNP Crime Laboratory. At the laboratory, the
sachet was received by Police Inspector Lourdeliza Gural, who found the sachet positive for point nineteen (.19)
[gram] of Methylamphetamine hydrochloride or shabu. The same sachet was identified in open court by P02
Tejero.29
Hence, like the courts below, the Court finds that the prosecution was able to adequately show the unbroken chain
of custody/possession of the seized item from the moment the sale was consummated, until it was tested in the
crime laboratory, and up to the time it was offered in evidence. Clearly, its integrity and evidentiary value have not
been compromised at any stage. WHEREFORE, premises considered, the appeal is DISMISSED. The Decision of
the Court of Appeals dated November 18, 2009 in CA-G.R. CR-H.C. No. 03561 is hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 190863 November 19, 2014

vs.
RAUL SATO, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Assailed in this appeal is the March 13, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CEB-CR-H.C. No.
00481 affirming with modifications the July 3, 2006 Judgment2 of the Regional Trial Court (RTC), Branch 14, Cebu
City in Criminal Case No. CBU-70799. The RTC found appellant Raul Sato (appellant) guilty beyond reasonable
doubt of the crime of statutory rape committed against "AAA"3 as described in an Information,4 the pertinent portion
of which reads:
That sometime in the afternoon of the 10th day of September, 2004, at xx x, Province of Cebu, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, with lewd design and by means of force,
violence and intimidation, did then and there willfully, unlawfully and feloniously have carnal knowledge [of] "AAA" a
9-year old girl, against her will.
CONTRARY TO LAW.5
During his arraignment, appellant pleaded "not guilty" to the crime charged. Thereafter, pre-trial and trial ensued.
On September 10, 2004,then nine-year old6 "AAA" and her six-year old cousin "BBB" were invited by the appellant,
who was their neighbor, to an abandoned nipahut. Appellant then carried "AAA" while "BBB" walked towards the
hut. Upon entering the premises, appellant told "AAA" and "BBB" to undress. When the children complied, appellant
started playing with the private parts of "AAA." He then counted "one, two, three," inserted his penis into "AAA’s"
vagina, and made coital movements that caused "AAA"to feel pain. Thereafter, appellant gave "AAA" ₱5.00 and
threatenedto kill her and her father with a knife if she tells anyone of the things he did toher. The whole time, "BBB,"
who was likewise naked, was just sitting beside "AAA." Appellant did not molest or touch her. Appellant then carried
"AAA" and "BBB" and brought them out of the nipahut through the window. "AAA" reported the incident to her
grandmother because her parents were not around at that time.7
At the time of the incident, prosecution witness Efren Alcover (Alcover) was near the abandoned nipahut gathering
balani (banana trunk). When he passed by the hut which had no door, he saw appellant, "AAA" and "BBB" inside.
Upon getting closer, he saw all of them naked. "AAA" was lying down while appellant was doing push and pull
movements on top of her. Beside"AAA" was "BBB" whom appellant only gazed at. When appellant was done,
Alcover saw him give the children money.8
On September 11, 2004, "AAA" was physically examined. Her physician found hyperemia or an increasein redness
of "AAA’s" hymen.9
Appellant denied the accusations against him. He testified that at around 4:00 a.m. of September 10, 2004, he went
fishing and returned ashore at 3:30 p.m. He cooked some of the fish he caught and shared it with Arsenio Baraquia
(Baraquia). They went their separate ways at 4:00 p.m. When he arrived home, he cooked and ate the rest of the
fish for dinner. After finishing his meal, he slept throughout the night.10 This was corroborated by Baraquia.11
Appellant attributed ill motive to "AAA" and her parents in filing the case. He claimed that he would often scold
1âwphi 1
"AAA" for hurting his youngest son. Anent her parents, he averred that he had a confrontation withthem before the
barangay. This was after he threw a stone at their dog which tried tobite him. Accidentally, the stone hit their house
instead and this angered "AAA’s" brother.12
On July 3, 2006, the RTC rendered its Judgment13 finding appellant guilty beyond reasonable doubt of the crime of
statutory rape. The trial court gave weight to "AAA’s" categorical, straight forward and spontaneous manner of
testifying that she was raped by appellant. On the other hand, it debunked appellant’s defense of denial and alibi.
The dispositive portion of the RTC Judgment reads:
WHEREFORE, in view of the foregoing premises, JUDGMENT is rendered finding accused, RAUL SATO, GUILTY
beyond reasonable doubt of STATUTORY RAPE pursuant to ART. 266-A of the Revised Penal Code (The Anti-
Rape Law of 1997-R.A. 8353) and is sentenced to the indivisible penalty of reclusion perpetua pursuant to the first
paragraph of Art. 266-B of the same Law.
Accused is also ordered to pay the victim "AAA", through her parents the following amounts:
a.) FIFTY THOUSAND (₱50,000.00) PESOS, for and as his civil liability towards the victim;
b.) TEN THOUSAND (₱10,000.00) PESOS, for and as moral damages

c.) FIVE THOUSAND (₱5,000.00)PESOS, for and as exemplary damages.
SO ORDERED.14
Before the CA, appellant averred that the RTC failed to take into consideration the improbabilities in "AAA’s" claim of
rape, to wit: (1) he could not have raped "AAA" in the presence of her cousin "BBB;" (2) if he indeed raped "AAA" in
"BBB’s" presence, the prosecution should have presented the latter as witness to corroborate "AAA’s" testimony; (3)
ifhe was really motivated by his bestial desire, he would have also raped "BBB," which according to "AAA," he also
ordered to undress; (4) if he indeed raped "AAA," the medical examination done on her should have indicated the
presence of vaginal laceration or any condition suggestive of forceful penile penetration;and, (5) it was unbelievable
and inconceivable for prosecution witness Alcover to do nothing to prevent or stop the criminal act if he indeed
witnessed the alleged rape of "AAA." Appellant further averred that the RTC erred in not appreciating his defense of
alibi that he was at the seashore at the time of rape since it was corroborated by Baraquia.15
In its Decision16 dated March 13, 2009,the CA held thatit was neither inconceivable for appellant to have raped
"AAA" in the presence of "BBB" nor unbelievable for him to undress both "AAA"and "BBB" but rape only "AAA." It
has been held that rape is no respecter of timeand place. Also, a child molester’s mind could never be truly
fathomed. Besides, the whole incident had been narrated by "AAA" in a clear, candid and straight forward manner
and corroborated in its essential points by Alcover’s testimony.
With respect to the result of the medical examination, the CA explained that the lack of lacerations in "AAA’s" vagina
does not negate sexual intercourse. It explained that penetration of the penis through the lips of vagina, even
without rupture or laceration of the hymen, is enough to justify a conviction for rape.
The CA likewise debunked appellant’s argument that Alcover should have rescued "AAA" if he indeed saw her being
molested by appellant. The appellate court emphasized that different people react differently to a given situation and
there is no standard form of behavioral response when one isconfronted with a strange or startling experience.
Moreover, there is no reason to doubt Alcover’s testimony as no evil or dubious motive could be imputed against
him to falsely testify against appellant.
Neither did the CA give credence to appellant’s allegation that the complaint against him was merely lodged
because "AAA’s" parents harbored ill feelings against him due to their previous confrontation in the barangay. To the
CA, it is inconceivable for "AAA’s" parents to drag their nine-year old daughter into a rape scandal with all its
attendant humiliation although said incident did not happen.
In view of these, the CAaffirmed appellant’s conviction but modified the award of damages, viz:
WHEREFORE, the decision of the Regional Trial Court, Branch 14, of Cebu City in Crim. CaseNo. CBU-70799,
dated July3, 2006 finding accusedappellant RAUL SATO guilty beyond reasonable doubt of STATUTORY RAPE
pursuant to Article 266-A of the Revised Penal Code (The Anti-Rape Law of 1997 R.A. 8353) and sentencing him to
suffer the penalty of Reclusion Perpetua is hereby AFFIRMED with the following MODIFICATIONS:
1. the moral damages is increased to Fifty Thousand Pesos (Php50,000.00);
2. the Five Thousand Pesos (Php5,000.00) awarded as exemplary damages is hereby deleted for lack of basis;
3. the award of Fifty Thousand Pesos (Php50,000.00) as civil indemnity is however retained.
SO ORDERED.17
Hence, this appeal where appellant adopted as his Supplemental Brief the Appellant’s Brief he filed before the CA.18
Our Ruling

To support his bid for acquittal,appellant banks on the alleged improbabilities of "AAA’s" claim of rape. However, the
Court finds that the said improbabilities have all been amply discussed and correctly passed upon by the CA in its
assailed Decision such that it is not minded to discuss them all over again. Besides, the improbabilities pointed out
by appellant are inconsequential matters that do not bear upon the elements of the crime of rape. As such, they
cannot be used as grounds for his acquittal.19
What is clear in this case is that the nine-year old victim, "AAA," candidly and spontaneously testified that she was
raped by appellant. "Testimonies of child-victims are normally given full weight and credit, since when a girl,
particularly if she is a minor, says that she has been raped, she says in effect all that is necessary to show that rape
has infact been committed. When the offended party is of tender age and immature, courts are inclined to give credit
to her account of what transpired, considering not only her relative vulnerability but also the shame to which she
would be exposed if the matter to which she testified is not true. Youth and immaturity are generally badges of truth
and sincerity. Considering her tender age,"AAA" could not have invented a horrible story."20 "And although "AAA’s"
testimony was already convincing proof, by itself, of [appellant’s] guilt, it was further corroborated by the testimony of
[Alcover], who personally witnessed the rape. x x x"21
On the other hand, all that appellant put forward for his defense was mere denial and the alibi that at the time of the
incident, he went fishing, was back ashore in the afternoon, cooked some fish, went home and slept throughout the
night. "As this Court has oft pronounced, both denial and alibi are inherently weak defenses which cannot prevail
over the positive and credible testimonies of the prosecution witnesses that[appellant] committed the crime. For alibi
to prosper, the requirements of time and place must be strictly met. It is not enough to prove that [appellant was]
somewhere else when the crime happened. [He] must also demonstrate by clear and convincing evidence that it
was physically impossible for [him] to have been at the scene of the crime at the approximate time of its
commission. Unless substantiated by clear and convincing proof, such defense is negative, self-serving, and
undeserving of any weight in law."22 Obviously, the physical impossibility is not present in this case. Appellant did not
present any proof that it was physically impossible for him to be at the locus criminisat the time of the incident.
In the same vein, appellant’s denial isinherently weak and "constitutes selfserving negative evidence, which cannot
be accorded greater evidentiary weight than the declaration of credible witnesses who testify on affirmative
matters."23
In view of the foregoing, the Court finds no reversible error on the part of the RTC and the CA in finding appellant
guilty of the crime of statutory rape and in imposing upon him the penalty of reclusion perpetua. The said penalty
must, however, be qualified to be without eligibility for parole.24
Anent the award of civil indemnity, the same must be increased to ₱75,000.00 in accordance with the current policy
of the Court. The award of moral damages in the amount of ₱50,000.00 is proper. In addition, appellant is ordered to
pay ₱30,000.00 as exemplary damages "whichis justified under Article 2229 of the Civil Codeto set a public
example or correction for the public good."25
Finally, all the damages awarded shall earn interest at the rate of 6% per annum from the date of finality of this
judgment until fully paid.26
WHEREFORE, the assailed March 13, 2009 Decision of the Court of Appeals in CA-G.R. CEB-CR-H.C. No. 00481
is AFFIRMED with the MODIFICATIONS that appellant Raul Sato is sentenced to reclusion perpetua without
eligibility for parole; the award of civil indemnity is increased to ₱75,000.00; appellant is further ordered to pay
"AAA" exemplary damages in the amount of ₱30,000.00; and all damages awarded shall earn interest at 6% per
annum from the date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 184618 November 19, 2014

PEAK VENTURES CORPORATION and/or EL TIGRE SECURITY and INVESTIGATION AGENCY, Petitioners,
vs.
HEIRS OF NESTOR B. VILLAREAL, Respondents.
DECISION
DEL CASTILLO, J.:
The twin reliefs that should be given to an illegally dismissed employee are full backwages and
reinstatement.1Backwages restore the lost income of an employee and is computed from the time compensation
was withheld up to actual reinstatement.2 Anent reinstatement, only when it is not viable is separation pay given.3
This Petition for Review on Certiorari4 assails the March 28, 2008 Decision5 of the Court of Appeals (CA) in CA-G.R.
SP No. 99440, which dismissed the Petition for Certiorari filed therewith by petitioners Peak Ventures Corporation
(Peak Ventures) and/or El Tigre Security and Investigation Agency (El Tigre), and in effect affirmed the October 18,
2005 Decision6 and March 20, 2007 Resolution7 of the National Labor Relations Commission (NLRC) in NLRC NCR
CA No. 038029-03. The NLRC affirmed in totothe July 30, 2003 Decision8 of the Labor Arbiter in NLRC NCR 00-08-
06823-2002 declaring Nestor B. Villareal (Villareal) to have been illegally dismissed by petitioners and ordering them
to reinstate him to his former position without loss of seniority rights, to pay him backwages and attorney’s fees
equivalent to 10% of the total monetary award. Likewise assailed isthe CA’s September 16, 2008 Resolution9 which
denied petitioners’ Motion for Reconsideration.
Factual Antecedents
On June 16, 1989, Peak Ventures, the owner/operator of El Tigre, hired Villareal as security guard and assigned
him at East Greenhills Village. On May 14, 2002, however, he was relieved from duty without any apparent reason.
Villareal was later informed by the management that he would no longer be given any assignment because of his
age. At that time, he was 42. His repeated requests for a new posting during the months of June and July of 2002
were likewise declined.
Due to his prolonged lack of assignmentand dwindling resources, Villareal was constrained to claim his security
bond deposits from petitioners. However, he was advised to first tender a letter of resignation before the samecould
be released to him. Out of sheer necessity, Villareal submitted a letter of resignation.10 He stated therein that he was
constrained to resign effective July 31, 2002 since he cannot expect to be given any assignment for another one
and a half months and that he can no longer afford the fare going to petitioners’ office. Villareal alleged that the
tenor of his resignation letter was not acceptable to petitioners, who required him to submit another one stating that
his resignation is voluntary.11 In the first week of August 2002, petitioners released to Villareal his security bond
deposits.
On August 27, 2002, Villareal filed before the Labor Arbiter a Complaint12 for illegal dismissal with prayer for
reinstatement, backwages, 13th month pay, holiday pay, service incentive leave pay, moral and exemplary
damages and attorney’s fees against petitioners. He asserted that petitioners have no valid and authorized cause to
relieve him from duty and place him on floating status. For one, he had dedicated almost 14 years of outstanding
work performance to petitioners as shown by his commendation13 and award.14 For another, petitioners still had an
existing security services contract with East Greenhills Village at the time he was relieved from his post. Villareal
averred that the dire financial strait brought about by his unjustified relief from duty had made it unbearable for him
to continue his employment with petitioners. Further, his illegal dismissal was effected without due process.
Petitioners denied the charge and asserted that it was Villareal who voluntarily severed his employment with them
as shown by: 1) his handwritten letter of resignation, 2) a Talaan ng Pakikipanayam sa Pagbibitiw15 duly
accomplished by Villareal which negates any act of coercion on petitioners’ part, and 3) a notarized
Clearance16showing Villareal’s receipt of his security deposits amounting to ₱12,700.00 and waiver of all his claims
against petitioners.
The Labor Arbiter, in a Decision17 dated July 30, 2003, concluded that there was no valid and effective resignation
on the part of Villareal; that he was constructively dismissed by petitioners; and that his dismissal was carried out
without due process of law. The dispositive portionof the Labor Arbiter’s Decision is as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of [Villareal] by the
[petitioners] in the above-entitled case was illegal and the [petitioners are] hereby ordered to reinstate immediately
[Villareal] to his former position withoutloss of seniority rights and other privileges. The [petitioners are] directed to
comply with this reinstatement order upon receipt of this decision.
Furthermore, the [petitioners are]ordered to pay [Villareal] his backwages for the period from July 3, 2002 up to July
4, 2003, in the amount of ₱100,800.00, subject to further adjustment or computation up to the reinstatement of
[Villareal] or the finality of this decision, as the case may be.
In addition, the [petitioners are] hereby ordered to pay [Villareal] attorney’s fees equivalent to ten percent (10%) of
the total monetary award.
All other claims are dismissed.
SO ORDERED.18
Petitioners appealed to the NLRC. In a Decision19 dated October 18, 2005, the NLRC agreed with the Labor Arbiter’s
findings and conclusion. Hence, the dispositive portion of its Decision, viz: WHEREFORE, premises considered,
[petitioners’] appeal is hereby DENIED. Accordingly, the assailed Decision is hereby AFFIRMED in toto.
SO ORDERED.20
Petitioners filed a Motion for Reconsideration21 but the same was likewise denied in a Resolution22 dated March 20,
2007.
In their Petition for Certiorariwith Prayer for the Issuance of Temporary Restraining Order and/or Writ of Preliminary
Injunction23 filed before the CA, petitioners, aside from still insisting that Villareal voluntarily resigned and is not
entitled to the awards made inhis favor, also called attention to the fact that they already required Villareal to return
to work, in compliance with the reinstatement aspect of the Labor Arbiter’s Decision.24
On December 1, 2005, Villareal died.25 The CA, in a Resolution26 dated August 22, 2007, required Villareal’s counsel
of record, Atty. Alex B.Carpela, Jr. (Atty. Carpela) to cause the substitution of Villareal’s heirs as respondents.
However, per Manifestation27 of Atty. Carpela, the said heirs cannotbe located.
Nevertheless, the CA proceeded to resolve the case. On March 28, 2008, it rendered a Decision28 upholding the
NLRC. The CA noted that petitioners failed to afford Villareal substantive and procedural due process when he was
relieved from duty and also when he was not given a new post. And as a result of the unjustified relief and non-
posting, his situation became unbearable, leaving him with no choice but to forego employment. To the CA, this is a
clear case of constructive dismissal. On the other hand, petitioners’ evidence did not suffice to support the alleged
voluntariness of Villareal’s resignation.
In view of the finding of illegal dismissal, the CA made the following disquisition as to the monetary awards in favor
of Villareal:
An illegally dismissed employee is entitled to the twin relief[s] of (a) either reinstatement or separation pay, if
reinstatement is no longer viable, and (b) backwages. The award of one does notbar the other. Moreover, illegally
dismissed employees are entitled to full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time their actual compensation was withheld fromthem up to the time of actual
reinstatement. If reinstatement is not possible, the same shall be computed fromthe time of their illegal termination
up to the finality of the decision.
The amount of backwages shall be computed from the time he was separated from the company, that is July 3,
2002 up to the finality of this Decision, as [Villareal] already died. Moreover, since reinstatement is now impossible,
the petitioners shall give separation pay of one month pay for every year of service to [Villareal] in lieu of
reinstatement.
The petitioners must also be held liable to pay [Villareal] attorney’s fees equivalent to ten percent (10%) of the total
monetary award. This Court deems it just and equitable that attorney’s fees should be recovered pursuant to Article
2208 (11) of the New Civil Code.29
Ultimately, the CA dismissed the Petition, viz:
WHEREFORE, premises considered, the instant petition is hereby DISMISSED.
SO ORDERED.30
n their Motion for Reconsideration,31 petitioners questioned, among others, the award of backwages. They asserted
that the backwages should be computed from the time of Villareal’s relief from duty on May 14, 2002 until his actual
reinstatement and not until the finality of the Decision. And since Villareal was actually reinstated and has rendered
duty from November 1, 2003 to March 16, 2004, he is only entitled to backwages computed up to his actual
reinstatement on November 1, 2003. To support this, petitioners presented Assignment Orders dated November 8,
200332 and March 15, 2004,33 as well as Villareal’s Daily Time Record (DTR) from November 8-30,34 December 1-16,
200335 and March 16, 2004.36 To show that Villareal was paidhis wages and salaries during his actual reinstatement,
petitioners also presented the Payroll Registry Receipts37 and Bank Advice Slips.38 Petitioners further explained that
Villareal went on Absence Without Official Leave since March 22, 2004.39 After submitting his letter40dated June 18,
2004 explaining his absences due to poor health, nothing was heard from him since then.
Aside from backwages, petitioners also questioned the computation of separation pay. They contended that the
amount should be computedat 1/2 month pay for every year of service and not one month pay for every year of
service as awarded by the CA.
In the Comment41 he submitted, Atty. Carpela argued, among others, that petitioners are barred from asserting that
they have already complied with the order of reinstatement as to question the computation of backwages for failure
to raise the same at the first instance.
In a Resolution42 dated September 16, 2008, the CA denied petitioners’ Motion for Reconsideration.
Petitioners insist that Villareal was not illegally dismissed. He voluntarily resigned from his work. Hence, he isnot
entitled to backwages and separation pay. Even assuming that he is entitled to backwages, the same should be
computed only from the time of Villareal’s relief on May 14, 2002 up to his actual reinstatement and not up to the
finality of the decision. Neither should Villareal be awarded attorney’s fees as there is no showing of bad faith on
petitioners’ part.
In Atty. Carpela’s Comment,43 he seeks for the dismissal of the Petition as it raises factual issues. He also points out
that the Petition contains a defective verification and certification against forum-shopping because while the same
was verified and certified by oneCirilo A. Almario (Almario) on November 6, 2008, the Petition is actually dated
November 10, 2008. He thus argues that petitioners could not possibly verify and certify an inexistent petition.
Besides, he maintains that the CA Decision is in accord with law and jurisprudence.
Meanwhile, the heirs of Villareal, namely: his surviving spouse, Julieta Villareal, and his children, Jocelyn and
Lilybeth Villareal, filed on November 10, 2011 a Motion for Substitution of Parties44 wherein they prayed to be
substituted as parties-respondents to the case. This was granted by the Court in the Resolution45 dated June20,
2012.
Our Ruling
Variance between the date of the Petition and the date when it was verified/certified does not render the Petition
fatally defective.
Before delving into the issues raised by petitioners, the Court shall first resolve the technical defect pointed out by
respondents.
In explaining the variancebetween the date of the Petition and the date it was verified, petitioners submitted
Almario’s Affidavit46 dated May 22, 2009. Almario, the Director for Security Operationsof Peak Ventures, attested to
the fact that the final draft of the Petition was shown to him on November 6, 2008 and on the same date, he read the
same and executed a verification and certification of non-forum shopping. He further affirmed that the final draft of
the Petition shown to him on November 6, 2008 is the samePetition dated November 10, 2008 that was filed in this
Court. He explained that the variance in dates came about because petitioners wanted the Petition to bear the same
date as the date of its actual filing.
"[T]he requirement regarding verification of a pleading is formal, not jurisdictional and x x x the non-complianceof
which does not necessarily render the pleading fatally defective. Verification is simply intended to secure an
assurance that the allegations in the pleading are true and correct and not the product of the imagination or a matter
of speculation, and that the pleading is filed in good faith."47 With respect to the requirementof a certification of non-
forum shopping, "[t]he fact that the [Rules] require strict compliance merely underscores its mandatory nature that it
cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial
compliance with its provisions under justifiable circumstances."48
In Spouses Valmonte v. Alcala,49 the Court held that the variance between the dates of the verification/certification
and the Petition does not necessarily contradict the categorical declaration made by petitioners in their affidavit that
they read and understood the contents of the pleading. In that case, the Court noted that as the pleading and the
verification are prepared separately, a variance in their dates is a matter that may satisfactorily be explained. It held
that to demand the litigants to read the very same document that is to be filed in court is too rigorous a requirement
since what the Rules require is for a party to read the contents of a pleading without any specific requirement on the
form or manner in which the reading is to be done. The Court stressed that what is important is that efforts were
made to satisfy the objective of the Rule, that is, to ensure good faith and veracity in the allegations of a pleading,
thereby allowing the courts to act on the case with reasonable certainty that the petitioners’ real positions have been
pleaded.
Thus, here, the variance between the date of the Petition and the date it was verified is not fatal to petitioners’
case. As explained, any variance does not necessarily mean that no valid verification/certification was made.
1âwphi1
Moreover, it must be emphasized that the rules of procedure, especially in labor cases, ought not to be applied in a
very rigid, technical sense for theyhave been adopted to help secure, not override, substantial justice.50
Villareal was constructively dismissed.
Coming now to the substantive issues, the Court subscribes to the uniform rulings of the Labor Arbiter, the NLRC
and the CA that Villareal was constructively and illegally dismissed. Petitioners anchor their claim of voluntary
resignation on Villareal’s resignation letter, the Talaan ng Pakikipagpanayam sa Pagbibitiw(exit interview form)
accomplished by him, and his notarized clearance. However, the circumstances surrounding the execution of these
documents prove otherwise.
When Villareal was relieved from duty, he was placed on floating status. "A floating status requires the dire exigency
of the employer’s bona fide suspension of operation, business or undertaking."51 "It takes place when the security
agency’s clients decide not to renew their contracts with the agency x x x" and also "in instances where contracts for
security services stipulate that the client may request the agency for the replacement of the guards assigned to it x x
x."52 In the latter case, the employer should prove that there are no posts available to which the employee
temporarily out of work can be assigned.53
As pointed out by the labortribunals, petitioners failed to discharge the burden of proving that there were no other
posts available for Villareal after his recall from his last assignment. Worse, no sufficient reason was given for his
relief and continued denial of a new assignment. And because of the dire financial straits brought about by these
unjustified actsof petitioners, Villareal was forced to resign and execute documents in a manneras directed by
petitioners in order to claim his security bond deposits. From these circumstances, petitioners’ claim of voluntary
resignation is untenable. What is clear instead is that Villareal was constructively dismissed. There is constructive
dismissal when an act of clear discrimination, insensitivity or disdain on the part of the employer has become so
unbearable as to leave anemployee with no choice but to forego continued employment. "Constructive dismissal
exists where there is cessation of work because continued employmentis rendered impossible, unreasonable or
unlikely, as an offer involving a demotion inrank and a diminution in pay."54 Moreover, Villareal’s immediate filing of a
Complaint for illegal dismissal to ask for reinstatement negates the fact of voluntary resignation.55
The Court, thus, finds thatthe CA did not err in declaring that Villareal was constructively and illegally dismissed by
petitioners.
Villareal’s backwages must be computed from the time of his unjustified relief from duty up to his actual
reinstatement; the award of separation pay must be deleted.
The awards granted by the CA in favorof Villareal must, however, be modified.
Under Article 279 of the Labor Code, as amended by Republic Act No. 6715, an employee who is unjustly dismissed
shall be entitled to (1) reinstatement without loss of seniority rights and other privileges; and, (2) full backwages,
inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation
was withheld up to the time of actual reinstatement. If reinstatement is no longer viable, separation pay is
granted.56"[S]eparation pay is intended to provide the employeemoney during the period in which he will be looking
for another employment."57 Backwages, on the other hand, "are granted on grounds of equity for earnings lost by an
employee due to his illegal dismissal."58
As may be recalled, the CA, in granting monetary awards to Villareal, concluded that reinstatement is no longer
possible since he was already dead. Hence, it ordered the computation of backwages from the time of Villareal’s
separation from the company on July 3, 2002 up to the finality of the Decision and awarded separation pay.
However, records reveal that Villareal was actually reinstated. As shown by his duly signed DTRs, Villareal rendered
work on November 8-30, December 1-16, 2003 and March 16, 2004. Also, in his letter of June 18, 2004 where he
explained his continued absence from work, he specifically mentioned that he last rendered duty in March 2004.
Notably, these substantial evidence of Villareal’s actual reinstatement was not disputed by respondents.
Anent the assertion that petitioners belatedly raised before the CA the fact of Villareal’s reinstatement,suffice it to
say that petitioners could not be faulted for the same. The need to raise the matter only came up when the said
court did not consider Villareal’s reinstatement and rendered its Decision ordering petitioners to pay him backwages
from July 3, 2002 up to the finality of its Decision.
In view therefore of Villareal’s reinstatement, modifications with respect to the awards of backwages and separation
pay must necessarily be made. The award of separation pay mustbe deleted because as mentioned, separation pay
is only granted as an alternative to reinstatement. Regarding backwages, aside from computing it up to Villareal’s
actual reinstatement and not up to the finality of the Decision, the reckoning point of the computation as also pointed
out by petitioners themselves, must likewise be corrected. It must not be reckoned from July 3, 2002, the date when
Villareal submitted his resignation letter and considered by the CA as the date of his separation from the company.
Rather, it must be computed from May 14, 2002 or the time he was unjustly relieved from duty since it was from this
time that his compensation was withheld from him. Hence, Villareal’s backwages must be computed from the time
he was unjustly relieved from duty on May 14, 2002 up to his actual reinstatement on November 8, 2003.
As to the grant of 10% of the total award as attorney's fees, the same is warranted because Villareal was impelled to
litigate to protect his interests.59
WHEREFORE, the Petition is PARTLY GRANTED. The March 28, 2008 Decision of the Court of Appeals in CA-
G.R. SP No. 99440 is hereby MODIFIED in that (1) the award of full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, shall be computed from the time Nestor B. Villareal was unjustly relieved from
duty on May 14, 2002 up to his actual reinstatement on November 8, 2003; and (2) the award of separation pay is
deleted.
SO ORDERED.
G.R. No. 190623 November 17, 2014

vs.
ROMMEL ARAZA y SAGUN, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
In this appeal, appellant Rommel Araza y Sagun (Araza) assails the October 14, 2009 Decision1 of the Court of
Appeals (CA) in CA-G.R. CR-H.C. No. 03164 which affirmed the December 11, 2007 Decision2 of the Regional Trial
Court (RTC), Branch 93, San Pedro, Laguna in Criminal Case No. 3829-SPL finding him guilty beyond reasonable
doubt of illegal possession of shabu.
Factual Antecedents
On August 15, 2003, an Information3 for violation of Section 11, Article II, Republic Act No. 9165 (RA 9165)
otherwise known as the Comprehensive Dangerous Drugs Act of 2002 was filed against Araza, the accusatory
portion of which reads as follows:
That on or about August 28, 2002, inthe Municipality of San Pedro, Province of Laguna, Philippines and within the
jurisdiction of this Honorable Court the said accused, not being authorized by law, did then and there willfully,
unlawfully and feloniously have in his possession, control and custody one (1) small heat-sealed transparent
plasticsachet containing METHAMPHETAMINE HYDROCHLORIDE commonly known as "shabu," a dangerous
drug, weighing zero point zero six (0.06) gram.
CONTRARY TO LAW.4
During arraignment, Araza pleaded "not guilty."5 Thereafter, trial ensued.
The prosecution presented Police Officer 1 Edmund Talacca (PO1 Talacca) who testified as follows:
At around 8:00 p.m. of August 28, 2002,PO1 Talacca accompanied the Barangay Chairman, BarangayTanods and
several members of the barangay council in confiscating a video karera machine inside the house of a certain
Alejandro Sacdo (Sacdo). While confiscating said machine, PO1 Talacca saw nine persons, including Araza, sniffing
shabuor engaging in a pot session inside the house of Sacdo. He arrested and frisked them. Recovered from the
pocket of Araza was a small heat-sealed transparent plastic sachet containing white crystalline substance which
PO1 Talacca suspected to be shabu. PO1 Talacca immediately seized said sachet and brought Araza and his
companions to the police station. He turned over the said sachet to the chief investigator, Larry Cabrera (Cabrera),
who marked the same with the initials "RSA" in his presence.
The prosecution was supposed to alsopresent Police Senior Inspector Donna Villa Huelgas (P/Sr. Insp. Huelgas),
the Forensic Chemist who examined the confiscated white crystalline substance, but her testimony was dispensed
with after the defense agreed to the following stipulations: 1) Chemistry Report No. D-2028-02 as Exhibit "B"; 2) the
name of suspect Rommel Araza ySagun as Exhibit "B-1"; 3) the specimen submitted as Exhibit "B-2"; 4) findingsas
Exhibit "B-3"; 5) conclusion as Exhibit "B-4"; 6) the name and signature of P/Sr. Insp. Huelgas as Exhibits "B-5"; 7)
the request for laboratory examination as Exhibit "C"; 8) the name of suspect Rommel Araza ySagun as Exhibit "C-
1"; 9) the evidence submitted as Exhibit "C-2"; 10) the stamp mark as Exhibit "C-3"; 11) the half-size white envelope
as Exhibit "D"; 12) the plastic sachet as Exhibit "D-1"; and 13) the small heat-sealed plastic sachets as Exhibit "D-1-
A."6
The defense presented a completely different version of the incident. Araza testified that he was sleeping inside a
room in the house of Sacdo when PO1 Talacca suddenly woke him up and frisked him. PO1 Talacca confiscated his
wallet that contained coins then took him to the police station and charged him with illegal possession of prohibited
drugs.
The RTC ruled thatthe prosecution was able toestablish the guilt of Araza beyond reasonable doubt. It gave
credence to the testimony of PO1 Talacca since he is presumed to have regularly performed his duties and there
was no evidence that he had any motive to falsely testify against Araza. The RTC rejected Araza’s alibi as a feeble
defense that cannot prevail over the positive testimony of PO1 Talacca. The dispositive portion of the December 11,
2007 Decision7 of the RTC reads:
WHEREFORE, the Court herebysentences accused ROMMEL ARAZA y SAGUN to suffer an indeterminate penalty
of imprisonment from twelve (12) years and one (1) day as minimum to fifteen (15)years as maximum and to pay a
fine in the amount of ₱300,000.00.
The 0.06 gram of Methamphetamine Hydrochloride "shabu" which constitutes the instrument in the commission of
the crime is confiscated and forfeited in favor of the government. Atty. Jaarmy Bolus-Romero, Branch Clerk of Court,
is hereby directed to immediately transmit the 0.06 [gram] of Methamphetamine Hydrochloride "shabu"to the
Dangerous Drugs Board for proper disposition.
Costs against accused.
SO ORDERED.8
Araza filed a notice of appeal9 which was approved bythe RTC. Hence, the entire records of the casewere forwarded
to the CA.10
In his brief,11 Araza highlighted PO1 Talacca’s admission under oath that the shabuwas confiscated from his pocket
and not in plain view. He posited that the shabu is inadmissible in evidence since it was illegally seized, having been
taken from his pocket and not as an incident of an arrest in flagrante delicto. Araza likewise argued that the rule on
chain of custody was not properly adhered to since there was no evidence that a physical inventory of the shabu
was conducted in the presence ofany elected local government official and the media. He claimed that the possibility
of tampering, alteration or substitution of the substance may have been present since the investigating officer who
marked the seized shabuin the police station and the person who delivered the same to the crime laboratory were
not presented during the trial.
The CA, however, was not impressed. It ruled that Araza was estopped from assailing the legality of his arrest for
his failure to move to quash the Information against him prior to arraignment.It also held that he could no longer
question the chain of custody for failing to raise the same during trial. Besides, the prosecution was able to establish
the integrity and evidentiary value of the seized item. Thus, the CA issued its assailed Decision12 with the following
dispositive portion:
WHEREFORE, the assailed Decisiondated 11 December 2007 of the Regional Trial Court, Fourth Judicial Region,
San Pedro, Laguna, Branch 93, in Criminal Case No. 3829-SPL, is hereby AFFIRMED.
SO ORDERED.13
Hence, this appeal where Araza seeks for his acquittal.
Issues
On February 15, 2010, the parties weredirected to file their respective supplemental briefs but both of them opted to
just adopt the brief they submitted before the CA.
Araza imputes error upon the RTC and CA in upholding the validity of his warrantless arrest and in finding that the
procedure for the custody and control of prohibited drugs was complied with.14
Our Ruling
The appeal is unmeritorious.
The offense of illegal possession of dangerous drugs has been established.
The elements that must be established in the successful prosecution of a dangerous drugs case are: "(1) the
accused is in possession of an item or object which is identified to be a prohibited drug; (2) such possession is not
authorized by law; and (3) the accused freely and consciously possessed the drug."15 "Mere possession x x x of a
prohibited drug, without legal authority, is punishable under [RA 9165]."16
The prosecution satisfied the foregoing elements during trial. The arresting officer, PO1 Talacca, positively identified
Arazaas the person caught in possession of the shabu presented in court. He stated that the shabuwas validly
confiscated after Araza was arrested in flagrante delicto sniffing shabuin the company of other people. Relevant
portions of his testimony are as follows:
Q Do you recall where you were on August 28, 2002 at around 8:00 o’clock in the evening?
A Yes, ma’am, I was with the barangay chairman of Brgy. Langgam, San Pedro, Laguna, Police Officer Mendoza,
some members of the barangay council and members of the barangay tanod. [W]e went to Brgy. Langgam to
conduct a confiscation of video karera in the house of Alejandro Sacdo.
xxxx
Q When you arrived at the house ofAlejandro Sacdo, what happened?
A We [went directly] to the house ofAlejandro Sacdo [where] we found a video karera.
Q What did you do when you saw that there was a video karera machine inside the house?
A The barangay chairman and [the] members of our group immediately confiscated the video karera machine.
Q Was Alejandro Sacdo inside his house then?
A Yes, ma’am, he was present.
xxxx
Q Aside from Alejandro Sacdo, who else, if any, was inside that house?
A There were all in all nine persons, including Alejandro Sacdo.
Q What were they doing?
A They were inside the house of Alejandro Sacdo sniffing shabu.

Q After that, what did you do?
A I called the attention of our companions, the barangay officials and the tanods and we immediately [entered] the
house and arrested these nine people.
Q After you arrested the nine people,including Alejandro Sacdo, what happened next?
A When we arrested the nine persons, it is our standard operating procedure to search each suspect and when I
searched Mr. Araza, I found one small heat[-]sealed plastic sachet [on] him. Q You referred to Mr. Rommel Araza y
Sagun as the one from whom you were able to confiscate a small heat[-]sealed plastic [sachet], if he is in court right
now, will you beable to identify him?
A Yes, ma’am, there he is (witness pointing to a man seated inside the courtroom who identified himself as Rommel
Araza y Sagun)
Q After you arrested the nine persons including Alejandro Sacdo and herein accused Araza and after confiscating
from him the small heat[-] sealed plastic sachet, what did you do next?
A We brought them to the barangay hall of Brgy. Langgam.
Q What did you do next?
A After we [took down their names and pertinent details] in the blotter, all of them were brought to the police station
for investigation and proper filing of case against them.
Q What did you do with the specimen you confiscated from Araza?
A I gave it to our chief investigator, Officer Larry Cabrera, for proper [marking] of the specimen and for them to
deliver the same to the crime laboratory for examination.
Q Where were you then when the police investigator put the markings on the specimen?
A I was in front of him, ma’am.
Q Did you see what markings were placed on the specimen?
A Yes, ma’am, it was RSA which stands for the name of Rommel Araza y Sagun.17 Chemistry Report No. D-2028-02
confirmed that a qualitative examination conducted on the specimen inside the plastic sachet seized from Araza
yielded positive result for methamphetamine hydrochloride or shabu.18
We find the statement of PO1 Talacca tobe credible. The narration of the incident by a police officer, "buttressed by
the presumption that they have regularly performed their duties in the absence of convincing proof to the contrary,
must be given weight."19 His testimony, the physical evidence and the facts stipulated upon during trial
wereconsistent with each other. Araza also failed to adduce evidence showing thathe had legal authority to possess
the seized drugs. Thus, there is no reason to disturb the findings of the RTC as affirmed by the CA.
An accused cannot assail any irregularity in the manner of his arrest after arraignment.
Araza calls attention to the admission of PO1 Talacca that the shabuwas confiscated from his pocket and was not in
plain view. Hetherefore posits that he was not apprehended in flagrante delicto and the ensuing warrantless arrest
was invalid. Moreover, the sachet allegedly seized from him isnot admissible in evidence against him being the fruit
of a poisonous tree.
Such an argument is unworthy of credence since objections to a warrant of arrest or the procedure by which the
court acquired jurisdiction over the person of the accused must be manifested prior to entering his plea.20 Otherwise,
the objection is deemed waived.21 Moreover, jurisprudence dictates that "the illegal arrest of an accused is not
sufficient cause for setting aside a valid judgment rendered upon a sufficient complaint after a trial free from error. It
will not even negate the validity of the conviction of the accused."22
Here, Araza did not object to the alleged irregularity of his arrest before or during his arraignment. He even actively
participated in the proceedings before the RTC. He is, therefore, deemed to have waived any defect he believes to
have existed during his arrest and effectively submitted himself to the jurisdiction of the RTC. In other words,
Arazais already estopped from assailing any irregularity in his arrest after he failed to raise this issue or to move for
the quashal of the Information on this ground before his arraignment.
Circumstances when warrantless search and subsequent seizure are valid.
As to the admissibility of the shabuseized from Araza, it is crucial to ascertain whether the search that yielded the
alleged contraband was lawful.23 The Constitution states that failureto secure a judicial warrant prior to the actual
search and consequent seizure would render it unreasonable and any evidence obtained therefrom shall be
inadmissible for any purpose in any proceeding.24 This constitutional prohibition,however, admits of the following
exceptions:
1. Warrantless search incidental to a lawful arrest;
2. Search of evidence in "plain view";
3. Search of a moving vehicle;
4. Consented warrantless search;
5. Customs search;
6. Stop and Frisk; and
7. Exigent and emergency circumstances.25
In this case, there is sufficient evidence to prove that the warrantless search of Araza was effected as an incident to
a lawful arrest. Section 5, Rule 113 of the Rules of Court provides in part:
Sec. 5. Arrest without warrant; when lawful. – A peace officer or a private person may, without a warrant, arrest a
person:
(a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to
commit an offense;
(b) When an offense has just been committed and he has probable cause to believe based on personal knowledge
of facts or circumstances that the person to be arrested has committed it; and
(c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he
isserving final judgment or temporarily confined while his case is pending, or has escaped while being transferred
from one confinement to another.
PO1 Talacca testified that he saw Araza and his companions sniffing substance that seemed to be shabu inside the
premises where a video karera machine was being confiscated by the barangay officials for whom he provided
security. He thus entered the room, effected their arrest and conducted a body search on them. Upon searching the
person of Araza, PO1 Talacca recovered from him a plastic sachet containing white crystalline substance. Araza
and the seized item were then brought to the police station. After a laboratory examination, the white crystalline
substance insidethe sachet was found positive for shabu.
Considering the foregoing, Arazawas clearly apprehended inflagrante delictoas he was then committing a crime
(sniffing shabu) in the presence of PO1 Talacca. Hence, his warrantless arrest is valid pursuant to Section 5(a) of
the above-quoted Rule 113 of the Rules of Court. And having been lawfully arrested, the warrantless search that
followed was undoubtedly incidental to a lawful arrest, which as mentioned, is an exception to the constitutional
prohibition on warrantless search and seizure. Conversely, the shabuseized from Araza is admissible in evidence
toprove his guilt of the offense charged.
Failure to comply with Section 21, Article II of Republic Act No. 9165 is not fatal.
Araza hinges his claim for acquittal on the failure of the police officers to submit a pre-coordination report and
physicalinventory of the seized dangerous drug. He cites Section 21(1), Art. II of RA 9165, which provides:
Equipment. – The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous
equipment so confiscated, seized and/orsurrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after seizure and
confiscation, physically inventory and photograph the same in the presence of the accused, or the person/s from
of the inventory and be given a copy thereof.
However, it has beenheld time and again that failure to strictly comply with aforesaid procedure will not render an
arrest illegal or the seized items inadmissible in evidence. Substantial compliance is sufficientas provided under
Section 21(a) of the Implementing Rules and Regulationsof RA 9165, viz:
of the inventory and be given a copy thereof: Provided, that the physical inventory and photograph shall be
the apprehending officer/ team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
seizures of and custody over said items; (Emphasis supplied)
Araza’s contention that there must be compliance with a pre-coordination report has no legal basis since nowhere is
itstated in the foregoing provision that this is an essential procedural requisite. A pre-coordination report is also not
needed when an accused is apprehended inflagrante delicto for obvious reason.
Further, failure by the prosecution to prove that the police officers conducted the required physical inventory of the
seized shabudoes not immediately result in the unlawful arrest of an accused or render inadmissible in evidence the
items seized. "What is essential is the preservation of the integrity and the evidentiary value of the seized items, as
the same would be utilized in the determination of the guilt orinnocence of the accused."26 Here, the records reveal
that the police officers substantially complied with the process of preserving the integrity of the seized shabu.
The chain of custody has not been broken.
Araza likewise contends thatthe prosecution failed to properly establish the chain of custody of evidence, and this
adversely affected its admissibility. He argues that the non-presentation of the investigating officer and the person
who delivered the specimen to the police crime laboratory creates serious doubt that the alleged shabuconfiscated
from him was the same one marked, forwarded to the crime laboratory for examination, and later presented as
evidence in court. He puts forward the possibility that the evidence may have been tampered, altered, and/or
substituted as would affectits identity and integrity.
Section 1(b) of Dangerous Drugs Board Regulation No. 1, Series of 2002, implementing RA 9165, defines chain of
custody as "the duly recorded authorized movements and custody of seized drugs orcontrolled chemicals or plant
sources of dangerous drugs or laboratory equipment of each stage, from the time of seizure/confiscation to receipt
in the forensic laboratory to safekeeping to presentation in court for destruction. Such record of movements and
custody of [the] seized item shall include the identity and signature of the person who held temporary custody of the
seized item, the date and time when such transfer of custody were made in the course of safekeeping and use in
court as evidence, and the final disposition."
The chain of custody requirement ensures the preservation of the integrity and evidentiary value of the seized items
such that doubts as to the identity of the evidence are eliminated.27 "To be admissible, the prosecution must show by
records or testimony, the continuous whereabouts of the exhibit at least between the time it came into possession of
the police officers and until it was tested in the laboratory to determine its composition up to the time it was offered
in evidence."28
Here, the prosecution proved the chain of custody of the seized shabuas follows: After arresting Araza for
possession of a sachet of suspected shabu, PO1 Talacca brought him and the confiscated item to the police station.
The said sachet was turned over to the chief investigator, Cabrera, who marked it with the initials "RSA" in front of
PO1 Talacca. A request for laboratory examination of the contents of said sachet was delivered, together with the
sachet of suspected shabu, to the PNP Crime Laboratory in Calamba, Laguna. Forensic Chemist P/Sr. Insp.
Huelgas examined the contents ofthe sachet with markings "RSA" and prepared Chemistry Report No. D-2028-02,
confirming that the specimen tested positive for shabu. During the trial, this result was submitted to the RTC as
Exhibit "D" and stipulated on by both parties.29 The marked sachet of shabuwas also presented in evidence and
identified by PO1 Talacca.
Araza’s contention that the investigating officer who received the seized drug in the police station and the person
who delivered the same to the crime laboratory should have been presented to establish an unbroken chain of
custody fails to impress. It is not necessary to present all persons who came into contact with the seized drug to
testify in court.30 "As long as the chain of custody of the seized drug was clearly established to have not been broken
and the prosecution did not fail to identify properly the drugs seized, it is not indispensable that each and every
person who came into possession of the drugs should take the witness stand."31 The non-presentation as witnesses
of the evidence custodian and the officer on duty is not a crucial point against the prosecution since it has the
discretion as to how to present its case and the right tochoose whom it wishes to present as witnesses.32
Based on the foregoing findings, the chain of custody of the seized substance was not broken. The suspected
1âw phi 1
illegal drug confiscated from Araza was the same substance presented and identified in court. There is therefore no
reason to disturb the findings of the RTC, as affirmed by the CA, that he is guilty beyond reasonable doubt of illegal
possession of a dangerous drug.
Proper Penalty
Section 11, Article II of RA 9165, provides:
Sec. 11. Possession qf' Dangerous Drugs. - The penalty of life imprisonment to death and a fine ranging from Five
hundred thousand pesos (₱500,000.00) to Ten million pesos (₱10,000,000.00) shall be imposed upon any person
who, unless authorized by law, shall possess any dangerous drug in the following quantities, regardless of the
degree of purity thereof;
xxxx
Otherwise, if the quantity involved is less than the foregoing quantities, the penalties shall be graduated as follows:
xxxx
(3) Imprisonment of twelve (12) years and one (1) day to twenty (20) years and a fine ranging from Three hundred
thousand (₱300,000.00) pesos to Four hundred thousand pesos (₱400,000.00), if the quantities of dangerous drugs
are less than five (5) grams of opium, morphine, heroin, cocaine or cocaine hydrochloride, marijuana resin or
marijuana resin oil, methamphetamine hydrochloride or "shabu," or other dangerous drugs such as, but not limited
to MDMA or "ecstasy," PMA, TMA, LSD, GHB, and those similarly designed or newly introduced drugs and their
derivatives, without having any therapeutic value or if the quantity possessed is far beyond therapeutic
requirements; or less than three hundred (300) grams of marijuana x x x. (Emphasis supplied)
Araza was found guilty of possessing 0.06 gram of shabu, or less than five grams of the dangerous drug, without
any legal authority. Under these circumstances, the penalty of imprisonment imposed by the RTC and affinned by
the CA, which is twelve (12) years and one (1) day as minimum to fifteen (15) years as maximum, is within the
range provided by RA 9165. Thus, the Court finds the same, as well as the payment of fine of ₱300,000.00 in order.
WHEREFORE, the appeal is DISMISSED. The Decision dated October 14, 2009 of the Court of Appeals in CA-G.R.
CR-H.C. No. 03164 is AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 183872 November 17, 2014
OWEN PROSPER A. MACKAY, Petitioner,

vs.
SPOUSES DANA CASWELL and CERELINA CASWELL, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 30, 2008 Decision2 of the Court of Appeals (CA) in CA-GR.
SP No. 97146 which granted the Petition for Review3 filed therewith, reversed and set aside the October 31, 2006
Decision4 of the Regional Trial Court (RTC), Branch 70, Iba, Zambales in Civil Case No. RTC-2426-I, and reinstated
the June 29, 2006 Decision5 of the Municipal Trial Court (MTC), San Narciso, Zambales in Civil Case No. 538. The
MTC Decision dismissed petitioner Owen Prosper A. Mackay's (Owen) claims against respondents spouses Dana
Caswell and Cerelina Caswell (the Caswells) and ordered him to pay the latter ₱46,205.00 representing the
expenses they incurred for the rectification of the defective work he did for them. The Petition also assails the July
24, 2008 Resolution6 of the CA denying Owen's Motion for Reconsideration7 thereto.
Factual Antecedents
In their search for someone who could provide electrical installation service in their newly built home in San Narciso,
Zambales, the Caswells asked the sole distributor of electricity in the area, ZambalesII Electric Cooperative
(Zameco II), thru its sub-office manager, Engr. Victor Pulangco (Engr. Pulangco), how much its service for the
installation would be. Engr. Pulangco quoted an estimate of ₱456,000.00.
However, the Caswells hired Owen who offered to do the job for only ₱250,000.00. With the help of Cesar Badua
(Badua) and Albert Galeng, Owen claimed that the installation was completed and ready for power service
connection as of August 1998. By then, the Caswells had paid him ₱227,000.00.
At Cerelina Caswell’s (Cerelina) request, Zameco II inspected the installation work and tested the distribution
transformers.8 The inspection showed the following defects as specified in Engr. Pulangco’s letter dated August 11,
1998:9
I. For A-5 Construction
a. No guying
b. Improper use of deadend materials for neutral line
c. Lack of armor tape

d. Lack of clamp loop deadend materials
e. No locknuts on all bolts.
II. For A-2 construction
a. Improper use of materials for pole top pin
b. Lack of pole top pin
c. No guying
d. Improper use of materials for neutral line
e. Wrong phasing of pole top pin
f. Lack of armor rod (single & double support)
III. For Grounding:
a. [Substandard] grounding wire
b. Wrong installation of pole grounding wire
c. Lack of grounding rods
V. Tapping Point:
Lack of fuse cut-out with lightning arrester combination at the tapping point.
VI. For Transformer Installation:
Wrong distance of the transformer from the neutral line.10
Because of the deficiencies and other incomplete requirements, Zameco II refused to provide energization to the
Caswell home. The Caswells thus looked for Owen but he could not be found. Hence, they were constrained to ask
Zameco II to correct all the problems it found. After the single phase distribution system was completed in
accordance with the standard specifications of Zameco II in January 1999,11 only then did the Caswells finally have
electricity.
On September 4, 1998, the Caswells executed a Joint Affidavit12 to charge Owen and his group of swindling them of
₱227,000.00. The Caswells alleged that Owen and his group misrepresented themselves to be people from the
National Power Corporation (NAPOCOR). By reason of the misrepresentation, the Caswells suffered damage as the
electrical installation made were replete with deficiencies such that no electricity can properly flow to their house.
This led to the filing of an Estafa case under Article 315 paragraph 2(a) of the Revised Penal Code13 against Owen,
docketed as Criminal Case No. RTC-2533-I.14 However, on ground of reasonable doubt, Owen was acquitted onMay
15, 2003.15
Still unpaid for the remaining ₱23,000.00 for his installation work, Owen in turn filed a Complaint16 for Collection of
Sum of Money with Damages against the Caswells before the MTC, docketed as Civil Case No. 538.
Owen alleged that out of the ₱250,000.00 contract price for the installation of an electrical line, the Caswells have
only paid him ₱227,000.00. He thus wanted to recover from the Caswells the remaining balance of ₱23,000.00, as
well as damages on account of sleepless nights, serious anxiety and social humiliation he suffered due to the
Caswells’ malicious filing of estafa case against him.
The Caswells, on the other hand, maintained that Owen is not entitled to any money. They pointed out that Owen
failed to finish the job and walked out of the contract. Hence, they are the ones entitled to reimbursement of
expenses incurred to correct Owen’s defective work. As proof of their expenses, the Caswells submitted as
evidence a) Engr. Pulangco’s handwritten receipt of ₱15,400.00 as partial payment for the materials needed to
correct the deficiencies in Owen’s installation work;17 b) an undated Sales Invoice No. 2029 issued by Peter A.
Eduria Enterprises itemizing nine electrical materials Dana Caswell (Dana) bought, their quantities, and the total
price of ₱53,805.00.0018 and; c) a list of all the materials obtained for Zameco’s corrective work with the
corresponding unit prices, labor cost and the total price charged.19 Owen and Badua testified that they rectified all
the discrepancies that Zameco II found. After the corrections, Owen informed Engr. Pulangco that the Caswell home
was ready for electrical connection. Hedid not know what Engr. Pulangco did next. Owen likewise asserted that he
even reminded Cerelina to submit to Zameco II all the documentary requirements for power connection.20
Ruling of the Municipal Trial Court
Finding the contract entered into by the parties to be a contract for a piece of work, the MTC relied upon Article 1715
of the Civil Code, viz:
The contractor shall execute the work in such a manner that it has the qualities agreed upon and has no defects
which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the work be not of such quality,
the employer may require that the contractor remove the defect or execute another work. If the contractor fails or
refuses to comply with this obligation, the employer may have the defect removed or another work executed, at the
contractor’s cost. The MTC held that since it was proven that the work of Owen suffers from deficiencies, the
Caswells, pursuant to the above-quoted provision, have the right to require him to remove the defect or execute
another work. It did not give credence to Owen’s claim that he corrected the deficiencies for lack of evidence to
substantiate the same. The MTC likewise held that the Caswells had no chance to demand from Owen the removal
of the defector the execution of another work as he was then nowhere to be found. On the other hand, the Caswells’
evidence clearly showed that they caused the Zameco II people to rectify the defects for which they spent
₱69,205.00.
By virtue of Article 116721 of the Civil Code, the MTC ruled that the said ₱69,205.00 should be borne by Owen. From
the ₱69,205.00, the said court then deducted the ₱23,000.00 Owen was seeking to collect from the Caswells. The
dispositive portion of the MTC’s June 29, 2006 Decision22 reads:
WHEREFORE, viewed from all the foregoing, judgment is hereby rendered in favor of the [Caswells] and against
[Owen] as follows:
1. Dismissing [Owen’s] claims for lack of merit, and
2. Ordering [Owen] to pay the [Caswells] the amount of ₱46,205.00 representing the rectification cost.
SO ORDERED.23
Owen appealed to the RTC.
In a Decision24 dated October 31, 2006, the RTC reversed and set aside the MTC Decision. The RTC opined that
the Caswells should have first filed a judicial action for specific performance where there could have been an
exhaustive determination of the quality and acceptability of Owen’s installation work. By immediately resorting to the
service of Zameco II, the Caswells never afforded Owen the opportunity to correct the deficiencies in accordance
with Article 1715 of the Civil Code. It noted Cerelina’s testimony during the trial before the MTC where she was
asked if she confronted Owen about the unfinished work. She answered that Owen did not come to her so she went
to Zameco II when she could no longer wait for electricity.25
Furthermore, the RTC was convinced that Owen kept up his end of the bargain as shown by Engr. Pulangco’s
testimony on cross-examination that even without replacing the fuse cut-out connection, electricity will still flow
smoothly and will function in the Caswell home.26
Opining that Owen must be given what is actually due him, the RTC disposed of the case as follows:
WHEREFORE, the decision of the Municipal Trial Court of San Narciso is reversed and set aside and judgment is
hereby rendered as follows:
1. Ordering the defendants to pay unto the plaintiff the amount of Twenty Three Thousand Pesos (₱23,000.00)
representing the balance of the price or consideration for his services in the installation of electrical lines in the
defendants’ home, with legal interest at the rate of six (6%) [per annum] from the time of the filing of the complaint
until it is fully paid;
2. Ordering the defendants to pay to the plaintiff moral damages in the amount of TWENTY FIVE THOUSAND
PESOS (₱25,000.00) for their willful non-compliance with their contractual obligation to the plaintiff, and exemplary
damages in the amount of TWENTYTHOUSAND PESOS (₱20,000.00) by way of example or correction for the
public good;
3. Ordering the defendants[,] spouses DANA and CERELINA CASWELL[,] to pay attorney’s fees to the plaintiff in
the amount of THIRTY THOUSAND PESOS (₱30,000.00), the latter having been haled to court to enforce his
contractual rights;
[4.] Ordering the defendants to pay the costs of this suit.
SO ORDERED.27
Refusing to accept the RTC judgment and heavily relying on the MTC Decision, the Caswells elevated the case to
the CA by way of a Petition for Review.28
In its Decision29 of April 30, 2008, the CA reinstated the MTC Decision. It reasoned:
The RTC opined that [the Caswells] should have given the contractor the chance to rectify the flaw in his work. To
Our mind, however, the effort to communicate with [Owen] effectively served as [the Caswells’] request for the
former to rectify the flaws in the contracted work. In fact, [the Caswells’] act of demanding that [Owen] secure the
permit and to subject the transformer to testing can already be construed as a substantial compliance with Article
1715. It must be emphasized that it was [Owen’s]refusal to secure the necessary permits and to comply with the
requirements of Zameco [II] as well as his refusal to communicate with [the Caswells] that impelled the latter to file a
case for estafa against him. Had he been willing to make good his obligation, then it would not have been necessary
for [the Caswells] to file the said criminal case. Instead of complying with his end of the bargain, [Owen] opted to file
a case for collection of sum of money with damages. Thus, any effort to require [Owen] either to rectify his flawed
work or to remove the same would have been futile since [Owen’s] act of demanding payment through the said
complaint showed his belief that his work in the house was done.
Clearly, the RTC erred in stating that [the Caswells’] failure to file an action for specific performance led to the
presumption that [Owen] performed his obligations in accordance with their agreement. Said presumption could not
have prevailed in view of the nature of the contracted work, the ultimate goal of which was to have electricity flowing
into [the Caswell] house. Thus, the thing speaks for itself. Res ipsa loquitur. This, the RTC failed to consider.
Therefore, this Court finds the decision of the MTC more in accord with law and jurisprudence.30
His Motion for Reconsideration31 having been denied by the CA,32 Owen argues in this Petition for Review on
Certiorari that: 1) he has done the installation job and that it was not his duty but that of the Caswells to secure the
necessary permits from Zameco II; 2) his acquittal in the criminal case should have been considered; 3) there is no
basis for the award of the rectification costs as the sales receipt for the alleged materials used is inadmissible and;
4) the Caswells never demanded that he remove the defects or execute another work in accordance with Article
1715 of the Civil Code.
Our Ruling
We deny the Petition.
Owen failed to execute his work in such

a manner that it has no defects which
destroy or lessen its value or fitness for
its ordinary or stipulated use.
Owen insists that as far as he is concerned, he had done what was required of him. i.e., the installation of electrical
materials in the Caswell home. Anent the permits, he avers that securing the same is not part of his work but is the
responsibility of the Caswells.
Considering all the undisputed facts, the Court, however, finds that the Caswells were not only after securing
permits. They suffered other major problems as shown by their narration in their Joint Affidavit, viz:
5. That we think they were done in three days, that same week. The contact man, Owen Mackay, had told us that he
would take care of all permits. He asked us to get a paper done for the permission on one piece of land. No permits
were shown to us. No ZAMECO authorization [was] ever shown to us. He went to ZAMECO, to tell them it was
ready [for connection]. ZAMECO did not connect because: (1) no permits [were] requested or [were] given by
ZAMECO; (2) transformer allegedly brand new [and] had to run through testing laboratory. Owen[’s] group [neither]
did the testing nor caused a testing; (3) complete inspection of installation was [yet] to be done x x x; (4) no
installation layout was provided or presented to ZAMECO; (5) nobody [from Owen’s group was] around for 4-5 days
to x x x talk about our problems. Owen called, sent word to [us] and we have gone down (3) occasions at night to try
to find him. The three did [a] vanishing act. Finally, [they came] to take the transformer for testing. [The] one day
testing told us by Pulangco turned into 1 ½ weeks x x x. I had to go pick it up myself at test complex. Brought the
transformer home from Castillejos, August [10,] 1998 with the test results. No response from the people who called
themselves NAPOCOR. After [chasing after] Owen Mackay x x x and [after] empty promises we were referred to
Atty. Pacis, [and] the rest is still unsettled;33
These circumstances, together with the deficiencies enumerated in Engr. Pulangco’s August 10, 1998letter,
sufficiently explain the delay in the energization of the Caswell home. Engr. Pulangco’s testimony that electricity will
still work without replacing the fuse cut-out connection is not enough to negate the fact that Owen’s overall work is
not satisfactory.
Moreover, Owen, in contending that his acquittal in the estafa case should have been a factor for a favorable
decision in this civil case, relied on a remark by the RTC that referred to an opinion mentioned in the judgment in the
estafa case, i.e., that the delay in supplying power to the Caswell home could possibly be due to the resentment
harbored by certain employees of Zameco II as they were not chosen to do the work.34 A perusal, however, of the
judgment in Criminal Case No. RTC-2533-I35 would show that this statement is only a mere obiter. The RTC cannot
hinge on this opinion as this is mere conjecture. Notably, the Zameco II people were not even parties or witnesses in
the estafa case.
Suffice it to say that Owen’s job was not only to finish the electrical installation work. It was likewise his obligation to
do quality work and to provide quality materials to ensure that electricity would flow in the Caswell home. For the
Caswells to avail of this utility, it is definitely expected that the electrical materials used should meet the technical
requirements for a service entrance as imposed by the only distributor of the electricity in the area, Zameco II, so
that the latter can supply residential electric service efficiently and safely to the Caswells. However, as shown
above, Owen failed to execute his work in such a manner that it has no defects which destroy or lessen its value or
fitness for its ordinary or stipulated use.
The CA correctly ruled that Caswells’

effort to communicate with Owen
effectively served as a demand to rectify
the latter’s work.
Under Article 1715 of the Civil Code, if the work of a contractor has defects which destroy or lessen its value or
fitness for its ordinary or stipulated use, he may be required to remove the defect or execute another work. If he fails
to do so, he shall be liable for the expenses by the employer for the correction of the work. The demand required of
the employer under the subject provision need not be in a particular form. In the case at bar, we agree with the CA
that Owen was given the opportunity to rectify his work. Subsequent to Zameco II’s disapproval to supply the
Caswells electricity for several reasons, the Court gives credence to the latter’s claim that they looked for Owen to
demand a rectification of the work, but Owen and his group were nowhere to be found. Had Owen really been
readily available to the Caswells to correct any deficiency in the work, the latter would not have entertained the
thought that they were deceived and would not have been constrained to undergo the rigors of filing a criminal
complaint and testifying therein. Without doubt, the Caswells exercised due diligence when they demanded from
Owen the proper rectification of his work. As correctly held by the CA, the Caswells substantially complied with the
requirement of Article 1715 of the Civil Code, viz:
To Our mind, however, the effort to communicate with [Owen] effectively served as [the Caswells’] request for the
former to rectify the flaws in the contracted work. In fact, [the Caswells’] act of demanding that [Owen] secure the
permit and to subject the transformer to testing can already be construed as a substantial compliance with Article
1715. It must be emphasized that it was [Owen’s] refusal to secure the necessary permits and to comply with the
requirements of Zameco [II] as well as his refusal to communicate with [the Caswells] that impelled the latter to file a
case for estafa against him. Had he been willing to make good his obligation, then it would not have been necessary
for [the Caswells] to file the said criminal case. Instead of complying with his end of the bargain, [Owen] opted to file
a case for collection of sum of money with damages. Thus, any effort to require [Owen] either to rectify his flawed
work or to remove the same would have been futile since [Owen’s] act of demanding payment through the said
complaint showed his belief that his work in the house was done.36
Furthermore, to require the Caswells to file an action for specific performance, as opined by the RTC, not only
deprives them of hiring someone else to rectify the work, but also defeats the very purpose of the contracted work,
i.e., to immediately have electricity in their home. In this situation, time is of the essence.
For Owen’s failure to provide quality

work, he is to reimburse the rectification
costs the Caswells had shouldered as the
latter’s actual damages; the unpaid
compensation Owen is claiming shall be
set-off from the Caswells’ monetary
claims supported by receipts.
he Court recognizes that in view of the substandard work done, the Caswells necessarily incurred expenses by
purchasing materials to finally get a supply of electricity in their home.
One is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly
proved.37"To justify an award of actual damages, there must be competent proof of the actual amount of loss,
credence can be given only to claims which are duly supported by receipts."38 The claimant must prove the actual
amount of loss with a reasonable degree of certainty premised upon competent proof and on the best evidence
obtainable.39 In the case at bar, we give credence to the documents relied upon by the CA and the MTC in arriving at
the rectification cost, i.e., a) Engr. Pulangco’s handwritten receipt of ₱15,400.00, to which he had testified before the
court that he had indeed received such amount and b) the Sales Invoice No. 2029 issued by Peter A. Eduria
Enterprises reflecting the total cost of ₱53,805.00.00.
Notably, Owen assails the admissibility of the Sales Invoice, contending that said document is insufficient to be a
basis for computation of damages as the respective unit price for each item enumerated therein are lacking.
Furthermore, he attempts to highlight that Peter A. Eduria Enterprises is a non-existing business establishment by
submitting the negative certification of a business name issued by the Department of Trade and Industry,40 the
certification of no record issued by Business Permit and License Office of Valenzuela City,41 and the certification of
non-registration of corporation/partnership by the Securities and Exchange Commission.42
The failure to indicate the unit price of each item in the sales invoice does not defeat the claim of the Caswells for
reimbursement. In most cases in the ordinary course of business, sellers issue handwritten receipts that are
1âw phi 1
perfunctorily filled out without completely stating all the details of the purchase. This 'flaw' should not be taken
against the Caswells. Besides, if the unit price per
item is an issue, a perusal of Dana's separate list43 will show the unit prices of the items in the sales invoice. 1âw phi 1
With regard to the documentary evidence Owen adduced in his attempt to show the alleged non-existence of Peter
A. Eduria Enterprises, the negative certifications presented however only highlight the probable liability of the store
with the government for non-compliance with business registration. Regardless of whether the latter had registered
itself as a business entity with the proper authorities, the documents Owen relies upon fail to overcome the point of
the receipt: that a sale of electrical items for installation had transpired between the Caswells and the seller. With
the relevant facts established that Zameco II rejected the quality of Owen's work and that rectifications were made
by installing the necessary materials to meet the electric distributor's specifications, the said invoice cannot be
considered as bereft of evidentiary value.
It must be noted en passant that Cerelina herself admitted that the contract price agreed upon was the lump sum of
₱250,000.00, and that she only paid Owen ₱227,000.00,44 while the dispositive portion of the MTC Decision stated
that Owen's claims are dismissed, the lower court implies that the ₱23,000.00 unpaid compensation he sought to
recover from the Caswells shall not be given directly to him, offsetting the said amount from the rectification cost that
the Caswells had prayed for. In effect, under the circumstances, we deem this fair and just to measure the actual
damages due the Caswells by reducing the cost they shouldered to repair the defects with the unpaid amount of the
contract price due Owen.
WHEREFORE, the instant petition is DENIED. The April 30, 2008 Decision and July 24, 2008 Resolution of the
Court of Appeals in CA-G.R. SP No. 97146, which reinstated the June 29, 2006 Decision of the Municipal Trial
Court, San Narciso, Zambales, in Civil Case No. 538, are AFFIRMED in toto. No costs.
SO ORDERED.
SECOND DIVISION
G.R. No. 190175 November 12, 2014

vs.
EDWIN CABRERA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Assailed in this appeal is the June 18, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CEB-CR-H.C. No.
00784 which affirmed in all respects the March 5, 2007 Decision2 of the Regional Trial Court (RTC), Branch 15,
Cebu City in Criminal Case No. CBU-64615, finding appellant Edwin Cabrera (appellant) guilty beyond reasonable
doubt of violation of Section 5, Article II of Republic Act No. 91653 (RA 9165) and sentencing suffer the penalty oflife
imprisonment and to pay a fine of ₱500,000.
Factual Antecedents
After receiving information from residents of Sitio Galaxy, Tangke, Talisay, Cebu and a report from a confidential
asset of the illegal drug activities of appellant, police officers from the Talisay Police Station composed of POI
Leopoldo Palconit (POI Palconit), P03 Isaias Cabuenas, and P02 Joel Cunan conducted a buy-bust operation
against appellant on September 30, 2002. At about 4:30 p.m., poseur-buyer POI Palconit, together with the
confidential asset, approached appellant who was standing outside his house. The confidential asset introduced PO
I Palconit to appellant as a person who wanted to buy shabu. PO 1 Palconit gave appellant two marked ₱50.00 bills,
while the latter handed to him two plastic sachets containing white crystalline substance. Thereupon, PO I Palconit
made the pre-arranged signal by touching his head with his right hand. His back-ups then rushed to the scene and
simultaneously therewith POI Palconit arrested the appellant. He then put the markings "EC" on the two plastic
sachets and brought the same to the Philippine National Police (PNP) Crime Laboratory for forensic
examination.4The· following day or on October 1, 2002, a Complaint/Information was filed against appellant charging
him with violation of Sec. 5, Article II, of RA 9I65 as amended, the pertinent portion of which reads:
That on or about 4:30 P.M. of September 30, 2002, at Tangke, Talisay City, Cebu, Police Operatives of Talisay City
Police Station proceeded to Tangke, Talisay City, Cebu to conduct buy[-]bust operation [resulting in] the arrest of
one (1) Edwin Cabrera and within the jurisdiction of this Honorable Court, the above[-]named accused without the
authority of the law, did then and there, willfully, unlawfully and feloniously, [recover] from [his] possession, custody
and control, [t]wo (2) xx x plastic pack[s] of white crystalline substance believed to be shabu, other paraphernalia in
[his] illegal activity and [t]wo [f]ifty[-p]eso [b]ill[s] used as mark[ed] money with [the markings] SN.WD565189 and
VH234189 (Recovered White [Crystalline] Substance submitted to Crime Lab. [ f]or examination.
CONTRARY TO LA W.5
The chemistry report6 from the PNP Crime Laboratory later revealed that the white crystalline substance with a total
weight of O. I I gram inside the two plastic sachets marked with "EC" tested positive for methylamphetamine
hydrochloride or shabu, a dangerous drug.
Appellant pleaded "not guilty" to the crime charged.7 He denied the accusations against him and offered his own
version of the story. According to appellant, at around 4:30 p.m. of September 30, 2002, he was at the alley outside
his house washing clothes. 1bree men then approached him. They requested him to buy shabu and gave ₱200.00.
He acceded and thus went to the house of a certain Rey Campo (Campo) which is about 50 meters or six houses
away from his house. After buying shabu from Campo, he went back to his house to give it to the three men.
Thereupon, four policemen arrived and searched his house, but recovered nothing therefrom. Appellant claimed that
he was familiar with one of the policemen, PO 1 Palconit, because he would see him conducting raids in Sitio
Galaxy. Appellant thus averred that he would never sell shabu to POI Palconit because he knew that he is a police
officer.8 Ruling of the Regional Trial Court
In a Decision9 dated March 5, 2007, the RTC convicted appellant of the crime charged, viz: WHEREFORE, in view
of the foregoing, this Court hereby finds accused Edwin Cabrera GUILTY beyond reasonable doubt for violation of
Section 5, Article II of R.A. 9165 and in the absence of any mitigating and aggravating circumstances, he is hereby
sentenced to suffer the penalty of LIFE IMPRISONMENT and to pay a FINE of FNE HUNDRED THOUSAND
(₱500,000.00) PESOS, together with all the accessory penalties provided for by law. The physical evidence is
hereby forfeited in favor of the government to be disposed of in accordance with law.
SO ORDERED.10
On appeal to the CA, appellant questioned the legality of the alleged buybust operation. He pointed to the absence
of a prior surveillance and pre-operation report. He likewise assailed the non-presentation in court of the confidential
informant and of the marked money. Moreover, he alleged a break in the chain of custody by emphasizing that the
confiscation of the specimen happened at 4:30 p.m. of September 30, 2002 while the submission of the same to the
PNP Crime Laboratory for examination was made only at 10:50 p.m. of the same day. Because of these, appellant
averred that his guilt was not proven beyond reasonable doubt.11
In its Decision12 dated June 18, 2009, the CA held that the testimony of PO 1 Palconit and the existence of the
dangerous drug seized from appellant more than sufficiently proved the crime charged. PO 1 Palconit positively
identified appellant as the person who sold to him the plastic sachets containing the white crystalline substance
which was confirmed in the laboratory examination as shabu and later brought to and identified in court.
The appellate court likewise upheld the legality of the buy-bust operation. It ratiocinated that prior surveillance is not
required in a buy-bust operation especially where the police operatives are accompanied by their informant during
the entrapment, as in this case. Neither is the submission of a pre-operation report necessary for a conviction under
Section 5, Article II of RA 9165 as long as the elements of the offense are sufficiently established by the
prosecution. Further, there is no need to present in court the confidential informant and the marked money.
Presentation of the confidential informant is only required when there are material inconsistencies in the testimony
of the prosecution witness which is not the case here, since POI Palconit's testimony was found by the trial court to
be credible and convincing. In the same way, presentation of the marked money is not required either by law or
jurisprudence.
The CA did not likewise give credence to appellant's claim of gap in the chain of custody as it found the identity and
integrity of the drugs to have been established and preserved by the prosecution. Besides, the defense admitted the
existence, due execution and genuineness of the chemistry report and the specimen submitted.
WHEREFORE, the Decision dated March 5, 2007 of the Regional Trial Court ("RTC"), 7th Judicial Region, Branch
15, Cebu City, in Criminal Case No. CBU-64615, finding appellant Edwin Cabrera guilty beyond reasonable doubt of
violation of Section 5, Article II of Republic Act No. 9165 is AFFIRMED in all respects.
SO ORDERED.13
Appellant thus interposes this appeal where he raised as additional assignment of errors the lack of physical
inventory of the seized specimen and the non-taking of its photograph pursuant to Section 2114 of the Implementing
Rules of RA 9165.15
Our Ruling
The Court has gone over the assailed Decision of the CA and found the appellate court's resolution on the issues
raised, as well as its conclusions, to be in order. Hence, the Court finds no need to dwell on them again.
With regard to the non-compliance by the police officers with Section 21 of the Implementing Rules of RA 9165 as
alleged by appellant in his Supplemental Brief, particularly the lack of physical inventory of the seized specimen and
the non-taking of photograph thereof, the Court notes that appellant raised the same only in this appeal. The records
of the case is bereft of any showing that appellant objected before the RTC regarding the seizure and safekeeping
of the shabu seized from him on account of the failure of the police officers to maintain an unbroken chain of
custody of the said drugs. The only time that appellant questioned the chain of custody was before the CA but not
on the ground of lack of physical inventory or non-taking of photograph, but on the alleged gap between the time of
confiscation of the specimen and the time of its submission to the PNP Crime Laboratory. But even then, it was
already too late in the day for appellant to do so. Appellant should have raised the said issue before the trial
court.16In similar cases, the Court brushed aside the accused's belated contention that the illegal drugs confiscated
from his person were inadmissible because the arresting officers failed to comply with Section 21 of RA
9165.17 "Whatever justifiable grounds may excuse the police officers from literally complying with Section 21 will
remain unknown, because [appellant] did not question during trial the safekeeping of the items seized from him.
Objection to evidence cannot be raised for the first time on appeal; when a party desires the court to reject the
evidence offered, he must so state in the form of an objection. Without such objection, he cannot raise the question
for the first time on appeal."18 Besides and as already mentioned, the CA had already aptly concluded that the
identity of the seized drugs was established by the prosecution and its integrity preserved, viz:
Record show[ s] that after the arrest, PO 1 Palconit immediately marked the sachets of shabu with [appellant's]
initials, requested a laboratory examination of the confiscated substance and himself brought the sachets of shabu
on the same day to the PNP Regional Crime Laboratory. Thus, the identity of the drugs had been duly preserved
and established by the prosecution. Besides, the integrity of the evidence is presumed to be preserved unless there
is a showing of bad faith, ill will or proof that the evidence has been tampered with. [Appellant] bears the burden to
make some showing that the evidence was tampered or meddled with to overcome a presumption of regulaiity in the
handling of exhibits by public officers and a presumption that public officers properly discharged their duties. This is
also bolstered by the defense's admission of the existence, due execution and genuineness of the request for
laboratory examination, the Chemistry Report ai1d specimens submitted.19
Thus, the Court upholds appellant's conviction for violation of Section 5, Article II of RA 9165 as well as the penalty
imposed upon him. It must, however, be added that appellant is not eligible for parole.20
WHEREFORE, the appeal is DISMISSED. The assailed June 18, 2009 Decision of the Court of Appeals in CA-G.R.
CEB-CR-H.C. No. 00784 is AFFIRMED with the MODIFICATION that appellant Edwin Cabrera is not eligible for
parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 185449 November 12, 2014
GOODYEAR PHILIPPINES, INC. and REMEGIO M. RAMOS, Petitioners,

vs.
MARINA L. ANGUS, Respondent.
DECISION
DEL CASTILLO, J.:
In the absence of an express or implied prohibition against it, collection of both retirement benefits and separation
pay upon severance from employment is allowed. This is grounded on the social justice policy that doubts should
always be resolved in favor of labor rights.1
By this Petition for Review on Certiorari with Prayer for Injunctive Relief,2 petitioners Goodyear Philippines, Inc.
(Goodyear) and Remigio M. Ramos (Ramos) assail the May 13, 2008 Decision3 and November 17, 2008
Resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 98418. The CA partly granted the Petition for Certiorari
filed there with by modifying the September 30, 2005 Decision5 of the National Labor Relations Commission (NLRC)
in that it ordered p etitioners to pay respondent Marina L. Angus (Angus) separation pay, attorney's fees equivalent
to 10% of the separation pay, and moral damages.
Factual Antecedents
Angus was employed by Goodyear on November 16, 1966 and occupied the position of Secretary to the Manager of
Quality and Technology.
In order to maintain the viability of its operations in the midst of economic reversals, Goodyear implemented cost-
saving measures which included the streamlining of its workforce. Consequently, on September 19, 2001, Angus
received from Ramos, the Human Resources Director of Goodyear, a letter which reads as follows:
September 18, 2001
xxxx
Dear Ms. Angus:
Please be advised that, based on a thorough study made by Management, the position of Secretary to the Manager
of Quality & Technology is already redundant or is no longer necessary for its effective operation and is to be
abolished effective today, September 18, 2001.
In view of the above, we regret to inform you that your services, as Secretary to the Manager of Quality &
Technology, will be terminated effective October 18, 2001. Your last day of work, however, will be effective today,
September 18, 2001, to give you a month's time to look for another employment.
As Company practice, termination due to redundancy or retrenclunent is paid at 45 days' pay per year of service.
Considering, that you have rendered 34.92 years of service to the Company as of October 18, 2001, and have
reached the required minimum age of 55 to qualify for early retirement, Management has decided to grant you early
retirement benefit at 47 days' per year of service.
The Company will pay you the following termination benefits on October 18, 2001: 47 days' gay per year of service
(which will come from the Pension Fund), fractions of 13th and 14th months pay, longevity pay, emergency leave
and any earned and unused vacation and/or sick leave. The refund of your contributions to the Goodyear Savings
Plan, as well as the Company's share will be handled separately by Security Bank Corporation, the Administrator of
said Plan.
Should the Company find in the future that your services are again needed, it shall inform you of the opportunity so
you can apply. The Company will try to assist you find new work elsewhere, and you may use Goodyear as a
reference, if needed.
We thank you for your 34.92 years of loyal service with Goodyear Philippines, and we wish you success in your
future endeavours.
Very truly yours,
GOODYEAR PHILIPPINES INC.
(signed)
LUIS J. ISON
Manager-Quality & Technology
(signed)
REMIGIO M. RAMOS
Hwnan Resources Director6
Upon receipt, Angus responded through a letter of even date, viz:
Dear Sirs:
With reference to the attached letter dated September 18, 2001, I accept Management decision to avail early
retirement benefit. However, I do not agree on the terms stated therein. I suggest I be given a premiwn of additional
3 days for every year of service which is only 6.3% or a total of 50 days. I gathered it is Philippine industry's practice
to give premiwn to encourage employees to avail of the early retirement benefit.
Acceptance of this proposal will make my separation from Goodyear pleasant.
Very truly yours,
(signed)
MARINA L. ANGUS7
Meanwhile and in connection with the retrenchment of Angus, an Establishment Termination Report8 was filed by
Goodyear with the Department of Labor and Employment (DOLE).
On November 20, 2001, Angus accepted the checks which covered payment of her retirement benefits computed at
4 7 days' pay per year of service and other company benefits. However, she put the following annotation in the
acknowledgement receipt thereof:
Received under protest - amount is not acceptable. Acceptance is on condition that I will be given a premiwn of
additional 3 days for every year of service.
Since my service was tenninated due to redundancy, I now claim my separation pay as mandated by law. This is a
separate claim from my early retirement benefit.
(Signed)
Marina L. Angus
11-20-019
Allegedly because of the above-quoted annotation, and also of Angus' refusal to sign a Release and Quitclaim,
petitioners took back the checks.10
In response to Angus' protest, Ramos wrote her a letter11 dated November 29, 2001 explaining that the company has
already offered her the most favorable separation benefits due to redundancy, that is, 47 days' pay per year of
service instead of the applicable rate of 45 days' pay per year of service. And based on the Retirement Plan under
the Collective Bargaining Agreement (CBA) and the parties' Employment Contract, Angus is entitled to only one of
the following kinds of separation pay: (1) normal retirement which is payable at 47 days' pay per year of service; (2)
early retirement at a maximum of 47 days' pay per year of service; (3) retrenchment, redundancy, closure of
establishment at 45 days' pay per year of service; (4) medical disability at 45 days' pay per year of service; or (5)
resignation at 20 days' pay per year of service. Because of these, Ramos informed Angus that the company cannot
anymore entertain any of her additional claims.
In reply,12 Angus reiterated her claim for both termination pay and early retirement benefits. She also demanded that
she be given a copy of the Notice of Redundancy filed with the DOLE and a copy of the specific provisions in the
Retirement Plan, CBA and Employment Contract which could justify the prohibition against the grant of both to a
separated employee as asserted by petitioners. However, Ramos merely reminded Angus to claim her checks and
brushed aside her demands in a letter13 dated December 19, 2001.
On January 17, 2002, Angus finally accepted a check in the amount of ₱1,958,927.89 purportedly inclusive of all
termination benefits computed at 47 days' pay per year of service. She likewise executed a Release and
Quitclaim14in favor of Goodyear.
On February 5, 2002, Angus fil.ed with the Labor Arbiter a complaint for illegal dismissal with claims for separation
pay, damages and attorney's fees against petitioners.
In her Position Paper,15 Angus claimed that her termination by reason of redundancy was effected in violation of the
Labor Code for it was not timely reported to the DOLE and no separation pay was given to her; that the separation
pay to which she is entitled by law is entirely different from the retirement benefits that she received; that nothing in
the company's Retirement Plan under the CBA, the CBA itself or the Employment Contract prohibits the grant of
more than one kind of separation pay; and, that she was only forced to sign a quitclaim after accepting her
retirement benefits.
On the other hand, petitioners asseverated in their Position Paper16 that Angus was validly dismissed for an
authorized cause; that she voluntarily accepted her termination benefits and freely executed the corresponding
quitclaim; that her receipt of early retirement benefits equivalent to 4 7 days' pay for every year of service, which
amount is higher than the regular separation pay, had effectively barred her from recovering separation pay due to
redundancy; and, that the following Section 1, Article XI of the last company CBA supports the grant of only one
benefit:
It is hereby understood that the availment of the retirement benefits herein provided for shall exclude entitlement to
any separation pay, termination pay, redundancy pay, retrenchment pay or any other severance pay.
The parties finally agree that an employee shall be entitled to only one (1) benefit, whichever is higher.17
In her Rejoinder,18 Angus disputed the existence of the aforesaid provision in the company's CBA. She presented a
copy of the latest CBA19 between Goodyear and Unyon ng mga Manggagawa sa Goma sa Goodyear Phils., Inc.
effective for the period July 25, 2001 to July 24, 2004, to show that the provisions alluded to by the petitioners do not
exist. In contrast, she pointed to Section 5, Article VIII of the latest CBA which she claimed to be the one applicable
to her case, viz:
SECTION 5. Retirement Plan.
At normal retirement age of 60 years, a worker shall be entitled to a lump sum retirement benefit in an amount
equivalent to his daily rate (base rate x 8) multiplied by 4 7 days, and further multiplied by his years of service.
A worker who is at least 50 years old and with at least 15 years of service, and who has been recommended by the
President of the UNION for early retirement and duly approved by the Human Resources Director, shall be paid a
lump sum retirement benefit as follows:
Years of Retirement Benefit

Service Rendered Equivalent to
15 - less than 21 34 days pay per year of service

31 and up 47 days pay per year of service20
In a Decision21 dated January 23, 2004, the Labor Arbiter upheld the validity of Angus' termination from employment.
It likewise declared that the amount she received from the company was actually payment of separation pay due to
redundancy, only that it was computed under the CBA's retirement plan since the same was more advantageous to
her. Anent her claim for both separation pay and retirement benefits, the Labor Arbiter held that the grant of both is
not allowed under the Retirement Plan/CBA. Moreover, it was held that her claim of vitiated consent in signing the
quitclaim is unworthy of credence considering that she fairly negotiated the matter with the management and that
the consideration for its execution is higher than what she is mandated to receive.
Hence, the dispositive portion of the Labor Arbiter's Decision, viz:
WHEREFORE, premises considered, the instant complaint is hereby dismissed for lack of merit.
SO ORDERED.22
Angus appealed to the NLRC, but was unsuccessful as it rendered a Decision23 dated September 30, 2005 affirming
the ruling of the Labor Arbiter. Thus:
WHEREFORE, finding no cogent reason to modify, alter, much less reverse the decision appealed from, the same
is AFFIRMED and the instant appeal is DISMISSED for lack of merit. SO ORDERED.24
Angus filed a motion for reconsideration, but was denied by the NLRC in a Resolution25 dated January 9, 2007.
Still undeterred, Angus filed a Petition for Certiorari26 with the CA. She attributed grave abuse of discretion
amounting to lack of or in excess of jurisdiction on the part of the NLRC in sustaining the ruling of the Labor Arbiter.
On May 13, 2008, the CA rendered a Decision27 partially granting Angus' Petition. While it found her dismissal valid
in both substance and procedural aspects, it declared Angus entitled to separation pay in addition to the retirement
pay she already received. Citing Croz v. Philippine Global Communications, Inc.,28 the CA ruled that Angus is
entitled to the payment of both retirement benefit and separation pay in view of the absence of any provision in the
CBA prohibiting the payment of both. It also concluded that Angus did not voluntarily sign the release and quitclaim
as under its terms, she would receive less than what she is legally entitled to. Further, Angus was granted attorney's
fees as she was forced to litigate to protect her rights and interest, as well as moral damages for the anxiety and
distress that she suffered because of the pressure exerted on her to avail of early retirement and accept her
retirement pay.

WHEREFORE, premises considered, the petition for certiorari is hereby partially GRANTED. The NLRC Decision
dated September 30, 2005 is modified by ordering Goodyear to pay Angus: (1) separation pay pursuant to Article
283 of the Labor Code, (2) attorney's fees equivalent to ten percent (10%) of her separation pay, and (3) moral
damages in the amount of five thousand pesos (₱5,000.00).
SO ORDERED.29
Petitioners filed a Partial Motion for Reconsideration30 vehemently questioning the awards for separation pay,
attorney's fees and moral damages. This was, however, denied by the CA in its Resolution31 dated November 17,
2008.
Issues
Petitioners raise the following grounds for this Court's review:
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED THE PAYMENT OF
SEPARATION PAY TO RESPONDENT ON TOP OF THE RETIREMENT PAY DESPITE THE FACT THAT IT IS
VERY CLEAR IN THE COLLECTIVE BARGAINING AGREEMENT THAT RESPONDENT IS ENTITLED TO ONLY
ONE TYPE OF BENEFIT, EITHER SEPARATION PAY OR RETIREMENT BENEFIT, WHICHEVER IS HIGHER.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED GOODYEAR TO PAY
AGAIN SEPARATION PAY TO RESPONDENT DESPITE THE FACT THAT RESPONDENT EXECUTED A VALID
AND BINDING QUITCLAIM, THE CONSEQUENCES AND EFFECTS OF WHICH SHE FULLY UNDERSTOOD,
AND WHICH SHE CANNOT NOW UNILATERALLY REVOKE.
III.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED THE PAYMENT OF
MORAL DAMAGES AND ATTORNEY'S FEES NOTWITHSTANDING THAT THE COMPLAINT FOR ILLEGAL
DISMISSAL AND MONEY CLAIMS LACKED MERIT.32 Petitioners argue that the CA erred in ordering them to still
pay Angus separation pay as she was already paid the same at the rate used for computing early retirement
benefits. They insist that Angus is entitled to only one kind of pay as the recovery of both retirement benefits and
separation pay is proscribed by the company's CBA. Petitioners further contend that the CA has no basis in
disregarding the quitclaim since it was knowingly and voluntarily executed by Angus. And such voluntary execution,
coupled with her acceptance of separation pay computed at early retirement rate, had effectively barred Angus from
demanding for more.
Our Ruling
Angus is entitled to both separation pay and early retirement benefit due to the absence of a specific provision in the
CEA prohibiting recovery of both.
In Aquino v. National Labor Relations Commission,33 citing Batangas Laguna Tayabas Bus Company v. Court of
Appeals34 and University of the East v. Hon. Minister of Labor,35 the Court held that an employee is entitled to recover
both separation pay and retirement benefits in the absence of a specific prohibition in the Retirement Plan or CBA.
Concomitantly, the Court ruled that an employee's right to receive separation pay in addition to retirement benefits
depends upon the provisions of the company's Retirement Plan and/or CBA.36
Here, petitioners allege that there is a provision in the last CBA against the recovery of both retirement benefits and
separation pay. To support their claim, petitioners submitted a copy of what appears to be a portion of the company
1âwphi1
CBA entitled "Retirement Plan, Life Insurance, Physical Disability Pay and Resignation Pay." Section 1, Article XI
thereof provides that the availment of retirement benefits precludes entitlement to any separation pay. The same,
however, can hardly be considered as substantial evidence because it does not appear to be an integral part of
Goodyear's CBA. Even assuming that it is, it would still not suffice as there is no showing if the CBA under which the
said provision is found was the one in force at the time material to this case. On the other hand, Angus presented
the parties' 2001-2004 CBA and upon examination of the same, the Court agrees with her that it does not contain
any restriction on the availment of benefits under the company's Retirement Plan and of separation pay. Indeed, the
Labor Arbiter and the NLRC erred in ignoring this material piece of evidence which is decisive of the issue
presented before them. The CA, thus, committed no error in reversing the Decisions of the labor tribunals when it
ruled in favor of Angus' entitlement to both retirement benefits and separation pay.
Moreover, the Court agrees with the CA that the amount Angus received from petitioners represented only her
retirement pay and not separation pay. A cursory reading of petitioners' September 18, 2001 letter notifying Angus
of her termination from employment shows that they granted her early retirement benefits pegged at 4 7 days' pay
per year of service. This rate was arrived at after petitioners considered respondent's length of service with the
company, as well as her age which qualified her for early retirement. In fact, petitioners were even explicit in stating
in the said letter that the amount she was to receive would come from the company's Pension Fund, which, as
correctly asserted by Angus, was created to cover retirement benefit payment of employees. In addition, the
document37 showing a detailed account of Angus' termination benefits speaks for itself as the same is entitled
"Sununary of Retirement Pay and other Company Benefits." In view therefore of the clear showing that what
petitioners decided to grant Angus was her early retirement benefits, they cannot now be permitted to deny having
paid such benefit.
Petitioners further argue that Angus is not entitled to retirement pay because she does not meet the requirements
enumerated in the Retirement Plan provision of the CBA. The Court disagrees. While it is obvious that Angus is not
entitled to compulsory retirement as she has not yet reached the age of 60, there is no denying, however, that she is
qualified for early retirement. Under the provision of the Retirement Plan of the CBA as earlier quoted, a worker who
is at least 50 years old and with at least 15 years of service, and who has been recommended by the President of
the Union for early retirement and duly approved by the Human Resources Director, shall be entitled to lump sum
retirement benefits. At the time of her tennination, Angus was already 57 years of age and had been in the service
for more than 34 years. The exchange of correspondence between Angus and Ramos also shows that the latter, as
Goodyear's Human Resources Director, offered, recommended and approved the grant of early retirement in favor
of the former. Clearly, all the requirements for Angus' availment of early retirement under the Retirement Plan of
CBA were substantially complied with.
It is worthy to mention at this point that retirement benefits and separation pay are not mutually
exclusive.38Retirement benefits are a form of reward for an employee's loyalty and service to an employer39 and are
earned under existing laws, CBAs, employment contracts and company policies.40 On the other hand, separation
pay is that amount which an employee receives at the time of his severance from employment, designed to provide
the employee with the wherewithal during the period that he is looking for another employment and is recoverable
only in instances enumerated under Articles 283 and 284 of the Labor Code or in illegal dismissal cases when
reinstatement is not feasible.41 In the case at bar, Article 28342 clearly entitles Angus to separation pay apart from the
retirement benefits she received from petitioners.
Release and Quitclaim signed by Angus is invalid
The release and quitclaim signed by Angus cannot be used by petitioners to legalize the denial of Angus' rightful
claims. As aptly observed by the CA, the terms of the quitclaim authorizes Angus to receive less than what she is
legally entitled to. "Under prevailing jurisprudence, x x x a quitclaim cannot bar an employee from demanding
benefits to which he is legally entitled."43 It was held to be "ineffective in barring claims for the full measure of the
worker's rights and the acceptance of benefits therefrom does not amount to estoppel".44 Moreover, release and
quitclaims are often looked upon with disfavor when the waiver was not done voluntarily by employees who were
pressured into signing them by unscrupulous employers seeking to evade their obligations.45
Angus is entitled to moral damages and attorney's fees.

The Court likewise finds no cogent reason to overturn the CA's award of moral damages in the amount of ₱5,000.00
and attorney's fees. Moral damages is awarded when fraud and bad faith have been established,46 as in this case.
Petitioners' false contention over what has been paid to Angus suggests an attempt to feign compliance with their
legal obligation to grant their employee all the benefits provided for by agreement and law. Their bad faith is evident
in the intent to circumvent this legal mandate. And as Angus was then forced to litigate her just claims when
petitioners refused to heed her demands for the payment of separation pay, the award of attorney’s fees equivalent
to 10% of the amount of separation pay is also in order.47
WHEREFORE, the Petition is DENIED. The May 13, 2008 Decision and November 17, 2008 Resolution of the Court
of Appeals in CA-G.R. SP No. 98418, are AFFIRMED.
SO ORDERED.
SECOND DIVISION
A.C. No. 9395 November 12, 2014
DARIA O. DAGING, Complainant,

vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This administrative complaint for disbarment arose from an Affidavit Complaint1 filed by Daria O. Daging
(complainant) before the Integrated Bar of the Philippines (IBP), Benguet Chapter,2 against Atty. Riz Tingalon L.
Davis (respondent).
Antecedents
Complainant was the owner and operator of Nashville Country Music Lounge. She leased from Benjie Pinlac
(Pinlac) a building spaGe located at No. 22 Otek St., Baguio City where she operated the bar.
Meanwhile, complainant received a Retainer Proposal3 from Davis & Sabling Law Office signed by respondent and
his partner Atty. Amos Saganib Sabling (Atty. Sabling). This eventually resulted in the signing by the complainant,
the respondent and Atty. Sabling of a Retainer Agreement4 dated March 7, 2005.
Because complainant was delinquent in paying the monthly rentals, Pinlac terminated the lease. Together with
Novie Balageo (Balageo) and respondent, Pinlac went to complainant's music bar, inventoried all the equipment
therein, and informed her that Balageo would take over the operation of the bar. Complainant averred that
subsequently respondent acted as business partner of Balageo in operating the bar under her business name,
which they later renamed Amarillo Music Bar.
Complainant likewise alleged that she filed an ejectment case against Pinlac and Balageo before the Municipal Trial
Court in Cities (MTCC), Branch 1, Baguio City. At that time, Davis & Sabling Law Office was still her counsel as their
Retainer Agreement remained subsisting and in force. However, respondent appeared as counsel for Balageo in
that ejectment case and filed, on behalf of the latter, an Answer with Opposition to the Prayer for the Issuance of a
Writ of Preliminary Injunction.5
In his Comment,6 respondent denied participation in the takeover or acting as a business partner of Balageo in the
operation of the bar. He asserted that Balageo is the sole proprietress of the establishment. He insisted that it was
Atty. Sabling, his partner, who initiated the proposal and was in fact the one who was able to convince complainant
to accept the law office as her retainer. Respondent maintained that he never obtained any knowledge or
information regarding the business of complainant who used to consult only Atty. Sabling. Respondent admitted
though having represented Balageo in the ejectment case, but denied that he took advantage of the Retainer
Agreement between complainant and Davis and Sabling Law Office. Thus:
3.a Prior to the engagement of the Complainant of the DAVIS and SABLING LAW OFFICE as her retainer, Novie
Balageo was already one of the Clients of Respondent in several cases;
3.b Sometime in the last week of the month of May 2005, while Respondent was in his office doing some legal
works, Novie Balageo called up Respondent informing the latter that his assistance is needed for purposes of
conducting an inventory of all items at the former Nashville Country Music Lounge;
3.c Respondent [asked] Novie Balageo [the purpose of] the inventory [to which] the latter x xx responded x xx that
she entered into a lease contract with the present administrator of the building, Benjie Pinlac;
3.d Respondent, to his disbelief requested Novie Balageo to go [to] the LAW OFFICE for further clarification of the
matter. Thereafter, Respondent was later informed that the business of Complainant was taken over and operated
by Mr. Benjie Pinlac for seven days. Furthermore, Mr. Benjie Pinlac offered the said place to Novie Balageo which
the latter readily accepted;
3.e [Left] with no recourse, Respondent requested one of his staff to assist Novie Balageo in conducting an
inventory. Furthermore, Respondent never acted as partner of Novie Balageo in operating the former Nashville
Country Music Lounge;
3.f When Complainant filed the civil case for Ejectment against Novie Balageo and Benjie Pinlac, Respondent
represented the former thereof without taking advantage of the retainership contract between the DA VIS and
SABLING LAW OFFICE [and] Complainant as Respondent has no knowledge or information of any matters related
by complainant to Atty. Sabling regarding the former' s business;
3.g While the Complaint was pending, respondent was xx x informed by Novie Balageo and Benjie Pinlac of the
truth of all matters x x x which x x x Respondent [was unaware of];
3.h However, for the interest of justice and fair play, x x x Respondent [deemed it prudent] to xx x withdraw as
Counsel for Novie Balageo. Hence, Respondent filed his Motion to Withdraw As Counsel. x x x
3.i The civil case was subsequently dismissed for lack of jurisdiction over the [Complaint's] subject matter. x x x7
On October 15, 2008, the Investigating Commissioner rendered a Report and Recommendation8 finding respondent
guilty of betrayal of his client's trust and for misuse of information obtained from his client to the disadvantage of the
latter and to the advantage of another person. He recommended that respondent be suspended from the practice
oflaw for a period of one year.
On December 11, 2008, the IBP Board of Governors adopted and approved the Report and Recommendation of the
Investigating Commissioner.9 Upon motion of the respondent, it reduced the penalty imposed to six months
suspension considering that there is no proof that respondent actually handled any previous legal matters involving
complainant.10
Our Ruling
It is undisputed that complainant entered into a Retainer Agreement dated March 7, 2005 with respondent's law
firm. This agreement was signed by the respondent and attached to the rollo of this case. And during the
subsistence of said Retainer Agreement, respondent represented and defended Balageo, who was impleaded as
one of the defendants in the ejectment case complainant filed before the MTCC of Baguio City. In fact, respondent
filed on behalf of said Balageo an Answer with Opposition to the Prayer for the Issuance of a Writ of Preliminary
Injunction dated July 11, 2005. It was only on August 26, 2005 when respondent withdrew his appearance for
Balageo.
Based on the established facts, it is indubitable that respondent transgressed Rule 15.03 of Canon 15 of the Code
of Professional Responsibility. It provides:
1âw phi 1
Rule 15.03 -A lawyer shall not represent conflicting interests except by written consent of all concerned given after a
full disclosure of the facts.
"A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest
conflicts with that of his present or former client."11 The prohibition against representing conflicting interests is
absolute and the rule applies even if the lawyer has acted in good faith and with no intention to represent conflicting
interests.12 In Quiambao v. Atty. Bamba,13 this Court emphasized that lawyers are expected not only to keep inviolate
the client's confidence, but also to avoid the appearance of treachery and double-dealing for only then can litigants
be encouraged to entrust their secrets to their lawyers, which is of paramount importance in the administration of
justice.14
Respondent argues that while complainant is a client of Davis & Sabling Law office, her case is actually handled
only by his partner Atty. Sabling. He was not privy to any transaction between Atty. Sabling and complainant and
has no knowledge of any information or legal matter complainant entrusted or confided to his law partner. He thus
inveigles that he could not have taken advantage of an information obtained by his law firm by virtue of the Retainer
Agreement. We are not impressed. In Hilado v. David,15 reiterated in Gonzales v. Atty. Cabucana, Jr.,16 this Court
held that a lawyer who takes up the cause of the adversary of the party who has engaged the services of his law
firm brings the law profession into public disrepute and suspicion and undermines the integrity of justice. Thus,
respondent's argument that he never took advantage of any information acquired by his law finn in the course of its
professional dealings with the complainant, even assuming it to be true, is of no moment. Undeniably aware of the
fact that complainant is a client of his law firm, respondent should have immediately informed both the complainant
and Balageo that he, as well as the other members of his law firm, cannot represent any of them in their legal tussle;
otherwise, they would be representing conflicting interests and violate the Code of Professional Responsibility.
Indeed, respondent could have simply advised both complainant and Balageo to instead engage the services of
another lawyer.
The penalty for representing conflicting interests may either be reprimand or suspension from the practice of law
ranging from six months to two years.17 We thus adopt the recommendation of the IBP Board of Governors.
WHEREFORE, the Court ADOPTS and AFFIRMS the January 15, 2012 Resolution of the Integrated Bar of the
Philippines Board of Governors. Atty. Riz Tingalon L. Davis is found GUILTY of violating Rule 15.03, Canon 15 of
the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of six (6)
months effective upon receipt of this Resolution. He is warned that a commission of the same or similar offense in
the future will result in the imposition of a stiffer penalty.
Let a copy of this Resolution be entered into the records of Atty. Riz Tingalon L. Davis and furnished to the Office of
the Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the
Philippines, for their information and guidance.
Atty. Riz Tingalon L. Davis is DIRECTED to inform the Court of the date of his receipt of this Resolution.
SO ORDERED.
SECOND DIVISION
G.R. No.198878 October 15, 2014
RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE, STO. TOMAS PROPER BARANGAY, BAGUIO CITY,
represented by BEATRICE T. PULAS, CRISTINA A. LAPP AO. MICHAEL MADIGUID, FLORENCIO
MABUDYANG and FERNANDO DOSALIN, Petitioners,
vs.
STA. MONICA INDUSTRIAL & DEVELOPMENT CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside: 1) the August 5, 2011 Decision2 of the Court of Appeals
(CA) in CA-G.R. CV No. 84561 which affirmed the December 6, 2004 Decision3 of the Regional Trial Court of
Baguio City (Baguio RTC), Branch 6 in Civil Case No. 4946-R; and 2) the CA October 3, 2011 Resolution 4 denying
herein petitioners' Motion for Reconsider.5
Factual Antecedents
In May 2001, petitioners – residents of Lower Atab & Teachers’ Village, Sto. Tomas Proper Barangay, Baguio City –
filed a civil case for quieting of title with damages against respondent Sta. Monica Industrial and
DevelopmentCorporation. The case was docketed as Civil Case No. 4946-R and assigned to Branch 59 of the
Baguio RTC.6 The Complaint7 in said case essentially alleged that petitioners are successors and transferees-in-
interest of Torres, the supposed owner of an unregistered parcel of land in Baguio City (the subject property,
consisting of 177,778 square meters) which Torres possessed and declared for tax purposes in 1918; that they are
in possession of the subject property in the concept of owner, declared their respective lots and homes for tax
purposes, and paid the real estate taxes thereon; that in May 2000, respondent began to erect a fence on the
subject property, claiming that it is the owner of a large portion thereof8 by virtue of Transfer Certificate of Title No. T-
631849 (TCT No. T-63184); that said TCT No. T-63184 is null and void, as it was derived from Original Certificate of
Title No. O-281 (OCT No. O-281), which was declared void pursuant to Presidential Decree No. 127110 (PD 1271)
and in the decided case of Republic v. Marcos;11 and that TCT No. T-63184 is a cloud upon their title and interests
and should therefore be cancelled. Petitioners thus prayed that respondent’s TCT No. T-63184 be surrendered and
cancelled; that actual, moral and exemplary damages, attorney’s fees, legal expenses, and costs be awarded in
their favor; and finally, that injunctive relief be issued against respondent to prevent it from selling the subject
property.
In its Answer with Special Affirmative Defenses and Counterclaim,12 respondent claimed that petitioners have no
cause of action; that TCT No. T- 63184 is a valid and subsisting title; that the case for quieting of title constitutes a
collateral attack upon TCT No. T-63184; and that petitioners have no title to the subject property and are mere
illegal occupants thereof. Thus, it prayed for the dismissal of Civil Case No. 4946-R and an award of exemplary
damages, attorney’s fees, litigation expenses, and costs in its favor.
In their Pre-Trial Brief13 and Memorandum,14 petitioners acknowledged that while they declared their respective lots
for tax purposes, they applied for the purchase of the same – through Townsite Sales applications – with the
Department of Environment and Natural Resources (DENR).
After trial, the Baguio RTC issued a Decision15 dated December 6, 2004, the dispositive portion of which reads:
WHEREFORE, Judgment is hereby rendered in favor of defendant Sta. Monica Industrial and Development
Corporation and against the plaintiffs, as follows:
1. Dismissing the Complaint for Quieting of Title and Damages with Prayer for a Writ of Preliminary Injunction of
plaintiffs;
2. Dismissing likewise the counterclaim for Damages and attorney’s fees of defendant corporation since it has not
been shown that the plaintiffs acted in bad faith in filing the Complaint. Without pronouncement as to costs.
SO ORDERED.16
The trial court held that Civil Case No. 4946-R constitutes a collateral attack upon respondent’s TCT No. T-63184,
which became indefeasible after one year from the entry of the decree of registration thereof. It held that if it is
claimed that respondent’s title is void, then a direct proceeding should have been filed by the State to annul it and to
secure reversion of the land; petitioners have no standing to do so through a quieting of title case. The trial court
added that TCT No. T-63184 is a subsisting title; its validity was confirmed through the annotation therein by the
Baguio City Register of Deeds – Entry No. 184804-21-15917 – that TCT No. T-27096, from which TCT No. T-63184
was derived, was validated by the PD 1271 Committee in a May 9, 1989 Resolution; that petitioners could not
present any title to the subject property upon which to base their case for quieting of title, and have failed to show
during trial that they have a cause of action against respondent.
Petitioners filed a Motion for Reconsideration,18 but the trial court denied the same in a January 17, 2004
Resolution.19
In an appeal to the CA which was docketed as CA-G.R. CV No. 84561, petitioners insisted that they have a cause of
action against respondent for quieting of title and damages; that Civil Case No. 4946-R is not a collateral attack
upon respondent’s title; that Civil Case No. 4946-R is not a case for reversion and annulment of title which could
only be filed by the State; and that the trial court erred in finding that respondent’s title was validated in accordance
with law.
On August 5, 2011, the CA issued the assailed Decision affirming the trial court, thus:
In this case, plaintiffs-appellants20 are without any title to be cleared of or to be quieted nor can they be regarded as
having equitable title over the subject property. Ballantine’s Law Dictionary defines an equitable title as follows:
"A title derived through a valid contract or relation, and based on recognized equitable principles; the right in the
party, to whom it belongs, to have the legal title transferred to him (15 Cyc. 1097; 16 Id. 90). In order that a plaintiff
may draw to himself an equitable title, he must show that the one from whom he derives his right had himself a right
to transfer. x x x"
xxxx
In the instant case, plaintiffs-appellants cannot find refuge in the tax declarations and receipts under their names
considering that the same are not incontrovertible evidence of ownership.
Moreover, plaintiffs-appellants’ act of questioning the validity of the title of the defendant-appellee21 constitutes a
collateral attack and under Section 48 of P.D. 1529, "a certificate of title shall not be subject to collateral attack. x x
x"
xxxx
Meantime, it is meet to point out that P.D. 127[1] invoked by plaintiffsappellants themselves, specifically provides
under Section 6 (paragraph 2) thereof that "the Solicitor General shall institute such actions or suits as may be
necessary to recover possession of lands covered by all void titles not validated under this Decree." Hence, the
Office of the Solicitor General, being mandated by law, must be the proper party to institute actions to recover lands
covered by void titles under the said decree x x x.
xxxx
As regards the validation of TCT No. T-63184 x x x, no error was committed by the Court a quo in ruling that the
same is in accordance with law. It is important to note that the validation of the subject TCT was never disputed by
the Register of Deeds or any other government agency. Moreover, there is no showing that the TCT of the
defendant-appellee and the OCT wherein it was derived were declared null and void by virtue of Pres. Decree No.
1271. While the TCT of the defendant-appellee was issued under L.R.C. Case No. 1, Record No. 211, it was
validated in accordance with law in Entry No. 184804-21-159 annotated at the dorsal side of the subject title.
xxxx
WHEREFORE, premises considered, the Decision dated December 6, 2004 of the Regional Trial Court, Branch 6,
Baguio City is AFFIRMED in toto.
SO ORDERED.22
Petitioners moved for reconsideration, but in its October 3, 2011 Resolution, the CA stood its ground. Hence, the
instant Petition.
Issues
Petitioners raise the following issues in this Petition:
1. The Trial Court and the Court of Appeals erred in finding that the Petitioners x x x have no cause of action.
2. The Trial Court and the Court of Appeals erred in finding that the action is a collateral attack on the Torrens Title
of respondent Corporation.
3. The Trial Court and the Court of Appeals erred in finding that the present action is to annul the title of respondent
Corporation due to fraud, [thus] it should be the Solicitor General who should file the case for reversion.
4. The Trial Court and the Court of Appeals erred in finding that the validation of TCT No. T-63184 registered in the
name of respondent Corporation was in accordance with law.23
Petitioners’ Arguments
In their Petition and Reply,24 petitioners seek a reversal of the assailed CA dispositions and the nullification of
respondent’s TCT No. T-63184 so that said title shall not "hinder the approval of the Townsite Sales Application of
the [p]etitioners by the [DENR]-Cordillera Administrative Region and stop the harassment being done by the
Corporation on the [p]etitioners x x x."25 They argue that they have equitable title over the subject property, having
possessed the same for many years and obtained the rights of their predecessor Torres; that Civil Case No. 4946-R
is not a collateral attack upon TCT No. T-63184, as said title is null and void by virtue of PD 1271 and the ruling in
Republic v. Marcos; that there is no need to file a reversion case since TCT No. T-63184 has been effectively
declared void, and respondent is not in possession of the subject property; and finally, that Entry No. 184804-21-159
cannot have the effect of validating TCT No. T-63184, because PD 1271 itself states that only certificates of title
issued on or before July 31, 1973 are considered valid.26 Since OCT No. O-281 – the predecessor title of TCT No. T-
63184 – was issued only on January 28, 1977, it is thus null and void, and all other titles subsequently issued
thereafter, including TCT No. T-63184, are invalid as well.
On the other hand, respondent’s Comment27 simply reiterates the pronouncement of the CA. Consequently, it prays
for the denial of the instant Petition.
Our Ruling
For an action to quiet title to prosper, two indispensable requisites must be present, namely: "(1) the plaintiff or
complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed,
claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy."28
"Legal title denotes registered ownership, while equitable title means beneficial ownership."29
Beneficial ownership has been defined as ownership recognized by law and capable of being enforced in the courts
at the suit of the beneficial owner. Black’s Law Dictionary indicates that the term is used in two senses: first, to
indicate the interest of a beneficiary in trust property (also called "equitable ownership"); and second, to refer to the
power of a corporate shareholder to buy or sell the shares, though the shareholder is not registered in the
corporation’s books as the owner. Usually, beneficial ownership is distinguished from naked ownership, which is the
enjoyment of all the benefits and privileges of ownership, as against possession of the bare title to property.30
Petitioners do not have legal or equitable title to the subject property. Evidently, there are no certificates of title in
their respective names. And by their own admission in their pleadings, specifically in their pre-trial brief and
memorandum before the trial court, they acknowledged that they applied for the purchase of the property from the
government, through townsite sales applications coursed through the DENR. In their Petition before this Court, they
particularly prayed that TCT No. T-63184 be nullified in order that the said title would not hinder the approval of their
townsite sales applications pending with the DENR.Thus, petitioners admitted that they are not the owners of the
subject property; the same constitutes state or government land which they would like to acquire by purchase. It
would have been different if they were directly claiming the property as their own as a result of acquisitive
prescription, which would then give them the requisite equitable title. By stating that they were in the process of
applying to purchase the subject property from the government, they admitted that they had no such equitable title,
at the very least, which should allow them to prosecute a case for quieting of title.
In short, petitioners recognize that legal and equitable title to the subject property lies in the State. Thus, as to
1âwphi1
them, quieting of title is not an available remedy.
Lands within the Baguio Townsite Reservation are public land.31 Laws and decrees such as PD 1271 were passed
recognizing ownership acquired by individuals over portions of the Baguio Townsite Reservation, but evidently,
those who do not fall within the coverage of said laws and decrees – the petitioners included – cannot claim
ownership over property falling within the said reservation. This explains why they have pending applications to
purchase the portions of the subject property which they occupy; they have no legal or equitable claim to the same,
unless ownership by acquisitive prescription is specifically authorized with respect to such lands, in which case they
may prove their adverse possession, if so. As far as this case is concerned, the extent of petitioners’ possession has
not been sufficiently shown, and by their application to purchase the subject property, it appears that they are not
claiming the same through acquisitive prescription.
The trial and appellate courts are correct in dismissing Civil Case No. 4946-R; however, they failed to appreciate
petitioners’ admission of lack of equitable title which denies them the standing to institute a case for quieting of title.
Nevertheless, they are not precluded from filing another case – a direct proceeding to question respondent’s TCT
No. T-63184; after all, it appears that their townsite sales applications are still pending and have not been summarily
dismissed by the government – which could indicate that the subject property is still available for distribution to
qualified beneficiaries. If TCT No. T-63184 is indeed null and void, then such proceeding would only be proper to
nullify the same. It is just that a quieting of title case is not an option for petitioners, because in order to maintain
such action, it is primarily required that the plaintiff must have legal or equitable title to the subject property – a
condition which they could not satisfy.
With the conclusion arrived at, the Court finds no need to resolve the other issues raised.
WHEREFORE, the Petition is DENIED. The assailed August 5, 2011 Decision and October 3, 2011 Resolution of
the Court of Appeals in CA-G.R. CV No. 84561 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 183272 October 15, 2014
SUN LIFE OF CANADA (PHILIPPINES), INC., Petitioner,

vs.
SANDRA TAN KIT and The Estate of the Deceased NORBERTO TAN KIT, respondents.
DECISION
DEL CASTILLO, J.:
The Court of Appeals' (CA) imposition of 12o/o interest on the ₱13,080.93 premium refund is the only matter in
question in this case.
This Petition for Review on Certiorari1 assails the October 17, 2007 Decision2 of CA in CA-GR. CV No. 86923,
which, among others, imposed a 12% per annum rate of interest reckoned from the time of death of the insured until
fully paid, on the premium to be reimbursed by petitioner Sun Life of Canada (Philippines), Inc. (petitioner) to
respondents Sandra Tan Kit (respondent Tan Kit) and the Estate of the Deceased Norberto Tan Kit (respondent
estate). Likewise assailed in this Petition is the CA's June 12, 2008 Resolution3 denying petitioner's Motion for
Reconsideration of the said Decision.
Factual Antecedents
Respondent Tan Kit is the widow and designated beneficiary of Norberto Tan Kit (Norberto), whose application for a
life insurance policy,4 with face value of ₱300,000.00, was granted by petitioner on October 28, 1999. On February
19, 2001, or within the two-year contestability period,5 Norberto died of disseminated gastric
carcinoma.6Consequently, respondent Tan Kit filed a claim under the subject policy.
In a Letter7 dated September 3, 2001, petitioner denied respondent Tan Kit’s claim on account of Norberto’s failure
to fully and faithfully disclose in his insurance application certain material and relevant information about his health
and smoking history. Specifically, Norberto answered "No" to the question inquiring whether he had smoked
cigarettes or cigars within the last 12 months prior to filling out said application.8 However, the medical report of Dr.
Anna Chua (Dr. Chua), one of the several physicians that Norberto consulted for his illness, reveals that he was a
smoker and had only stopped smoking in August 1999. According to petitioner, its underwriters would not have
approved Norberto’s application for life insurance had they been given the correct information. Believing that the
policy is null and void, petitioner opined that its liability is limited to the refund of all the premiums paid. Accordingly,
it enclosed in the said letter a check for ₱13,080.93 representing the premium refund.
In a letter9 dated September 13, 2001, respondent Tan Kit refused to accept the check and insisted on the payment
of the insurance proceeds.
On October 4, 2002, petitioner filed a Complaint10 for Rescission of Insurance Contract before the Regional Trial
Court (RTC) of Makati City.
In its November 30, 2005 Decision,11 the RTC noted that petitioner’s physician, Dr. Charity Salvador (Dr. Salvador),
conducted medical examination on Norberto. Moreover, petitioner’s agent, Irma Joy E. Javelosa (Javelosa),
answered "NO" to the question "Are you aware of anything about the life to be insured’s lifestyle, hazardous sports,
habits, medical history, or any risk factor that would have an adverse effect on insurability?" in her Agent’s Report.
Javelosa also already knew Norberto two years prior to the approval of the latter’s application for insurance. The
RTC concluded that petitioner, through the above-mentioned circumstances, had already cleared Norberto of any
misrepresentation that he may have committed. The RTC also opined that the affidavit of Dr. Chua, presented as
part of petitioner’s evidence and which confirmed the fact that the insured was a smoker and only stopped smoking
a year ago [1999], is hearsay since Dr. Chua did not testify in court. Further, since Norberto had a subsisting
insurance policy with petitioner during his application for insurance subject of this case, it was incumbent upon
petitioner to ascertain the health condition of Norberto considering the additional burden that it was assuming.
Lastly, petitioner did not comply with the requirements for rescission of insurance contract as held in Philamcare
Health Systems, Inc. v. Court of Appeals.12 Thus, the dispositive portion of the RTC Decision:
WHEREFORE, in view of the foregoing considerations, this court hereby finds in favor of the [respondents and]
against the [petitioner], hence it hereby orders the [petitioner] to pay the [respondent], Sandra Tan Kit, the sum of
Philippine Pesos: THREE HUNDRED THOUSAND (₱300,000.00), representing the face value of the insurance
policy with interest at six percent (6%) per annum from October 4, 2002 until fully paid.
Cost de oficio.
SO ORDERED.13
Petitioner moved for reconsideration,14 but was denied in an Order15 dated February 15, 2006.
Hence, petitioner appealed to the CA.

On appeal, the CA reversed and set aside the RTC’s ruling in its Decision16 dated October 17, 2007.
From the records, the CA found that prior to his death, Norberto had consulted two physicians, Dr. Chua on August
19, 2000, and Dr. John Ledesma (Dr. Ledesma) on December 28, 2000, to whom he confided that he had stopped
smoking only in 1999. At the time therefore that he applied for insurance policy on October 28, 1999, there is no
truth to his claim that he did not smoke cigarettes within 12 months prior to the said application. The CA thus held
that Norberto is guilty of concealment which misled petitioner in forming its estimates of the risks of the insurance
policy. This gave petitioner the right to rescind the insurance contract which it properly exercised in this case.
In addition, the CA held that the content of Norberto’s medical records are deemed admitted by respondents since
they failed to deny the same despite having received from petitioner a Request for Admission pursuant to Rule 26 of
the Rules of Court.17 And since an admission is in the nature of evidence the legal effects of which form part of the
records, the CA discredited the RTC’s ruling that the subject medical records and the affidavits executed by
Norberto’s physicians attesting to the truth of the same were hearsay.
WHEREFORE, the foregoing considered, the instant appeal is hereby GRANTED and the appealed Decision
REVERSED and SET ASIDE, and in lieu thereof, a judgment is hereby rendered GRANTING the complaint a quo.
Accordingly, [petitioner] is ordered to reimburse [respondents] the sum of ₱13,080.93 representing the [premium]
paid by the insured with interest at the rate of 12% per annum from the time of the death of the insured until fully
paid.
SO ORDERED.18
The parties filed their separate motions for reconsideration.19 While respondents questioned the factual and legal
bases of the CA Decision, petitioner, on the other hand, assailed the imposition of interest on the premium ordered
refunded to respondents.
However, the appellate court denied the motions in its June 12, 2008 Resolution,20 viz:
WHEREFORE, the foregoing considered, the separate motions for reconsideration filed by the [petitioner] and the
[respondents] are hereby DENIED.
SO ORDERED.21
Only petitioner appealed to this Court through the present Petition for Review on Certiorari.
Issue
The sole issue in this case is whether petitioner is liable to pay interest on the premium to be refunded to
respondents.
Petitioner argues that no interest should have been imposed on the premium to be refunded because the CA
Decision does not provide any legal or factual basis therefor; that petitioner directly and timely tendered to
respondents an amount representing the premium refund but they rejected it since they opted to pursue their claim
for the proceeds of the insurance policy; that respondents should bear the consequence of their unsound decision of
rejecting the refund tendered to them; and, that petitioner is not guilty of delay or of invalid or unjust rescission as to
make it liable for interest. Hence, following the ruling in Tio Khe Chio v. Court of Appeals,22 no interest can be
assessed against petitioner.
Respondents, on the other hand, contend that the reimbursement of premium is clearly a money obligation or one
that arises from forbearance of money, hence, the imposition of 12% interest per annum is just, proper and
supported by jurisprudence. While they admit that they refused the tender of payment of the premium refund, they
aver that they only did so because they did not want to abandon their claim for the proceeds of the insurance policy.
In any case, what petitioner should have done under the circumstances was to consign the amount of payment in
court during the pendency of the case.
Our Ruling
Tio Khe Chio is not applicable in this case.
Petitioner avers that Tio Khe Chio, albeit pertaining to marine insurance, is instructive on the issue of payment of
interest. There, the Court pointed to Sections 243 and 244 of the Insurance Code which explicitly provide for
1âwphi1
payment of interest when there is unjustified refusal or withholding of payment of the claim by the insurer, 23 and to
Article 220924 of the New Civil Code which likewise provides for payment of interest when the debtor is in delay.
The Court finds, however, that Tio Khe Chio is not applicable here as it deals with payment of interest on the
insurance proceeds in which the claim therefor was either unreasonably denied or withheld or the insurer incurred
delay in the payment thereof. In this case, what is involved is an order for petitioner to refund to respondents the
insurance premium paid by Norberto as a consequence of the rescission of the insurance contract on account of the
latter’s concealment of material information in his insurance application. Moreover, petitioner did not unreasonably
deny or withhold the insurance proceeds as it was satisfactorily established that Norberto was guilty of concealment.
Nature of interest imposed by the CA
There are two kinds of interest – monetary and compensatory.
"Monetary interest refers to the compensation set by the parties for the use or forbearance of money."25 No such
interest shall be due unless it has been expressly stipulated in writing.26 "On the other hand, compensatory interest
refers to the penalty or indemnity for damages imposed by law or by the courts."27 The interest mentioned in Articles
2209 and 221228of the Civil Code applies to compensatory interest.29
Clearly and contrary to respondents’ assertion, the interest imposed by the CA is not monetary interest because
aside from the fact that there is no use or forbearance of money involved in this case, the subject interest was not
one which was agreed upon by the parties in writing. This being the case and judging from the tenor of the CA, to
wit:
Accordingly, [petitioner] is ordered to reimburse [respondents] the sum of ₱13,080.93 representing the [premium]
paid by the insured with interest at the rate of 12% per annum from time of death of the insured until fully paid.30
there can be no other conclusion than that the interest imposed by the appellate court is in the nature of
compensatory interest.
The CA incorrectly imposed compensatory interest on the premium refund reckoned from the time of death of the
insured until fully paid
As a form of damages, compensatory interest is due only if the obligor is proven to have failed to comply with his
obligation.31
In this case, it is undisputed that simultaneous to its giving of notice to respondents that it was rescinding the policy
due to concealment, petitioner tendered the refund of premium by attaching to the said notice a check representing
the amount of refund. However, respondents refused to accept the same since they were seeking for the release of
the proceeds of the policy. Because of this discord, petitioner filed for judicial rescission of the contract. Petitioner,
after receiving an adverse judgment from the RTC, appealed to the CA. And as may be recalled, the appellate court
found Norberto guilty of concealment and thus upheld the rescission of the insurance contract and consequently
decreed the obligation of petitioner to return to respondents the premium paid by Norberto. Moreover, we find that
petitioner did not incur delay or unjustifiably deny the claim.
Based on the foregoing, we find that petitioner properly complied with its obligation under the law and contract.
Hence, it should not be made liable to pay compensatory interest.
Considering the prevailing circumstances of the case, we hereby direct petitioner to reimburse the premium paid
within 15 days from date of finality of this Decision. If petitioner fails to pay within the said period, then the amount
shall be deemed equivalent to a forbearance of credit.32 In such a case, the rate of interest shall be 6% per annum.33
WHEREFORE, the assailed October 17, 2007 Decision of the Court of Appeals in CA-G.R. CV No. 86923 is
MODIFIED in that petitioner Sun Life of Canada (Philippines), Inc. is ordered to reimburse to respondents Sandra
Tan Kit and the Estate of the Deceased Norberto Tan Kit the sum of ~13,080.93 representing the premium paid by
the insured within fifteen (15) days from date of finality of this Decision. If the amount is not reimbursed within said
period, the same shall earn interest of 6% per annum until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 198528, October 13, 2014
MAGSAYSAY MITSUI OSK MARINE, INC. AND/OR MOL TANKSHIP MANAGEMENT (ASIA) PTE
LTD., Petitioners, v. JUANITO G. BENGSON,*Respondent.
DECISION
DEL CASTILLO, J.:
Time and again, this Court has held that cardiovascular disease, coronary artery disease, and other heart ailments are work-
related and, thus, compensable.
Assailed in this Petition for Review on Certiorari1 is the July 15, 2011 Decision2 of the Court of Appeals (CA) in CA-G.R. SP
No. 118501 which set aside the August 31, 2010 Decision of the National Labor Relations Commission (NLRC) in NLRC LAC
No. (OFW-M) 10-000643-09 and reinstated with modification the June 18, 2009 Decision of the Labor Arbiter in NLRC OFW
Case No. (M) 07-10402-08. Also assailed herein is the CA’s September 9, 2011 Resolution3 denying reconsideration of its
assailed Decision.
Factual Antecedents
The facts are succinctly summarized by the appellate court, thus: chanRoblesvi rtual Lawli bra ry
Since the year 1986, x x x Juanito G. Bengson4 has been working as a seafarer for x x x Magsaysay Mitsui OSK Marine,
Inc.5 (Magsaysay, Inc.), from his first position as Deck Cadet until his present position as Third Mate Officer. On August 7,
2007, at the age of 45, [Bengson] entered into his 22nd contract of employment with Magsaysay, Inc. for and in behalf of its
foreign principal MOL Tankship Management (Asia) Pte., Ltd.,6 as a Third Mate Officer on board the vessel “KN TRADER”. The
contract was for a duration of nine (9) months with a basic monthly salary of US$814.00 for a minimum of 40 hours of work
in a week. Prior to his deployment, [Bengson] underwent and passed the Pre-Employment Medical Examination (PEME) and
was found to be “fit for sea duty” on August 11, 2007. Thereafter, [Bengson] boarded the ship and performed his assigned
tasks.
On October 5, 2007, after doing his usual duties on board the vessel, [Bengson] suddenly experienced difficulty in breathing
and numbness on half of his body. Thinking that it was caused by fatigue, he rested for a while. After two hours, he still felt
numbness over his half body prompting him to ask for assistance. On October 7, 2007, [Bengson] was brought to the
Neurological Department of the Izola General Hospital in Slovenia where he was confined for three days. While in the
hospital, [Bengson] had partial paralysis of the right hand and a minor partial paralysis of the right leg. His Computed
Tomography (CT) Scan of the head showed a “small hematoma in the left part of the crane”. At that time, [Bengson] could
only walk with the help of a physiotherapist and was prohibited from lifting heavy things. Due to his incapacity to work, his
immediate repatriation was arranged.
Upon [Bengson’s] arrival in the Philippines on October 21, 2007, he was immediately brought to the Manila Doctors Hospital
for confinement under the supervision of company-designated-physician Dr. Benigno F. Agbayani, Jr. [Bengson’s]
Cerebrovascular Investigation Form reveals that he had, among other things, stroke, hypertension, carotid bruit, Transient
Ischemic Attack (T.I.A.), Hemiplegia, and Amaurosis Fugax. His Plaque Morphology Type I reveals a “uniformly echolucent
with thin echogenic cap (homogenous hypoechoic) or a high risk for plaque rupture and embolism regardless of % of
stenosis”. Upon [Bengson’s] discharge on November 1, 2007, his Medical Abstract/Discharge Summary showed that he had
a stroke.
On November 4, 2007, Dr. Agbayani issued an Initial Out-Patient Consult Report which stated that [Bengson’s] illness
of “hematoma in the cranium” was not work-related. Thus, [Magsaysay, Inc. and MOL Tankship] did not anymore issue any
assessment on [Bengson’s] disability grade. [Bengson], on the other hand, continuously took medications and was unable to
return to his work as a seaman due to the severity of his disability. [Bengson] thus filed his disability compensation claim
against x x x Magsaysay, Inc. However, during the grievance proceedings before the Associated Marine Officers and
Seamen’s Union of the Philippines (AMOSUP), his claim was outrightly denied by x x x Magsaysay, Inc.7 chanrobles law
Bengson filed against the petitioners, Magsaysay Mitsui Osk Marine, Inc. (Magsaysay, Inc.) and MOL Tankship Management
(Asia) Pte Ltd. (MOL Tankship), a complaint for the recovery of total permanent disability benefits, reimbursement of medical
and transportation expenses, damages, and attorney’s fees, with interest. The labor case was docketed as NLRC OFW Case
No. (M) 07-10402-08.
In his Position Paper and related pleadings,8 Bengson argued that under his Collective Bargaining Agreement (CBA) with the
petitioners (IBF JSU/ AMOSUP-IMMA CBA), he is entitled to US$137,500.00 work-related compensation as Third Mate; that
his illness is work-related and was contracted as a result of the pressure, stress, and demands of his work as well as the long
period of service with petitioners; that his illness is continuing, and has resulted in total and permanent disability, complete
inability to perform his work, and loss of qualifications and aptitude required for employment as seaman in any capacity; that
petitioners unjustifiably refused to compensate him, thus causing upon him further anxiety, sleepless nights, and mental
anguish and forcing him to litigate. Thus, he prayed that judgment be rendered in his favor for the payment of permanent
and total disability compensation in the amount of US$137,500.00; moral and exemplary damages in the amount of
P150,000.00; attorney’s fees equivalent to 10% of his claims; reimbursement of his medical and transportation expenses;
and legal interest.
On the other hand, petitioners’ main defense in their Position Paper and other written submissions9 is that Bengson’s illness
is not an occupational disease; that it is not work-related and therefore not compensable; that there is no medical evidence
to support his claims; that his “small hematoma on the left cranium” has already been declared by the company-designated
physician to be not work-related, and is not included in the Philippine Overseas and Employment Authority Standard
Employment Contract (POEA-SEC) list of occupational diseases; that they have shouldered Bengson’s medical expenses and
paid him his sickness and transportation allowances; that the standard in measuring the degree of disability of a seafarer is
not the 120-day period provided under Article 192(c) (1) of the Labor Code10and Rule X, Section 2 of the Amended Rules on
Employees’ Compensation Commission,11 but the disability grading issued by the company-designated physician – that is, a
seafarer may be entitled to total and permanent disability benefits if he has been issued a Grade 1 disability; that
consequently, Bengson is not entitled to damages, attorney’s fees and other claims. Petitioners thus prayed for the dismissal
of the labor complaint.
On June 18, 2009, the Labor Arbiter issued his Decision12 in NLRC OFW Case No. (M) 07-10402-08, which decreed as
follows:
cha nRoblesv irt ual Lawlib rary
WHEREFORE, judgment is hereby rendered ordering respondents jointly and severally liable to pay complainant JUANITO
BENGZON [sic] the Philippine peso equivalent at the actual payment of One Hundred Thirty Seven Thousand Five Hundred
U.S. Dollars (US$137,500.00) representing 100% of the compensation benefit under the CBA and ten (10%) percent of the
total money claims as attorney’s fees.
Other monetary claims are dismissed for lack of merit.
SO [ORDERED].13
The Labor Arbiter declared that Bengson’s hematoma in the left part of his cranium is related to his work as Third Mate, and
the strenuous nature of his work and the conditions he was subjected to while working on board petitioners’ vessel caused
his illness; that respondent suffered from heart disease and/or cerebral infarction which required medication and regular
medical check-up up to the present; that despite his condition, the company-designated physician (Agbayani) has to date
failed to issue a disability assessment; that consequently, Bengson suffered from permanent and total disability.
The Labor Arbiter added that Agbayani’s November 4, 2007 Initial Out-Patient Consult Report declaring that Bengson’s illness
is not work-related cannot be given credence, as it has been shown that prior to boarding MOL Tankship’s vessel, respondent
was declared “fit to work” by petitioners’ own physicians, and if he contracted heart disease while on board the ship, it can
only be caused by his work and the conditions he was subjected to during his employment. Finally, the Labor Arbiter held
that pursuant to the IBF JSU/AMOSUP-IMMA CBA under which Bengson is covered, disability compensation should be
awarded to him in the amount of US$137,500.00, which is equivalent to 100% degree of disability under said CBA.
Petitioners appealed to the NLRC, where the case was docketed as NLRC LAC No. (OFW-M) 10-000643-09.
On August 31, 2010, the NLRC rendered its Decision14 granting the appeal, setting aside the Labor Arbiter’s June 18, 2009
Decision, and thus dismissing the complaint in NLRC OFW Case No. (M) 07-10402-08. Respondent moved to reconsider, but
the NLRC stood its ground.15 cralawlawl ibra ry
Essentially, the NLRC held that the IBF JSU/AMOSUP-IMMA CBA is relevant only in cases of permanent disability arising from
accident – which is not the case for Bengson, who contracted illness; thus, the provisions of the POEA-SEC apply instead. It
added that under the POEA-SEC, hematoma is not included in the list of compensable illnesses; this being the case, Bengson
should have proved that such illness was work-related and compensable, and it is not enough for him to claim or show that it
was contracted during his employment with petitioners. Having failed to do so, Agbayani’s findings that his illness is not
work-related should prevail. It held further that since respondent’s illness is not work-related, his inability to work for more
than 120 days is therefore irrelevant and does not entitle him to permanent total disability benefits.
In a Petition for Certiorari16 filed with the CA and docketed therein as CA-G.R. SP No. 118501, Bengson sought to set aside
the above NLRC Decision and reinstate that of the Labor Arbiter’s, arguing mainly that his illness is work-connected which
therefore entitles him to disability compensation under the IBF JSU/AMOSUP-IMMA CBA.
On July 15, 2011, the CA issued the herein assailed Decision containing the following decretal portion: c hanRoble svirtual Lawlib ra ry
WHEREFORE, premises considered, the instant petition for certiorari is hereby GRANTED. The Decision dated August 31,
2010 of public respondent National Labor Relations Commission (NLRC), First Division, is ANNULLED and SET
ASIDE. Accordingly, the Decision dated June 18, 2009 of the Labor Arbiter is REINSTATED with the modification in that
private respondents Magsaysay Mitsui OSK Marine, Inc. and/or MOL Tankship Management (ASIA) PTE, Ltd. are jointly and
severally liable to pay petitioner Juanito G. Bengson the amount of Sixty Thousand U.S. Dollars (US$60,000.00) representing
120% of the compensation benefit under the 2000 POEA Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels.
The CA held that Bengson’s exposure to different hazards on board petitioners’ vessel, the performance of his functions as
Third Mate, and the extraordinary physical and mental strain required by his position caused him to suffer his present illness,
which requires continuous medication to date. It held that as Third Mate, Bengson
is a licensed member of the deck department of his ship and is under the supervision of the Chief Mate. He traditionally
stands [an] “8-12” watch: from 8am until 12 noon and 8pm until midnight. At sea, the mate on watch has three
fundamental duties: to navigate the ship, to safely avoid traffic, and to respond to any emergencies that may arise. He also
has special responsibilities to keep the ship seaworthy during fire and loss of stability, and providing aid and maintaining
safety during man overboard, abandoning ship, and medical emergencies. Indeed, in performing his functions as a Third
Mate, [Bengson’s] position requires a thorough knowledge of the environment in which he is operating, otherwise, the safety
of the ship would be endangered.
In addition, [Bengson] was performing a minimum of 40 hours a week and was made to work under the heat of the
sun. [Bengson] has also been subjected to this same kind of work as a Third Mate for twelve (12) years since he was
continuously rehired and deployed after the expiration of his employment contract. He has no known disease or illness
based on his Pre-Employment Medical Examination, thus, bolstering petitioner’s claim that his illness was caused by his
strenuous activities on board the vessel.18chan roble slaw
The CA added that in the course of performing his duties, Bengson suffered a stroke or cerebro-vascular accident (CVA),
which means that a blood vessel within or about his brain burst which caused cerebral or intracranial hemorrhage; that such
illness is an occupational disease under Section 32-A (12) of the POEA-SEC; that according to Agbayani’s Cerebrovascular
Investigation Form, Bengson suffered from stroke, hypertension, carotid bruit, Transient Ischemic Attack (T.I.A.),
Hemiplegia, and Amaurosis Fugax; that the disease being work-related, Agbayani should have made a declaration either of
fitness or disability, which he failed to do up to this day; that the failure to make a declaration entitles Bengson to permanent
total disability benefits in the amount of US$60,000.00 in accordance with Sections 2019 and 3220 of the POEA-SEC, and not
US$137,500.00 under the IBF JSU/AMOSUP-IMMA CBA which applies only in case of accident; and finally, that an award of
attorney’s fees is proper as the case is one for recovery of wages and indemnity under employer’s liability laws.
Petitioners filed a Motion for Reconsideration, but the CA denied the same in its September 9, 2011 Resolution. Hence, the
present Petition.
Issues
Petitioners submit the following issues for resolution: chanRob lesvi rtua lLawl ibra ry
Whether the Court of Appeals committed serious error in law when it disregarded the expert opinion of the company-
designated physician that Respondent’s illness is not work-related.
Whether the Court of Appeals committed serious error in law when it ruled that Respondent is considered as Cerebro-
Vascular accident, and thus compensable, when not all the requisites for the same have been complied with.21
Praying that the assailed CA pronouncements be set aside and that a new judgment be rendered absolving them from the
payment of disability benefits and attorney’s fees, petitioners essentially maintain in their Petition and Reply22 that Bengson’s
illness – hypertensive cardio-vascular disease (HCVD) not in failure, CVD infarct left thalamocapsular23 – is not work-related;
that between Bengson’s bare allegations that his exposure to different hazards and the stressful nature of his work were the
causes of his illness and Agbayani’s categorical declaration that Bengson’s illness is not work-related, the latter should
prevail; that the CA failed to specifically point out the exact unusual and extraordinary physical or mental strain or event
which caused respondent’s alleged CVA; and that with Agbayani’s expertise and experience as petitioners’ company-
designated physician, his declaration and diagnosis should be given more weight.24 c ralawlawl ibra ry
In his Comment,25 respondent counters that the CA finding that his illness is work-related prevails over Agbayani’s
declaration; that it is not required that in order to be entitled to disability benefits, his work should be the sole cause of the
growth, development or acceleration of his illness;26 that Agbayani’s declaration should not be given credence because it is
self-serving and biased, favoring petitioners and protecting the latter’s interests; that the opinions of company-designated
physicians should not at all times be believed;27 that he could not have contracted his illness except while working for
petitioners on board their vessel; and that since he could no longer return to work, he should thus be paid permanent
disability benefits.
Our Ruling
The only issue in this case is whether Bengson’s illness – which petitioners claim and admit to be hypertensive cardio-
vascular disease (HCVD) not in failure, CVD infarct left thalamocapsular – is an occupational disease.
In many cases decided in the past, this Court has held that cardiovascular disease, coronary artery disease, and other heart
ailments are compensable. Thus, in Fil-Pride Shipping Company, Inc. v. Balasta,28 severe 3-vessel coronary artery disease
which the seaman contracted while serving as Able Seaman was considered an occupational disease. In Villanueva, Sr. v.
Baliwag Navigation, Inc.,29 it was held that the 2000 POEA-SEC considers heart disease as an occupational
disease. In Jebsens Maritime, Inc. v. Undag,30 the Court held that hypertensive cardiovascular disease may be a
compensable illness, upon proof. In Oriental Shipmanagement Co., Inc. v. Bastol31 and Heirs of the late Aniban v. National
Labor Relations Commission,32 it was held that myocardial infarction as a disease or cause of death is compensable, such
being occupational. Iloreta v. Philippine Transmarine Carriers, Inc.33 held that hypertensive cardiovascular disease/coronary
artery disease and chronic stable angina are compensable. Micronesia Resources v. Cantomayor34 stated that a finding of
coronary artery disease entitles the claimant – a seaman Third Officer – to disability compensation. In Remigio v. National
Labor Relations Commission,35 the Court held that the claimant – a musician on board an ocean-going vessel – was entitled
to recover for suffering from coronary artery disease. In Sepulveda v. Employees’ Compensation Commission,36 it was
declared that the employee’s illness, myocardial infarction, was directly brought about by his employment as schoolteacher
or was a result of the nature of such employment.
In the present case, petitioners flatly claim that Bengson’s hypertensive cardio-vascular disease is not compensable on the
sole basis of its company-designated physician Agbayani’s declaration that such illness is not work-related.
However, the Court finds that Bengson’s illness is work-related. The undisputed facts indicate that respondent has been
working for petitioners since 1988; that per his service record,37 he has been serving as Third Mate for twelve (12) years;
and that as Third Mate, he was saddled with heavy responsibilities relative to navigation of the vessel, ship safety and
management of emergencies. It is beyond doubt that respondent was subjected to physical and mental stress and strain: as
Third Mate, he is the ship’s fourth in command, and he is the ship’s safety officer; these responsibilities have been heavy
burdens on respondent’s shoulders all these years, and certainly contributed to the development of his illness. Besides, “[i]t
is already recognized that any kind of work or labor produces stress and strain normally resulting in wear and tear of the
human body.”38 “Notably, it is a matter of judicial notice that an overseas worker, having to ward off homesickness by
reason of being physically separated from his family for the entire duration of his contract, bears a great degree of emotional
strain while making an effort to perform his work well. The strain is even greater in the case of a seaman who is constantly
subjected to the perils of the sea while at work abroad and away from his family.”39 cralawlawli bra ry
Having worked for petitioners since 1988 under employment contracts that were continuously renewed, it can be said that
respondent spent much of his productive years with petitioners; his years of service certainly took a toll on his body, and he
could not have contracted his illness elsewhere except while working for petitioners. To be sure, the Court has ruled that
“the list of illnesses/diseases in Section 32-A40 does not preclude other illnesses/diseases not so listed from being
compensable. The POEA-SEC cannot be presumed to contain all the possible injuries that render a seafarer unfit for further
sea duties.”41 And equally significant, “it is not the injury which is compensated, but rather it is the incapacity to work
resulting in the impairment of one’s earning capacity.”42 cral awlawlibra ry
Respondent’s illness, which has likewise been diagnosed as intracerebral hemorrhage43 or hemorrhagic stroke,44 is a serious
condition,45 and could be deadly.46 cralawlaw lib rary
In Alpha Ship Management Corporation v. Calo,47 it was held that an employee’s disability becomes permanent and total
when so declared by the company-designated physician, or, in case of absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the 120 or 240-day treatment period under Article 192 (c) (1) of the Labor
Code48 and Rule X, Section 2 of the Amended Rules on Employees’ Compensation Commission,49 while the employee’s
disability continues and he is unable to engage in gainful employment during such period, and the company-designated
physician fails to arrive at a definite assessment of the employee’s fitness or disability. This is true regardless of whether the
employee loses the use of any part of his body or if the injury or disability is classified as Grade 1 under the POEA-SEC.
Bengson was repatriated on October 21, 2007 and immediately brought to the Manila Doctors Hospital for confinement. He
was discharged on November 1, 2007. On November 4, 2007, Agbayani issued an Initial Out-Patient Consult Report which
stated that respondent’s illness was not work-related. As a result of such adverse declaration, respondent filed NLRC OFW
Case No. (M) 07-10402-08. Meanwhile, respondent underwent medication and rehabilitation under Agbayani’s supervision
until February 2008.50 However, Agbayani did not make a definite assessment of respondent’s fitness or disability, even up
to this day; thus, respondent’s medical condition remains unresolved. In the meantime, respondent’s medical condition
persists, and petitioners did not renew or continue with respondent’s employment; nor was he able to work for other
employers. Quite understandably, respondent’s condition remains delicate given that his illness is serious and could be
fatal. Thus, applying the above doctrine in Alpha Ship Management Corporation v. Calo, respondent is deemed totally and
permanently disabled and entitled to the corresponding benefit under the POEA-SEC in the amount of US$60,000.00.
Finally, while the CA’s assailed Decision is correct, it should nonetheless be modified, such that the award therein should be
paid in the national currency.
WHEREFORE, the Petition is DENIED. The assailed July 15, 2011 Decision and September 9, 2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 118501 are AFFIRMED, with the MODIFICATIONthat the adjudged awards of US$60,000.00
and attorney’s fees equivalent to 10% per cent thereof, be paid in Philippine pesos, computed at the exchange rate
prevailing at the time of payment.
SO ORDERED. cralawred
SECOND DIVISION
G.R. No. 193650, October 08, 2014
GEORGE PHILIP P. PALILEO AND JOSE DE LA CRUZ, Petitioners, v. PLANTERS DEVELOPMENT BANK, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the July 28, 2009 Amended Decision2 of the Court of Appeals (CA) in CA-G.R.
SP No. 01317-MIN, entitled “Planters Development Bank, Petitioner, versus Hon. Eddie R. Roxas (in his capacity as the
former Pairing Judge), Hon. Panambulan M. Mimbisa (in his capacity as the Presiding Judge of RTC, Branch 37, General
Santos City), Sheriff Marilyn P. Alano, Sheriff Ramon A. Castillo, George Philip P. Palileo, and Jose Dela Cruz, Respondents,”
as well as its August 23, 2010 Resolution3 denying reconsideration of the assailed amended judgment.
Factual Antecedents
In a June 15, 2006 Decision4 rendered by the Regional Trial Court (RTC) of General Santos City, Branch 37, in an action for
specific performance/sum of money with damages docketed as Civil Case No. 6474 and entitled “George Philip P. Palileo and
Jose Dela Cruz, Plaintiffs, versus, Planters Development Bank, Engr. Edgardo R. Torcende, Arturo R. delos Reyes, Benjamin
N. Tria, Mao Tividad and Emmanuel Tesalonia, Defendants,” it was held thus: chanRoblesvi rt ual Lawlib rary
Before this Court is a complaint for specific performance and/or sum of money and damages with prayer for the issuance of
writs of preliminary attachment and preliminary injunction filed by Plaintiff George Philip Palileo and Jose L. Dela Cruz against
Engr. Edgardo R. Torcende, Planters Development Bank (defendant Bank), Arturo R. Delos Reyes, Benjamin N. Tria, Mao
Tividad, and Emmanuel Tesalonia on 22 December 1998.
After summons together with the verified Complaint and its annexes were duly served upon defendants, the latter answered.
During Pre-Trial conference defendant Bank manifested [its] intention of settling the case amicably and several attempts to
explore the said settlement [were] made as per records of this case. In the last pre-trial hearing dated 17 November 2000,
only plaintiffs[,] George Philip Palileo and Jose L. Dela Cruz[,] and their counsel appeared, thus, the latter move [sic] for the
presentation of evidence ex-parte, which was granted by the Court with the reservation of verifying the return card [to
determine] whether the order for the pre-trial was indeed received by defendants. Finally, [at the] 21 November 2001
hearing, x x x defendants [again] failed to appear and their failure to file pre-trial brief was noted; thus [plaintiffs were]
allowed to present evidence ex-parte before the Clerk of Court.
xxxx
IN LIGHT OF THE FOREGOING, defendants are hereby ORDERED to jointly and severally PAY plaintiffs as follows: chanRoble svirtual Lawlib ra ry
i) Actual Damages;
a) Plaintiff George Philip Palileo[,] the amount of Two Million Six Hundred Five Thousand Nine [sic] Seventy Two Pesos and
Ninety Two Centavos (P2,605,972.92), with 12% compounded interest [per annum] reckoned from the filing of this case
until full settlement thereof;
b) Plaintiff Jose R. Dela Cruz[,] the amount of One Million Five Hundred Twenty Nine Thousand Five Hundred Eight Thousand
[sic] and Eighty Centavos (P1,529,508.80), with 12% compounded interest [per annum] reckoned from the filing of this case
until full settlement thereof;
ii) Moral damages in the amount of Five Hundred Thousand Pesos (P500,000.00) each;
iii) Exemplary Damages in the amount of Five Hundred Thousand Pesos (P500,000.00) each;
iv) Attorney’s Fees in the amount of Five Hundred Thousand [Pesos] (P500,000.00) each x x x and to pay the costs.
Respondent Planters Development Bank (PDB) received a copy of the RTC Decision on July 17, 2006.
On July 31, 2006, PDB filed by private courier service – specifically LBC6 – an Omnibus Motion for Reconsideration and for
New Trial,7 arguing therein that the trial court’s Decision was based on speculation and inadmissible and self-serving pieces
of evidence; that it was declared in default after its counsel failed to attend the pre-trial conference on account of the
distance involved and difficulty in booking a flight to General Santos City; that it had adequate and sufficient defenses to the
petitioners’ claims; that petitioners’ claims are only against its co-defendant, Engr. Edgardo R. Torcende [Torcende]; that the
award of damages and attorney’s fees had no basis; and that in the interest of justice, it should be given the opportunity to
cross-examine the petitioners’ witnesses, and thereafter present its evidence.
Petitioners’ copy of the Omnibus Motion for Reconsideration and for New Trial was likewise sent on July 31, 2006 by courier
service through LBC, but in their address of record – Tupi, South Cotabato – there was no LBC service at the time.
On August 2, 2006, PDB filed with the RTC another copy of the Omnibus Motion for Reconsideration and for New Trial via
registered mail; another copy thereof was simultaneously sent to petitioners by registered mail as well.
Meanwhile, petitioners moved for the execution of the Decision pending appeal.
In an August 30, 2006 Order,8 the RTC denied the Omnibus Motion for Reconsideration and for New Trial, while it granted
petitioners’ motion for execution pending appeal, which it treated as a motion for the execution of a final and executory
judgment. The trial court held, as follows:
chanRob lesvi rtua lLawl ibra ry
Anent the first motion, records show that the Omnibus Motion for Reconsideration and for New Trial dated 28 July 2006 was
initially filed via an LBC courier on 28 July 2006 and was actually received by the Court on 31 July 2006, which was followed
by filing of the same motion thru registered mail on 2 August 2006. Said motion was set for hearing by the movant on 18
August 2006 or 16 days after its filing.
The motion fails to impress. Section 5, Rule 159 of the 1997 Rules of Civil Procedure as amended is pertinent thus: chanro blesvi rt uallawl ibra ry
Section 5. Notice of hearing. – The notice of hearing shall be addressed to all parties concerned, and shall specify the time
and date of the hearingwhich must not be later than ten (10) days after the filing of the motion. (Underscoring and italics
supplied)
The aforesaid provision requires [that] every motion shall be addressed to all parties concerned, and shall specify the time
and date of the hearing NOT later than ten (10) days after the filing of the motion. Being a litigated motion, the aforesaid
rule should have been complied [with]. Its noncompliance renders it defective.
[The] Rule is settled that a motion in violation thereof is pro forma and a mere scrap of paper. It presents no question which
the court could decide [upon]. In fact, the court has NO reason to consider it[;] neither [does] the clerk of court [have] the
right to receive the same. Palpably, the motion is nothing but an empty formality deserving no judicial cognizance. Hence,
the motion deserves a short shrift and peremptory denial for being procedurally defective.
As such, it does not toll the running of the reglementary period thus making the assailed decision final and executory. This
supervening situation renders the Motion for Execution pending appeal academic but at the same time it operates and could
serve [as] well as a motion for execution of the subject final and executory decision. Corollarily, it now becomes the
ministerial duty of this Court to issue a writ of execution thereon.
IN LIGHT OF THE FOREGOING, the Omnibus Motion for Reconsideration and New Trial is hereby DENIED, and the Motion for
Execution Pending Appeal (which is treated as a motion for execution of a final and executory judgment) is also GRANTED as
explained above. Accordingly, let A WRIT OF EXECUTION be issued against herein defendants to enforce the FINAL and
EXECUTORY Decision dated 15 June 2006.
SO ORDERED.10
PDB received a copy of the above August 30, 2006 Order on September 14, 2006.11 cralawlaw lib rary
On August 31, 2006, a Writ of Execution12 was issued. PDB filed an Urgent Motion to Quash Writ of Execution,13 arguing that
it was prematurely issued as the June 15, 2006 Decision was not yet final and executory; that its counsel has not received a
copy of the writ; and that no entry of judgment has been made with respect to the trial court’s Decision. Later on, it filed a
Supplemental Motion to Quash Writ of Execution,14 claiming that the writ was addressed to its General Santos branch, which
had no authority to accept the writ.
On September 7, 2006, PDB filed a Notice of Appeal.15 cra lawlawlib rary
In an October 6, 2006 Order,16 the RTC denied the motion to quash the writ of execution.
On October 9, 2006, the RTC issued a second Writ of Execution.17 cralawlaw lib rary
On October 11, 2006, PDB filed with the CA an original Petition for Certiorari, which was later amended,18 assailing 1) the
trial court’s August 30, 2006 Order – which denied the omnibus motion for reconsideration of the RTC Decision and for new
trial; 2) its October 6, 2006 Order – which denied the motion to quash the writ of execution; and 3) the August 31, 2006 and
October 9, 2006 writs of execution.
On May 31, 2007, the CA issued a Decision19 dismissing PDB’s Petition for lack of merit. It sustained the trial court’s
pronouncement, that by setting the hearing of the Omnibus Motion for Reconsideration and for New Trial on August 18, 2006
– or 16 days after its filing on August 2, 2006 – PDB violated Section 5, Rule 15 of the Rules of Court which categorically
requires that the notice of hearing shall specify the time and date of the hearing which must not be later than 10 days after
the filing of the motion. Citing this Court’s ruling in Bacelonia v. Court of Appeals,20 the CA declared that the 10-day period
prescribed in Section 5 is mandatory, and a motion that fails to comply therewith is pro forma and presents no question
which merits the attention and consideration of the court.
The appellate court further characterized PDB’s actions as indicative of a deliberate attempt to delay the proceedings, noting
that it did not timely move to reconsider the trial court’s November 17, 2000 ruling21allowing petitioners to present their
evidence ex parte, nor did it move to be allowed to present evidence in support of its defense. It was only after the RTC
rendered its June 15, 2006 Decision that PDB moved to be allowed to cross-examine petitioners’ witnesses and to present its
evidence on defense.
The CA likewise held that the RTC did not err in ruling that the omnibus motion for reconsideration did not toll the running of
the prescriptive period, which thus rendered the June 15, 2006 Decision final and executory. It noted as well that PDB’s
September 7, 2006 notice of appeal was tardy.
The CA found no irregularity with respect to the writs of execution, which contained the fallo of the June 15, 2006 Decision of
the RTC – thus itemizing the amount of the judgment obligation. Additionally, it held that the fact that the judgment debtors
are held solidarily liable does not require that the writs should be served upon all of the defendants; that it is not true that
the sheriffs failed to make a demand for the satisfaction of judgment upon PDB, as the mere presentation of the writ to it
operated as a demand to pay; and that PDB failed to attach the Sheriff’s Return to its Petition, which thus prevents the
appellate court from resolving its claim that the writs were not validly served.
PDB filed a Motion for Reconsideration,22 arguing that Rule 15, Section 5 of the Rules of Court should be relaxed in view of
the fact that judgment against it was based on a technicality – and not on a trial on the merits; that there was no deliberate
intention on its part to delay the proceedings; that the court acted with partiality in declaring that the Omnibus Motion for
Reconsideration and for New Trial was pro forma; that its notice of appeal was timely; and that the writs of execution are null
and void.
On July 28, 2009, the CA made a complete turnaround and issued the assailed Amended Decision, which decreed thus: chanRoblesvi rt ualLaw lib rary
WHEREFORE, the motion for reconsideration is GRANTED. This Court’s May 31, 2007 Decision is SET ASIDE and a new one is
rendered GRANTING the petition for certiorari. The trial court’s Order dated August 30, 2006 is SET ASIDE and the Writ of
Execution issued by the trial court is QUASHED. The trial court is ORDERED to hear and rule on the merits of petitioner’s
“Omnibus Motion for Reconsideration and New Trial.”
SO ORDERED.23
The CA reversed its original finding that the Omnibus Motion for Reconsideration and for New Trial was pro forma. This time,
it held just the opposite, ruling that PDB’s “tacit argument” that the “distances involved in the case at bench call for a
relaxation of the application of Section 5, Rule 15 of the Rules of Court” deserved consideration. It held that Section 5 should
be read together with Section 424 of the same Rule, thus: chanRoble svirtual Lawli bra ry
When a pleading is filed and served personally, there is no question that the requirements in Sections 4 and 5 of Rule 15 of
the Revised Rules of Civil Procedure pose no problem to the party pleading. Under this mode of service and filing of
pleadings, the party pleading is able to ensure receipt by the other party of his pleading at least three days prior to the date
of hearing while at the same time setting the hearing on a date not later than ten days from the filing of the pleading.
When, as in the case at bench, the address of the trial court as well as that of the opposing counsel is too distant from the
office of the counsel of the party pleading to personally effect the filing and service of the pleading, the latter counsel faces a
real predicament. In a perfect world with the best postal service possible, it would be problematic enough to ensure that both
requisites are fully met: that opposing counsel receives the pleading at least three days before the date of hearing and that
the date of hearing is no more than ten days after the filing (mailing) of the pleading. But, as a matter of fact, given the
state of the postal service today – a matter the Court takes judicial notice of – the party pleading often finds himself [locked]
between the horns of a dilemma.
The case at bench presents the Court with the novel issue of whether the same rigid application of the cited Sections-and-
Rule is warranted when the filing and service of pleadings is by mail. The Court is of the opinion that when confronted
between [sic] the demands of sufficient notice and due process on the one hand and the requirement that the date of
hearing be set no later than ten days from filing, the stringent application of the Rules is not warranted and a liberal posture
is more in keeping with Section 6, Rule 1 of the 1997 Rules of Civil Procedure which provides: c hanRoble svirtual Lawli bra ry
SECTION 6. Construction. - These Rules shall be liberally construed in order to promote their objective of securing a just,
speedy, and inexpensive disposition of every action and proceeding.25
The CA further sustained PDB’s argument that since judgment against it was arrived at by mere default or technicality, it is
correspondingly entitled to a relaxation of the Rules, in line with the principles of substantial justice. It likewise held that PDB
counsel’s act of setting the hearing of the Omnibus Motion for Reconsideration and for New Trial 16 days after its filing was
an excusable lapse; that no scheme to delay the case is evident from PDB’s actions; that more telling is the trial court’s
“blurring in cavalier fashion” the distinction between Sections 1 and 2 of Rule 39 of the Rules of Court,26 as well as its
unequal treatment of the parties from its strict application of Section 5, Rule 15 against respondent, while it bent backward
to accommodate petitioners by converting the latter’s motion for execution pending appeal into a motion for execution of a
final and executory judgment.
Lastly, the appellate court concluded that the trial court committed grave abuse of discretion, which thus warrants the grant
of PDB’s Petition for Certiorari.
Petitioners filed their Urgent Motion for Reconsideration,27 which the CA denied through its assailed August 23, 2010
Resolution. Hence, the instant Petition.
Issues
Petitioners frame the issues involved in this Petition, as follows: c hanRoblesv irtual Lawlib rary
Being assailed herein is the refusal of the Court of Appeals, which is a patent error, for not giving credence to petitioners-
appellants’ arguments that the respondent-appellees’ special civil action for certiorari before it is clearly devoid of merit as (i)
the Decision dated June 15, 2006 of the RTC, Branch 37, General Santos City had become final and executory before the
special civil action for Certiorari was filed before it which should have been dismissed outright, and which issue of “finality”
was never ruled upon, (ii) granting arguendo that a certiorari proceeding could still be had, the same should be filed under
Rule 45 instead of Rule 65 of the 1997 Rules of Civil Procedure, (iii) the alleged attendant abuse of discretion on the part of
the public respondent judges, even granting arguendo that it exist [sic], were [sic] not grave but on the contrary were purely
errors of judgment and, (iv) the substantial and glaring defects of the petition in the special civil action for certiorari before
the Court of Appeals were consistently and clearly called to its attention but were unjustifiably ignored by it.28 cha nro bleslaw
In their Petition and Reply,29 petitioners seek to reverse the assailed CA dispositions and to reinstate the appellate court’s
original May 31, 2007 Decision, arguing that the trial court’s June 15, 2006 Decision became final and executory on account
of PDB’s failure to timely file its Omnibus Motion for Reconsideration and for New Trial, as it properly filed the same only on
August 2, 2006 – or beyond the 15-day period allowed by the Rules of Court.
Petitioners argue that PDB’s filing of its Omnibus Motion for Reconsideration and for New Trial on July 31, 2006 by courier
service through LBC was improper, since there was no LBC courier service in Tupi, South Cotabato at the time; naturally,
they did not receive a copy of the omnibus motion. This is precisely the reason why PDB re-filed its omnibus motion on
August 2, 2006 through registered mail, that is, to cure the defective service by courier; but by then, the 15-day period
within which to move for reconsideration or new trial, or to file a notice of appeal, had already expired, as the last day
thereof fell on August 1, 2006 – counting from PDB’s receipt of the trial court’s Decision on July 17, 2006.
Petitioners add that PDB’s notice of appeal – which was filed only on September 7, 2006 – was tardy as well; that PDB’s
resort to an original Petition for Certiorari to assail the trial court’s August 30, 2006 Order denying the Omnibus Motion for
Reconsideration and for New Trial was improper, for as provided under Section 9, Rule 37 of the Rules of Court,30 an order
denying a motion for new trial or reconsideration is not appealable, the remedy being an appeal from the judgment or final
order; that certiorari was resorted to only to revive PDB’s appeal, which was already lost; and that it was merely a face-
saving measure resorted to by PDB to recover from its glaring blunders, as well as to delay the execution of the RTC
Decision. They also assert that certiorari is not an available remedy, since PDB did not file a motion for reconsideration with
respect to the other assailed orders of the trial court.
Petitioners maintain as well that the CA erred in relaxing the application of the Rules of Court as to PDB, a banking institution
with adequate resources to engage counsel within General Santos City and not relegate Civil Case No. 6474 to its Manila
lawyers who are thus constrained by the distance involved.
Seeking the denial of the Petition, PDB in its Comment31 maintains that the CA did not err in declaring that its Omnibus
Motion for Reconsideration and for New Trial was not pro forma; that there are justifiable grounds to move for
reconsideration and/or new trial; that it had no intention to delay the proceedings; that it was correct for the appellate court
to relax the application of Section 5, Rule 15; and that the CA is correct in finding that the trial court committed grave abuse
of discretion in misapplying the Rules and in exhibiting partiality.
Our Ruling
The proceedings in the instant case would have been greatly abbreviated if the court a quo and the CA did not overlook the
fact that PDB’s Omnibus Motion for Reconsideration and for New Trial was filed one day too late. The bank received a copy of
the trial court’s June 15, 2006 Decision on July 17, 2006; thus, it had 15 days – or up to August 1, 2006 – within which to
file a notice of appeal, motion for reconsideration, or a motion for new trial, pursuant to the Rules of Court.32 Yet, it filed the
omnibus motion for reconsideration and new trial only on August 2, 2006.
Indeed, its filing or service of a copy thereof to petitioners by courier service cannot be trivialized. Service and filing of
pleadings by courier service is a mode not provided in the Rules.33 This is not to mention that PDB sent a copy of its omnibus
motion to an address or area which was not covered by LBC courier service at the time. Realizing its mistake, PDB re-filed
and re-sent the omnibus motion by registered mail, which is the proper mode of service under the circumstances. By then,
however, the 15-day period had expired.
PDB’s Notice of Appeal, which was filed only on September 7, 2006, was tardy; it had only up to August 1, 2006 within which
to file the same. The trial court therefore acted regularly in denying PDB’s notice of appeal.
Since PDB’s Omnibus Motion for Reconsideration and for New Trial was filed late and the 15-day period within which to
appeal expired without PDB filing the requisite notice of appeal, it follows that its right to appeal has been foreclosed; it may
no longer question the trial court’s Decision in any other manner. “Settled is the rule that a party is barred from assailing the
correctness of a judgment not appealed from by him.”34 The “presumption that a party who did not interject an appeal is
satisfied with the adjudication made by the lower court”35 applies to it. There being no appeal taken by PDB from the adverse
judgment of the trial court, its Decision has become final and can no longer be reviewed, much less reversed, by this Court.
“Finality of a judgment or order becomes a fact upon the lapse of the reglementary period to appeal if no appeal is perfected,
and is conclusive as to the issues actually determined and to every matter which the parties might have litigated and have x
x x decided as incident to or essentially connected with the subject matter of the litigation, and every matter coming within
the legitimate purview of the original action both in respect to matters of claim and of defense.”36 And “[i]n this jurisdiction,
the rule is that when a judgment becomes final and executory, it is the ministerial duty of the court to issue a writ of
execution to enforce the judgment;”37 “execution will issue as a matter of right x x x (a) when the judgment has become
final and executory; (b) when the judgment debtor has renounced or waived his right of appeal; [or] (c) when the period for
appeal has lapsed without an appeal having been filed x x x.”38 cralawlawlib rary
Neither can the Court lend a helping hand to extricate PDB from the effects of its mistake; indeed, PDB erred more than once
during the course of the proceedings. For one, it did not attempt to set right its failure to appear during pre-trial, which
prompted the court to allow petitioners to present evidence ex parte and obtain a favorable default judgment. Second,
assuming for the sake of argument that it timely filed its Omnibus Motion for Reconsideration and for New Trial, it
nonetheless violated the ten-day requirement on the notice of hearing under Section 5 of Rule 15. Third, even before it could
be notified of the trial court’s resolution of its omnibus motion on September 14, 2006 – assuming it was timely filed, it filed
a notice of appeal on September 7, 2006 – which thus implies that it abandoned its bid for reconsideration and new trial, and
instead opted to have the issues resolved by the CA through the remedy of appeal. If so, then there is no Omnibus Motion
for Reconsideration and for New Trial that the trial court must rule upon; its August 30, 2006 Order thus became moot and
academic and irrelevant. “[W]here [an action] or issue has become moot and academic, there is no justiciable controversy,
so that a declaration thereon would be of no practical use or value.”39 cralawlawli bra ry
Fourth, instead of properly pursuing its appeal to free itself from the unfavorable effects of the trial court’s denial of its notice
of appeal, PDB chose with disastrous results to gamble on its Omnibus Motion for Reconsideration and for New Trial by filing
an original Petition for Certiorari to assail the trial court’s denial thereof. Time and again, it has been said that certiorari is
not a substitute for a lost appeal, especially if one’s own negligence or error in one’s choice of remedy occasioned such
loss.40
cralaw lawlib rary
What remains relevant for this Court to resolve, then, is the issue relative to the trial court’s October 6, 2006 Order – which
denied the motion to quash the writ of execution – and the August 31, 2006 and October 9, 2006 writs of execution. The
Court observes that the October 6, 2006 Order and the August 31, 2006 and October 9, 2006 writs of execution were set
aside and quashed merely as a necessary consequence of the CA’s directive in the Amended Decision for the trial court to
hear and rule on the merits of PDB’s Omnibus Motion for Reconsideration and for New Trial. Other than this singular reason,
the CA would have sustained them, and this is clear from a reading of both its original May 31, 2007 Decision and its
subsequent Amended Decision. Now, since the Court has herein declared that PDB’s omnibus motion may not be considered
for being tardy and for having been superseded by the bank’s filing of a notice of appeal, then the CA’s original
pronouncement regarding the October 6, 2006 Order and the August 31, 2006 and October 9, 2006 writs of execution should
necessarily be reinstated as well.
In light of the above conclusions, the Court finds no need to further discuss the other issues raised by the parties. They are
rendered irrelevant by the above pronouncements.
WHEREFORE, the Petition is GRANTED. The assailed July 28, 2009 Amended Decision and August 23, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 01317-MIN are REVERSED and SET ASIDE. The Regional Trial Court of General
Santos City, Branch 37 is ORDERED to proceed with the execution of its June 15, 2006 Decision in Civil Case No. 6474.
SO ORDERED
ECOND DIVISION
G.R. No. 193426 September 29, 2014
SUBIC BAY LEGEND RESORTS AND CASINOS, INC., Petitioner,

vs.
BERNARD C. FERNANDEZ, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 27, 2010 Decision2 and August 24, 2010 Resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 91758, entitled "Bernard C. Fernandez, Plaintiff-Appellee, versus Subic
Bay Legend Resorts and Casinos, Inc., Defendant-Appellant," which affirmed in toto the May 17, 2006 Decision4 of
the Regional Trial Court (RTC) of Olongapo City, Branch 74, in Civil Case No. 237-0-97.
Factual Antecedents
Petitioner Subic Bay Legend Resorts ¥d Casinos, Inc., a duly organized and e)(isting corporation operating under
Philippine laws, operates the Legenda Hotel and Casino (Legenda) located in the Subic Bay Freeport Zone in
Zambales. On the other hand, respondent Bernard C. Fernandez is the plaintiff in Civil Case No. 237-0-97
prosecuted against petitioner in Olongapo RTC.
As determined by the CA, the facts of the case are as follows:
At around eleven o'clock in the evening of 6 June 1997, the appellee's5 brother[,] Ludwin Fernandez[,] visited the
Legenda Hotel and Casino x x x owned and operated by the appellant6 and located along the Waterfront Road,
Subic Bay Freep011 Zone. Legenda had strategically installed several closedcircuit television (CCTV) cameras as
part of security measures required by its business. The monitors revealed that Ludwin changed x x x $5,000.00
w011h of chips into smaller denominations. Legenda admitted in its brief that its surveillance staff paid close
attention to Ludwin simply because it was "wmsual" for a Filipino to play using dollar-denominated chips. After
Ludwin won $200.00 in a game of baccarat, he redeemed the value of chips worth $7,200.00. A review of the CCTV
recordings showed that the incident was not the first time Ludwin visited the Casino, as he had also been there on 5
June 1997.
An operation was launched by Legenda to zero-in on Ludwin whose picture was furnished its security section. Thus,
unbeknownst to him, he was already closely watched on 13 June 1997 when he went with another brother,
Deoven[,] to the casino at around the same time or at 11: 17 p.m. After playing (and losing $100.00) only one round
of baccarat, the siblings had their chips encashed at two separate windows. Since the cashiers were apprised of a
supposed irregularity, they "froze" the transaction.
Shortly thereafter, Legenda's internal security officers accosted Ludwin and Deoven and ordered them to return the
cash and they complied without ado because they were being pulled away. The two were eventually escorted to
private rooms where they were separately interrogated about the source of the chips they brought. They were held
for about seven hours w1til the wee hours of the morning, without food or sleep. The ultimaturn was simple: they
confess that the chips were given by a certain employee, Michael Cabrera, or they would not be released from
questioning. The same line of questioning confronted them when they were later twned-over for blotter preparation
to the Intelligence and Investigation Office of the Subic Bay Metropolitan Authority (IIO SBMA). Finally, the brothers
succwnbed to Legenda's instruction to execute a joint statement implicating Cabrera as the illegal source of the
chips. Due to hunger pangs and fatigue, they did not disown the statement even when they subscribed the same
before the prosecutor in whose office they were [later] brought. On the other hand, they signed for basically the
san1e reason a document purporting to show that they were "released to [their] brother's custody in good condition."
At the time, Deoven was about 21 years old, in his second year of engineering studies and was not familiar with the
so-called "estafa" with which the security personnel threatened to sue him for; although he was quite aware of the
consequences of a crime such as direct assault because he had previously been convicted thereof. About two
weeks later, Deoven exec ted a retraction in Baguio City where he took up his engineering course.7
On July 1, 1997, respondent filed Civil Case No. 237-0-97 for recovery of sum of money with damages against
petitioner, on the premise that on June 13, 1997, he went to Legenda with his brothers Ludwin and Deoven; that he
handed over Legenda casino chips worth US$6,000.00, which belonged to him, to his brothers for the latter to use
at the casino; that petitioner accosted his brothers and unduly and illegally confiscated his casino chips equivalent to
US$5,900.00; and that petitioner refused and continues to refuse to return the same to him despite demand. His
Complaint8 prayed for the return of the casino chips and an award of ₱50,000.00 moral damages, ₱50,000.00
exemplary damages, ₱30,000.00 attorney's fees, ₱20,000.00 litigation expenses, and costs.
Petitioner's Answer with Compulsory Counterclaim9 essentially alleged that right after Ludwin and Deoven's
transactions with the Legenda cashier were frozen on June 13, 1997, they voluntarily agreed to proceed to the
Legenda security office upon invitation, where Ludwin voluntarily informed security officers that it was a certain
Michael Cabrera (Cabrera) - a Legenda table inspector at the time - who gave him the casino chips for encashment,
taught him how to play baccarat and thereafter encash the chips, and rewarded him with Pl,000.00 for every
$1,000.00 he encashed; that Ludwin pointed to a picture of Cabrera in a photo album of casino employees shown to
him; that Ludwin and Deoven were then brought to the IIO SBMA, where they reiterated their statements made at
the Legenda security office; that they volunteered to testify against Cabrera; that respondent himself admitted that it
was Cabrera who gave him the casino chips; that Ludwin and Deoven voluntarily executed a joint affidavit before
the Olongapo City Prosecutor's Office, which they subsequently recanted; that respondent had no cause of action
since the confiscated casino chips worth US$5,900.00 were stolen from it, and thus it has the right to retain them.
By way of counterclaim, petitioner sought an award of P 1 million moral damages, ₱1 million exemplary damages,
and P.5 million attorney's fees and litigation expenses.
Respondent filed his Answer10 to petitioner's counterclaim.
After pre-trial and trial, the trial court rendered its May 17, 2006 Decision, which decreed as follows:
WHEREFORE, finding that the evidence preponderates in favor of the plaintiff, judgment is rendered against the
defendant ordering it to:
1) Return to plaintiff casino chips worth USD $5,900.00 or its equivalent in Philippine Peso at the rate of ₱38.00 to
USD $1 in 1997.
2) Pay plaintiff attorney's fees in the amount of ₱30,000.00 3) [Pay] [c]ost of this suit.
SO DECIDED.11
In arriving at the above conclusion, the trial court held:
The primordial issue is whether or not plaintiff can be considered the lawful owner of the USD $5,900 worth of
casino chips that were confiscated.
There is no dispute that the subject chips were in the possession of the plaintiff. He claims he got hold of them as
payment for car services he rendered to a Chinese individual. Defendant however, contends that said chips were
stolen from the casino and it is the lawful owner of the same.
The onus fell on defendant to prove that the casino chips were stolen. The proof adduced however, is wanting. The
statements of Deoven and Ludwin C. Fernandez, confessing to the source of the chips were recanted hence, have
little probative value. The testimony of defendant's witnesses narrated defendant's action responding to the
suspicious movements of the Fernandez brothers based on surveillance tapes. The tapes, however, do not show
how these persons got hold of the chips. The alleged source in the person of Mike Cabrera, a table inspector of the
casino[,] was based on the recanted declarations of the brothers. No criminal charge was shown to have been filed
against him nor the plaintiff and his brothers. Neither was there an explanation given as to how those chips came
into the possession of Mike Cabrera much less that he passed them on to the brothers for the purpose of encashing
and dividing the proceeds amongst themselves. All told therefore, there is no direct evidence to prove the theory of
the defendant and the circumstantial evidence present is, to the mind of the court, not sufficient to rebut the legal
presw11ption that a person in possession of personal property is the lawful owner of the same (Art. 559, Civil Code
of the Philippines).12
Petitioner appealed the May 1 7, 2006 Decision of the trial court, arguing that Ludwin and Deoven's admission in
their joint affidavit before the Olongapo City Prosecutor's Office that it was Cabrera who gave them the casino chips
strongly indicates that the chips were stolen from Legenda; that the subsequent recantation by Ludwin and Deoven
of their joint affidavit should be looked upon with disfavor, given that recanted testimony is unreliable and
recantations can be easily secured from poor and ignorant witnesses and for monetary consideration or through
intimidation; that respondent's explanation that he gave the chips to his brothers Ludwin and Deoven for them to
play in the casino is highly doubtful; that the true purpose of Ludwin and Deoven was to encash the stolen chips;
that no force or intimidation attended the treatment accorded Ludwin and Deoven when they were accosted and
asked to explain their possession of the chips; and that the trial court erred in awarding attorney's fees and costs for
the filing of a baseless suit solely aimed at unjustly enriching respondent at petitioner's expense.
On April 27, 2010, the CA issued the assailed Decision which affirmed the trial court's May 17, 2006 Decision.
Petitioner's Motion for Reconsideration was rebuffed as well.
In deciding against petitioner, the CA held that, applying Article 559 of the Civil Code,13 respondent had the legal
presumption of title to or ownership of the casino chips. This conclusion springs from respondent's admission during
trial that the chips represented payment by a Chinese customer for services he rendered to the latter in his car shop.
The CA added that since respondent became the owner of the chips, he could very well have given them to Ludwin
and Deoven, who likewise held them as "possessors in good faith and for value" and with "presumptive title" derived
from the respondent. On the other hand, petitioner failed to convincingly show that the chips were stolen; for one, it
did not even file a criminal case against the supposed mastermind, Cabrera - nor did it charge Ludwin or Deoven -
for the alleged theft or taking of its chips.
The CA likewise held that Ludwin' s and Deoven' s statements and admissions at the Legenda security office are
inadmissible because they were obtained in violation of their constitutional rights: they were held in duress, denied
the right to counsel and the opportunity to contact respondent, and deprived of sleep, which is one of the "more
subtler [sic] techniques of physical and psychological torture to coerce a confession."14 It found that the actions and
methods of the Legenda security personnel in detaining and extracting confessions from Ludwin and Deoven were
illegal and in gross violation of Ludwin's and Deoven's constitutional rights.15
Finally, the CA held that petitioner was guilty of bad faith in advancing its theory and claim against respondent by
unduly accusing him of dealing in stolen casino chips, which thus entitles respondent to the reduced award of
attorney's fees in the amount of ₱30,000.00
Issues
a) The Honorable Court seriously erred in ruling that the recanted statements of Deoven Fernandez and Ludwin C.
Fernandez have [no] probative value;
b) The Honorable Court seriously erred in ruling that the circumstantial evidence present is not sufficient to rebut the
legal presumption that a person in possession of personal property is the lawful owner of the same;
c) The Honorable Court seriously erred in finding that the evidence preponderates in favor of the herein respondent;
[and]
d) The Honorable Court seriously erred in awarding attorney's fees and costs of suit I favor of the respondent.16
In its Petition and Reply,17 petitioner mainly argues that the assailed dispositions are grounded entirely on
speculation, and the inferences made are manifestly mistaken and based on a misappreciation of the facts and law;
that the CA failed to consider the testimonial and documentary evidence it presented to prove the fact that the
casino chips were missing and were stolen by Cabrera, who thereafter gave them to respondent's brothers, Ludwin
and Deoven. Petitioner maintains that the presumption of title under Article 559 cannot extend to respondent's
brothers, who admitted during the investigation at the Legenda security office and in their Joint Affidavit18 that the
chips came from Cabrera, and not responcient; that the subsequent Sworn Statement19 recanting the Joint Affidavit
should not be given credence, as affidavits of recantation can easily be secured - which thus makes them unreliable;
and that no duress attended the taking of the brothers' Joint Affidavit, which was prepared by Henry Marzo of the
Intelligence and Investigation Office (IIO) of the Subic Bay Metropolitan Authority (SBMA).
Petitioner asserts that it is unbelievable that respondent would give US$6,000.00 worth of casino chips to his
brothers with which to play at the casino; that with the attending circumstances, the true intention of respondent's
brothers was to encash the stolen chips which Cabrera handed to them, and not to play at the casino. Petitioner
thus concludes that no coercion could have attended the investigation of Ludwin and Deoven; that their subsequent
recantation should not be given weight; and that for suing on a baseless claim, respondent is not entitled to
attorney's fees and costs of litigation.
Petitioner thus prays for the reversal of the assailed dispositions and the corresponding dismissal of Civil Case No.
237-0-97.
In his Comment,20 respondent generally echoes the pronouncement of the CA. He likewise notes that petitioner has
raised only questions of fact; that the Petition is being prosecuted to delay the proceedings; that the trial and
appellate courts are correct in finding that petitioner failed to prove its case and show that the casino chips were
stolen; that petitioner failed to rebut the presumption that a person in possession of personal property is the lawful
owner of the same, pursuant to Article 559 of the Civil Code; and that the ₱30,000.00 award of attorney's fees
should be increased to ₱100,000.00.
Our Ruling
The Petition is denied.
Petitioner's underlying theory is that the subject casino chips were in fact stolen by its employee Cabrera, then
handed over to respondent's brothers, Ludwin and Deoven, for encashment at the casino; that Ludwin and Deoven
played at the casino only for show and to conceal their true intention, which is to encash the chips; that respondent's
claim that he owned the chips, as they were given to him in payment of services he rendered to a Chinese client, is
false. These arguments require the Court to examine in greater detail the facts involved. However, this may not be
done because the Court is not a trier of facts and does not normally undertake the re-examination of the evidence
presented during trial; the resolution of factual issues is the function of lower courts, whose findings thereon are
received with respect and are binding on the Court subject only to specific exceptions.21 In tum, the factual findings
of the Court of Appeals carry even more weight when they are identical to those of the trial court's.22
Besides, a question of fact cannot properly be raised in a petition for review on certiorari.23 Moreover, if petitioner
should stick to its theory that Cabrera stole the subject casino chips, then its failure to file a criminal case against the
latter -including Ludwin and Deoven for that matter - up to this point certainly does not help to convince the Court of
its position, especially considering that the supposed stolen chips represent a fairly large amount of money. Indeed,
for purposes of this proceeding, there appears to be no evidence on record - other than mere allegations and
suppositions - that Cabrera stole the casino chips in question; such conclusion came unilaterally from petitioner, and
for it to use the same as foundation to the claim that Ludwin, Deoven and respondent are dealing in stolen chips is
clearly irregular and unfair.
Thus, there should be no basis to suppose that the casino chips found in Ludwin's and Deoven's possession were
stolen; petitioner acted arbitrarily in confiscating the same without basis. Their Joint Affidavit - which was later
recanted - does not even bear such fact; it merely states that the chips came from Cabrera. If it cannot be proved, in
the first place, that Cabrera stole these chips, then there is no more reason to suppose that Ludwin and Deoven
were dealing in or possessed stolen goods; unless the independent fact that Cabrera stole the chips can be proved,
it cannot be said that they must be confiscated when found to be in Ludwin's and Deoven's possession.
It is not even necessary to resolve whether Ludwin's and Deoven's Joint Affidavit was obtained by duress or
otherwise; the document is irrelevant to petitioner's cause, as it does not suggest at all that Cabrera stole the
subject casino chips. At most, it only shows that Cabrera gave Ludwin and Deoven casino chips, if this fact is true at
all - since such statement has since been recanted.
The fact that Ludwin and Deoven appear to be indecisive as to who gave them the casino chips does not help
petitioner at all. It cannot lead to the conclusion that Cabrera stole the chips and then gave them to the two; as
1âwphi1
earlier stated, petitioner had to prove this fact apart from Ludwin's and Deoven's claims, no matter how incredible
they may seem.
Though casino chips do not constitute legal tender,24 there is no law which prohibits their use or trade outside of the
casino which issues them. In any case, it is not unusual – nor is it unlikely – that respondent could be paid by his
Chinese client at the former' s car shop with the casino chips in question; said transaction, if not common, is
nonetheless not unlawful. These chips are paid for anyway; petitioner would not have parted with the same if their
corresponding representative equivalent - in legal tender, goodwill, or otherwise – was not received by it in return or
exchange. Given this premise - that casino chips are considered to have been exchanged with their corresponding
representative value - it is with more reason that this Court should require petitioner to prove convincingly and
persuasively that the chips it confiscated from Ludwin and Deoven were indeed stolen from it; if so, any Tom, Dick
or Harry in possession of genuine casino chips is presumed to have paid for their representative value in exchange
therefor. If petitioner cannot prove its loss, then Article 559 cannot apply; the presumption that the chips were
exchanged for value remains.
Finally, the Court sustains the award of attorney's fees. Under Article 2208 of the Civil Code,25 attorney's fees may
be recovered when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly
valid, just and demandable claim, or in any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered. Petitioner's act of arbitrarily confiscating the casino chips and
treating Ludwin and Deoven the way it did, and in refusing to satisfy respondent's claim despite the fact that it had
no basis to withhold the chips, confirm its bad faith, and should entitle respondent to an award.
With the foregoing view of the case, a discussion of the other issues raised is deemed irrelevant and unnecessary.
WHEREFORE, the Petition is DENIED. The assailed April 27, 2010 Decision and August 24, 2010 Resolution of the
Court of Appeals in CA-G.R. CV No. 91758 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 176020 September 29, 2014
HEIRS OF TELESFORO JULAO, namely, ANITA VDA. DE ENRIQUEZ, SONIA J. TOLENTINO and RODERICK
JULAO, Petitioners,
vs.
SPOUSES ALEJANDRO and MORENITA DE JESUS, Respondents.
DECISION
DEL CASTILLO, J.:
Jurisdiction over the subject matter is conferred by law and is determined by the material allegations of the
complaint.1 Thus, it cannot be acquired through, or waived by, any act or omission of the parties;2 nor can it be cured
by their silence, acquiescence, or even express consent.3
This Petition for Review on Certiorari4 under Rule 45 of the Rules of Court assails the Decision5 dated December 4,
2006 of the Court of Appeals (CA) in CA-G.R. CV No. 72845.
Factual Antecedents
Sometime in the 1960's, Telesforo Julao (Telesforo)6 filed before the Department of Environment and Natural
Resources (DENR), Baguio City, two Townsite Sales Applications (TSA), TSA No. V-2132 and TSA No. V-
6667.7Upon his death on June 1, 1971, his applications were transferred to his heirs.8
On April 30, 1979,9 Solito Julao (Solito) executed a Deed of Transfer of Rights,10 transferring his hereditary share in
the property covered by TSA No. V-6667 to respondent spouses Alejandro and Morenita De Jesus. In 1983,
respondent spouses constructed a house on the property they acquired from Solito.11 In 1986, Solito went missing.12
On March 15, 1996, the DENR issued an Order: Rejection and Transfer of Sales Rights,13 to wit:
WHEREFORE, premises considered and it appearing that herein applicant is a holder of two (2) applications in
violation with established policy in the disposition [of] public lands in the City of Baguio, TSA V-6667 is hereby
ordered dropped from the records. Accordingly, it is henceforth ordered that TSA 2132 in the name ofTELESFORO
JULAO be, as [it is] hereby transferred to the heirs of TELESFORO JULAO, represented by ANITA VDA. DE
ENRIQUEZ, and as thus transferred, the same shall continue to be given due course. For convenience of easy
reference, it is directed that the [pertinent] records be consolidated in the name of the latter.
SO ORDERED.14
Consequently, on December 21, 1998, Original Certificate of Title (OCT) No. P-2446,15 covering a 641-square meter
property, was issued in favor of the heirs of Telesforo.16
On March 2, 1999, petitioners Anita Julao vda. De Enriquez, Sonia J. Tolentino and Roderick Julao,17 representing
themselves to be the heirs of Telesforo, filed before the Regional Trial Court (RTC), Baguio City, a Complaint or
Recovery of Possession of Real Property,18 docketed as Civil Case No. 4308-R,19 against respondent spouses.
Petitioners alleged that they are the true and lawful owners of a 641-square meter parcel of land located at
Naguilian Road, Baguio City, covered by OCT No. P-2446;20 that the subject property originated from TSA No. V-
2132;21 that respondent spouses' house encroached on 70 square meters of the subject property;22 that on August 4,
1998, petitioners sent a demand letter to respondent spouses asking them to return the subject property;23 that
respondent spouses refused to accede to the demand, insisting that they acquired the subject property from
petitioners' brother, Solito, by virtue of a Deed of Transfer of Rights;24 that in the Deed of Transfer of Rights, Solito
expressly transferred in favor of respondent spouses his hereditary share in the parcel of land covered by TSA No.
V-6667;25 that TSA No. V-6667 was rejected by the DENR;26 and that respondent spouses have no valid claim over
the subject property because it is covered by a separate application, TSA No. V-2132.27
Respondent spouses filed a Motion to Dismiss28 on the ground of prescription, which the RTC denied for lack of
merit.29 Thus, they filed an Answer30 contending that they are the true and lawful owners and possessors of the
subject property;31 that they acquired the said property from petitioners' brother, Solito;32 and that contrary to the
claim of petitioners, TSA No. V-6667 and TSA No. V-2132 pertain to the same property.33
During the trial, petitioners disputed the validity of the Deed of Transfer of Rights executed by Solito. They
presented evidence to show that Telesforo submitted two applications, TSA No. V-2132 and TSA No. V-6667.34 The
first one, TSA No. V-2132, resulted in the issuance of OCT No. P-2446 in favor of the heirs ofTelesforo, while the
second one, TSA No. V-6667, was dropped from the records.35 They also presented evidence to prove that Solito
had no hereditary share in the estate of Telesforo because Solito was not Telesforo's biological son, but his
stepson, and that Solito 's real name was Francisco Bognot.36
After petitioners rested their case, respondent spouses filed a Motion for Leave of Court to File a Demurrer to
Evidence.37 The RTC, however, denied the Motion.38
The heirs of Solito then moved to intervene and filed an Answer-lnlntervention,39 arguing that their father, Solito, is a
legitimate son ofTelesforo and that Solito sold his hereditary share in the estate of his father to respondent spouses
by virtue of a Deed of Transfer of Rights.40
To refute the evidence presented by petitioners, respondent spouses presented two letters from the DENR: ( 1) a
letter dated April 27, 1999 issued by Amando I. Francisco, the Officer-In-Charge of CENRO-Baguio City, stating that
"it can be concluded that TSA No. V-2132 and TSA No. V-6667 referred to one and the same application covering
one and the same lot;"41 and (2) a letter42 dated September 30, 1998 from the DENR stating that "the land applied for
with assigned number TSA No. V-2132 was renumbered as TSA No. V-6667 as per 2nd Indorsement dated
November 20, 1957 x x x."43 They also presented two affidavits,44 both dated August 31, 1994, executed by
petitioners Sonia Tolentino and Roderick Julao,45 acknowledging that Solito was their co-heir and that he was the
eldest son of Telesforo.46 Ruling of the Regional Trial Court
On August 10, 2001, the RTC rendered a Decision47 in favor of petitioners. The RTC found that although petitioners
1âw phi 1
failed to prove their allegation that Solito was not an heir of Telesforo,48 they were nevertheless able to convincingly
show that Telesforo filed with the DENR two applications, covering two separate parcels of land, and that it was his
first application, TSA No. V-2132, which resulted in the issuance of OCT No. P-2446.49 And since what Solito
transferred to respondent spouses was his hereditary share in the parcel of land covered by TSA No. V-6667,
respondent spouses acquired no right over the subject property, which was derived from a separate application,
TSA No. V-2132.50 Thus, the RTC disposed of the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the [petitioners] and against the
[respondents] who are hereby ordered to restore the possession of the land in question consisting of an area of 70
square meters, more or less, which is a portion of the land covered by [OCT] No. P-2446. The [respondents] are
ordered to remove the house and/or other improvements that they constructed over the said parcel of land and to
vacate the same upon the finality of this decision.
SO ORDERED.51
Aggrieved, respondent spouses elevated the case to the CA.
On December 4, 2006, the CA reversed the ruling of the RTC. The CA found the Complaint dismissible on two
grounds: (1) failure on the part of petitioners to identify the property sought to be recovered; and (2) lack of
jurisdiction. The CA noted that petitioners failed to pinpoint the property sought to be recovered.52 In fact, they did
not present any survey plan to show that respondent spouses actually encroached on petitioners'
property.53Moreover, the CA was not fully convinced that the two applications pertain to two separate parcels of land
since respondent spouses were able to present evidence to refute such allegation.54 The CA likewise pointed out
that the Complaint failed to establish that the RTC had jurisdiction over the case as petitioners failed to allege the
assessed value of the subject property.55 Thus:
WHEREFORE, premises considered, the appeal is GRANTED. The decision appealed from is REVERSED and
SET ASIDE. The complaint is DISMISSED.
SO ORDERED.56
Issues
Hence, petitioners filed the instant Petition for Review on Certiorari, raising the following errors:
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT PETITIONERS FAILED TO PROVE THE
IDENTITY OF THE PROPERTY IN QUESTION.
II
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID NOT ACQUIRE
JURISDICTION OVER THE COMPLAINT.57
At this juncture, it must be mentioned that in the Resolution58 dated March 19, 2007, we required respondent
spouses to file their Comment to the Petition which they failed to comply with. Thus, in the Resolution59 dated March
11, 2013, we dispensed with the filing of respondent spouses' Comment. At the same time, we required petitioners
to manifest whether they are willing to submit the case for resolution based on the pleadings filed. To date,
petitioners have not done so.
Our Ruling
The assessed value must be alleged in the complaint to determine which court has jurisdiction over the action.
Jurisdiction as we have said is conferred by law and is detennined by the allegations in the complaint, which
contains the concise statement of the ultimate facts of a plaintiffs cause of action.60
Section 19(2) and Section 33(3) of Batas Pambansa Big. 129, as amended by Republic Act No. 7691, provide:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the
assessed value of the property involved exceeds twenty thousand pesos (₱20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (₱50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts:
xxxx
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil
Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
x x x x (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or
any interest therein where the assessed value of the property or interest therein does not exceed Twenty Thousand
Pesos (₱20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty Thousand
Pesos (₱50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined
by the assessed value of the adjacent lots.
Based on the foregoing, it is clear that in an action for recovery of possession, the assessed value of the property
sought to be recovered determines the court's jurisdiction.61
In this case, for the RTC to exercise jurisdiction, the assessed value of the subject property must exceed
₱20,000.00. Since petitioners failed to allege in their Complaint the assessed value of the subject property, the CA
correctly dismissed the Complaint as petitioners failed to establish that the RTC had jurisdiction over it. In fact, since
the assessed value of the property was not alleged, it cannot be determined which trial court had original and
exclusive jurisdiction over the case.
Furthermore, contrary to the claim of petitioners, the issue of lack of jurisdiction was raised by respondents in their
Appellant's Brief62 And the fact that it was raised for the first time on appeal is of no moment. Under Section 1,63Rule
9 of the Revised Rules of Court, defenses not pleaded either in a motion to dismiss or in the answer are deemed
waived, except for lack of jurisdiction, litis pendentia, res judicata, and prescription, which must be apparent from the
pleadings or the evidence on record. In other words, the defense of lack of jurisdiction over the subject matter may
be raised at any stage of the proceedings, even for the first time on appeal.64 In fact, the court may motu proprio
dismiss a complaint at any time when it appears from the pleadings or the evidence on record that lack of
jurisdiction exists.65
In an action to recover, the property must be identified
Moreover, Article 434 of the Civil Code states that "[i]n an action to recover, the property must be identified, and the
plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim." The plaintiff,
therefore, is duty-bound to clearly identify the land sought to be recovered, in accordance with the title on which he
anchors his right of ownership.66 It bears stressing that the failure of the plaintiff to establish the identity of the
property claimed is fatal to his case.67
In this case, petitioners failed to identify the property they seek to recover as they failed to describe the location, the
area, as well as the boundaries thereof. In fact, as aptly pointed out by the CA, no survey plan was presented by
petitioners to prove that respondent spouses actually encroached upon the 70-square meter portion of petitioners'
property.68 Failing to prove their allegation, petitioners are not entitled to the relief prayed for in their Complaint.
All told, we find no error on the part of the CA in dismissing the Complaint for lack of jurisdiction and for failing to
identify the property sought to be recovered.
WHEREFORE, the Petition is hereby DENIED. The Decision dated December 4, 2006 of the Court of Appeals in
CA-G.R. CV No. 72845 is hereby AFFIRMED.
SO ORDERED.
A.C. No. 7337 September 29, 2014
ROLANDO VIRAY, Complainant,

vs.
ATTY. EUGENIO T. SANICAS, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a verified Complaint for Disbarment/Gross Immoral Conduct1 filed with this Court on September 18, 2006 by
complainant Rolando Viray (complainant) against respondent Atty. Eugenio T. Sanicas (respondent).
Factual Antecedents
Complainant alleges that he engaged the services of respondent relative to a labor case2 he filed against Ester
Lopez and Teodoro Lopez III (spouses Lopez). On February 26, 2001, the Labor Arbiter ruled in favor of
complainant and disposed of the case as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents Ester Lopez and Teodoro
Lopez III to pay complainant Rolando Viray of the following, to wit:
1. Backwages ........................... ₱146,726.67
2. Separation Pay ......................... 24,000.00
3. Service Incentive Leave Pay ......... .1,538.46
4. Attorney's Fees ........................ .17,226.51
or a total amount of One Hundred Eighty Nine Thousand Fom Hw1dred Ninety One Pesos & 64/100 (Pl89,491.60)
[sic] to be deposited with the Cashier of this Office, wjthin ten (10) days from receipt hereof
All other claims are hereby denied for lack of merit.
SO ORDERED.3
Subsequently, an Alias Writ of Execution4 was issued relative to aforesaid decision. During the implementation of
said writ, however, complainant discovered that respondent had already collected the total amount of ₱95,000.00
from spouses Lopez. Respondent received said amount in the following manner:
Date Voucher No. Amount Purpose

0210512004 7802 ₱20,000.00 Attorney's fees
02/13/2004 7833 10,000.00 Partial payment for judgment
0212612004 7848 10,000.00 Partial payment for judgment
Total Amount: ₱95,000.00
Complainant also discovered that respondent misrepresented to spouses Lopez that he is authorized to receive
payments on his behalf, when in truth and in fact he is not. Consequently, complainant made several verbal
demands to the respondent to remit to him the amount of ₱95,000.00, less his attorney's fees of ₱20,000.00. But
respondent did not budge. Thus, complainant lodged a complaint before the Office of the Punong Barangay of Brgy.
Felisa, Bacolod City. Respondent, however, ignored the summons to attend a conference before the barangay to
resolve the issues.
In his Comment,5 respondent admits that he received ₱95,000.00 from spouses Lopez on installments, but denies
that he was not authorized to accept it. He explains that complainant agreed to pay him additional attorney's fees
equivalent to 25o/o of the total monetary award, on top of the attorney's fees that may be awarded by the labor
tribunal, and to refund all expenses respondent incurred relative to the case. Thus, from the total award of
₱189,491.60, the sum of ₱17,226.57 representing respondent's professional fees has to be deducted, leaving a
balance of ₱172,275.13.6 Then from said amount, complainant proposed that he will get ₱100,000.00 and the
balance of ₱72,275.13 shall belong to respondent as and for his additional 25o/o attorney's fees and reimbursement
for all expenses he incurred while handling the case. However, after receiving the amount of ₱95,000.00 and
deducting therefrom the amounts of ₱20,000.007 attorney's fees, ₱17,000.00 earlier given to complainant, and
₱2,000.00 paid to the sheriff, what was left to respondent was only ₱56,000.00. Respondent whines that this
amount is way below the promised 25o/o attorney's fees and refund of expenses in the total amount of ₱72,275.13.
Respondent asserts that, in any event, complainant will still be receiving a sum greater than what he expects to
receive. He avers that complainant is still entitled to receive from spouses Lopez the sum of ₱93,491.60. Adding the
Pl 7,000.00 respondent previously remitted to complainant, the latter will get a total amount of ₱110,491.60. This
amount, according to respondent, exceeds the amount of ₱100,000.00 complainant agreed to and expected to
receive.
IBP's Report and Recommendation
On February 26, 2007,8 we referred this case to the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation. On January 31, 2011, the Investigating Commissioner issued his Report and
Recommendation9 with the following recommendation:
In view of the foregoing, it is respectfully recommended that the respondent be meted the penalty of two (2) years
suspension. Respondent is also ordered to return, in restitution all the amounts in his possession which are due to
complainant, less his rightful attorney's fees.10 On October 28, 2011, the IBP Board of Governors adopted Resolution
No. XX-2011-139,11 which approved the Report and Recommendation of the Investigating Commissioner
suspending respondent from the practice of law for two years, but with the modification that respondent should
restitute the sum of ₱85,500.0012 to the complainant.
Issue
The essential issue in this case is whether the respondent is guilty of gross misconduct for his failure to promptly
account to his client the funds received in the course of his professional engagement and return the same upon
demand.
The Court's Ruling
"The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing with the
moneys entrusted to lawyers because of their fiduciary relationship."13 Specifically, Rule 16.01 of the Code imposes
upon the lawyer the duty to "account for all money or property collected or received for or from the client." Rule
16.03 thereof, on the other hand, mandates that "[a] lawyer shall deliver the funds xx x of his client when due or
upon demand."
In this case, respondent on nine separate occasions from February 5, 2004 to April 30, 2004 received payments for
attorney's fees and partial payments for monetary awards on behalf of complainant from spouses Lopez. But
despite the number of times over close to three months he had been receiving payment, respondent neither
informed the complainant of such fact nor rendered an accounting thereon. It was only when an Alias Writ of
Execution was issued and being implemented when complainant discovered that spouses Lopez had already given
respondent the total amount of ₱95,000.00 as partial payment for the monetary awards granted to him by the labor
tribunal.
To make matters worse, respondent withheld and refused to deliver to the complainant said amount, which he
merely received on behalf of his client, even after demand. Complainant brought the matter before the barangay, but
respondent simply ignored the same. Such failure and inordinate refusal on the part of the respondent to render an
accounting and return the money after demand raises the presumption that he converted it to his own use.14 His
unjustified withholding of the funds also warrants the imposition of disciplinary action against him.15
Respondent justifies his action by asserting that complainant authorized him to receive payment. He implies that he
is also authorized to apply the sum of money he received from spouses Lopez to his additional 25o/o attorney's fees
and reimbursement for all expenses he incurred for the case, in the total amount of ₱72,275.13. However, after
deducting from the amount of ₱95,000.00 the amounts of ₱20,000.00, ₱17,000.00, and ₱2,000.00, what was left to
respondent, to his dismay was only ₱56,000.00.
The Court is not impressed. As aptly observed by the Investigating Commissioner, other than his self-serving
statements, there is nothing in the records which would support respondent's claim that he was authorized to
receive the payments. Neither is there proof that complainant agreed to pay him additional 25% attorney's fees and
reimburse him for all expenses he allegedly incurred in connection with the case. Respondent did not present any
document, retainer's agreement, or itemized breakdown of the amount to be reimbursed to support his claim. In any 1âwphi 1
event, even assuming that respondent was authorized to receive payments, the same does not exempt him from his
duty of promptly informing his client of the amounts he received in the course of his professional employment. "The
fiduciary nature of the relationship between counsel and client imposes on a lawyer the duty to account for the
money or property collected or received for or from the client. He is obliged to render a prompt accounting of all the
property and money he has collected for his client."16 "The fact that a lawyer has a lien for his attorney's fees on the
money in his hands collected for his client does not relieve him from the obligation to make a prompt
accounting."17Moreover, a lawyer has no right "to unilaterally appropriate his client's money for himself by the mere
fact alone that the client owes him attorney's fees."18
In sum, "[r]espondent's failure to immediately account for and return the money when due and upon demand
violated the trust reposed in him, demonstrated his lack of integrity and moral soundness, and warrants the
imposition of disciplinary action."19
The Penalty
"The penalty for gross misconduct consisting in the failure or refusal despite demand of a lawyer to account for and
to return money or property belonging to a client has been suspension from the practice of law for two years."20Thus,
the IBP Board of Governors did not err in recommending the imposable penalty. Considering, however, that this is
respondent's first offense and he is already a nonagenarian,21 the Court, in the exercise of its compassionate judicial
discretion, finds that a penalty of one year suspension is sufficient. WHEREFORE, the Court finds respondent Atty.
Eugenio T. Sanicas GUILTY of gross misconduct and accordingly SUSPENDS him from the practice of law for one
(1) year upon the finality of this Resolution, with a warning that a repetition of the same or similar act or offense shall
be dealt with more severly.
Atty. Sanicas is ordered to return to complainant, within 90 days from finality of this Resolution, the net amount of
₱85,500.00 with interest at the rate of 6% per annum from finality of this Resolution until the full amount is returned.
Failure to comply with the foregoing directive will warrant the imposition of a more severe penalty.
Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Sanicas' record as a
member of the Bar.
SO ORDERED.
SECOND DIVISION
G.R. No. 195289 September 24, 2014
ROBINSON'S BANK CORPORATION (formerly THE ROY AL BANK OF SCOTLAND [PHILS.], INC.), Petitioner,
vs.
HON. SAMUEL H. GAERLAN, HON. HAKIM S. ABDULWAHID and HON. RICARDO R. ROSARIO, in their
capacity as Associate Justices respectively of the Tenth Division of the Court of Appeals, and TRADE AND
INVESTMENT DEVELOPMENT CORPORATION OF THE PHILIPPINES, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Certiorari1 assails the July 19, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
104141, entitled "Trade and Investment Development Corporation of the Philippines, Petitioner, versus World
Grannary Corporation, Respondent," as well as its December 6, 2010 Resolution3 denying the Motion for
Reconsideration4 of herein petitioner Robinson's Bank Corporation5 (RBC).
Factual Antecedents
On December 4, 2006, Nation Granary, Inc. (now World Granary6 Corporation, or WGC) filed a Petition for
Rehabilitation with Prayer for Suspension of Payments, Actions and Proceedings7 before the Regional Trial Court
(RTC) of Lucena City, which was docketed as Special Proceedings No. 2006-77 and assigned to Branch 57.
WGC is engaged in the business of mechanized bulk handling, transport and storage, warehousing,drying, and
milling of grains. It incurred loans amounting to ₱2.66 billion from RBC and other banks and entities such as herein
private respondent Trade and Investment Development Corporation of the Philippines (TIDCORP). It appears
thatRBC is both a secured and unsecured creditor,8 while TIDCORP is a secured creditor.9
On December 12, 2006, the RTC issued a Stay Order10 staying the enforcement of creditors’ claims; prohibiting
WGC from disposing or encumbering its properties and paying its outstanding liabilities; prohibiting its suppliers from
withholding their goods and services; appointing a rehabilitation receiver; and directing creditors and interested
parties to file their respective comments to the Petition.
RBC filed its Opposition11 to the Petition for Rehabilitation.
In a July 27, 2007 Order,12 the RTC gave due course to the Petition for Rehabilitation and directed the receiverto
evaluate the rehabilitation plan submitted by WGC, and thereafter submit his recommendations thereon.
Accordingly, the receiver submitted his Report withRecommendation13 dated September 27, 2007, to which RBC
and TIDCORP filed their respective Comments.14 Apparently, the Reportproposed, among others, a pari passu– or
equal – sharing between the secured and unsecuredcreditors of the proceeds from WGC’s cash flow made
available for debt servicing.15
In its Comment, TIDCORP among others took exception to the proposed pari passusharing, insisting that as a
secured creditor, it should enjoy preference over unsecured creditors, citing law and jurisprudence to the effect that
the law on preference of credits shall be observed inresolving claims against corporations under rehabilitation.16 It
likewise claimed that WGC violated its Indemnity Agreement17 with TIDCORP – which required that while the
agreement subsisted, WGC shall not incur new debts without TIDCORP’s approval18 – by obtaining additional loans
without the knowledge and consent of the latter.
RBC filed an Opposition19 to TIDCORP’s Comment, arguing pertinently that TIDCORP’s objection to a pari
passusharing of WGC’s cash flow proceeds and insistence on preferential treatment goes against the legal principle
that during rehabilitation, both secured and unsecuredcreditors stand on equal footing, and that it is only when
rehabilitation is nolonger feasible – and liquidation is the remaining option – that secured creditorsshall enjoy
preference over unsecured creditors;20 that giving preference to TIDCORP would violate the Stay Order and impair
the powers of the receiver; and thatany change in the contractual relations between TIDCORP and WGC relative to
their Indemnity Agreement comes as a necessary consequence of rehabilitation,which TIDCORP may not be heard
to complain.
On June 6, 2008, the RTC issued an Order21 approving WGC’s rehabilitation plan, thus: WHEREFORE, the
Rehabilitation Program submitted as Attachment "A" of the Report with Recommendation (On the Rehabilitation
Program), dated September 27, 2007, of the Rehabilitation Receiver is hereby APPROVED with the following
conditions to form part thereof:
1. that with the exception of the guarantee fees to TIDCORP (also known as PHILEXIM) all obligations of the
petitioner should be settled on a pari-passubasis;
2. that the Rehabilitation Program should include a schedule of the equity infusion in the amount of Eighty Three
Million Pesos;
3. that Petitioner should submit tothe Court, copy furnished the creditors, the schedule of contracts under
negotiations with its prospective clients with informationsas to their status and proposed terms and conditions within
thirty (30) days from receipt of this Order;
4. that Petitioner should submit tothe Court, copy furnished the creditors, a complete inventory of all the properties it
bought using the proceeds from the LC/TR within thirty (30) days from receipt of this Order; and
5. that the Petitioner should include inthe Rehabilitation Program the repayment terms of the creditors on record not
included therein, among whom is creditor Belmont Agricorp, Inc., furnishing copy thereof the concerned creditors.
The Petitioner is enjoined to strictlycomply with the provisions of the Rehabilitation Program, performing its
obligations thereunder, and to take all the actions necessary to carry out the program, failing which the Court shall
either upon motion, motu propio, or upon the recommendation of the Rehabilitation Receiver, terminate the
proceedingsas provided for under the Rules.
The Rehabilitation Receiver is directed to strictly monitor the implementation of the program and submit a quarterly
report on the progress thereof.
SO ORDERED.22
TIDCORP thus filed CA-G.R. SP No. 104141, which is a Petition for Review23 assailing the above June 6, 2008
Order on the ground that the trial court’s specific directive for WGC to settle its obligations on a pari passubasis is
contrary to law and jurisprudence, as it unduly benefits unsecured creditors and thus prejudices its interests as a
secured creditor. In addition, TIDCORP claimed that WGC violated its covenants under its Indemnity Agreement
with TIDCORP by subsequently obtaining additional loans from RBC and other banks without TIDCORP’s
knowledge and consent.24
TIDCORP argued that the banks – including RBC – which granted new loans to WGC in violation of its Indemnity
Agreement contributed to TIDCORP’s present "iniquitous predicament" – that is, its rights as a secured creditor
were "greatly impaired"; thus, these banks "should be held accountable" pursuant to the Civil Code provision that
any "person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the
same."25 It maintained that for these reasons, it should be given preferential and special treatment among the WGC
creditors.
TIDCORP thus prayed in its Petition thatthe portion of the assailed June 6, 2008 Order specifically directing that all
WGC obligations be settled on a pari passubasis be reversedand set aside. It likewise sought injunctive relief.
RBC filed an Urgent Motion for Intervention with attached Comment in Intervention,26 which is anchored on its
original claim and objection to TIDCORP’s position – that the latter may notenjoy preferential treatment over the
other WGC creditors.27 Additionally, RBC argued that as an unsecured creditor which stood to be affectedby the
outcome of TIDCORP’s Petition, it should have been impleaded in the Petition; since it was not impleaded, the
Petition for review should be dismissed. Finally, RBC pointed out that TIDCORP actually knew of the additional
loans WGC obtained as it approved, on July 26, 2006, WGC’s request for TIDCORP to increase itsguarantee on
these additional loans.28 RBC therefore prayed that TIDCORP’s Petition for Review be dismissed; that the RTC’s
June 6, 2008 Order be affirmed in toto; and that TIDCORP’s application for injunctive relief be denied.
In its Opposition29 seeking the dismissal of RBC’s Urgent Motion for Intervention, TIDCORP maintained that
intervention is not allowed in rehabilitation proceedings, citing Rule 3,Section 1 of the Interim Rules of Procedure on
Corporate Rehabilitation30 (Interim Rules), which applies even on appeal, since an appeal ismerely a continuation
ofthe original action for rehabilitation.31 It added that the cases cited by RBC do not apply to the instant case, since
they involved petitions for suspension of payments, while the instant case involves a petition for rehabilitation
pursuant to the Interim Rules. Next, it claimed that RBC failed toshow that its participation would not delay the
proceedings on appeal. Finally, it argued that a final determination of the appeal does not depend on RBC’s
participation since rehabilitation proceedings are in remand binding on all interested and affected parties even if they
did not participate in the proceedings.
On July 19, 2010, the first assailed Resolution was issued, which held thus:
As pointed out by the petitioner inits opposition, intervention is a prohibited pleading under Rule 3, Section 1 par 2
(g) of the Rules of Procedure On Corporate Rehabilitation to wit:
Section 1. Nature of proceeding-
xxxx
The proceedings shall also be summary and nonadversarial in nature. The following pleadings are prohibited:
xxxx
(g) Intervention
xxxx
In view of the foregoing, the instant motion is DENIED. The parties are directed to file their respective memoranda
within fifteen (15) days from notice.
SO ORDERED.32
RBC filed a Motion for Reconsideration,33 arguing that the Interim Rules covering prohibited pleadings apply only
during rehabilitation proceedings and before the rehabilitation court decides the case; after a decision is rendered,
the Rules of Court34 apply. It cited the case of Leca Realty Corporation v. Manuela Corporation,35 which held as
follows:
The issue posed before usin G.R. No. 166800 for certiorariand mandamusis whether the trial court erred in ruling
that a motion for extension of time to file record on appeal is a prohibited pleading under Section 1 of the Interim
Rules of Procedure on Corporate Rehabilitation which provides:
Section 1. Nature of Proceedings. – Any proceeding initiated under these Rules shall be considered in rem.
Jurisdiction over all those affected by the proceedings shall be considered as acquired upon publication of the notice
of the commencement of the proceedings in any newspaper of general circulation in the Philippines in the manner
prescribed by these Rules. The proceedings shall also be summary and non-adversarial in nature. The following
pleadings are prohibited:
a. Motion to Dismiss;
b. Motion for Bill of Particulars;
c. Motion for New Trial or For Reconsideration;
d. Petition for Relief;
e. Motion for Extension;
f. Memorandum;
g. Motion for Postponement;
h. Reply or Rejoinder;
i. Third Party Complaint;
j. Intervention;
xxxx
The prohibited pleadings enumerated above are those filed in the rehabilitation proceedings. Once the trial court
decides the case and an aggrieved party appeals, the procedure to be followed is that prescribed by the Rules of
Court as mandated by Section 5, Rule 3, of the same Interim Rules, thus:
The review of any order or decision of the court or on appeal therefrom shall be in accordance with the Rules of
Court.36
In its Comment/Opposition,37 TIDCORP essentially argued that the cited pronouncement in the Leca Realtycase is a
mere obiter dictum; that since RBC failed to file a Petition for Review of the trial court’s June 6,2008 Order, it cannot
now move to intervene in TIDCORP’s Petition for Review as a substitute for its lost appeal; that there are no valid
reasonsfor intervention; and that intervention would unnecessarily delay the proceedings.
In its second assailed Resolution of December 6, 2010, the CA remained unconvinced, stating that while the
pronouncement in Leca Realtyis applicable to the case, it is nonetheless true that RBC may not resort to
intervention as a substitute for a lost appeal, occasioned by its failure to file a Petition for Review within fifteen (15)
days from notice of the trial court’s June 6, 2008 Order – which is the sanctioned procedure under Rule 8,Section 2
of the Rules of Procedure on Corporate Rehabilitation.38
Hence, RBC filed the instant Petition.
Issues
In the present recourse, petitioner argues that –
Respondent Justices gravely abused their discretion amounting to lack or excess of jurisdiction and failed to perform
what their duty is under the Rules of Court:
1. WHEN THEY ERRED IN DECIDING THAT THE PROPER REMEDY OF THE PETITIONER WAS TO FILE A
PETITION FOR REVIEW INSTEAD OF A MERE MOTION FOR INTERVENTION.
2. WHEN THEY SUMMARILY DENIED THE PETITIONER’S URGENT MOTION FOR INTERVENTION, DESPITE
THE CLEAR SHOWING THAT PETITIONER HAS LEGAL INTEREST IN AND WILL BE ADVERSELY AFFECTED
BY THE MATTERS RAISED BY PRIVATE RESPONDENT IN ITS PETITION AND THAT THE INTERVENTION
WILL NOT UNDULY DELAY THE PROCEEDINGS.39
In its Petition and Reply,40 petitioner RBC maintains that the CA committed patent error and grave abuse of
discretion in failing to discern that it is not assailing the trial court’s judgment – specifically its June 6, 2008 Order –
but rather seeks its affirmance in toto, and that its sole objective was simply to obtain a dismissal of TIDCORP’s
Petition for Review; that it would have been improper for it to initiate a new case given that its rights and liabilities as
WGC creditor are so interwoven with and inseparable from TIDCORP’s; that intervention was prompted by
TIDCORP’s allegation in itsPetition for Review that the creditor banks – including RBC – are responsible for
TIDCORP’s present situation and must be held accountable to it for their willful acts; that in claiming preferential
treatment over the other creditors in the Petition for Review, TIDCORP disregards law and settled jurisprudence to
the effect that during rehabilitation proceedings, creditors should stand on equal footing; that in view of TIDCORP’s
actions, RBC stood to be affected and thus must intervene to protect its rights and interests; that intervention is
necessary to prevent multiplicity of suit and conflicting decisions that may arise from cases that may be filed by the
other creditors.
Petitioner thus prays that the assailed dispositions be reversed and that it be allowed to intervene inCA-G.R. SP No.
104141.
Private Respondent’s Arguments
In its Comment,41 TIDCORP insists that the Rules of Procedure on Corporate Rehabilitation apply even on appeal,
as it is merely a continuation of the proceedings below; that intervention is prohibited under the said Rules; that the
CA exercised sound discretion in disallowing RBC’s motion to intervene; that intervention would have resulted in
delay; that the conditions for intervention are not present in RBC’s case, since RBC’s interest in the case is merely
inchoate and indirect; that since RBC is already a party to the rehabilitation case, intervention on its part was
improper asit may be availed of only by a third party, not an original party to the case; that RBC’s arguments are
speculative; and that the Petition lacked a valid verification and certification against forum-shopping for lack of proof
of authority that the individual who prepared the Petition was authorized to sign or file the same.
Our Ruling
The Court partially grants the Petition.
Incipiently, on the procedural issue covering verification and the certification against forum-shopping, it must be said
that the matter has been rendered irrelevant by this Court’s November 26, 2012 Resolution42 which gave due course
to the Petition. Indeed, TIDCORP no longer reiterated the issue in its Memorandum.43
Next, it is beyond question that under Rule 3, Section 5 of the Rules of Procedure on Corporate Rehabilitation, the
review of any order or decision of the rehabilitation court or on appeal therefrom shall be in accordance with the
Rules of Court, unless otherwise provided.44 This being the case, there is no visible objection to RBC’s participation
in CA-G.R. SP No. 104141 as it stands to be injured or benefited by the outcome ofTIDCORP’s Petition for Review
– being both a secured and unsecured creditor of WGC.
To recall, TIDCORP’s Petition for Review in CA-G.R. SP No. 104141 sought to 1) nullify the pari passusharing
scheme directedby the trial court; 2) declare RBC and the other creditor banks– which granted additional loans to
WGC after the latter executed its Indemnity Agreement with TIDCORP – guilty of violating TIDCORP’s rights; and 3)
grant preferential and special treatment to TIDCORP over other WGC creditors. These remedies would undoubtedly
affect not merely the rights of RBC, but of all the other WGC creditors as well, as their standing or status as
creditors would be somewhat downgraded, and the manner of recovery of their respective credits will be altered if
TIDCORP’s prayer is granted. Not to mention that some of them are in danger ofbeing held liable on TIDCORP’s
accusations relative to its Indemnity Agreement with WGC. Surely, if TIDCORP’s arguments are to be considered
and its remedies granted, the other creditors should be given the opportunityto be heard by way of comment or
opposition; they are entitled to due process. "In its most basic sense, the right to due process is simply that every
man is accorded a reasonable opportunity to be heard. Its very concept contemplates freedom from arbitrariness, as
what it requires is fairness or justice. It abhors all attempts to make an accusation synonymous with liability."45
Thus, the nature of TIDCORP’s Petition in CA-G.R. SP No. 104141 is such that the other creditors like RBC must be
allowed to participate in the proceedings. They have aninterest in the controversy where a final decree would
necessarily affect their rights. Indeed, the appellate court, on its own, should have seen that the rights of RBC stand
to be adversely affected by the remedies prayed for by TIDCORP. Thus, the CA could have ordered RBC to file its
comment in CA-G.R. SP No. 104141 and allowed to participate therein. Just as the trial court allowed RBC and
TIDCORP toparticipate in the proceedings below, the CA should have likewise allowed RBC to participate in the
proceedings before it. This is only fair and logical considering that, as admitted by TIDCORP, RBC is already a party
in the rehabilitation case, and that the instant Petition for Review is merely a continuation ofthe proceedings below. 1âwphi1
To disallow the participation of RBC constitutes an evasion of the appellate court’s positive duty to observe due
process,a gross and patent error that can be considered as grave abuse of discretion.46 Likewise, when an adverse
effect on the substantial rights of a litigant results from the exercise of the court’s discretion, certiorarimay issue.47 If
not, this Court possesses the prerogative and initiative to take corrective action when necessary to prevent a
substantial wrong or to do substantial justice.
x x x In the exercise of our superintending control over inferiorcourts, we are to be guided by all the circumstances
of each particular case "as the ends of justice may require." So it is that the writ will be granted where necessary to
prevent a substantial wrong or to do substantial justice.48
While TIDCORP is correct in arguing that intervention is not the proper mode for RBC coming to the CA since it is
already a party to the rehabilitation proceedings, this merely highlights the former’s error in not allowing the latter to
participate in the proceedings in CA-G.R. SP No. 104141 just as it underscores the appellate court’s blunder in not
ordering that RBC be allowed to comment or participate in the case so that they may be given the opportunity to be
heard on TIDCORP’s allegations and accusations. And while RBC chose the wrong mode for interposing its
comments and objections in CA-G.R. SP No. 104141, this does not necessarily warrant the outright denial ofits
chosen remedy; the Court is not so rigid as to be precluded from adopting measures to insure that justice would be
administered fairly to all parties concerned. If TIDCORP must pursue its Petition for Review, then RBC should be
allowed to comment and participate in the proceedings. There is no other solution to the impasse.
Finally, the CA committed another patent error in declaring that RBC’s proper remedy was not to move for
intervention, but to file a Petition for Review of the trial court’s June 6, 2008 Order. It failed to perceive the obvious
fact that there is nothing about the trial court’s order that RBC questioned; quite the contrary, it sought to affirm the
said order in totoand simply prayed for the dismissal of TIDCORP’s Petition for Review.There is thus no legal and
logical basis for its conclusion thatRBC should have resorted toa Petition for Review just the same.
With the foregoing conclusions arrived at and the view taken of the case, the CA is hereby directed to allow RBC
tofile its comment and participate in the proceedings; thereafter, the CA shall continue with the proceedings in CA-
G.R. SP No. 104141.
WHEREFORE, the Petition is partially GRANTED. The assailed July 19, 2010 and December 6, 2010 Resolutions
of the Court of Appeals in CA-G.R. SP No. 104141 are SET ASIDE. The Court of Appeals is hereby directed to
allow petitioner Robinson’s Bank Corporation to file its comment and to participate in CA-G.R. SP No. 104141.
SO ORDERED.
SECOND DIVISION
G.R. No. 189850 September 22, 2014

vs.
REYNALDO TORRES, JAY TORRES, BOBBY TORRES @ ROBERTO TORRES y NAVA, and RONNIE
TORRES,Accused,
BOBBY TORRES @ ROBERTO TORRES y NAVA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This is an appeal from the July 23, 2009 Decision1 ofthe Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02925,
which modified the December 5, 2006 Decision2 of the Regional Trial Court (RTC), Manila, Branch 27 in Criminal
Case No. 02-200171. The RTC found appellant Bobby Torres @Roberto Torres y Nava (appellant) guilty beyond
reasonable doubt of the crime of murder but on appeal, the CA found appellant guilty of the special complex crime
of robbery with homicide.
Factual Antecedents
On January 28, 2004, an Amended lnformation3 was filed before the charging siblings Reynaldo Torres (Reynaldo),
Jay Torres (Jay), Ronnie Torres (Ronnie) and appellant with the special complex crime ofrobbery withhomicide
committed against Jaime M. Espino (Espino). The Amended Information contained the following accusatory
allegations:
That on or about September 21, 2001, inthe City of Manila, Philippines, the said accused, armed with bladed
weapons, conspiring and confederating together with one malefactor whose true name, real identity and present
whereabouts [is] still unknown and helping one another, did then and there willfully, unlawfully and feloniously, with
intent of gain and by means of force, violence, and intimidation,to wit: while one JAIME M. ESPINO was on board
his car and travelling along C.M. Recto Avenue corner Ylaya St., Tondo , this City, by blocking his path and forcibly
grabbing from the latter his belt-bag; that on the occasion of the said robbery and by reason thereof, the herein
accused, in pursuance of their conspiracy, did thenand there willfully, unlawfully and feloniously, with intent to kill,
attack, assault, use personal violence and abuse of superior strength upon the said JAIME M.ESPINO and that
when the latter resisted, by then and there stabbing the latter with bladed weapons on x x x different parts of his
body, thereby inflicting upon the latter multiple stab wounds which were the direct and immediate cause of his death
thereafter, and afterwhich, divest, take, rob and carry away a belt-bag, wallet, necklace, watch and ring of
undetermined amount, belonging to said JAIME M. ESPINO.
Contrary to law.4
Only appellant was arrested. Reynaldo, Jay and Ronnie remain at-large to date. During arraignment,
appellantentered a plea of "not guilty".5 After the termination of the pre-trial conference, trial ensued.6
The prosecution presented as eyewitnesses Eduardo Umali (Umali), a butcher, and MerlitoMacapar (Macapar), a
cigarette vendor. Also presented were Dr. Romeo T. Salen (Dr. Salen), who testified on the cause of death of
Espino. From their testimonies,7 the following facts emerged:
At around 10:00 p.m. of September 21,2001, Espino was driving his car along C.M. Recto Avenue in Divisoria,
Manila when Ronnie suddenly blocked his path. Espino alighted from his vehicle and approached Ronnie, who tried
to grab his belt-bag. Espino resisted and struggled with Ronnie for the possession of his belt-bag but the latter’s
brothers, Jay, Rey, appellant, and an unidentified companion suddenly appeared. With all of them brandishing
bladed weapons, appellant and his brothers took turns in stabbing Espino in different parts of his body while the
unidentified companion held him by the neck. When Espino was already sprawled on the ground, they took his belt-
bag, wallet and jewelries and immediately fled.
Espino was rushed to the hospital butwas pronounced dead on arrival. In his Medico-Legal Report No. W-658-
2001,8 Dr. Salen concluded that Espino died of multiple stab wounds caused by sharp bladedinstruments. The back
portion of his head bore two stab wounds while his body suffered four stab wounds which proved fatal. Considering
the number and varying measurements of the wounds, Dr. Salen opined that there weremore than one assailant.
To prove the civil aspect of the case, Espino’s daughter, Winnie EspinoFajardo (Winnie) testified that the pieces of
jewelry stolen from her father consisted of a necklace worth ₱35,000.00, bracelet worth ₱15,000.00, wristwatch
worth ₱10,000.00 and two rings worth ₱10,000.00 each. As for their expenses, Winnie said that ₱25,000.00 was
spent for the burial lot and ₱37,000.00 for the funeral services. She stated further that Espino was 51 years old at
the time of his death and was earning ₱3,000.00 a day asa meat vendor.9
Appellant denied any participation in the crime. He testified that at around 10:00 p.m. of September 21, 2001, he
was with his girlfriend, Merlita Hilario (Merlita). They proceeded to the house oftheir friend, Marilou Garcia (Marilou),
in Villaruel, Tayuman, Manila where they had a drinking session which lasted until they fell asleep. They did not
leave their friend’s house until the following morning when they went home. Thereupon, he was told that policemen
were looking for him because his brothers got involved in an altercation that resulted in the death of
someone.10Merlita and Marilou corroborated appellant’s alibi in their respective testimonies.11
From the testimony of another defense witness, Jorna Yabut-Torres (Jorna), wife of Ronnie, the defense’s version of
the incidentemerged as follows:
In the evening of September 21, 2001, Jorna and Ronnie were sharing jokes with other vendors in Divisoria when a
car stopped a few meters from their stall. The driver alighted and asked why they were laughing. Ronnie replied that
it had nothing to do with him. The driver seemed drunk since he walked back to his vehicle in an unsteady manner.
Moments later, the driver returned and stabbed Ronnie on the wrist with a knife. Jay saw the assault on his brother,
Ronnie, and got a bolo which he used to hack the driver repeatedly. Thereafter, Ronnie and Jay fled.12 Ditas
Biescas-Mangilya, a vegetable vendor in Divisoria, corroborated Jorna’s version of the incident in her testimony.13

In its December 5, 2006 Decision,14 the RTC held that appellant could not have committed robbery. It ratiocinated,
viz:
Prosecution witness Merlito D. Macapar testified that Ronnie took the belt bag of the deceased while Bobby and the
rest took his wristwatch, ring and necklace. However, on cross-examination, witness admitted that he did not see
who took the ring, wristwatch and necklace because as soon as the deceased fell on the ground, accused and
companions surrounded him. Merlito’s testimony was contradicted by Eduardo Umali on a vital point. Thus, Merlito
testified that there was an exchange of heated words. There was no intimation whatsoever what the altercation was
about. He was ten meters away. No such altercation, however, took place according to Eduardo who was barely five
meters away. This tainted the testimony of Merlitoand Eduardo with suspicion. When material witnesses contradict
themselves on vital points, the element of doubt is injected and cannot be lightly disregarded. That was not all
though. Merlito testified [that] several people witnessed the incident. The stall of the victim’s daughter was about ten
meters from the crime scene, which was a few meters from the stall of Ronnie. They both had been in their
respective stalls for quite sometime. The principal prosecution witnesses are familiar with the deceased and the
accused except for the unidentified companion as they often see them at the vicinity. Thus, in all likelihood, accused
and the victim are familiar if not know each other very well. The perpetration of robbery at the place was thus
unlikely.
Even granting that the element of taking is present, still, accused cannot be held liable for the complex crime of
robbery with homicide for the reason that it was not indubitably shown that the mainpurpose of the accused was to
rob the victim. To the mind of the Court, this is precisely the reason why the prosecution skipped the utterances
made by the protagonist[s] during the attack. To sustain a [conviction] for the special complex crime of robbery with
homicide, the original criminal design of the culprit must be robbery and the homicide is perpetrated with a view to
the consummation of the robbery, or by reason or on the occasion of the robbery (People vs. Ponciano, 204 SCRA
627).
xxxx
The crime of robbery not having been indubitably established, the accused cannot be convicted of the special
complex crime of robbery with homicide.15
The RTC thus concluded that appellant can only be liable for the killing of Espino. It held him guilty of murder after it
found the qualifying circumstance of abuse of superior strength, which was alleged in the Information and duly
established by the prosecution. Moreover, the RTC ruled that conspiracy among the accused attended the crime.
Anent the civil aspect of the case, the RTC granted civil indemnity, actual and moral damages to the heirs of
Espino,but denied the claim for loss of earning capacity for lack of documentary evidence.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Court finds accused Bobby Torres y Nava, "Guilty" beyond
reasonable doubt of the crime of Murder as the qualifying circumstance of abuse of superior strength attended the
commission of the crime and hereby sentences him to suffer the penalty of Reclusion Perpetua, to indemnify the
heirs of the victim the sum of ₱50,000.00, the additional sum of ₱50,000.00 as moral damages, actual damages in
the amount of ₱62,000.00 and to pay the costs.
Let alias warrant of arrest issue against accused Reynaldo Torres, Jay Torres and Ronnie Torres.
SO ORDERED.16
Appellant filed a Motion for Reconsideration17which was denied in an Order18 dated April 10, 2007.
Hence, appellant appealed to the CA.19

In modifying the ruling of the RTC, i.e., finding appellant guilty of robbery with homicide instead of murder, the CA
found that the primary intention of appellant and his co-accusedwas to rob Espino and his killing was only incidental
to the robbery. The blocking of Espino’s car and the struggle for possession of his belt-bag after he alighted are
clear manifestations of the intent to commit robbery. The dispositive portion of the July 23, 2009 Decision20 of the CA
reads as follows:
WHEREFORE, in view of foregoing, the appealed decision of the RTC Manila, Branch 27 dated December 5, 2006
is hereby MODIFIED in that appellant is found GUILTY beyond reasonable doubt of the crime of ROBBERY with
HOMICIDE and he is hereby sentenced to suffer the penalty of reclusion perpetua. The trial court’s award to the
heirs of the victim, Jaime Espino, of civil indemnity in the amount of ₱50,000.00, moral damages in the amount of
₱50,000.00, and actual damages in the amount of ₱62,000.00 as well as its order to appellant to pay the costs of
suit, are hereby AFFIRMED.
SO ORDERED.21
Hence, this present appeal.
Appellant imputes upon the CA the following errorsin his Supplemental Brief.22
The acquittal of the accused-appellant in the robbery charge should be left undisturbed as being final and executory
which cannot be overturned without violating the proscription against double jeopardy.23
The appellate court exceeded its jurisdiction when it reviewed the entire case despite the fact that the accused-
appellant only appealed his conviction for murder.24
It was an error to convict the accused-appellant of the crimes charged considering that his guilt was notproven
beyond reasonable doubt.25
Our Ruling
In an appeal by an accused, he waives his right not to be subject to double jeopardy.
Appellant maintains thatthe CA erred in finding him liable for robbery with homicide as charged in the Amended
Information. He argues that his appeal to the CA was limited to his conviction for murder and excluded his acquittal
for robbery. And by appealing his conviction for murder, he does not waive his constitutional right not to be subject
to double jeopardy for the crime of robbery. He claims that even assuming that the RTC erred in acquitting him of
the robbery charge, such error can no longer be questioned on appeal.
We cannot give credence to appellant’s contentions. "An appeal in [a] criminal case opens the entire case for review
on any question including one not raised by the parties."26 "[W]hen an accused appeals from the sentence of the trial
court, he waives the constitutional safeguard against double jeopardy and throws the whole case open to the review
of the appellate court, which is then called upon to render such judgment as law and justice dictate, whether
favorable or unfavorable to the appellant."27 In other words, when appellant appealed the RTC’s judgment of
conviction for murder, he is deemed to have abandoned his right to invoke the prohibition on double jeopardy since
it became the duty of the appellate court to correct errors as may be found in the appealed judgment. Thus,
appellant could not have been placed twice in jeopardy when the CA modified the ruling of the RTC by finding him
guilty of robbery with homicide as charged in the Information instead of murder.
Appellant is guilty of the crime of robbery with homicide.
"Robbery with homicide exists ‘when a homicide is committed either by reason, or on occasion, of the robbery. To
sustain a conviction for robbery with homicide, the prosecution must prove the following elements: (1) the taking of
personal property belonging to another; (2) with intent togain; (3) with the use of violence or intimidation against a
person; and (4) on the occasion or by reason of the robbery, the crime of homicide, as usedin its generic sense, was
committed. A conviction requires certitude that the robbery is the main purpose and objective of the malefactor and
the killing ismerely incidental to the robbery. The intent to rob must precede the taking of human life but the killing
may occur before, during or after the robbery’."28
In this case, the prosecution adduced proof beyond reasonable doubt that the primary intention of appellant and his
companions was to rob Espino. Umali and Macapar, the eyewitnesses presented by the prosecution, testified that at
around 10:00 p.m. of September 21, 2001, appellant’s brother and co-accused, Ronnie, blocked Espino’s car at the
corner of C.M. Recto Avenue and Ylaya Street. When Espino alighted from his vehicle, Ronnie attempted to grab
his beltbag. A struggle for possession of the belt-bag ensued. It was at this juncture that appellant and the other co-
accused joined the fray and stabbed Espino several times in the head and body. When Espino fell to the pavement
from his stab wounds, appellant, Ronnie and their cohorts got hold of the victim’s wallet, beltbag, wristwatch and
jewelry then fled together.29
From the foregoing, it is clear that the primordial intention of appellant and his companions was to rob Espino. Had
they primarily intended to kill Espino, they would have immediately stabbed him to death. However, the fact that
Ronnie initially wrestled with appellant for possession of the belt-bag clearly shows that the central aim was to
commit robbery against Espino.This intention was confirmed by the accused’s taking of Espino’s belt-bag, wallet,
wrist-watch and jewelries after he was stabbed to death. The killing was therefore merely incidental, resulting by
reason oron occasion of the robbery.
The testimonies of the prosecution eyewitnesses are worthy of credence.
Appellant attempts to discredit Umali and Macapar by asserting that there are glaring contradictions in their
testimonies. He calls attention to the RTC’s observation that Macapar gave conflicting testimonies on whether he
actually witnessed who among appellant and his cohorts took Espino’s valuables after he fell to the ground.
Appellant asserts further that Umali’s testimony that an altercation did not precede the commission of the crime
contradicts the testimony of Macapar that a heated exchange of words occurred prior to the incident. He also claims
that it is contrary to human nature for Espino to alight from his car at 10:00 p.m. while in possession of a large
amount of money without fear of an impending hold-up.
We are not persuaded. The inconsistencies attributed to the prosecution’s eyewitnesses involve minor details, too
trivial to adversely affect their credibility. Said inconsistencies do not depart from the fact that these eyewitnesses
saw the robbery and the fatal stabbing of Espino by appellant and his cohorts. "[T]o the extent that inconsistencies
were in fact shown, they appear to the Court to relate to details of peripheral significance which do not negate or
dissolve the positive identification by [Umali and Macapar of appellant] as the perpetrator of the
crime."30"Inaccuracies may in fact suggest that the witnesses are telling the truth and have not been rehearsed.
Witnesses are not expected to remember every single detail of an incident with perfect or total recall."31
Moreover, it is unlikely that Espino feared alighting from his vehicle at a late hour while in possessionof a huge
amount of money since he was a vendor doing business in the vicinity where the incident occurred. He was familiar
with the people and their activities in the premises. In view of the above, the Court finds that the CA properly lent full
credence to the testimonies of Umali and Macapar.
The weapons are not the corpus delicti.
Appellant contends that the evidence is insufficient for his conviction since the weapons used in the stabbing of
Espino were not presented. In other words, he asserts that it was improper to convict him because the corpus
delictihad not been established.
We disagree. ‘"[C]orpus delictirefers to the fact of the commission of the crime charged or to the body or substance
of the crime. In its legal sense, it does not refer to the ransom money in the crime of kidnapping for ransom or to the
body of the person murdered’ or, in this case, [the weapons used in the commission of robbery with homicide].
‘Since the corpus delictiis the fact of the commission of the crime, this Court has ruled that even a single witness’
uncorroborated testimony, if credible may suffice to prove it and warrant a conviction therefor. Corpus delictimay
even be established by circumstantial evidence.’"32
In this case, the corpus delictiwas established by the evidence on record. The prosecution eyewitnesses testified
that appellant and his cohorts used knives to perpetrate the crime. Their testimonies on the existence and use of
weapons in committing the offense was supported by the medical findings of Dr. Salen who conducted the post-
mortem examination. Dr. Salen found that Espino sustained several stab wounds with varying measurements which
were caused by sharp bladed instruments. Appellant is therefore mistaken in arguing that the failure to present the
weapons used in killing Espino was fatal to the cause of the prosecution.
The defenses of denial and alibi cannot prosper.
We are in complete agreement with the RTC and the CA in finding lack of merit in appellant’s defenses of denialand
alibi.
Appellant claims that he was in a drinking session in his friend’s house in Villaruel, Tayuman,Manila, from 10:00
p.m. of September 21, 2001 until 1:00 a.m. of the following day. He alleges to have slept atthe place and went home
at around 7:00 a.m. of September 22, 2001. According to appellant, he did not depart from his friend’s house from
the time they started drinking until he went home the following morning.
Appellant’s alibi is unworthy of credence. Appellant himself testified that Villaruel is less than two kilometers
awayfrom Divisoria and that it would only take a few minutes to go toDivisoria from Villaruel.33 Clearly, it was not
impossible for appellant to be physicallypresent at the crime scene during its commission. "For alibi to prosper, it
muststrictly meet the requirements of time and place. It is not enough to prove that the accused was somewhere
else when the crime was committed, but it must also be demonstrated that it was physically impossible for him to
have been at the crime scene at the time the crime was committed."34
The fact that appellant presented witnesses to corroborate his alibi deserves scant consideration. Their testimonies
are viewed with skepticism due to the very nature of alibi the witnesses affirm.35 Appellant can easily fabricate an
alibi and ask relatives and friends to corroborate it.36
We have always ruled that alibi and denial are inherently weak defenses and must be brushed aside when the
prosecution has sufficiently and positively ascertained the identity of the accused. Moreover, it is only axiomatic
thatpositive testimony prevails over negative testimony.37
The evidence was sufficient to establish the presence of abuse of superior strength.
Appellant argues that mere superiority in numbers does not indicate the presence of abuse of superior strength. In
the samemanner, appellant claims that the number of wounds inflicted on the victim is not the criterion for the
appreciation of this circumstance.
"There is abuse of superior strength when the offenders took advantage of their combined strength in order to
consummate the offense."38 Here, appellant and his four companions not only took advantage of their numerical
superiority, they were also armed with knives. Espino, on the other hand, was unarmed and defenseless. While
Ronnie was wrestling with Espino, appellant and his coaccused simultaneously assaulted the latter. The unidentified
companion locked his arm around the neck of Espino while appellant and his co-accused stabbed and hacked him
several times. While Espino was lying defenseless on the ground, they divested him of all his valuables. Thereafter,
they immediately fled the scene of the crime.39 It is clear that they executed the criminal act by employing physical
superiorityover Espino.
The Proper Penalty
Nonetheless, the presence of abuse of superiorstrength should not result in qualifying the offense to murder. When
1âw phi 1
abuse of superior strength obtains in the special complex crime of robbery with homicide, it is to be regarded as a
generic circumstance, robbery withhomicide being a composite crime with its own definition and special penalty in
the Revised Penal Code. With the penalty of reclusion perpetuato death imposed for committing robbery with
homicide,40 "[t]he generic aggravating circumstance of[abuse of superior strength] attending the killing of the victim
qualifies the imposition of the death penalty on [appellant]."41 In view, however, of Republic Act No. 9346, entitled
"An Act Prohibiting the Imposition of the Death Penalty in the Philippines," the penalty that must be imposed on
appellant is reclusion perpetua without eligibility for parole.42
The Civil Liabilities
In robbery with homicide, civil indemnity and moral damages are awarded automatically without need ofallegation
and evidence other than the death of the victim owing to the commission of the crime.43 Here, the RTC and CA
granted civil indemnity and moral damages to Espino’s heirs in the amount of ₱50,000.00 each. These courts were
correct in granting the awards, but the awards should have been ₱100,000.00 each.Recent jurisprudence44 declares
that when the imposable penalty is death, the awards of civil indemnity and moral damages shall be ₱100,000.00
each.
In granting compensatory damages, the prosecution must "prove the actual amount of loss with a reasonable
degree of certainty, premised upon competent proof and the best evidence obtainable to the injured
party."45‘"Receipts should support claims of actual damages.’ Thus, as correctly held by the [RTC] and affirmed by
the CA, the amount of [₱62,000.00] incurred as funeral expenses can be sustained since these are expenditures
supported by receipts."46 The existence of one aggravating circumstance also merits the grant of exemplary
damages under Article 2230 of the New Civil Code. Pursuant to prevailing jurisprudence, we likewiseaward
₱100,000.00 as exemplary damages to the victim’s heirs.47 An interest at the legal rate of 6% per annum on all
awards of damages from the finality of this judgment until fully paid should likewise be granted to the heirs of
Espino.48
Lastly, the RTC did not err in refusing to award indemnity for loss of earning capacity of Espino despite the
testimony of his daughter that he earned ₱3,000.00 a day as a meat dealer. "Such indemnity is not awarded in the
absence of documentary evidence except where the victim was either self-employed or was a daily wage worker
earning less than the minimum wage under current labor laws. Since it was neither alleged nor proved that the
victim was either selfemployed or was a daily wage earner, indemnity for loss of earning capacity cannot be
awarded to the heirs of the victim."49
WHEREFORE, the July 23, 2009 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 02925 that affirmed with
modifications the December 5, 2006 Decision of the Regional Trial Court of Manila, Branch 27, in Criminal Case No.
02-200171 is AFFIRMED with further MODIFICATIONS. Appellant Bobby Torres@ Roberto Torres y Nava is
ordered to pay the heirs of the victim, Jaime M. Espino, ₱100,000.00 as civil indemnity; ₱100,000.00 as moral
damages, and Pl00,000.00 as exemplary damages. The interest rate of 6% per annum is imposed on all damages
awarded from the finality of this Decision until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 176121 September 22, 2014
SPOUSES TEODORICO and PACITA ROSETE, Petitioners,

vs.
FELIX and/or MARIETTA BRIONES, SPOUSES JOSE and REMEDIOS ROSETE, AND NEORIMSE and
FELICITAS CORPUZ, Respondents.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are the October 30, 2006 Decision2 of the Court of Appeals (CA)
which denied the Petition for Review in CA-G.R. SP No. 79400 and its December 22, 2006 Resolution3 denying the
herein petitioners' Motion for Reconsideration.4
Factual Antecedents
The subject lot is a 152-square meter lot located at 1014 Estrada Street, Malate, Manila which is owned by the
National Housing Authority (NHA).
On July 30, 1987, the NHA conducted a census survey of the subject lot, and the following information was
gathered:
Tag No. 674

Ricardo Dimalanta, Sr. - absentee structure owner
Felix Briones - lessee
Neorimse Corpuz - lessee
Tag No. 87-0675

Teodoro Rosete - residing owner
Jose Rosete – lessee5
The NHA awarded the subject lot topetitioner Teodorico P. Rosete (Teodorico).6 The herein respondents, Jose and
Remedios Rosete(the Rosetes), Neorimse and Felicitas Corpuz (the Corpuzes), and Felix and Marietta Briones (the
Brioneses) objected to the award, claiming that the award of the entire lot to Teodorico was erroneous.
In 1990, a Declaration of Real Property was filed and issued in Teodorico’s name.7 On March 21, 1991,he made full
payment of the value of the subject lot in the amount of ₱43,472.00.8 He likewise paid the real property taxes
thereon.9
In an August 5, 1994 Letter-Decision,10 the NHA informed Teodorico that after consideration of the objections raised
by the Rosetes, the Corpuzes and the Brioneses, the original award of 152 square meters in his favor has been
cancelled and instead, the subject lot will besubdivided and awarded as follows:
1. Teodorico – 62 square meters
2. The Brioneses – 40 square meters
3. The Rosetes – 25 square meters
4. The Corpuzes – 15 square meters
5. Easement for pathwalk – 10 square meters
In the same Letter-Decision, NHA likewise informed Teodorico that his payments shall be adjusted accordingly, but
his excess payments will not be refunded; instead, they will be applied to his co-awardees’ amortizations. His
coawardees shall in turn pay him, under pain of cancellation of their respective awards. NHA also
informedTeodorico that the matters contained in the letter were final, and that if he intended to appeal, he should do
so with the Office of the President within 30 days.
In an October 18, 1994 letter11 to the NHA, Teodorico protested and sought a reconsideration of the decision to
cancelthe award, claiming that it was unfair and confiscatory. He likewise requested that his co-awardees be
required to reimburse his property tax payments and that the subject lot be assessed at its current value.
Meanwhile, on October 24, 1994, the Rosetes and the Corpuzes appealed the NHA’s August 5, 1994 Letter-
Decision tothe Office of the President (OP), which case was docketed as O.P. Case No. 5902.
On February 2, 1995, Teodorico filed an undated letter12 in O.P. Case No. 5902. In the said letter, he directed the
OP’s attention to the Rosetes and the Corpuzes’ resolve not to question the 62-square meter allocation/award to
him. At the same time, he manifested his assent to such allocation, thus:
Undersigned is satisfied with the 62 sq. m. lot awarded to him. However, in the adjudication of the above-mentioned
case and in furtherance of justice, it is prayed that:
1. The period within which refund to the undersigned by the spouses Jose and Remedios Rosete, Neorimseand
Felicitas Corpuz, and Felix and Marietta Briones of the purchase price of the lots awarded to them be fixed, with
interest thereon from March 21, 1991 until full reimbursement is made;
2. The foregoing awardees be ordered likewise to reimburse to the undersigned the real estate taxes paid on their
respective lots from 1980, plus interest thereon, until full reimbursement; and 3. Other relief in favor of the
undersigned be issued.13
On November 19, 1997, the OP issued its Decision14 in O.P. Case No. 5902, dismissing the appeal for being filed
out of time.
On March 27, 1998, the OP issued a Resolution15 declaring that the above November 19, 1997 Decision in O.P.
Case No. 5902 has become final and executory since no motion for reconsideration was filed, nor appeal taken, by
the parties.
In another July 28, 1999 letter16 to the NHA, Teodorico, the Rosetes, and the Corpuzes sought approval of their
request to subdivide the subject lot on an "as is, where is" basis as per NHA policy, since it appeared that the
parties’ respective allocations/awards did not correspond to the actual areas occupied by them and thus could result
in unwanted demolition of their existing homes/structures.
In a November 12, 1999 Letter-Reply,17 the NHA informed the parties that the original awards/allocationswere being
retained; it also advised them to hire a surveyor for the purpose of subdividing the subject lot in accordance with
such awards.
Through counsel, Teodorico wrote back. In his November 23, 1999 letter,18 he reiterated his request tosubdivide the
subject lot onan "as is, where is" basis and to be reimbursed by his co-awardees for his overpayments, with interest.
This was followed by another March 29, 2001 letter19 by his counsel.
Receiving no response from the NHA regarding the above November 23, 1999 letter, Teodorico senta May 7, 2003
letter cummotion for reconsideration20 to the OP, in which he sought a reconsideration of the November 19, 1997
Decision in O.P. Case No. 5902. Heclaimed that the August 5, 1994 LetterDecision of the NHA containing the
award/allocation of the subject lot to the parties is null and void as it violated the provisions of Presidential Decree
No. 151721 (PD 1517) and PD 2016;22 that the award of 40 square meters to the Brioneses is null and void as they
were mere "renters" (lessees); that because the August 5, 1994 Letter-Decision of the NHA is a nullity, it never
became final and executory. Thus, he prayed:
WHEREFORE, it is reiterated that the "as is, where is" policy of the NHA be followed in the instant case and that
Teodorico P. Rosete be reimbursed by Marietta Briones, et al. of the value of the lots adjudicated in their favor and
the real estate taxes he paid on the lots they occupy, plus interest thereon to be determined by the NHA. Wewill not
demand the cancellation of the awards to Marietta Briones, et al. so as not to prejudice their respective families.23
In a September 8, 2003 Resolution,24 the OP denied Teodorico’s May 7, 2003 letter cummotion for reconsideration,
saying that –
Before this Office is the motion filed by Teodorico P. Rosete, requesting reconsideration of the Decision of this
Office dated November 19, 1997 dismissing the appeal for having been filed out of time.
On March 27, 1998, this Office also declared the said Decision dated November 19, 1997 as having become final
and executory. Being so, this Office has no more jurisdiction over the case. There is nothing left for the office a quo
except to implement the letter-decision of the National Housing Authority (NHA) dated October 24, 1994.25
Besides, contrary to appellants’ motion, the said NHA letter-decision is in accordance with NHA Circular No. 13
dated February 19, 1982, pertinent provisions of which read:
"V. BENEFICIARIES SELECTION AND LOT ALLOCATION
1. The official ZIP censusand tagging shall be the primary basis for determining potential program beneficiaries and
structures or dwelling units in the area.
xxxx
4. Only those households included in the ZIP Census and who, in addition, qualify under the provisions of the Code
of Policies, are the beneficiaries of the Zonal Improvement Program.
5. A qualified censused-household is entitled to only one residential lot within the ZIP Project area of Metro Manila."
Hence, the letter decision ofthe NHA is a valid judgment.
WHEREFORE, premises considered, the instant motion for reconsideration is hereby DENIED. Let the records of
the case be remanded to the office-a-quo for implementation.
SO ORDERED.26
Teodorico and his wife Pacita, the Rosetes, and the Corpuzes went up to the CA by Petition for Review,27 docketed
as CA-G.R. SP No. 79400. They essentially claimed that pursuant to the "pertinent laws on Beneficiary Selection
and Disposition of Homelots in Urban Bliss Projects,"28 the Rosetes, the Corpuzes, and the Brioneses are not
entitled to own a portion of the subject lot since they were mere "renters" or lessees therein; for thisreason, the
NHA’s August 5, 1994 Letter-Decision and November 19, 1997 Decision and September 8, 2003 Resolution of the
OP are null and void. The Petition contained a prayer for the CA to order the NHA to allocatethe subject lot on an
"as is, where is" basis; that the assailed Decision and Resolution be stayed; and that the Rosetes, the Corpuzes and
the Brioneses be ordered to reimburse Teodorico in such manner as originally prayed for byhim in the NHA and OP.
On October 30, 2006, the CA issued the questioned Decision, which held as follows:
Clearly, the Office of the President, in issuing the assailed Resolution, mainly anchored its denial ofPetitioner
TEODORICO’s motion for reconsideration of the Decision dated 19 November 1997 on the finalityof said Decision,
which accordingly, the said Office has no jurisdiction to disturb. We agree with the Office of the President.
It bears emphasis that as early as 27 March 1998, the Office of the President had issued a Resolution which
essentially states, thus:
Considering that appellants in the above-entitled case have received certified copies ofthe decision of this Office,
dated November 17, 1997, as shown by registry return receipts attached to the records’ copy of said decision, and
as of March 23, 1998, no motion for reconsideration thereof has been filed nor appeal taken to the proper court, this
Office resolves to declare said decision, dated November 19, 1997, to have become FINAL and EXECUTORY.
Necessarily therefore, the subsequent filing by Petitioner TEODORICO of a motion for reconsideration of the
Decision, supra. before the Office of the President did not produce any legal effect as to warrant a reversal of the
said Decision.
Generally, once a decision has become final and executory, it can no longer be modified or otherwise disturbed.
Thus, it is the ministerial duty of the proper judicial or quasi-judicial body to order its execution, except when, after
the decision has become final and executory, facts and circumstances would transpire which render the execution
impossible or unjust. On this regard, in order to harmonize the disposition withthe prevailing circumstances, any
interested party may ask a competent court to stay its execution or prevent its enforcement.
However, the Petitioners failed to prove that the aforesaid exception is present in the case at bar. Instead, they insist
that Decisions/Resolutions of the NHA and of the Office of the President are wanting in validity because they
allegedly violated certain statutes and jurisprudence.
Sadly, We cannot sustain Petitioners’ theory.
xxxx
Accordingly, the findings of the NHA and of the Office of the President are perforce no longer open for review.
xxxx
Withal, We find no legal as well as equitable reason for Us to discuss further the issue, supra, raised by the
Petitionersin the instant petition.
WHEREFORE, premises considered, the instant Petition is DENIED. The challenged Resolution of the Office of the
President is hereby AFFIRMED in toto.
SO ORDERED.29
Petitioners filed their Motion for Reconsideration,30 which the CA denied in its assailed December 22, 2006
Resolution. Hence, the present Petition.
Issues
Petitioners raise the following issues:
5.00.1 The Court of Appeals erred in ruling that petitioner Teodorico Rosete did not file an appeal from the decision
of the National Housing Authority;
5.00.2 The Court of Appeals erred in ruling that the decision of the Office of the President against the appeal of
Remedios Rosete and Felicitas Corpuz binds petitioner Teodorico Rosete; 5.00.3 The Court of Appeals erred in
failing to look into the merits of petitioner Teodorico Rosete’s claim over the subject lot.31
Praying that the assailed CA Decision and Resolution be set aside and that the NHA’s August 5, 1994 Letter-
Decision be modified – soas to allow: 1) the subdivision of the subject lot on an "as is, where is" basis; 2)
reimbursement/ refund by the respondents of Teodorico’s lot and tax overpayments; and 3) the corresponding
transfer of title to them – petitioners maintain in their Petition and Consolidated Reply32 that Teodorico’s October 18,
1994 letter to the NHA – which he allegedly sent on September 24, 1994 – should have been treated as a timely
appeal to the OP, the same having been filed with the NHA within the 30-day reglementary period prescribed by the
latter in its August 5, 1994 LetterDecision and pursuant to Section 1 of Administrative Order No. 18, series of
198733of the OP (OP AO 18; Prescribing Rules and Regulations Governing Appeals to the Office of the President of
the Philippines). Thus, the CA’s pronouncement that Teodorico made no appeal to the OP or that it was not timely
filed is erroneous.
Petitioners add that since Teodorico’s October 18, 1994letter to the NHA – which should be treated as an appeal to
the OP – remains pending and unacted upon, then his case is still pending as far as the OP is concerned; that the
dismissal of the appeal through the November 19, 1997 Decision in O.P. Case No. 5902 affected only the appellants
therein, or the Rosetes and the Corpuzes, but not Teodorico – whose appeal remained pending asa result of the
OP’s failure to act on his October 18, 1994 letter cumappeal. They add thatTeodorico’s subsequent filing of his May
7, 2003 letter with the OP seeking a reconsideration of the November 19, 1997 Decision in O.P. CaseNo. 5902
should not have been taken against him by the CA, as it was prompted more by confusion engendered by the OP’s
failure to act on his October 18, 1994 letter cumappeal; the fact remains that he was not a party appellant in said
case, and thus could not be bound by the November 19, 1997judgment therein rendered.
Finally, petitioners argue that the NHA committed error insubdividing the subject lot, as it failed to accurately survey
the same before making the awards; that the NHA failed to review the sketch plans submitted by the NHA District
Office which reflected clearly the existing position of the structures built by the awardees; that the NHA decision
would result in the unwarranted destruction of such structures in order to conform to the respective allocations of the
awardees; and that their overpayments should be returned to them by the respondents, lest unjust enrichment
results.
On the other hand, the Rosetes in their Comment34 argue that the NHA’s August 5, 1994 Letter-Decision is
erroneous and unjust, because only the Brioneses stand to unduly benefit therefrom since their existing lot area
would be increased while that of the others would be decreased, thus resulting in the destruction of their existing
homes and structures.
The Corpuzes in their Comment35 claim that Teodorico’s October 18, 1994 letter to the NHA cannot betreated as an
appeal to the OP, and the NHA’s inaction or failure to act on the said letter should be construed as an implied denial
thereof which should have prompted Teodorico to takefurther legal steps to protect his interests. They object to
being required to pay for interests on the purchase price and taxes advanced by Teodorico, claiming that this was
unjust. Finally, they maintain that the NHA is correct in allocating the subject lot the way it did among the parties;
they should observe and yield to the law and policy of the NHA, even if it required the destruction of their homes and
structures.
The Brioneses in their Comment36 plainly adopt the decisions of the NHA, the OP and the CA. They particularly
stress thatthe OP’s disposition has long become final and executory;that the courts cannot interfere with the NHA’s
discretion in awarding the subject lot; that in the absence of grave abuse of discretion, the courts cannot overturn
the OP’s judgment; and that petitioners have not shown any valid ground to have the NHA and OP’s respective
decisions reversed.
Our Ruling
The Court deniesthe Petition.
On August 5, 1994, the NHA rendered its Letter-Decision, which Teodorico received on September 24, 1994. In an
October 18, 1994 letter to the NHA, Teodorico sought a reconsideration ofthe said decision. This was followed by a
July 28, 1999 letter to the NHA, where Teodorico, the Rosetes, and the Corpuzes sought approval of their request to
subdivide the subject lot on an "as is, where is" basis. In a November 12, 1999 Letter-Reply, the NHA informed the
parties that the original awards/allocationswere being retained, and advised them to hire a surveyor for the purpose
of subdividing the subject lot in accordance with such awards. It can be said that the NHA’s November 12, 1999
Letter-Reply constituted not only a written response tothe July 28, 1999 letter of Teodorico, the Rosetes, and the
Corpuzes, buta denial as well of Teodorico’s October 18, 1994 letter cum motion for reconsideration ofthe
agency’sAugust 5, 1994 Letter-Decision. As such, Teodorico should have thereafter filed an appealwith the
OPwithin the prescribed period. However,instead of doing so, he sent another letter to the NHA dated November 23,
1999 reiterating his request to subdivide the subject lot on an "as is, where is" basis and to bereimbursed by his co-
awardees for his overpayments, withinterest. He likewise filed in O.P. Case No. 5902 a May 7, 2003 letter, in which
he sought a reconsideration of the November 19, 1997 Decision rendered in said case.
With his failure to timely appealthe NHA’s August 5, 1994 LetterDecision and its November 12, 1999 Letter-Reply
denying his motion for reconsideration, and instead taking various erroneous courses of action which did not
properly direct his grievances at the right forum and within the prescribed period, the NHA’s August 5,1994 Letter-
Decision became final and executory as against Teodorico – and the petitioners for that matter. In contemplation of
law, petitioners did not at all file an appeal of the NHA’s August 5, 1994 Letter Decision.
Contrary to petitioners’ claim, the Court cannot consider Teodorico’s October 18, 1994 letter to the NHA as his
appeal to the OP; it is properly a motion for reconsideration of the agency’s August 5, 1994 Letter-Decision. Indeed,
OP AO 18 does not preclude the filing of a motion for reconsideration with the agency which rendered the
questioned decision; in reference to such motions for reconsideration, OP AO 18 specifically states that "[t]he time
during which a motion for reconsideration has been pending with the Ministry/agency concerned shall be deducted
from the period for appeal."
With regard to O.P. Case No. 5902, Teodorico could not have validly intervened. He had no personality to register
his objections – through his undated letter which he filed on February 2, 1995 and his May 7,2003 letter in which he
sought a reconsideration of the OP’s November 19, 1997 Decision; he was not a party – appellant or otherwise – in
saidcase. Thus, "[h]e cannot impugn the correctness of a judgment not appealed from by him. Hecannot assign
such errors as are designed to have the judgment modified."37 This view is ineffect taken by petitioners themselves,
with their argument in the instant Petition that since Teodorico was not an appellant in O.P. Case No. 5902,then he
should not be bound by the November 19, 1997 judgment therein dismissing the appeal. If he did not intend to be
bound by the judgment therein, then he had no business intervening in the case.
Since petitioners did not have the personality to intervene in O.P. Case No. 5902, then Teodorico had no standing to
file therein his May 7, 2003 letter cum motion for reconsideration. The OP was thus correct indenying the same; in
turn, the CA correctly affirmed the OP.
Notably, there is very little that petitioners can benefit from in obtaining a reversal of the assailed Decision of the
CA. For one, they do not dispute the award of 62 square meters in Teodorico’s favor; this has been made clear as
1âwphi 1
early as in Teodorico’s undated letter to the OP which was filed on February 2, 1995, where he indicated that he
was "satisfied" with the award. For another, petitioners do not seek to question the allocations made in favor of their
co-awardees; in fact, in the instant Petition, they openly declared that –
In closing and perhaps most important of all, petitioners would like to respectfully manifest to this Honorable Court
that they have deliberately not questioned the right of respondents to be potential beneficiaries of the ZIP Census
even if they had argued before the Court of Appeals that respondents were mere renters. The reason for this is that,
at the end of the day, the peace of the community is paramount. x x x38
The petitioners' remaining point of contention is their claim for reimbursement. Sad to say, this Court cannot order a
refund of Teodorico's overpayments. First of all, NHA - the recipient of the overpayment - cannot be ordered to
make a refund, since Teodorico never prayed to recover from it; in all his submissions - from the NHA, the OP, the
CA, and all the way up to this Court - he consistently sought reimbursement only from his co-awardees, not the
NHA. Secondly, the specific amount of overpayment is not fixed or determinable from the record; this being the
case, it cannot be determined how much exactly each of Teodorico's co-awardees owes him. Thirdly, this Court is
not a trier of facts; it cannot go out of its way to determine and analyze from the record what should be returned to
Teodorico, nor can it receive evidence on the matter. Suffice it to state that petitioners are indeed entitled to be
indemnified for paying for the value of the subject lot and the real property taxes thereon over and above what was
awarded to them, pursuant to Article 1236 of the Civil Code, which states that "[w]hoever pays for another may
demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the
debtor, he can recover only insofar as the payment has been beneficial to the debtor." They may also recover from
the NHA, applying the principle of solutio indebiti.39
WHEREFORE, the Petition is DENIED. The assailed October 30, 2006 Decision and December 22, 2006
Resolution of the Court of Appeals in CA-G.R. SP No. 79400 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 181921 September 17, 2014
INTERORIENT MARITIME ENTERPRISES, INC., Petitioner,

vs.
VICTOR M. CREER III, Respondent.
DECISION
DEL CASTILLO, J.:
"The oft repeated rule is that whoever claims entitlement to the benefits provided by law should establish his or her
right thereto by substantial evidence."1
G.R. SP No. 90374 which reversed and set aside the July 30, 2004 Decision4 of the National Labor Relations
Commission (NLRC). The said NLRC Decision affirmed the November 28, 2003 Decision5 of the Labor Arbiter which
dismissed the Complaint6 filed by respondent Victor M. Creer III (Victor) against petitioner InterOrient Maritiime
Enterprises, Inc. (InterOrient) for permanent disability benefits, medical reimbursement, sickness allowances, moral
and exemplary damages, and attorney’s fees.
Also assailed in this Petition is the February 21, 2008 CA Resolution7 which denied InterOrient’s Motion for
Reconsideration.8
Factual Antecedents
On April 4, 2001, InterOrient hired Victor as Galley Boy on board the vessel M/V MYRTO owned by Calidero
Shipping Company, Ltd. (Calidero) for a period of nine months, which may be extended for three more months upon
mutual consent of the parties. Victor was required to work 48 hours a week, with a basic monthly salary of
US$235.00 and US$94.00 fixed overtime pay per month.
Prior to embarkation, Victor went through the requisite Pre-Employment Medical Examination (PEME) and was
declared fit for sea duty. On May 12, 2001, Victor commenced his employment on boardthe vessel where he
performed the following duties and responsibilities as Galley Boy/2nd Cook:
* carry food stuff from reefer and dry store provisions to galley;
* wash vegetables;
* prepare and cook breakfast;
* prepare and cook lunch and dinner;
* wash used cooking utensils;
* keep hygiene in mess room and mess room pantry;
* general cleaning in provision chambers and dry provision store;
* clean up mess room.9
As 2nd Cook, Victor was tasked to get provisions from the cold storage which is kept at its coldest temperature to
maintain freshness of the food stored therein. He would do this either immediately before or after his exposure to
intense heat in the galley.
Victor alleged that when he was about to get provisions from the cold storage sometime inNovember 2001, he felt a
sudden pain in his chest that radiated to his back. Since then, he experienced incessant cough, nasal congestion,
difficulty in breathing, physical weakness, chills and extreme apprehension. According tohim, this condition persisted
until the expiration of his contract on May 7, 2002.
On May 9, 2002, Victor arrived in Manila. The following day, he reported to the office of InterOrient and informed the
company about the pain he experienced while he was on board. Victor averred that InterOrient merely advised him
to consult a doctor without giving him any doctor’s referral. He did, however, sign a Receipt and Release10 where he
acknowledgedreceipt of the full payment of his monetary entitlements under the employmentcontract, which
provides in part, viz:
I hereby declare and confirm that I have no other claim against said vessel, her Master, Owners, Operators and
Agents and I hereby discharge and release them from any other liability whatsoever[.] I further certify and confirm
that I worked on board the said vessel under normal conditions and that I have not contracted or suffered any illness
orinjury from my work and that I was discharged in good and perfect health.11
Thereafter, Victor claimed that he underwent medical examination at the Fatima Medical Clinic where he shouldered
all expenses. Although he reported his condition to InterOrient, he was still notgiven any medical assistance.
Instead, he was merely told to continue medication and consultation.
On June 18, 2002, Victor went to the Heart and Lung Diagnostic Center where his attending physician, Dr.
Fernando G. Ayuyao (Dr. Ayuyao), found Victor to be suffering from Community-Acquired Pneumonia 1 and
Bronchial Asthma. Medicines were prescribed and he was advised to have another chest xray for re-evaluation after
two weeks. One month later, or on July 18, 2002, Dr. Ayuyao prescribed Victor with anti-TB medications.
Victorclaimed that he continued his medication for nine months. But when heconsulted another doctor, a certain Dr.
Purugganan from Citihealth Diagnostic Centeron June 5, 2003, it was found out that he had far-advanced
pulmonary tuberculosis.12
On August 13, 2003, Victor consulted another physician,Dr. Efren R. Vicaldo (Dr. Vicaldo), at the Philippine Heart
Center. After conducting a medical examination and evaluation, Dr. Vicaldo issueda medical certificate indicating
that Victor was diagnosed with Hypertension, Stage II, and Pulmonary Tuberculosis.13 He gave Victor an impediment
grade VIII (33.59%)14 and further declared him unfit to resume work as a seaman in any capacity, and that his illness
was considered work-aggravated.15
Victor contended that during the course of his treatment, he regularly informed InterOrient of his sickness. However,
he was neitherapprised of his rights to nor paid sickness allowance amounting to US$940.00 asmandated in the
Philippine Overseas Employment Agency (POEA) 2000 Amended Standard Terms and Conditions of Employment
Contract Governing Seafarers (POEA Contract). And as his requests for payment of the said allowance were
consistently ignored, he filed with the Labor Arbiter on August 28, 2003 a Complaint for permanent disability benefits
for pulmonary tuberculosis, medical reimbursement, sickness allowance, compensatory, moral and exemplary
damages, and attorney’s fees against InterOrient and Calidero.
In its Position Paper,16 InterOrient negated Victor’s claim for disability benefits averring that the same has no
factual,contractual or legal basis. It argued that his discharge from the vessel was not occasioned by any illness or
injury sustained or contracted on board but was simply due tocompletion or expiration of his contract; that he
voluntarily executed a Receipt and Release document wherein he acknowledged that he had notcontracted any
illness while on board; that he was released in good and perfect health; and that there is no clear evidence that
shows his entitlement to the benefits or damages being claimed.
In his Decision17 of November 28, 2003, the Labor Arbiter notedthat there is nothing on record to show that Victor
ever made any formal claim for sickness allowance, medical benefitsand disability benefits while on board the
vessel or immediately after his repatriation. Neither did he submit to, nor apply for any post-employment medical
examination withinthree days from his repatriation – a requirement for claims for sickness and disability benefits.
Instead, his Complaint to recover benefits based on the claim that he contracted sickness on board the vessel was
only filed 15 months after his repatriation.
The Labor Arbiter took judicial notice of the fact that seamen enjoy the most generous and liberal medical and
disability benefits of all overseas workers. Thus, he deemed it contrary to logic, reason and experience for Victor not
to claim medical and sickness benefitsif he really was ill while on board the vessel, or immediately after his
repatriation. In conclusion, the Labor Arbiter held that InterOrient cannot be held liable for Victor’s claims since he
must have contracted his ailment after repatriation and not while aboard the vessel, not to mention that the contract
between the parties had already expired. Hence, the dispositive portion of the said Decision reads:
WHEREFORE, premises considered, the complaint is hereby dismissed for lack of merit.
SO ORDERED.18
Ruling of the National LaborRelations Commission
Victor appealed tothe NLRC averring the following: that the Receipt and Release primarily relied upon by the Labor
Arbiter in arriving athis Decision contained a mere pro-forma addendum (particularly a certificate of fitness) which
had no substantial basis; that said Receipt and Release cannot overrule the certifications of the doctors/health
experts as to the status of his health; that the Receipt and Release cannot effectively bar his entitlement to benefits
since at the time of its execution, he honestly believed that what he had was just the common cough and colds that
he has had for several months; that he did not know that letting common colds persist for prolonged periods
weakens the body’s defenses and increases the risk of acquiring infection, including tuberculosis; that the absence
of any showing that he was claiming to be sick or claiming sickness benefits does not prevent his present claim;that
his acquisition of the infection can be clearly traced to his employment with InterOrient; that the absence of signs
and symptoms of tuberculosis while still underthe employ of InterOrient, and even after his disembarkation, does not
absolutely mean that he was free from such infection during the said period; and that the initial stages of
tuberculosis are usually asymptomatic thus explaining the absence of signs and symptoms during the early stages
of his infection while he was on board the vessel.
The NLRC, however, did not find merit in Victor’sarguments. In a Decision19 dated July 30, 2004, it affirmed in
totothe Decision of the Labor Arbiter and dismissed Victor’s appeal.
Victor moved for reconsideration20 but the same was denied in an Order21 dated April 20, 2005.
The CA, in resolving Victor’s Petition for Certiorari22 in a Decision23 dated November 29, 2007, granted the same and
awarded him permanent disability benefits and attorney’s fees. Applying Section 32-A of the POEA Contract, the CA
declared Victor’s illness, pulmonary tuberculosis, included inthe list of occupational diseases. It found that Victor
was overworked and over-fatigued as a result of the long hours of work required by his duties and that he was
exposed todaily rapid variations in temperature. Aside from physical strain, he was also subjected to emotional
stress brought about by the separation from his family. The CA concluded that with his daily exposure to these
factors which could weaken his immune system, it was not impossible that he contracted tuberculosis during the
course of his employment.
The CA disregarded the argument attributing the cause of ailment to Victor’s lifestyle and activities after his
repatriation, explaining that it was sufficient that the employment contributed even ina small degree to the
development of the disease. Anent InterOrient’s contention that Victor never intimated or complained about any
illness or injury while on board the vessel, the said court stated that it is not required for an illness to be considered
as an occupational disease before a Complaint can be filed. One needs only to prove that the ailment was
contracted while working under conditions involving the risk described in the POEA Contract. The CA did not
likewise give much weight to the Receipt and Release signed by Victor as it found its terms so unconscionable that
Victor was shortchanged by a significant amount.
InterOrient filed a Motion for Reconsideration24 which was denied by the CA in a Resolution25 dated February 21,
2008.
Issues
Hence, this Petition for Review on Certiorariimputing upon the CA the following errors:
X X X THE HONORABLE COURT OFAPPEALS GRIEVOUSLY ERRED IN AWARDING PERMANENT DISABILITY

BENEFITS IN THE AMOUNT OF US$60,000.00 AND ATTORNEY’S FEES, CONSIDERING THAT:
A.
THE COURT OF APPEALS ERRED INSETTING ASIDE THE NLRC’S DECISION, THERE BEING NO GRAVE
ABUSE OF DISCRETION ON THE PART OF THE COMMISSION. ON THE CONTRARY, THE NLRC DECISION
WAS SUPPORTED BY SUBSTANTIAL EVIDENCE.
B.
THE COURT OF APPEALS DISREGARDED THE TERMS AND CONDITIONS OF THE POEA STANDARD
EMPLOYMENT CONTRACT WHEN IT RULED THAT VICTORM. CREER III’S ILLNESS WAS WORK-RELATED
DESPITE THE FACT THAT THE SAME AROSE ELEVEN (11) MONTHS AFTER THE EXPIRATION OF HIS
EMPLOYMENT CONTRACT.
C.
THE COURT OF APPEALS ERRED IN RULING THAT VICTOR M. CREER III’S ILLNESS AROSE DURING HIS
EMPLOYMENT OR THE RISK OF CONTRACTING THE SAME WAS AGGRAVATED BY HIS EMPLOYMENT
DESPITE THE LACKOF REASONABLE PROOF IN THIS RESPECT.
D.
THE COURT OF APPEALS ERRED IN AWARDING ATTORNEY’S FEES.26 The pivotal issue is whether InterOrient
can be held accountable for Victor’s disease even if the same was diagnosed 11 months after he disembarked from
the vessel upon the termination of his employment contract.
InterOrient insists that the CA erred in ruling that Victor’s sickness was work-related considering the dearth of
evidence that would establish that he suffered from the symptoms of the disease while on board the vessel. It
argues that if Victor was really suffering from chest and backpains, incessant coughing and low-grade fever, he
would have reported the matter in the Ship’s Logbook, inform his superiors, and ask for a medical check-up upon
arrival. However, he did not. Instead, upon his repatriation, Victor willingly signed a Receipt and Release declaring
that he was not suffering from any ailments at that time. On the other hand, there is strong probability that Victor
contracted the disease after his disembarkation.
InterOrient also contends that Victor failed to satisfy allthe conditions for compensability of an occupational disease
as provided under the POEA Contract. It maintains that Victor failed to prove that hecontracted TB as a result of his
exposure to the described risks; that it was contracted within a period of exposure and under such other factors
necessary to contract it; and that there was an absence of notorious negligence on his part. Lastly, InterOrient
argues that Victor’s notorious negligence was apparent as he neither declared his alleged illness nor informed the
former about it; he did notinform the agency about his initial diagnoses; he did not follow the doctor’s
recommendation to take the medication for four months; and it took him a long time after the second diagnosis
before he went back to the physician. Had Victor not been negligent, his TB could have been successfully treated.
Victor, on the other hand, adopts the CA’s ratiocinations in its assailed Decision and impresses upon this Court
thathis illness was contracted during the term of his employment and that the risk of contracting the same was
increased or aggravated by his working conditions.
Our Ruling
At the outset, we notethat the Petition essentially assails the factual findings of the CA. As a rule, this Court is not a
trier of facts and only questions of law may be raised in petitions brought under Rule 45 of the Rules of Court.
However, the Court is constrained to decide factual issues in exceptional cases, one of which is when there is
conflict between the findings and position of the CA, on one hand, and that of the quasi-judicial bodies, on the
other,27 as in this case.
For a seaman’s claim for disability to prosper, it is mandatory that within three days from his repatriation, he is
examined by a company-designated physician. Non-compliance with this mandatory requirement results in the
forfeiture of the right to claim for compensation and disability benefits.
It is undisputed that on May 7, 2002, Victor’s employment contract was completed. He arrived in Manila on May 9,
2002; the following day, or on May 10, 2002, he reported to the office of InterOrient. Although he averred that he
informed InterOrient about the pain he experienced whileon board the vessel, the company allegedly only advised
him to consult a doctor but did not give any referral.
We are not persuaded by Victor’s contention. It must be stressed that his repatriation was not due toany medical
reasons but because his employment contract had already expired. Other than his self-serving allegation that he
experienced pain while on board, he was not able to substantiate the same. There was no showing that he reported
his injury to his officers while on board the vessel; neither did he prove that he sought medical attention but was
refused. Likewise, other than his bare and self-serving assertion that he informed InterOrient about his pain, he
presented no evidence ortangible proof that he indeed requested for medical attention, much more that he was
rebuffed.
On the contrary, the records show that when he reported to InterOrient immediately after his repatriation, he signed
a Receipt and Release stating that he has not contracted or suffered any illness or injury from work and that he was
discharged in good and perfect health. Moreover, we are baffled why, if indeed Victor needed medical services, he
opted to consult several doctors other than the company-designatedphysician. He offered no explanation for this.
"The rationale for the rule [on mandatory post-employment medical examination within three days from repatriation
by a company-designated physician] is that reporting the illness or injury within three days from repatriation fairly
makes it easier for a physician to determine the cause of the illness or injury. Ascertaining the real cause of the
illness or injury beyond the period may prove difficult. To ignore the rule might set a precedent with negative
repercussions, like opening floodgates to a limitless number of seafarers claiming disability benefits, or causing
unfairness to the employer who would have difficultydetermining the cause of a claimant’sillness because of the
passage of time. The employer would then have no protection against unrelated disability claims."28
In fine, we hold that Victor’s non-compliance with the three-day rule on post-employment medical examination is
fatal to his cause. As a consequence, his right to claim for compensation and disability benefits is forfeited. On this
1âw phi 1
score alone, his Complaint could have been dismissed outright.
Victor’s illness is not compensable.
Even if we disregard the mandatory three-day rule on post-employment medical examination by the company-
designated physician, Victor’s claim for disability benefits must still failfor not being compensable.
For an illness to be compensable, Section 20(B)(6)29 of the 2000 Amended Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (2000 Amended StandardTerms
and Conditions), deemed incorporated in the POEA Contract, requires the concurrence of two elements: first, that
the illness mustbe work-related; and second, that the work- related illness must have existed during the term of the
seafarer’s employment contract.30
a) Victor failed to show that his illness existed during the term of his contract.
In this case, Victor submitted no proofthat his illness was contracted during the term of his contract with InterOrient.
As already mentioned, the reason for Victor’s repatriation was the completion/expiration of his contract and not
because of any sickness. Other than his uncorroborated and self-serving assertion that he experienced chest pains
while on board the vessel, there was absolutely no proof at all that he consulted a doctor while on board, or thathe
reported the same to his superiors so that he will be provided with medical assistance. On the contrary, upon
repatriation, he signed a Receipt and Release wherein he acknowledged that he worked under normal conditions on
board the vessel; thathe did not contract or suffer any injury; and that hewas discharged in good health. Victor never
alleged that he was coerced into signing the Receipt and Release or that he did not understand the same. Thus, it
was crucial that Victor presented "concrete proof showing that he acquired orcontracted the x x x illness that
resulted to his disability during the term of his employment contract."31 Proof of this circumstance was particularly
crucial considering the absence of any evidence that he reported his illness while on board and after his
repatriation.32 However, all that Victor put forward were bare allegations that he experienced what appeared to be
symptoms of pulmonary tuberculosis on board the vessel, and the dogged insistence that his working conditions are
proof enough that his work contributed to his contracting the disease.
b) Victor failed to show thathis illness is work-related.
"Work-related illness" is defined under the 2000 Amended Standard Terms and Condition "as any sickness resulting
in disability or death due to an occupational disease listed under Section 32-A of [the said] contract[,] with the
conditions set therein satisfied."33 There is no question that Pulmonary Tuberculosis is listed as an occupational
disease under Section 32-A(18). However, for the disability caused by this occupational disease to be compensable,
the POEA Contract provides conditions that must be satisfied, viz:
SECTION 32-A OCCUPATIONAL DISEASES

For an occupational disease and the resulting disability or death to be compensable, allof the following conditions
must be satisfied:
1. The seafarer’s work must involve the risks describe herein;
2. The disease was contracted as a result of the seafarer’s exposure to the describe[d] risks;
4. There was no notorious negligence onthe part of the seafarer. x x x (Emphasis supplied)
Victor miserably failed to comply with these conditions.
While pulmonary tuberculosis is listed as an occupational disease, the Court is not convinced that Victor’s
pulmonary tuberculosis is work-acquired or work-aggravated because if it were so, then at the outset, Victor should
have already been diagnosed with pulmonary tuberculosis when he sought medical help one month from his
repatriation. Instead, Dr. Ayuyao diagnosed him with Community Acquired Pneumonia I and Bronchial Asthma34 –
sicknesses which aside from being different from pulmonary tuberculosis, were not shown to have any relation
thereto.
Furthermore, while it is undisputed thatVictor’s work as a Galley Boy/2nd Cook involved the risks provided in the
POEA Contract (first condition), i.e., overwork or fatigue and exposure to rapid variationsin temperature, there was
failure to prove that the TB was contracted as a result ofhis exposure to the said described risks (second condition).
No evidence on record shows how Victor’s working conditions caused or aggravated his TB. On the contrary, Victor
himself acknowledged that he worked under normal conditions while on board the vessel.
Likewise, the third and fourth conditions were not satisfied. There was no credible evidence on record to prove that
the TB was contracted within a period of exposure and under such other factors necessary to contract it. Neither is
there substantial evidence presented to show that his working conditions activated the disease-causing organism
thatmay be dormant in his system. As pointed out by both parties, pulmonary tuberculosis is airborne and easily
transmissible by infected patients. The risk of being infected, or acquiring, the tuberculosis infection is mainly
determined by exogenous factors.35 The probability of contact with a case of tuberculosis, the intimacy and duration
of that contact, the degree of infectiousness of the case, and the shared environment of the contact are all important
determinantsof transmission.36 On the other hand, the risk of developingthe disease after being infected is largely
dependent on endogenous factors.37 The tuberculosis bacteria may lie dormant in the infected person’s immune
system for years before it becomes reactivated, or he may ultimately develop the disease within the first year or two
after infection, depending on the innate susceptibility to disease of the person and level of immunity.38 Simply put,
there are so many possibilities how and when Victor could have acquired pulmonary tuberculosis. Itis "[t]he oft
repeated rule x x x that whoever claims entitlement to the benefits provided by law should establish his x x x right
thereto by substantial evidence."39 "The general principle is that one who makes an allegation has the burden
ofproving it. A party alleging a critical fact must support his allegation with substantial evidence. Any decision based
on unsubstantiated allegation cannot stand as it will offend due process."40
Besides, as already emphasized by this Court, "in the absence of substantial evidence, working conditions cannot
be accepted to have caused or at least increased the risk of contracting the disease x x x. Substantial evidence is
more than a mere scintilla. The evidence must be real and substantial, and not merely apparent; for the duty to
prove work-causation or work-aggravation imposed by law is real and not merely apparent."41
The Court cannot give credence to the medical certificate issued by Dr. Vicaldo. Records failed to show that the said
medical certification, which declares Victor’s illness as work-aggravated, was supported by diagnostic tests and
procedures. There was no explanation how the conclusions were arrived at. Neither was there any medical records
orother sufficient proof presented that would support and validate the findings contained therein. At most, the said
medical certificate is a mere summary and generalization of Victor’s ‘medical history and condition based on a one-
time consultation. While it is true that "[p]robability and not ultimate degree of certainty is the test of proof in
compensation proceedings[, i]t cannot begainsaid, however, that award of compensation and disability benefits
cannot rest on speculations, presumptions and conjectures."42
On the other hand, while the letter43 of Dr. Ayuyao two months after Victor returned to the Philippines would suggest
that the latter had developed pulmonary tuberculosis by then, the said letter still does not establish that the disease
was work-related or work-aggravated. There is nothing on record that would establish the development of the illness
astraceable to Victor’s employment. The Court cannot take at face value Victor’s bare allegations that he suffered
incessant cough, nasal congestion, difficulty of breathing, and that he experienced physical weakness and chills
while on board. Plainly, the claim is unsubstantiated.
The Court cannot over-emphasize that "self-serving and unsubstantiated declarations are insufficient to establish a
case x x x where the quantum of evidence required to establish as fact is substantial evidence."44
In fine, Victor's claim for disability benefits must be denied for failure to comply with the mandatory three-day rule on
post-employment medical examination without any valid or justifiable reason, and for being noncompensable there
being no showing that the illness existed during the term of his employment contract or that it is work-related.
As this Court has reiterated in a number of cases, it is "[ w ]ell aware of the principle that, consistent with the
purposes underlying the formulation of the POEA [Contract], its provisions must be applied fairly, reasonably and
liberally in favor of the seafarers, for it is only then that its beneficent provisions can be fully carried into effect. This
exhortation cannot, however, be taken to sanction the award of disability benefits and sickness allowance based on
flimsy evidence and/ or even in the face of an unjustified non-compliance with the mandatory reporting requirement
under the POEA [Contract]."45 "Liberal construction is not a license to disregard the evidence[, or lack thereof] on
record; or to misapply [the] laws."46 While we sympathize with Victor's plight, the Court is constrained to deny his
claims for disability benefits absent substantial evidence on record to justify such grant.
WHEREFORE, premises considered, the Petition is GRANTED and the assailed November 29, 2007 Decision of
the Court of Appeals in CA-G.R. SP No. 90374 is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another
is entered REINSTATING the Decision dated July 30, 2004 of the National Labor Relations Commission which, in
tum, affirmed the Decision dated November 28, 2003 of the Labor Arbiter.
SO ORDERED.
SECOND DIVISION
G.R. No. 178911 September 17, 2014
EDUARDO D. MONSANTO, DECOROSO D. MONSANTO, SR., and REV. FR. PASCUAL D. MONSANTO,
JR.,Petitioners,
vs.
LEONCIO LIM and LORENZO DE GUZMAN, Respondents.
DECISION
DEL CASTILLO, J.:
"Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court with
jurisdiction over the subject matter."1
Assailed in this Petition for Review on Certiorari2 are the March 12, 2007 Decision3 of the Court of Appeals (CA)
which denied the Petition for Certiorari in CA-G.R. CEB-SP No. 01343 and its July 6, 2007 Resolution4 denying the
herein petitioners' Motion for Reconsideration.5
Factual Antecedents
In a letter6 dated February 18, 2004, Flordelis B. Menzon, Regional Director of the Home Development Mutual Fund
(Pag-IBIG), requested the intervention of Executive Judge Sinforiano A. Monsanto (Executive Judge Monsanto) of
the Regional Trial Court (RTC) of Catbalogan, Samar on the alleged anomalous auction sale conducted by Sheriff
IVLorenzo De Guzman (De Guzman). According to Pag-IBIG, De Guzman previously acceded to its request to
move the date of the auction sale to January 20, 2004; however, to its surprise, the sale proceeded as originally
scheduled on January 15, 2004. Pag-IBIG also claimed that the winning bid of Leoncio Lim (Leoncio) in the amount
of ₱500,000.00 was grossly disadvantageous to the government considering that the outstanding loan obligations of
the mortgagor, Eduardo Monsanto (Eduardo), was more than the bid amount. Pag-IBIG thus manifested that –
It is for this reason that we are making this protest. Sheriff de Guzman failed to comply with our request for
deferment despitehis [acquiescence]. We are requesting for your intervention to nullify the results of the auction sale
conducted last January 15, 2004. This will give our office a chance to be able to participate and recoup our
investment.
We trust that you will give thismatter preferential attention.7
Executive Judge Monsantorefrained from acting on the letter considering that Eduardo is his relative; instead he re-
assigned the same to Judge Sibanah E. Usman (Judge Usman)8 of Branch 28.
In an Order9 dated May 3, 2004 and captioned "In the Matter of the Extrajudicial Foreclosure of Mortgage Filed by
the Home Development Mutual Fund (Pag-IBIG Fund)," Judge Usman declared that on even date, RTC-Branch 28
conducted a hearing; that Atty. Cesar Lee argued on behalf of Pag-IBIG; and that Pascual Monsanto (Pascual)
appeared on behalf of Eduardo. However, Judge Usman noted that no formal petition orcomplaint was actually filed
which presents a judicial issue; moreover, the acts complained of partake of administrative matter. Consequently,
Judge Usman referred the matter to the Office of the Court Administrator (OCA) for further action.
Subsequently, Pascual filed with the OCA, copy furnished the RTCCatbalogan, Samar, Branches 27 and 28, a
Motion to Lift Writ of Execution and Notice to Vacate10 dated March 13, 2004. Pascual alleged thaton March 5, 2005,
De Guzman, Sheriff of Branch 27, issueda Notice to Vacate; that the same is being enforced with grave threats and
harassment; thatthe protest of Pag-IBIG remains pending with and unresolved by OCA; thatthe trial court did not
transmit the records of the case tothe OCA; that the winning bid of ₱500,000.00 submitted by Leoncio is
disadvantangeous to the government; that Eduardo’s loan with PagIBIG is being proposed for restructuring; and that
the writ of execution and notice to vacate would gravely prejudice their rights. Pascual thus prayed that:
A. An order be issued lifting the Writ of Execution and the Notice to Vacate;
B. An order be issued enjoining or restraining the subject Sheriff from enforcing the said Notice to vacate; and
C. Court officials or personnel above mentioned be made to explain respecting the handling of the above captioned
case as cited above, and if found negligent be so sanctioned in accordance with the law.11
Acting on the aforesaid Motion to Lift Writ of Execution and Notice to Vacate, the OCA, in a letter12 dated May 9,
2005 directed Judge Usman to –
(1) conduct an investigation on the missing records of ‘Home Development Mutual Fund (Pag-IBIG) vs. Eduardo
Monsanto’ and to report thereon within THIRTY (30) days from notice; and (2) take action on (a) Items A and B of
the ‘Motion to Lift Writ ofExecution and Notice to Vacate’ and (b) the letter of Home Development Mutual Fund dated
18 February 2004, a copy of which is annexed to the ‘Motion to Lift Writ of Execution and Notice to Vacate’, herewith
attached.13 Pursuant to the above directive, Judge Usman notified Pag-IBIG, Eduardo, and Leoncio of a hearing
scheduled on June 14, 2005.14 This time, the case was captioned as "Home Development Mutual Fund (Pag-IBIG
Fund), mortgagee, v. Eduardo Monsanto, mortgagor."
In a Manifestation15 dated June 7, 2005 and filed before Branch 28, PagIBIG informed the trial court that the loan of
Eduardo had been restructured and that Eduardo had commenced paying monthly amortizations; that as a result of
the restructuring, Pag-IBIG is withdrawing its Petition for Extra-judicial Foreclosure; and that it is no longer interested
in pursuing an administrative action against De Guzman.
Leoncio opposed Pag-IBIG’s manifestation.16
Meanwhile, the record shows that on April 11, 2005, Leoncio filed with Branch 27 a Manifestation with Ex-Parte
Motion for Issuance of Writ of Possession17 claiming that the reglementary period had elapsed without Eduardo
redeeming the subject property; as such, he is already entitled to the issuance of a writ of possession.
On July 15, 2005, Decoroso D. Monsanto and Pascual moved to intervene in the case.18 Both claimed that they are
co-owners and actual possessors of the subject property.
Ruling of the Regional Trial Court – Branch 28
In an Order19 dated July 1, 2005, the RTC-Branch 28, Catbalogan, Samar resolved two pending motions, i.e., (1) the
motion for issuance of writ of possession filed by Leoncio with Branch 27; and (2) the motion to lift writ of execution
and notice to vacate filed by Pascual with the OCA butcopy furnished the RTC Catbalogan, Samar, Branches 27
and 2820 viz:
After careful and judicious scrutiny of the records of thiscase, this Court is highly convinced that the public auction
sale conducted by Mr. De Guzman and Atty. Ma. Luz Lampasa-Pabilona, Clerk of Court whereby Mr. Leoncio Lim
emerged as the highest bidder and purchaser of the subject property in good faith, and also given a Certificate of
Sale issued by the Sheriff and the same was registered with the Registry of Deeds on March 5, 2004 are in order.
The impugned Sheriff De Guzman had accordingly performed his functions. Accordingly, there is no showing that
hehas abuse[d] his authority during the conduct of the public auction. Such being the case, this Court is further
convinced that the motion filed by Leoncio Lim through counsel Atty. Labid being meritorious should be given due
course. On the other hand, the motion to lift writ of execution and notice to vacatefiled by Rev. Fr. Pascual D.
Monsanto, Jr. being devoid of merit should be denied.
Atty. Cesar E. Lee filed a manifestation dated June 7, 2005, praying that an order be issued directing Lorenzo
deGuzman, Sheriff to make the necessary notice to all concern[ed] of the fact that the mortgagee has restructured
his loan with the mortgagor, and in effect, redeemed his obligation subject matter of this foreclosure proceeding.
Mr. De Guzman explained that even assuming that there was restructuring of the [mortgage] loan it is very clear that
it was done after the lapse of the one (1) year redemption period and also there was no notice given to the Office of
the Clerk of Court. Moreover,if there was actual payment the Office of the Clerk of Court was never x x x informed
by Mr. Monsanto. WHEREFORE, premises considered, this Court finds that the instant motion to lift writ of
execution and notice to vacate the [premises] is devoid of merit, hence denied; likewise the manifestation of Atty.
Cesar Lee dated June 7, 2005 being devoid of merit is also denied. The motion for issuance of writ of possession
filed by Leoncio Lim through counsel Atty. Labid being meritorious is hereby ordered GRANTED, hence let a writ of
possession be issued immediately in favor of Mr. Leoncio Lim purchaser in good faith.
Let a copy of this order be furnished the Hon. Presbitero J. Velasco, Jr., Court Administrator for his information and
guidance.
SO ORDERED.21
Eduardo, Pascual,and Pag-IBIG filed motions for reconsideration; however, the same were denied by the trial court
in its August 30, 2005 Order.22
Petitioners thus filed a Petition for Certiorari23 with the CA, which was docketed as CA-G.R. CEB SP No. 01343.
They claimed that the RTC committed grave abuse of discretion indenying their Motion to Lift Writ of Execution and
Notice to Vacate and in granting Lim’s Ex ParteMotion for Issuance of Writ of Possession through its July 1, 2005
Order, arguing that Lim’s motion was not made under oath; that there are third parties in possession of the subject
property; that they were not notified of the confirmation of the sale; that the mere filing of the Certificate of Sale
withthe Register of Deeds without presenting the owner’s duplicate copy is not tantamount to registration; that since
the Certificate of Sale was not registered, then the period to redeem did not begin to run; that De Guzman’s March
7, 2005 Notice to Vacate was illegal, since at the time, no writ of possession was yet issued; that De Guzman’s
actions in enforcing the writ of possession on July 8 and 15, 2005 – while their motion for reconsideration was
pending – is inhuman and violated their constitutional rights; and that out of justice and equity, they should be
allowed to redeem the property. Petitioners prayed for the reversal of the RTC’s July 1, 2005 and August 30, 2005
Orders and for the CA to restore the status quo ante.
On March 12, 2007, the CA issued the assailed Decision finding no grave abuse of discretion on the part of the RTC
and affirming its July 1, 2005 and August 30, 2005 Orders, viz:
ACCORDINGLY, in line with the foregoing disquisitions, the petition is hereby DENIED. The assailed Orders dated 1
July 2005 and 30 August 2005 are AFFIRMED IN TOTO.
SO ORDERED.24
Petitioners filed their Motion for Reconsideration, which the CA denied in its assailed July 6, 2007 Resolution.
Issues
Petitioners raise the following grounds for the Petition:
1. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN RULING THAT NO GRAVE
ABUSE OF DISCRETION WAS COMMITTED BY THE HONORABLE REGIONAL TRIAL COURT BRANCH 27,
EIGHTH JUDICIAL REGION, CATBALOGAN, SAMAR IN ITS ISSUANCE OF THE WRIT OF POSSESSION AND
ITS ISSUANCE DOES NOT NEED A MOTION FOR THE CONFIRMATION OF SALE WHICH REQUIRES A
HEARING;
2. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN FINDING THAT THE
CERTIFICATE OF SALE WAS REGISTERED OR THAT THE MEREFILING WITH THE REGISTER OF DEEDS OF
THE SAME IS TANTAMOUNT TO ITS REGISTRATION, THUS THE REDEMPTION PERIOD HAD STARTED TO
RUN, ON THE COURT’S CONJECTURE THAT P.D. 1529 IMPLIEDLY REPEALED ACT NO. 3135,
PARTICULARLY SECTION 6, THEREOF;
3. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN AFFIRMING THE COURT A
QUO’S FINDINGS THAT ALL THE PETITIONERS WERE DULY NOTIFIED BUT FAILED TO APPEAR DURING
THE HEARING ON THE MOTION FOR THE ISSUANCE OF THE WRIT OFPOSSESSION. IT ERRED IN
ALLUDING THAT IN THE COURSE OF THE PROCEEDINGS OF THIS INSTANT CASE, PETITIONERS WERE
NOT DENIED DUE PROCESS OF LAW; AND
4. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN RULING THAT
PETITIONERS DECOROSO AND FR. PASCUAL, JR. DO NOT HOLDTHE FORECLOSED PROPERTY
ADVERSELY TO THAT OF THE PETITIONER-MORTGAGOR, FOR BEING MERE ASSIGNEES, THEYDERIVED
THEIR POSSESSORY RIGHTS FROM PETITIONER-MORTGAGOR.25
Praying that the assailed CA Decision and Resolution be set aside, petitioners reiterate intheir Petition and
Reply26the points they raised in their CA Petition. Thus, they argue that the ex partemotion for the issuance of a writ
of possession should be under oath, and requires prior notice and hearing; that the mere filing of the sheriff’s
certificate of sale with the Register of Deeds is not equivalent to registration as required in order for the one-year
redemption period to commence; that Presidential Decree No. 1529 did not repeal Act No. 3135; that the occupants
of the subject property hold rights adverse to the mortgagor Eduardo; and that the extrajudicial foreclosure
proceedings was attended by numerous irregularities.
Respondent Lim’s Arguments
On the other hand, Leoncio in his Comment27 insists in essence that the mere filing of the sheriff’s Certificate of Sale
with the Samar Register of Deeds on March 5, 2004 was equivalent to the registration thereof; that the Samar
Registrar of Deeds assured him that merereceipt of the Certificate of Sale is tantamount to registration; that he
relied upon this representation and assurance in good faith; and that petitioners’ remedy is to file a separate case for
recovery of ownership and possession.
Our Ruling
The Petition is dismissed.
"Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court with
jurisdiction over the subject matter."28 Section 5, Rule 1 of the Rules of Court specifically providesthat "[a] civil action
is commenced by the filing of the original complaint in court." Moreover, "[e]very ordinary civil action must bebased
on a cause of action."29
No proper initiatory pleading was filed before the trial court.
In this case, records show that no formal complaint or petition was filed in court. The case was supposedly
"commenced" through a letter of Pag-IBIG asking the intervention of Executive Judge Monsanto on the alleged
anomalous foreclosure sale conducted by De Guzman. However, saidletter could not in any way be considered as a
pleading. Section 1, Rule 6 of the Rules of Court defines pleadings as "written statements of the respective claims
and defenses of the parties submitted to the court for appropriate judgment." To stress, Pag-IBIG’s letter could not
be considered as a formal complaint or petition. First, the parties to the case were not identified pursuant to Section
1,30 Rule 3 and Section 1,31 Rule 7. Second, the so-called claim or cause of action was not properly mentioned or
specified. Third, the letter miserably failed to comply with the requirements of Rule 7, Rules of Court. The letter bore
no caption; it was not even assigned a docket number; the parties were not properly identified;the allegations were
not properly set forth; no particular relief issought; in fact, only the intervention of Executive Judge Monsanto is
requested; it was notsigned by a counsel; and most of all, there is no verification orcertification against forum-
shopping.
We have also noted that in its July1, 2005 Order, Judge Usman of Branch 28 resolved the following incidents: (1)
the motion for issuance of writ of possession filed by Leoncio; and (2) the motion to lift writ of execution and notice
to vacate. However, the said Manifestation with Ex Parte Motion for Issuance of Writ of Possession was not even
filed before Branch28; in fact, it was submitted for consideration of Branch 27. Moreover, the Motion to Lift Writ of
Execution and Notice to Vacatewas filed by Pascual before the OCA; the RTC Branches 27 and 28 of Catbalogan,
Samar, were only furnished copies thereof.
In addition, it is quite unfortunate that Judge Usman proceeded to take cognizance of the case notwithstanding his
prior observation as stated in the May 3, 2004 Order that no formal petition or complaint was actually filed and which
presents a judicial issue.In fact, Judge Usman even opined that the acts complained of partake of administrative
matter and thus referred the same to the OCA for further action. The May 9, 2005 letter of OCA directing Judge
Usman to take action on the Motion to Lift Writ of Execution and Notice to Vacatecould not be interpreted as vesting
Judge Usman with the authority and jurisdiction to take cognizance of the matter. Nothing to that effect could be
inferred from the tenor of the May 9, 2005 letter ofOCA. Jurisdiction is vested by law. When OCA directed Judge
Usman to take action on the Motion to Lift Writ of Execution and Notice to Vacate, it did not deprive the latter ofhis
discretion to dismiss the matter/case for lack of jurisdiction, if the matter/case so warrants.
In fine, there being no proper initiatory pleading filed, then the RTC Branch 28 did not acquire jurisdiction over the
matter/case.
No payment of docket fees.
We have also noted that no docket feeswere paid before the trial court. Section 1, Rule 141 of the Rules of Court
mandates that "[u]pon the filing of the pleading or other application which initiates an action or proceeding, the fees
prescribed therefor shall be paid in full." "It is hornbook law that courts acquire jurisdiction over a case only upon
payment of the prescribed docket fee."32
In Far East Bank and Trust Company v. Shemberg Marketing Corporation,33 we ruled thus: A court acquires
jurisdiction over a case only upon the payment of the prescribed fees. The importance of filing fees cannot be
gainsaid for these are intended to take care of court expenses inthe handling of cases in terms of costs of supplies,
use of equipment, salaries and fringe benefits of personnel, and others, computed as to man-hours used in the
handling of each case. Hence, the non-payment or insufficient payment of docket fees can entail tremendous losses
to government in general and to the judiciary in particular.
In fine, since no docket or filing feeswere paid, then the RTC Branch 28 did not acquire jurisdiction over the
matter/case. It therefore erred in taking cognizance of the same. Consequently, all the proceedings undertaken by
1âwphi 1
the trial court are null and void,and without force and effect. In, particular, the July 1, 2005 and August 30, 2005
Orders of the RTC are null and void.
It is settled jurisprudence that "[a]ny decision rendered without jurisdiction is a total nullity and may be struck down
at any time, even on appeal before this Court."34 Prescinding from the foregoing, we hold that the RTC-Branch 28 did
not acquire jurisdiction over the instant matter/case there being no formal initiatory pleading filed as well asnon-
payment of docket fees. Consequently, all proceedings had before the RTC Branch 28 were null and void for lack of
jurisdiction.
WHEREFORE, the Petition is DENIED. The assailedMarch 12, 2007 Decision and July 6, 2007 Resolution of the
Court of Appeals in CA-G.R. CEBSP No. 01343 are ANNULLED and SET ASIDE. The July 1, 2005 and August 30,
2005 Orders of the Regional Trial Court of Catbalogan, Samar, Branch 28 are DECLARED NULL and VOID. All
proceedings, processes and writs emanating therefrom are likewise NULLIFIED and VOIDEDfor lack of jurisdiction.
SO ORDERED.
SECOND DIVISION
G.R. No. 178733, September 15, 2014
ELISA ANGELES, Petitioner, v. HON. COURT OF APPEALS, OFFICER-IN-CHARGE MARILOU C. MARTIN, DEPUTY
SHERIFF JOSELITO SP ASTORGA, MARCO BOCO, AND JOHN DOES, REGIONAL TRIAL COURT OF PASIG, BRANCH
268, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Certiorari1 seeks to set aside the February 22, 2007 Decision2 of the Court of Appeals (CA) and its June 4,
2007 Resolution3 in CA-G.R. SP No. 93772, which dismissed the herein petitioner’s Petition for Contempt4 against the herein
respondent public officers and her Motion for Reconsideration,5respectively.
Factual Antecedents
A complaint for annulment of real estate mortgage, foreclosure sale, reconveyance and damages – docketed as Civil Case
No. 69213 in the Regional Trial Court of Pasig City, Branch 268 – was filed by spouses Juan and Anatalia Coronel (the
Coronels) against herein petitioner Elisa Angeles and several others. After trial, or on April 3, 2005, the trial court rendered
a Decision6 containing the following decretal portion:Cha nRobles Vi rtua lawlib rary
WHEREFORE, foregoing premises considered, judgment is hereby rendered in favor of the plaintiffs and against defendants:
Declaring Transfer Certificate of Title No. PT-113632 as null and void;
Ordering the Registry of Deeds for the City of Pasig to cancel TCT No. PT-113632 in the name of Rosalina Liwag and to issue
a new one in the names of plaintiffs Spouses Juan L. Coronel and Anatalia Coronel;
Ordering plaintiff to pay defendant Miguel Galicia the amount of P960,000.00 as reimbursement for his redemption of the
property;
No pronouncement as to costs.
SO ORDERED.7 cralawred
Petitioner and her co-defendants in Civil Case No. 69213 filed their Notice of Appeal, while the Coronels filed a motion for
execution of the April 3, 2005 judgment pending appeal, which the trial court denied in an October 19, 2005 Order. On
November 15, 2005, the Coronels filed their Motion for Reconsideration.8 c ralawred
Petitioner and her co-defendants’ appeal to the CA was docketed as CA-G.R. CV No. 86451.
In a November 15, 2005 Order,9 the trial court directed that the entire record of Civil Case No. 69213 be transmitted to the
CA for appropriate action.
In a February 1, 2006 Order,10 the trial court reconsidered its October 19, 2005 Order and thus granted the Coronels’ motion
for execution pending appeal. A Writ of Execution Pending Appeal was thus issued on February 16, 2006.11 cralawred
On February 27, 2006, the record of Civil Case No. 69213 was transmitted to the CA.12 cralaw red
On March 9, 2006, petitioner was evicted from the subject property as a result of the enforcement of the Writ of Execution
Pending Appeal.
On March 24, 2006, petitioner filed a Petition for Contempt13 with the CA against herein respondents Officer-In-Charge
Marilou C. Martin (Martin), Deputy Sheriff Joselito SP Astorga (Astorga), Clerk III Marco Boco (Boco), and John
Does. Docketed as CA-G.R. SP No. 93772, the Petition alleged that Martin defied the trial court’s November 15, 2005 Order
to elevate the records of Civil Case No. 69213 to the CA and acted in collusion with the Coronels to ensure that the latter
obtain execution pending appeal; that the Writ of Execution Pending Appeal was hastily and irregularly issued; that Astorga
and Boco “cleverly contrived” and used trickery in ejecting petitioner from the subject property; that Astorga and Boco
favored other tenants and did not evict them from the property; that Astorga did not have the authority to enforce the writ of
execution inasmuch as the trial court lost jurisdiction over the case after the records of Civil Case No. 69213 were elevated to
the CA on February 27, 2006; that the respondent public officers’ actions were abusive, illegal, and constitute indirect
contempt of the appellate court. Petitioner prayed that Martin, Astorga, Boco and John Does whose identities have yet to be
ascertained be declared in contempt of court and penalized accordingly.
In her Comment,14 Martin sought the dismissal of the Petition, alleging that as a mere court employee and researcher, she
had no authority or control over the proceedings in Civil Case No. 69213, as well as the issuance or implementation of the
court’s orders; that the non-transmittal of the records to the CA was not intentional but came as a result of the trial court’s
giving due course to the various motions filed by the parties; that she had no hand in the enforcement of the writ of
execution pending appeal as she had no power or authority to direct its implementation; and that she did not commit any
irregular or illegal act as to be held liable for contempt of court.
In their Comment,15 Astorga and Boco denied the accusations against them, claiming that these were already the subject of
administrative complaints in the Supreme Court – in MISC No. 2476 – filed by petitioner, to which Comments have been
submitted as well; that petitioner’s accusations were all lies and contrived; that without a stay order, they were duty-bound
to enforce the orders and writs of the trial court; and that they had no intention to impede or obstruct the administration of
justice or embarrass the court in the implementation of the lawful processes of the court.
On February 22, 2007, the CA issued the assailed Decision containing the following pronouncement: ChanRobles Vi rtualawl ib rary
The Supreme Court further explained in Igot v. Court of Appeals, thus:

In whatever context it may arise, contempt of court involves the doing of an act, or the failure to do an act, in such a manner
as to create an affront to the court and the sovereign dignity with which it is clothed. As a matter of practical judicial
administration, jurisdiction has been felt to properly rest in only one tribunal at a time with respect to a given
controversy. Only the court which rendered the order commanding the doing of a certain act is vested with the right to
determine whether or not the order has been complied with, or whether a sufficient reason has been given for
noncompliance, and therefore, whether a contempt has been committed. It is a well-established rule that the power to
determine the existence of contempt of court rests exclusively with the court contemned. No court is authorized to punish a
contempt against another.
This petition should have been filed with the court a quo. It bears stressing that the power to determine whether x x x the
acts alleged by petitioner constitute indirect contempt, rests exclusively in the court against which the contumacious act was
committed. The reason being that it was the court a quo which issued the subject orders and is vested with the right to
determine whether x x x such orders have been complied with or have been defied, which acts may constitute contempt of
court.
Further, basic is the rule that unless an order/resolution/directive issued by a court of competent jurisdiction is declared null
and void, such orders are presumed to be valid. But in this case, there is nothing on record to show that petitioner availed
herself of any of the legal remedies under the Rules of Court to assail the validity of the said order or writ, hence, the same
remained valid and enforceable.
It should be stressed that the authority to issue [an] order or writ of execution pertains to the presiding judge of the court a
quo. Respondents do not occupy positions of discretion, but are subject to the authority or control of the court a quo. Their
functions as officers or employees of the court are purely ministerial or administrative in character and confined to serving
court orders and processes, and carrying the same into effect. Contrary to petitioner’s allegations, the records show that
respondents were merely implementing the orders issued by the trial court in Civil Case No. 69213 and that no stay order
was issued against the enforcement of the subject writ of execution. There is no sufficient showing of acts committed by
respondents which may constitute contempt, such as among others, refusing to obey [a] lawful order of the court or act of
disrespect to the dignity of the court which tends to hamper the orderly proceedings and lessen its efficiency.
As a final note, it must be borne in mind that a court’s power to punish for contempt, must be exercised judiciously and
sparingly with utmost self-restraint, with the end in view of utilizing the same for correction and preservation of the dignity of
the court, and not for retaliation or vindication. Strict compliance with the rules and the guidelines prescribed in contempt
proceedings is mandatory. In this case, petitioner failed to show with convincing evidence sufficient compliance with the
foregoing rules and guidelines.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.16 cralawred
Petitioner filed a Motion for Reconsideration,17 which the appellate court denied in a June 4, 2007 Resolution. Hence, the
instant Petition.
In a December 10, 2008 Resolution,18 this Court resolved to give due course to the Petition.
Issue
The only issue here is whether the CA committed grave abuse of discretion in dismissing the Petition in CA-G.R. SP No.
93772 to hold the respondent public officers in contempt of court for defying the orders and directives of the trial court, and
for disregarding the CA’s authority after it acquired jurisdiction over the case through the appeal interposed by petitioner and
her co-defendants in Civil Case No. 69213.
In her Petition, petitioner insists that respondent public officers should be held in contempt of court for defying the trial
court’s order to elevate the records of the case to the CA, and for enforcing the writ of execution pending appeal even as the
CA obtained jurisdiction over the case through the appeal interposed by her and her co-defendants. She contends further
that respondents’ involvement in supposed irregularities relative to the issuance and implementation of the writ of execution
pending appeal warrants their punishment for indirect contempt. For failure of the CA to appreciate these facts, it thus
committed grave abuse of discretion in dismissing the petition in CA-G.R. SP No. 93772. She, therefore, prays that the
assailed dispositions be set aside, and that her Petition for Contempt be reinstated and consolidated with the appeal in CA-
G.R. CV No. 86451, with costs against the individual respondents.
Praying that the Petition be denied for lack of merit, respondents Astorga and Boco maintain and profess their innocence;
that they acted only in obedience to the directives, writs and processes of the trial court and have no authority to defy the
same unless a stay order is issued; and that petitioner’s contempt charge should have been initiated with the trial court, and
not with the CA.
Respondent Martin, on the other hand, failed to file her comment to the Petition.
Our Ruling
The Court dismisses the Petition.
Petitioner’s accusations are rooted not in the individual respondents’ official acts, but in the directives of the trial court in
Civil Case No. 69213. The CA is correct in its pronouncement that –
Further, basic is the rule that unless an order/resolution/directive issued by a court of competent jurisdiction is declared null
and void, such orders are presumed to be valid. But in this case, there is nothing on record to show that petitioner availed
herself of any of the legal remedies under the Rules of Court to assail the validity of the said order or writ, hence, the same
remained valid and enforceable.
It should be stressed that the authority to issue [an] order or writ of execution pertains to the presiding judge of the court a
quo. Respondents do not occupy positions of discretion, but are subject to the authority or control of the court a quo. Their
functions as officers or employees of the court are purely ministerial or administrative in character and confined to serving
court orders and processes, and carrying the same into effect. Contrary to petitioner’s allegations, the records show that
respondents were merely implementing the orders issued by the trial court in Civil Case No. 69213 and that no stay order
was issued against the enforcement of the subject writ of execution. There is no sufficient showing of acts committed by
respondents which may constitute contempt, such as among others, refusing to obey [a] lawful order of the court or act of
disrespect to the dignity of the court which tends to hamper the orderly proceedings and lessen its efficiency.19
Indeed, contrary to petitioner’s claims, it appears that the respondent public officers acted faithfully in carrying out the trial
court’s directives. If petitioner doubted these directives – arguing as she does that the trial court lost jurisdiction over the
case when her appeal was perfected – then she should have questioned them by filing the corresponding appeal or petition in
order to set them aside. Punishing the respondents for contempt will not solve her dilemma; it will not reverse the effects of
the trial court’s orders and processes.
And, speaking of contempt, the appellate court is likewise correct in its position that if respondent public officers should be
punished for their perceived defiance or failure to abide by the trial court’s directives and processes, then the contempt
charge should have been initiated in the court a quo, and not in the CA. Sections 4 and 5, Rule 71 of the Rules of Court
state, respectively, that “[p]roceedings for indirect contempt may be initiated motu proprio by the court against which the
contempt was committed” and “[w]here the charge for indirect contempt has been committed against a Regional Trial Court
or a court of equivalent or higher rank, or against an officer appointed by it, the charge may be filed with such court.”
x x x [C]ontempt proceedings are sui generis and are triable only by the court against whose authority the contempts are
charged; the power to punish for contempt exists for the purpose of enabling a court to compel due decorum and respect in
its presence and due obedience to its judgments, orders and processes and in order that a court may compel obedience to its
orders, it must have the right to inquire whether there has been any disobedience thereof, for to submit the question of
disobedience to another tribunal would operate to deprive the proceeding of half its efficiency.
Section 4, Rule 71 of the Rules of Court provides, in effect, that a charge for indirect contempt must be filed with the court
contemned. Although this provision is permissive in nature, in the event of concurrent jurisdiction over cases of contempt of
court, it would be a good practice to acknowledge the preferential right of the court against which the act of contempt was
committed to try and punish the guilty party.20
Besides, it cannot be said that the issuance and implementation by the individual respondents of the writ of execution
pending appeal is a contemptible disregard of the CA’s jurisdiction over CA-G.R. CV No. 86451. Apparently, the trial court
had the authority to grant execution pending appeal on February 1, 2006 and issue the writ on February 15, 2006. The
record of Civil Case No. 69213 was transmitted to the CA only on February 27, 2006. Prior to the transmittal of the original
record, the trial court may order execution pending appeal.21 “The ‘residual jurisdiction’ of trial courts is available at a stage
in which the court is normally deemed to have lost jurisdiction over the case or the subject matter involved in the
appeal. This stage is reached upon the perfection of the appeals by the parties or upon the approval of the records on
appeal, but prior to the transmittal of the original records or the records on appeal. In either instance, the trial court still
retains its so-called residual jurisdiction to issue protective orders, approve compromises, permit appeals of indigent
litigants, order execution pending appeal, and allow the withdrawal of the appeal.”22 cralawred
Having found no irregularity in the assailed pronouncement, and instead declaring herein that judgment was rendered
correctly, it cannot be said that the appellate court committed any abuse of its discretion at all as to allow the remedy
of certiorari petitioner prays for.
WHEREFORE, the Petition is DISMISSED.
SO ORDERED. cral
SECOND DIVISION
G.R. No. 198139 September 8, 2014
NATIONAL POWER CORPORATION, Petitioner,

vs.
FELICISIMO TARCELO and HEIRS OF COMIA SANTOS, Respondents.
DECISION
DEL CASTILLO, J.:
Execution must always conform to that decreed in the dispositive part of the decision, because the only portion
thereof that may be the subject of execution is that which is precisely ordained or decreed in the dispositive portion;
whatever is in the body of the decision can only be considered as part of the reasons or conclusions and serves as
a guide in determining the ratio decidendi.1
This Petition for Review on Certiorari2 seeks to set aside the January 20, 2011 Decision3 of the Court of Appeals
(CA) and August 9, 2011 Resolution4 in CA-G.R. SP No. 112054, which denied the herein petitioner's Petition for
Certiorari and Motion for Reconsideration, respectively, thus affirming the dispositions of the Regional Trial Court of
Batangas City, Branch VII (Batangas City RTC) in Civil Case No. 5785.
Factual Antecedents
Civil Case No. 5785

Respondents Felicisimo Tarcelo (Tarcelo) and the heirs of Comia Santos (Santos heirs) are the owners of two lots
measuring 4,404 and 2,611 square meters, respectively, which are situated in Brgy. Tabangao-Ambulong, Batangas
City.
Sometime in 2000, petitioner National Power Corporation (NPC) filed Civil Case No. 5785 with the Batangas City
RTC, seeking to expropriate portions of Tarcelo and the Santos heirs’ lots to the extent of 1,595.91 square meters
which are affected by the construction and maintenance of NPC’s 1,200 MW Ilijan Natural Gas Pipeline Project. In
other words, NPC’s natural gas pipeline shall traverse respondents’ lands to such extent.
On July 29, 2002, the Batangas City RTC issued an order of condemnation, thus authorizing NPC to take
possessionof the subject lots. Thereafter, it appointed three commissioners who in turn submitted their respective
Reports5 and recommendations on the amount of just compensation to be paid to respondents.
On November 7, 2005, the Batangas City RTC rendered a Decision6 fixing just compensation for the subject lots at
₱1,000.00 per square meter, thus:
In the Commissioner’s Report filed by Chairman of the Board Emelinda C. Atienza, she recommended x x x the
amount of ₱1,120.00 per square meter as just compensation for the properties involvedin this case. She based her
findings on the following:
Property of Felicisimo Tarcelo7
1. The subject property is classified as agricultural land;
2. It is approximately 420 meters away from Shell Refinery and approximately 40 meters away from the Barangay
Road;
3. Adjoining boundary owners property [sic] are also classified as agricultural lands.
Property of the Heirs of Santos Comia8
1. The subject property is classified as agricultural land;
2. It is approximately 560 meters away from Shell Refinery and approximately 140 meters away from the Barangay
Road;
3. Adjoining boundary owners property [sic] are also classified as agricultural lands.
Commissioners Alberto M. Nuique and Eladio Taupa of the National Power Corporation (NPC) also submitted their
own Commissioner’s Report. They recommended that the amount of ₱475.00 per square meter be made as the
payment of the affected portion of the subject property which is 10% of the fair market value pursuant to Republic
Act No. 6395 as amended. Commissioners Taupa and Nuique recommended the amount of ₱475.00 per square
meter because only a right-of-way easement will be acquired. According to the Supreme Court in the case of NPC v.
Manubay Agro Industrial Dev. Corp., G.R. No. 150936, August 18, 2004, even if what is acquired is only an
easement of right of way, still, the plaintiff should pay the full value of the property and not a mere easement fee.
Based on the foregoing, the court fixes the just compensation for the subject properties situated in Brgy. Tabangao-
Ambulong, Batangas City at ONE THOUSAND PESOS (₱1,000.00)per square meter.
WHEREFORE, plaintiff National Power Corporation is ordered to pay the defendants the amount of ₱1,000.00 per
square meter.
Upon payment of just compensation to the defendants, subject to the deductions of the sums due the Government
for unpaid real estate taxes and other imposts, the plaintiff shall have a lawful right to enter, take possession and
acquire easement of right-of-way over the portions of the properties together with the improvements sought to be
expropriated for the purpose stated, free from any and all liens and encumbrances.
Finally, the plaintiff is directed topay the corresponding Commissioner’s fees per meeting or the following sums:
Chairman Emelinda C. Atienza - ₱1,000.00
Members Alberto M. Nuique - P 800.00
and Eladio Taupa - P 800.00
SO ORDERED.9
CA-G.R. CV No. 86712
NPC filed an appeal – docketed as CA-G.R. CV No. 86712 – with the CA. On June 26, 2007, the appellate court
issued a Decision,10 stating as follows:
At bar, it cannot be gainsaid thatthe construction of underground pipeline is a simple case ofmere passage of gas
pipeline. It will surely cause damage and prejudice to the agricultural potentials of appellees’ property. Deep
excavation will have to be done whereby plants and trees will be uprooted. A possible leakage could certainly do
harm and adversely restrict the agricultural and economic activity of the land. This is not to mention that it will create
an environmental health hazard dangerous to the occupant’s life and limb.
Hence, defendants-appellees are entitled for [sic] justcompensation to [sic] the fullmarket value of their property
notjust ten percent (10%) of it.
xxxx
Taking all the consideration [sic] of the subject property, Commissioners Taupa and Nuique placed the value of the
property at ₱475.00 per square meter based on the Land Bank valuation and Cuervo Appraisers, Inc. and the
Provincial/City Appraisal Committees of Batangas, Laguna and Lipa City, while Commissioner Atienza valued the
property at ₱1,120.00 per square meter, based on the average value per findings of the Committee composed of the
City Assessor, City Treasurer, City Engineer under Resolution No. 9-99 dated June 18, 1999 that the subject
property will cost ₱1,000.00 to ₱1,300.00 per square meter, and the opinion value of her Team’s survey and Report
which revealed that the prevailing price of agricultural land in Tabangao-Ambulong, Batangas City is NINE
HUNDRED THIRTY PESOS (₱930.00) per square meter.
In pronouncing the just compensation in this case, We fix the rate of the subject property at SEVEN
HUNDREDNINETY SEVEN [sic] and FIFTY CENTAVOS (₱797.50) per square meter by averaging ₱475.00 and
₱1,120.00 of the commissioner’s report. This is nearest to and in consonance with the ruling that in expropriation
proceedings, the owner of the property condemned is generally entitled to the fair market value, that is the sum of
money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell.
IN VIEW OF ALL THE FOREGOING, appealed decision dated November 7, 2005 is AFFIRMEDwith
MODIFICATIONthat the just compensation in this case is lowered from ONE THOUSAND PESOS (₱1,000.00) to
SEVEN HUNDRED NINETY SEVEN and FIFTY CENTAVOS (₱797.50) per square meter. No pronouncement as to
costs.
SO ORDERED.11
The above Decision ofthe appellate court became final and executory, and entry of judgment was done
accordingly.12
Respondents moved for execution.13 In a March 6, 2009 Order,14 the Batangas City RTC granted their respective
motions, and a Writ of Execution15 was issued.
On May 14, 2009, a Notice of Garnishment16 was served on the Manager of the Land Bank of the Philippines, NPC
Branch, Quezon City for the satisfaction of the amount of ₱5,594,462.50 representing justcompensation for the
wholeof respondents’ 4,404- and 2,611-square meter lots – or 7,015 square meters – and not merely the
supposedly affected portions thereof totaling 1,595.91 square meters as NPC originally sought to acquire.
On May 29, 2009, NPC filed an Urgent Omnibus Motion17 seeking to quash the Writ of Execution and Notice of
Garnishment, which it claimed were inconsistent with the Batangas City RTC’s November 7, 2005 Decision and the
CA’s June 26, 2007 Decision in CA-G.R. CV No. 86712 where just compensation was fixed at ₱1,000.00 per square
meter only for the affected area of 1,591.91 square meters, and not for the whole of respondents’ respective lots. It
argued that the appeal in CA-G.R. CV No. 86712 resolved only the issue of whether respondents should be paid the
full marketvalue of the affected 1,595.91-square meter area or just a 10% easement fee therefor; it did not decide
whether NPC should pay just compensation for the entire area of 7,015 square meters.
On September 24, 2009,the Batangas City RTC issued an Order18 denying
NPC’s Urgent Omnibus Motion, declaring that –
The cases cited by plaintiff are not in point. These cases involved either the construction and maintenance of
electric transmission lines x x x or the widening of road component x x x. None of the cited cases involved
underground natural gas pipelines, as in this case. It does not take an expert to be able to infer that there is a world
of difference on the probable effects of the two (2) kinds of projects on the properties upon which these are
imposed. In the case of transmission lines, the NPC imposes a limitation on the property owner’s use of their
property in that below said transmission lines no plant higher than three (3) meters is planted. In the case of
underground pipelines, similar, if not more burdensome restrictions, are imposed for the reason that the ground
under which the natural gas pipelines are located could not be cultivated in view of the dangers that might result
from accidental injury or damage to the pipelines.
Moreover, there is the possible inestimable damage that an unpredictable natural disaster such as an earthquake of
tectonic origin, the precise date and time of occurrence of which are yet beyond the powers of man to accurately
foretell, could inflict on the underground natural gas pipelines and consequently, on all things, living and non-living,
that exist in the vicinity of the defendants’ properties.
Moreover, the ruling that just compensation should be paid for the entire area of the owner’s property and not justthe
affected portion thereof is not without precedent. In NPC vs. Court of Appeals (436 SCRA 195, 201 [August 12,
2001]), the Supreme Court [noted] that "Pobre’s property suffered permanent injury because of the noise, water, air,
and land pollution generated by NPC’s geothermal plants[; t]he construction and operation of the geothermal plants
drastically changed the topography of the property making it no longer viable as a resort-subdivision[; and t]he
chemicals emitted by the geothermal plants damaged the natural resources in the property and endangered the
lives of the residents. Accordingly, the Supreme Court held that "NPC did not only take the 8,311.60 square meter
portion of the property but also the remaining area of the 68,969 square-meter property. NPC had rendered Pobre’s
entire property useless as a resort-subdivision. The property has become useful only to NPC. NPC must therefore
take Pobre’s entire property and pay for it. x x x
In the case at bar, it was not disputed that the subject properties are agricultural lands. In order to be usefulto its
owners, suchagricultural lands must be cultivated to yield a harvest ofagricultural produce. But when such lands are
burdened with an easement even of the non-apparent kind, but which to all intents and purposes restrict, nay,
preclude the very activity that would render it useful to its owners because the existence of such easement poses an
undeniable danger to the life and limb of the occupants, then such lands cease to be useful to the property owners
and useful only to the entity that imposed the easement upon the land. The Honorable Court of Appeals recognized
this fact when it declared that:
"At bar, it cannot be gainsaid that the construction of underground pipeline is a simple case of mere passage of gas
pipeline. It will surely causedamage and prejudice to the agricultural potentials of appellees’ property. Deep
harm and adversely restrict the agricultural and economic activityof the land. This is not to mention that it will create
anenvironmental health hazard dangerous to the occupant’s life and limb.
Hence, defendants-appellees are entitled for [sic] just compensation to the full market value of their property not just
ten percent of it.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.
The measure is not the taker’s gain, but the owner’s loss." x x x
Thus, the argument of defendant heirs of Santos Comia is well taken that as to them, the entire area of their
property, and not just the affected portion thereof, had become useless to them. It is [useful only] to plaintiff NPC.
The same holds true for the entire property owned by defendant Felicisimo Tarcelo. Therefore, NPC must pay for
the full market value of the entire properties owned by defendant Felicisimo Tarcelo and defendant heirs of Santos
Comia.
WHEREFORE, the Omnibus Motion is DENIED. As the Writ of Execution dated March 9, 2009 and Notice
ofGarnishment dated May 14, 2009 are consistent with the Decision of the Court of Appeals dated June 28, 2007,
this Court’s Sheriff is hereby ordered to forthwith enforce the Writ of Execution dated March 9, 2009 and Notice of
Garnishment dated May 14, 2009 and to submit immediately a written report on his proceedings thereon.
SO ORDERED.19
NPC filed a Motion for Reconsideration,20 which was deniedin an October 23, 2009 Order21 on the ground that it did
not contain a notice of hearing and was thus a mere scrap of paper that did not toll the running of the period to
appeal and therefore rendered the Batangas City RTC’s September 24, 2009 Order final and executory.
Seeking to set aside the September 24, 2009 and October 23, 2009 Orders of the Batangas City RTC as well as
itsMarch 9, 2009 Writ ofExecution and May 14, 2009 Notice of Garnishment, NPC filed a Petition for Certiorari22 with
the CA, which was docketed as CA-G.R. SP No. 112054. It pleaded liberality in the application of the rule on
motions and insisted that the assailed writ of execution and notice of garnishment were inconsistent with the CA’s
June 26, 2007 Decision in CA-G.R. CV No. 86712 in which just compensation was fixed at ₱1,000.00 per square
meter only for the affected area of 1,595.91 square meters, and not for the whole of respondents’ respective lots. It
reiterated that since the trial court’s dispositions were irregular and inconsistent with the Decision in CA-G.R. CV No.
86712, justice dictated that the technical rules on motions should give way to considerations of equity; that in CA-
G.R. CV No. 86712, the only question that had to be resolved was whether NPC should pay the full market value of
the 1,595.91-square meter affectedarea or merely a 10% easement fee for the use thereof – and not whether it
should pay for the entire 7,015 square meters owned by respondents. Finally, it maintained that the inclusion of the
whole property instead of only the affected portions thereof would render the execution process in Civil Case No.
5785 unjust and inequitable.
On January 20, 2011, the CA rendered the assailed Decision containing the following decretal portion:
WHEREFORE, the instant petition for certiorari is DENIED. Accordingly, the assailed Orders of the public
respondent Regional Trial Court of Batangas City, in Civil Case No. 5785, STAND. SO ORDERED.23
The CA held that there was nothing in the November 7, 2005 Decision of the Batangas City RTC to indicate
thatNPC was being ordered to pay just compensation only for the 1,595.91-square meter portion ofrespondents’
properties; on the contrary, the trial court held that –
Based on the foregoing, the court fixes the justcompensation for the subject propertiessituated in Brgy. Tabangao-
Ambulong, Batangas City at ONE THOUSAND PESOS (₱1,000.00) per square meter.24 (Emphasis supplied)
– which meant that in the fixing of the amount of just compensation, the trial court did not confine itself to the
1,595.91-square meter portion but ratherto the subject properties in their entirety and without qualification. It added
that the trial court’s citation of National Power Corporation v. Manubay Agro-Industrial Development
Corporation25strengthened the view that the trial court intended for respondents to be paid compensation for the
whole of their properties,as it was held in said cited case that just compensation should be "neither morenor less
than the monetary equivalent of the land;"26 the trial court’s judgment may be clarified by referring to other portions
thereof, and not by reading them separately from the whole decision – in other words, the "decision should be taken
as a whole and considered in its entirety to get the truemeaning and intent of any particular portion thereof."27
The CA noted that even in the June 26, 2007 Decision inCA-G.R. CV No. 86712, it was acknowledged that –
At bar, it cannot be gainsaid thatthe construction of underground pipeline is a simple case of mere passage of gas
pipeline. It will surely cause damage and prejudice to the agricultural potentials of appellees’ property. Deep
harm and adversely restrict the agricultural and economic activity of the land. This is not to mention that it will create
Hence, defendants-appellees are entitled for [sic] justcompensation to [sic] the fullmarket value of their property not
just ten percent (10%) of it.28
It added that in the September 24, 2009 Order of the BatangasCity RTC, it was made clear that NPC should pay for
the entire area of respondents’ properties, and not just the affectedportions thereof when it held that –
x x x. In the case of underground pipelines, similar, if not more burdensome restrictions, are imposed for the reason
that the ground under which the natural gas pipelines are located could not be cultivated in view of the dangers that
might result from accidental injury or damage to the pipelines. Moreover, there is the possible inestimable damage
that an unpredictable natural disaster such as an earthquake of tectonic origin, the precise date and time of
occurrence of which are yet beyond the powers of man to accurately foretell, could inflict on the underground natural
gas pipelines and consequently, on all things, living and non-living, that exist in the vicinity of the defendants’
properties.
Moreover, the ruling that just compensation should be paid for the entire area of the owner’s property and not justthe
affected portion thereof is not without precedent. In NPC vs. Court of Appeals (436 SCRA 195, 201 [August 12,
2001]), the Supreme Court [noted] that "Pobre’s property suffered permanent injury because of the noise, water, air,
and land pollution generated by NPC’s geothermal plants[; t]he construction and operation of the geothermal plants
drastically changed the topography of the property making it no longer viable as a resort-subdivision[; and t]he
chemicals emitted by the geothermal plants damaged the natural resources in the property and endangered the
lives of the residents. Accordingly, the Supreme Court held that "NPC did not only take the 8,311.60 square meter
portion of the property but also the remaining area of the 68,969 square-meter property. NPC had rendered Pobre’s
entire property useless as a resort-subdivision. The property has become useful only to NPC. NPC must therefore
take Pobre’s entire property and pay for it. x x x
In the case at bar, it was not disputed that the subject properties are agricultural lands. In order to be usefulto its
owners, suchagricultural lands must be cultivated to yield a harvest ofagricultural produce. But when such lands are
burdened with an easement even of the non-apparent kind, but which to all intents and purposes restrict, nay,
preclude the very activity that would render it useful to its owners because the existence of such easement poses an
undeniable danger to the life and limb of the occupants, then such lands cease to be useful to the property owners
and useful only to the entity that imposed the easement upon the land. The Honorable Court of Appeals recognized
this fact when it declared that:
"At bar, it cannot be gainsaid that the construction of underground pipeline is a simple case of mere passage of gas
pipeline. It will surely causedamage and prejudice to the agricultural potentials of appellees’ property. Deep
1âwphi1
harm and adversely restrict the agricultural and economic activityof the land. This is not to mention that it will create
Hence, defendants-appellees are entitled for (sic) just compensation to [sic] the full market value of their property
not just ten percent of it.29
Finally, the CA found nothing wrong with the trial court’s October 23, 2009 Order denying NPC’s Motion for
Reconsideration (of the trial court’s September 24, 2009 Order), since the saidmotion lacked the required notice of
hearing; it was properly treated as a pro formamotion, a mere scrap of paper, and in the absence of merit and
compelling reasons, the Rule pertaining to motions may not be relaxed for NPC’s benefit.
NPC filed its Motion for Reconsideration,30 which was denied by the appellate court in an August 9, 2011 Resolution.
Issues
The Petition is grounded on the following:
THE COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT’S ORDERS APPROVING THE NOTICE
OF GARNISHMENT WHICH DEMANDED PAYMENT OF JUST COMPENSATION FOR THE ENTIRE PROPERTY
OF RESPONDENTS INSTEAD OF THE AFFECTED PORTIONS ONLY INACCORDANCE WITHTHE COMPLAINT
AND THE TRIAL COURT’S DECISION.
II
THE COURT OF APPEALS ERRED IN UPHOLDING THE ORDER OF THE TRIAL COURT WHICH
DENIEDPETITIONER’S MOTION FOR RECONSIDERATION IN COMPLETE DISREGARD OF LIBERALITY
ENUNCIATED IN SEVERAL DECISIONS OF THIS HONORABLE COURT.31
In its Petition and Consolidated Reply,32 NPC argues that while there is no dispute as to its liability torespondents,
the Sheriff’s computation as reflected in the Notice of Garnishment is erroneous inthat it is being made to pay for
more than what was adjudged; justcompensation should be limited to the value of that portion so taken, and not the
entire property of which such portion forms part. It cites cases where the computation and payment of just
compensation was limited to the value of the affected portions only.33 It continues to plead for liberality in respect to
its Motion for Reconsideration of the trial court’s September 24, 2009 Order, which was denied via the October 23,
2009 Order for lack of the required notice of hearing.
NPC thus prays that the assailed CA dispositions – together with the September 24, 2009 and October 23, 2009
Orders and the May 14, 2009 Notice of Garnishment – be set aside. Respondents’ Arguments
Praying that the Petition be denied for lack of merit, the Santos heirs in their Comment34 restate the assailed CA
Decision, and add that while NPC sought a mere right-of-way for its pipelines, the truth is that their property will be
rendered useless by the toxic fumes and hazardous substances that could beemitted by such pipelines; that their
situation is akin tothat of the landowner in the case of National Power Corporation v. Manubay Agro-Industrial
Development Corporation,35 who was adjudged to be entitled to the full value of the property, and not a mere
easement fee; and thatNPC cannot claim liberality in the application of the Rule on motions36 because there exist no
special or compelling circumstances to warrant the relaxation of the rule, and NPC’s failure is the result of fault and
negligence on itspart, and it has not shown to the satisfaction of the court that it is entitled to leniency.
On the other hand, respondent Tarcelo argues in his Comment37 that there is no inconsistency between the trial
court’s November 7, 2005 Decision and the June 26, 2007 Decision of the CA inCA-G.R. CV No. 86712 on the one
hand, and the trial court’s September 24, 2009 and October 23, 2009 Orders and the March 9, 2009 Writ of
Execution and May 14, 2009 Notice of Garnishment on the other; that the trial court and the CA treated
respondents’ properties as a whole or in their entirety in resolving the cases before them; thatNPC already knew
beforehand that it is being ordered to pay just compensation for the entirety of respondents’ properties and not mere
portionsthereof; and finally, that the trial court correctly denied NPC’s Motion for Reconsideration of the September
24, 2009 Order for lack of a notice of hearing.
Our Ruling
The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily
in derogation of private rights. It is one of the harshest proceedings known to the law. x x x The authority to
condemn is to be strictly construed in favor of the owner and against the condemnor. When the power is granted,
the extent to which it may be exercised is limited to the express terms or clear implication of the statute in which the
grant is contained.38
Corollarily, it has been held that trial courts should exercise care and circumspection in the resolution of just
compensation cases, considering that they involve the expenditure of public funds.39
The above principles were somehow lost on both the trial and appellate courts.
The Commissioners’ Reports in Civil Case No. 5785 indicate that only the affected areas were intended to
beacquired and compensated. Thus, Commissioner Emelinda C. Atienza’s Report containsthe following
recommendation:
IV. Recommendation
Finding x x x that the valuation established herein was reasonable and fair, the undersigned recommend [sic]
thatthe amount of Php1,120.00 per square meter be adopted to compensate the affected areas on the properties
involve [sic] in the above subject case.40 (Emphasis supplied)
On the other hand, Commissioners Alberto M. Nuique and Eladio R. Taupa’s respective Reports uniformly state:
III. RECOMMENDATIONS
It is hereby recommended that only easement fee be made as the payment on the affected portionof the above-
mentioned parcel of agricultural land which is 10% of the fair market value pursuant to Republic Act 6395 as
amended x x x41 (Emphasis supplied)
The trial court itself particularly decreed in its November 7, 2005 Decision that only the affectedportions of
respondents’ properties were to be acquired and compensated for. In the decretal portion ofits Decision, it thus held
as follows:
WHEREFORE, plaintiff National Power Corporation is ordered to pay the defendants the amount of ₱1,000.00 per
square meter.
Upon payment of just compensation to the defendants, subject to the deductions of the sums due the Government
for unpaid real estate taxes and other imposts, the plaintiff shall have a lawful right to enter, take possession and
acquire easement of right-of-way over the portions of the propertiestogether with the improvements sought to be
expropriated for the purpose stated, free from any and all liens and encumbrances.42 (Emphasis and underscoring
supplied)
The CA therefore patently erred in declaring in its assailed Decision that there is nothing in the November 7, 2005
Decision of the Batangas City RTC to indicate that NPC was being ordered to pay just compensation only for the
1,595.91-square meter portion of respondents’ properties.On the contrary, the evidence is quite clear that NPC has
beenmade liable precisely to such extent only, and not more.
The Court likewise observes that contrary to the CA’s appreciation, the June 26, 2007 Decision in CA-G.R. CV No.
86712 did notparticularly declare that NPC should pay for the entirearea of respondents’ properties. It merely stated
that respondents should be compensated for the full and fair market value of their property and not merely paid a
10%easement fee therefor; it did not resolve the issue of whether NPC should pay just compensation for the entire
area of 7,015 square meters. It simply said that NPC should pay for the full per-square meter value of the affected
portions, and not just a fraction thereof (or 10%). There could be no other interpretation of the June 26, 2007
pronouncement in CAG.R. CV No. 86712 when the CA stated therein that – At bar, it cannot be gainsaid thatthe
construction of underground pipeline is a simple case of mere passage of gas pipeline. It will surely cause damage
and prejudice to the agricultural potentials of appellees’ property. Deep excavation will have to be done whereby
plants and trees will be uprooted. A possible leakage could certainly do harm and adversely restrict the agricultural
and economic activity of the land. This is not to mention that it will create an environmental health hazard dangerous
to the occupant’s life and limb.
Hence, defendants-appellees are entitled for (sic) just compensation to (sic) the fullmarket value of their property
notjust ten percent (10%) of it.
xxxx
Taking all the consideration [sic] ofthe subject property, Commissioners Taupa and Nuique placed the value of the
property at ₱475.00 per square meter based on the Land Bank valuation and Cuervo Appraisers, Inc. and the
Provincial/City Appraisal Committees of Batangas, Laguna and Lipa City, while Commissioner Atienza valued the
property at ₱1,120 per square meter, based on the average value per findings of the Committee composed of the
City Assessor, City Treasurer, City Engineer under Resolution No. 9-99 dated June 18, 1999 that the subject
property will cost ₱1,000.00 to ₱1,300.00 per square meter, and the opinion value of her Team’s surveyand Report
which revealed that the prevailing price of agricultural land inTabangao-Ambulong, Batangas City is NINE
HUNDRED THIRTY PESOS (₱930.00) per square meter.43 (Emphasis in the original; underscoring supplied)
NPC is thus correct in its observation that the issue of whether it should be made to pay for the whole 7,015-square
meter area was not at all raised. Besides, in arriving at its judgment, the CA took into full consideration the
Commissioners’ Reports, which recommended the payment of just compensation only for the affected portions of
respondents’ properties;if it believed otherwise, the appellate court would have so indicated, and it would have taken
exception to the said reports and arrived at its own independent consideration of the case.
It has always been the rule that "[t]he only portion of the decision that may be the subject of execution is that which
isordained or decreed in the dispositive portion. Whatever may be found in the body of the decision can only be
considered as part of the reasons or conclusions of the court and serve only as guides to determine the ratio
decidendi."44 "[W]here there is a conflict between the dispositive portion of the decision and the body thereof, the
dispositive portion controls irrespective of what appears in the body of the decision. While the body of the decision,
order or resolution might create some ambiguityin the manner of the court’s reasoning preponderates, it is the
dispositive portion thereof that finally invests rights upon the parties,sets conditions for the exercise of those rights,
and imposes corresponding duties or obligation."45 Thus, with the decretal portion of the trial court’s November 7,
2005 Decision particularly stating that NPC shall have the lawful right to enter, take possession and acquire
easement of right-ofway over the affected portions of respondents’ properties upon the payment of just
compensation, any order executing the trial court’s Decision should be based on such dispositive portion. "An order
of execution is based on the disposition, not on the body, of the decision."46 Execution must therefore conform to that
ordained or decreed in the dispositive part of the decision.47 Since there is a disparity between the dispositive portion
of the trial court’s November 7, 2005 Decision asaffirmed with modification by the final and executory June 26, 2007
Decision of the CA in CA- G.R. CV No. 86712 – which decreed that respondents be paid just compensation only for
the affected portionsof their properties, totaling 1,595.91 square meters – and the Notice of Garnishment – for the
satisfaction of the amount of ₱5,594,462.50 representing just compensation for the whole 7,015 square meters – the
latter must be declared null and void.
It is a settled general principle that a writ of execution must conform substantially to every essential particular of the
judgment promulgated. Execution not in harmony with the judgment is bereft of validity. It must conform, more
particularly, to that ordained or decreed in the dispositive portion of the decision.48
In the same manner, the Batangas City RTC’s September 24, 2009 and October 23, 2009 Orders are hereby
declared null and void in regard only to the Notice of Garnishment, as it countermands the decretal portion of the
November 7, 2005 Decision and completely changes the tenor thereof by holding NPC liable to pay for the value of
the whole of respondents’ properties; all proceedings held for the purpose of amending or altering the dispositive
portion of the trial court’s November 7, 2005 Decision, as affirmed with modification by the CA’s final and executory
June 26, 2007 Decision in CA-G.R. CV No. 86712, are null and void for lack of jurisdiction. This is exactly what the
1âwphi1
Court said in one case:
Moreover, petitioner is correct in saying that impleading her for the purpose of execution is tantamount to modifying
a decision that had long become final and executory. The falloof the 1997 Decision bythe NLRC only held
"respondents Pro Agency Manila Inc., and Abdul Rahman Al Mahwes to jointly and severally pay complainants x x
x." By holding her liable despite not being ordained as such by the decision, both the CA and NLRCviolated the
doctrine on immutability of judgments.
In PH Credit Corporation v. Court of Appeals, we stressed that "respondent’s [petitioner’s] obligation is based on the
judgment rendered by the trial court. The dispositive portion or the fallois its decisive resolution and is thus the
subject of execution. x x x. Hence the execution must conform with that which is ordained or decreed in the
dispositive portion of the decision."
In INIMACO v. NLRC, we also held thus:
None of the parties in the case before the Labor Arbiter appealed the Decision dated March 10, 1987, hence the
same became final and executory. It was, therefore, removed from the jurisdiction of the Labor Arbiter orthe NLRC
to further alter or amend it. Thus, the proceedings held for the purpose of amending or altering the dispositive
portion of the said decision are null and void for lack of jurisdiction. Also, the Alias Writ of Execution is null and void
because it varied the tenor of the judgment in that it sought to enforce the final judgment against ‘‘Antonio
Gonzales/Industrial Management Development Corp. (INIMACO) and/or Filipinas Carbon and Mining Corp. and
Gerardo Sicat, which makes the liability solidary.
In other words, "[o]nce a decision or order becomes final and executory, it is removed from the power or jurisdiction
of the court which rendered it to further alter or amend it. It thereby becomes immutable and unalterable and any
amendment or alteration which substantially affects a final and executory judgment is null and void for lack of
jurisdiction, including the entire proceedings heldfor that purpose. An order of execution which varies the tenor of the
judgment or exceeds the terms thereof is a nullity."49 (Emphasis supplied)
The failure of NPC to include a notice of hearing in its Motion for Reconsideration of the trial court’s September 24,
2009 Order has been rendered irrelevant considering our pronouncement that the said Order is null and void on the
matter covering the Notice of Garnishment. "A void judgment or order has no legal and binding effect, force or
efficacy for any purpose. In contemplation of law, it is non-existent. Suchjudgment or order may be resisted in any
action or proceeding whenever it is involved. It is not even necessary to take any steps to vacate or avoid a void
judgment or final order; itmay simply be ignored."50
WHEREFORE, the Petition is GRANTED. Judgment is hereby rendered as follows:
1. The January 20, 2011Decision and August 9,2011 Resolution of the Court of Appeals in CA-G.R. SP No. 112054
are PARTIALLY REVERSED and SET ASIDE;
2. The September 24, 2009 and October 23, 2009 Orders of the Regional Trial Court of Batangas City, Branch VII in
Civil Case No. 5785 are declared NULL and VOID IN PART, in that the Notice of Garnishment is nullified and set
aside;
3. Petitioner National Power Corporation is adjudged liable to PAY JUST COMPENSATIONto respondents
Felicisimo Tarcelo and the Heirs of Comia Santos for the affected portions of their respective properties totaling
1,595.91 square meters, at ₱797.50 per square meter, subject to interest at the rate of twelve per cent (12%) per
annumfrom July 29, 2002 up to June 30, 2013, and thereafter, six percent (6%) per annumfrom July 1, 2013 until full
satisfaction, pursuant to Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799, Series of 2013 and
applicable jurisprudence;
4. Petitioner National Power Corporation is DIRECTED to pay the Commissioners' Fees as set forth in the
November 7, 2005 Decision of the Regional Trial Court ofBatangas City, Branch VII in Civil Case No. 5785.
SO ORDERED.
SECOND DIVISION
G.R. No. 197329 September 8, 2014
NATIONAL POWER CORPORATION, Petitioner,

vs.
LUIS SAMAR and MAGDALENA SAMAR, Respondents.
DECISION
DEL CASTILLO, J.:

This Petition for Review on Certiorari1 seeks to set aside the June 17, 2011 Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 82231 which denied the herein petitioner's appeal and affirmed the February 21, 2003 Decision3of
the Regional Trial Court (RTC) of Iriga City, Fifth Judicial Region, Branch 34 in Civil Case No. IR-2678.
Factual Antecedents
Civil Case No. IR-2243
Sometime in 1990, petitioner National Power Corporation (NPC) filed Civil Case No. IR-2243 with the RTC, seeking
to expropriate respondent spouses Luis and Magdalena Samar’s 1,020-square meter lot – covered by Tax
Declaration No. 30573 and situated in San Jose (Baras),Nabua, Camarines Sur – which NPC needed for the
construction of a transmission line. In an August 29, 1990 Order,4 the RTC directed the issuance of a Writ of
Condemnation in favor of NPC. Accordingly, NPC entered the subject lot and constructed its transmission
line,denominated as Tower No. 83.
However, on July 12, 1994, the trial court issued another Order5 dismissing Civil Case No. IR-2243 without prejudice
for failure to prosecute, as follows:
In the Order dated 14 August 1991, Atty. Raymundo Nagrampa was designated as the representative of his clients
in the Committee of Appraisers to appraise the reasonable value of the land together with the Court’s and plaintiffs’
representatives, namely, the Branch Clerk of Court and Mr. Lorenzo Orense, respectively for the purpose of fixing
the amount with which the plaintiff may be compensated for the land in question.
After almost three (3) years since the said order was issued, the Committee has not met nor deliberated on said
matter and the parties in this case have not exerted efforts in pursuing their claims despite so long a time.
Hence, this case is hereby dismissed without prejudice for failure to prosecute within a reasonable period of time.
SO ORDERED.6
It appears that the above July 12, 1994 Order was notassailed by appeal or otherwise; nor did NPC commence any
other expropriation proceeding.
Civil Case No. IR-2678
On December 5, 1994, respondents filed with the same trial court a Complaint,7 docketed as Civil Case No. IR-2678,
for compensation and damages against NPC relative to the subject lot which NPC took over but for which it failed to
pay just compensation on account of the dismissal of Civil Case No. IR-2243. The Complaint contained the following
prayer:
WHEREFORE, considering the above premises, it is most respectfully prayed for the Honorable Court to:
1. Order the defendant to compensate the plaintiff of [sic] the lot they are now occupying in accordance with the
current market value existing in the place;
2. Order the defendant to pay the plaintiff moral and actual damages and unrealized profits in the amount of not less
than ₱150,000.00;
3. Order the defendant to pay the exemplary damages of [sic] the amount of ₱10,000.00 and to pay the cost of suit;
Plaintiffs pray for other reliefs which are just and equitable under the premises.8
As agreed by the parties during pre-trial, a panel ofcommissioners – composed of one representative each from the
parties, and a third from the court – was constituted for the purpose of determining the value of the subject lot.
After conducting their appraisal, the commissioners submitted their individual reports. Atty. Wenifredo Pornillos,
commissioner for the respondents, recommended a valuation within the range of ₱1,000.00 to ₱1,500.00 per square
meter. Lorenzo C. Orense, commissioner for NPC, did notset an amount, although he stated that the lot should be
valued at the prevailing market prices of agricultural, and not residential, lands within the area. The court
representative, Esteban D. Colarina, proposed a ₱1,100.00 per square meter valuation.9
On February 21, 2003, the RTC rendered a Decision10 pegging the value of the subject lot at ₱1,000.00 per square
meter, thus:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant National Power Corporation
to pay plaintiffs the total sum of ₱1,020,000.00, representing the value of plaintiffs’ land expropriated by the
defendant. All other claims in the complaint and in the answer with counterclaim are hereby dismissed.
SO ORDERED.11
NPC filed an appeal with the CA claiming that pursuant to Section 4, Rule 67 of the 1964 Rules of Court,12 just
compensation for the lot should have been computed based on its value at the time of the taking or the filing of the
expropriation case (Civil Case No. IR-2243) in 1990, and prayed thatthe case be remanded to the lower court for
further reception ofevidence based on said Section 4, Rule 67 of the 1964 Rules of Court.
On June 17, 2011, the CArendered the assailed Decision containing the following decretal portion:
WHEREFORE, premises considered, the instant appeal is DENIED. The assailed Decision [dated] 21 February
2003 renderedby the Regional Trial Court of Iriga City, Fifth Judicial Region, Branch 34 in Civil Case No. IR-2678 is
hereby AFFIRMED.
SO ORDERED.13
The CA held that in the resolution of Civil Case No. IR-2678, the principles and rules of procedure in eminent
domain cases – under Rule 67 of the 1964 Rules of Court – cannot apply; thus, the rule that just compensation shall
be computed from the time of the taking or filing of the expropriation case is inapplicable, since the case is not one
for expropriation. Instead, Civil Case No. IR-2678 should be treated as a simple case for the recovery of damages.
Finally, the CA held that the trial court properly exercised its judicial function of ascertaining the fair market value of
the property asjust compensation.
NPC thus instituted the instant Petition.
Issues
The Petition raises the following issues:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE COURT A QUO’S
DECISION DATED FEBRUARY 21, 2003 IN CIVIL CASE NO. IR-2678 WHICH FIXED THE AMOUNT OF JUST
COMPENSATION FOR THE EXPROPRIATED PROPERTY OF RESPONDENTS AT ₱1,000.00PER SQUARE
METER IN CONTRAVENTION OF SECTION 4, RULE 67 OF THE REVISED RULES OF COURT WHICH
PROVIDES THAT THE JUST COMPENSATION FOR THE EXPROPRIATED PROPERTY MUST BE
DETERMINED EITHER AS OF THE DATE OF THE TAKING OFTHE PROPERTY OR THE FILING OF THE
COMPLAINT, WHICHEVER COMES FIRST.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT REMANDING THE CASE TO THE
COURT A QUOFOR THE PURPOSE OF DETERMINING THE AMOUNT OF JUST COMPENSATION FOR THE
EXPROPRIATED PROPERTY INACCORDANCE WITH SECTION 4, RULE 67 OF THE REVISED RULES OF
COURT.14
In its Petition and Reply,15 NPC insists that Section 4, Rule 67 of the 1964 Rules of Court should apply to Civil Case
No. IR-2678; therefore, just compensation should be based not on 1995 market values, but on those prevailing on
the date of taking or the filing of the expropriation casein 1990; that the dismissal without prejudice of the
expropriation case did not necessarily nullify the proceedings in said case – specifically, the August 29, 1990 Order
of expropriation/writ of condemnation, which became final and executory for failure of any of the parties to appeal
the same – which proceedingsfor expropriation may continue through the present Civil CaseNo. IR-2678 for
compensation and damages filed by respondents; and that the cited National Power Corporation v. Court of
Appeals16 case does not apply since the factual milieu is different, and it does not appear that the lot was damaged
by NPC’s entry therein.
NPC thus prays that the assailed CA disposition be set aside and that the case be remanded to the trial court for
further proceedings todetermine the proper amount of just compensation in accordance with Section 4, Rule 67 of
the 1964 Rules of Court.
Praying that the Petition be denied for lack of merit, the respondents in their Comment17 plainly echo the assailed CA
Decision, adding that the trial court’s basis for arriving at the proper amount of just compensation was correct as the
market value of adjacent properties were taken into account. Respondents add that by agreeing to have the
valuation determined by a panel of commissioners, NPC is bound by whatever findings such panel makes, and it
may not raise the issue that valuation should be computed from the time of taking or filing of the expropriation case
in 1990.
Our Ruling
NPC insists that Section 4, Rule 67 ofthe 1964 Rules of Court should have been observed in fixing the amount of
just compensation for the subject lot; that the value of the lot at the time of NPC’s taking thereof or filing of Civil
Case No. IR-2243 in 1990 should have been the basis for computing just compensation and not the prevailing
market value at the time of the filing or pendency of Civil Case No. IR-2678 in 1995. NPC thus prays that Civil
CaseNo. IR-2678 be remanded to the trial court for determination of just compensation applying Section 4, Rule 67
of the 1964 Rules of Court.
We agree with NPC’s contention.
In Republic v. Court of Appeals,18 we held that:
Just compensation is based on the price or value of the property at the time it was taken from the owner and
appropriated by the government. However, if the government takes possession before the institution of expropriation
proceedings, the value should befixed as of the time of the taking of said possession, not of the filing of the
complaint. The value at the time of the filing of the complaint should be the basis for the determination of the value
when the taking of the property involved coincides with or is subsequent to the commencement of the proceedings.
The procedure for determining just compensation is set forth in Rule 67 of the 1997 Rules of Civil Procedure.
Section 5 of Rule 67 partly states that ‘upon the rendition of the order of expropriation, the court shall appoint not
more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the
just compensation for the property sought to be taken.’ However, we held in Republic v. Court of Appealsthat Rule
67 presupposes a prior filing of complaint for eminent domain with the appropriate court by the expropriator. If no
such complaint is filed, the expropriator is considered to have violated procedural requirements, and hence, waived
the usual procedure prescribed in Rule 67, including the appointment of commissioners to ascertain just
compensation. In National Power Corporation v. Court of Appeals, we clarified that when there is no action for
expropriation and the case involves only a complaint for damages or just compensation, the provisions of the Rules
of Court on ascertainment of just compensation (i.e., provisions of Rule 67) are no longer applicable, and a trial
before commissioners is dispensable x x x.
Records show that sometime in 1990, NPC filed an expropriation case docketed as Civil Case No. IR-2243.
However, in an Order dated July 12, 1994, the expropriation case was dismissed by the RTC for failure of NPC to
prosecute. Subsequently, or on December 5, 1994, respondents filed Civil Case No. IR-2678 which is a complaint
for compensation and recovery of damages. Considering the dismissal of the expropriation case for failure of the
NPC to prosecute, it is as if no expropriation suit was filed. Hence, pursuant to the above-quoted ruling, NPC is
deemed "to have violated procedural requirements, and hence, waived the usual procedure prescribed in Rule 67,
including the appointment of commissioners to ascertain just compensation." Nevertheless, just compensation for
the property must be based on its value at the timeof the taking of said property, not at the time of the filing ofthe
complaint. Consequently, the RTC should have fixed the value ofthe property at the time NPC took possession of
the same in 1990, and not at the time of the filing of the complaint for compensation and damages in 1994 or its fair
market value in 1995.
In this case, the RTC formed a panel of commissioners in determining the just compensation of the property.
Although this is not required considering our pronouncement in Republic v. Court of Appeals,19 nonetheless, its
constitution is not improper.20 "The appointment was done mainly to aid the trial court in determining just
compensation, and it was not opposed by the parties. Besides, the trial court is not bound by the commissioner’s
recommended valuation of the subject property. The court has the discretion on whether to adopt the
commissioners’ valuation or to substitute itsown estimate of the value as gathered from the records."21
In this case, records show that respondents’ representative recommended a valuation of ₱1,000.00 to ₱1,500.00
per square meter; while the court’s representative recommended a value of ₱1,100.00 per square meter.Notably,
NPC’s representative did not give any value; he merely opined that the subject property should be classified as
agricultural and not residential land and valued at the prevailing market values. Significantly, the values
recommended by the commissioners were those values prevailing in 1994 and 1995, or during the time the
complaint for compensation and damages was filed. Considering that these are not the relevant values at the
timeNPC took possession of the property in 1990, it was incumbent upon the RTC to have disregarded the same.
Unfortunately, it adopted these values. Onthis score alone, we find a need to remand this case to the RTC for
further proceedings.
Moreover, we note that the RTC simply adopted the above values without citing its basis therefor. The pertinent
1avv phi 1
portions of the trial court’s Decision read:
Pursuant to the said Order of May 3, 1995, the Court formed a Commission chaired by Mr. Esteban D. Colarina, an
employee in Branch 34 of this Court; Atty. Wenifredo Pornillos representing the plaintiffs; and Mr. Lorenzo C.
Orense representing the defendant NAPOCOR. These gentlemen took the required oath and functioned as a
committee, submitting however their respective individual Commissioner’s Report. x x x
On July 11, 1995, Atty. Pornillos recommended that the land be valued at ₱1,000.00 to ₱1,500.00 per square meter
(page 58). On July 13, 1995, Mr. Esteban D. Colarina submitted his report recommending ₱1,100.00 as the fair
market value of the property per square meter. Attached to said report was the affidavit of Mr. Nicasio V. Diño, then
the Assistant CityAssessor of Iriga City pegging the value of the said land at ₱1,500.00 to ₱1,800.00 per square
meter. On August 3, 1995, Mr. Lorenzo Orense of the NAPOCOR submitted his Commissioner’s Report wherein he
recommended that the valuation of the land be based on its agricultural value, without however naming a price.
On the basis of past proceedings, the parties were allowed to file their respective memoranda. Only the defendant
1âwphi1
NAPOCOR filed a memorandum wherein it undertook to pay plaintiffs the value of their land, although praying that
the Court consider the land as agricultural. NAPOCOR admits that plaintiffs[’] property, per Tax Declaration No.
30573 has been classified as residential, but assails said classification with arguments which are mere speculations.
In the light of all the postures taken by both parties which, in effect, results in a failure to agree on how the land
should be valued, this Court shall fall back on the Order of May 3, 1995 wherein the report of the Court’s
representative shall be taken as a factor in determining x x x the value of the land, including other matters germane
thereto and others that may be of judicial notice.
In view of the above consideration, this Court hereby fixes the fair market value of the land in question at ₱1,000.00
per square meter.
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant National Power Corporation
to pay the plaintiffs the total sum of ₱1,020,000.00, representing the value of plaintiffs’ land expropriated by the
defendant. All other claims in the complaint and in the answer with counterclaim are hereby dismissed.
SO ORDERED.22
Indeed, the trial court merely recited the values fixed by each commissioner. Although it stated in general terms that
it considered other factors germane thereto and of judicial notice, it failed to specify what these factors were. It did
not even clarify whether it considered the values recommended by the two commissioners. In Republic v. Court of
Appeals,23 we remanded the case to the trial court and directed it to reconvene the panel of commissioners after it
was shown that its valuation of just compensation has no basis, viz:
However, we agree with the appellate court that the trial court's decision is not clear as to its basis for ascertaining
just compensation. The trial court mentioned in its decision the valuations in the reports of the City Appraisal
Committee and of the commissioners appointed pursuant to Rule 67. But whether the trial court considered these
valuations in arriving at the just compensation, or x x x made its own independent valuation based on the records,
[is] obscure in the decision. The trial court simply gave the total amount of just compensation due to the property
owner without laying down its basis. Thus, there is no way to determine whether the adjudged just compensation is
based on competent evidence. For this reason alone, a remand of the case to the trial court for proper determination
of just compensation is in order. In National Power Corporation v. Bongbong, we held that although the
determination of just compensation lies within the trial court's discretion, it should not be done arbitrarily or
capriciously. The decision of the trial court must be based on established rules, correct legal principles, and
competent evidence. The court is proscribed from basing its judgment on speculations and surmises.24
Finally, we hold that based on prevailing jurisprudence, respondents are entitled to "legal interest on the price of the
land from the time of the taking up to the time of full payment"25 by the NPC.
WHEREFORE, the Petition is GRANTED. The June 17, 2011 Decision of the Court of Appeals in CA-G.R. CV No.
82231 is REVERSED and SET ASIDE. This case is REMANDED to the Regional Trial Court of Iriga City, Fifth
Judicial Region, Branch 34 which is directed to re-convene the commissioners or appoint new commissioners to
determine, in accordance with this Decision, the just compensation of the subject property.
SO ORDERED.
SECOND DIVISION
G.R. No. 183360 September 8, 2014
ROLANDO C. DE LA PAZ,* Petitioner,

vs.
L & J DEVELOPMENT COMPANY, Respondent.
DECISION
DEL CASTILLO, J.:
"No interest shall be due unless it has been expressly stipulated in writing."1
This is a Petition for Review on Certiorari2 assailing the February 27, 2008 Decision3 of the Court of Appeals (CA) in
CA-G.R. SP No. 100094, which reversed and set aside the Decision4 dated April 19, 2007 of the Regional Trial
Court (RTC), Branch 192, Marikina City in Civil Case No. 06-1145-MK. The said RTC Decision affirmed in all
respects the Decision5 dated June 30, 2006 of the Metropolitan Trial Court (MeTC), Branch 75, Marikina City in Civil
Case No. 05-7755, which ordered respondent L & J Development Company (L&J) to pay petitioner Architect
Rolando C. De La Paz (Rolando) its principal obligation of ₱350,000.00, plus 12% interest per annumreckoned from
the filing of the Complaint until full payment of the obligation.
Likewise assailed is the CA’s June 6, 2008 Resolution6 which denied Rolando’s Motion for Reconsideration.
Factual Antecedents
On December 27, 2000, Rolando lent ₱350,000.00 without any security to L&J, a property developer with Atty.
Esteban Salonga (Atty. Salonga) as its President and General Manager. The loan, with no specified maturity date,
carried a 6% monthly interest, i.e., ₱21,000.00. From December 2000 to August 2003, L&J paid Rolando a total of
₱576,000.007 representing interest charges.
As L&J failed to pay despite repeated demands, Rolando filed a Complaint8 for Collection of Sum of Money with
Damages against L&J and Atty. Salonga in his personal capacity before the MeTC, docketed as Civil Case No. 05-
7755. Rolando alleged, amongothers, that L&J’s debtas of January 2005, inclusive of the monthly interest, stood at
₱772,000.00; that the 6% monthly interest was upon Atty. Salonga’s suggestion; and, that the latter tricked him into
parting with his money without the loan transaction being reduced into writing.
In their Answer,9 L&J and Atty. Salonga denied Rolando’s allegations. While they acknowledged the loan as a
corporate debt, they claimed that the failure to pay the same was due to a fortuitous event, that is, the financial
difficulties brought about by the economic crisis. They further argued that Rolando cannot enforce the 6% monthly
interest for being unconscionable and shocking to the morals. Hence, the payments already made should be applied
to the ₱350,000.00 principal loan.
During trial, Rolando testified that he had no communication with Atty. Salonga prior to the loan transaction but
knew him as a lawyer, a son of a former Senator, and the owner of L&J which developed Brentwood Subdivision in
Antipolo where his associate Nilo Velasco (Nilo) lives. When Nilo told him that Atty. Salonga and L&J needed money
to finish their projects, heagreed to lend them money. He personally met withAtty. Salonga and their meeting was
cordial.
He narrated that when L&J was in the process of borrowing the ₱350,000.00 from him, it was Arlene San Juan
(Arlene), the secretary/treasurer of L&J, who negotiated the terms and conditions thereof.She said that the money
was to finance L&J’s housing project. Rolando claimed that it was not he who demanded for the 6% monthly
interest. It was L&J and Atty. Salonga, through Arlene, who insisted on paying the said interest as they asserted that
the loan was only a short-term one.
Ruling of the Metropolitan Trial Court
The MeTC, in its Decision10 of June 30, 2006, upheld the 6% monthly interest. In so ruling, it ratiocinated that since
L&J agreed thereto and voluntarily paid the interest at suchrate from 2000 to 2003, it isalready estopped from
impugning the same. Nonetheless, for reasons of equity, the saidcourt reduced the interest rate to 12% per
annumon the remaining principal obligation of ₱350,000.00. With regard to Rolando’s prayer for moral damages, the
MeTC denied the same as it found no malice or bad faith on the part ofL&J in not paying the obligation. It likewise
relieved Atty. Salonga of any liability as it found that he merely acted in his official capacity in obtaining the loan. The
MeTC disposed of the case as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff, Arch. Rolando C. Dela
Paz, and against the defendant, L & J Development Co., Inc., as follows:
a) ordering the defendant L & J Development Co., Inc. to pay plaintiff the amount of Three Hundred Fifty Thousand
Pesos (₱350,000.00) representing the principal obligation, plus interest at the legal rate of 12% per annum to be
computed from January 20, 2005, the date of the filing of the complaint, until the whole obligation is fully paid;
b) ordering the defendant L & J Development Co., Inc. to pay plaintiff the amount of Five Thousand Pesos
(₱5,000.00) as and for attorney’s fees; and
c) to pay the costs of this suit.
SO ORDERED.11
L&J appealed to the RTC. It asserted in its appeal memorandum12 that from December 2000 to March 2003, it paid
monthly interest of ₱21,000.00 based on the agreed-upon interest rate of 6%monthly and from April 2003 to August
2003, interest paymentsin various amounts.13 The total of interest payments made amounts to ₱576,000.00 – an
amount which is even more than the principal obligation of ₱350,000.00
L&J insisted that the 6% monthly interest rate is unconscionable and immoral. Hence, the 12% per annumlegal
interest should have been applied from the time of the constitution of the obligation. At 12% per annum interest rate,
it asserted that the amount of interestit ought to pay from December 2000 to March 2003 and from April 2003 to
August 2003, only amounts to ₱105,000.00. If this amount is deducted from the total interest paymentsalready
made, which is ₱576,000.00, the amount of ₱471,000.00 appears to have beenpaid over and above what is due.
Applying the rule on compensation, the principal loan of ₱350,000.00 should be set-off against the ₱471,000.00,
resulting in the complete payment of the principal loan.
Unconvinced, the RTC, inits April 19, 2007 Decision,14 affirmed the MeTC Decision, viz: WHEREFORE, premises
considered, the Decision appealed from is hereby AFFIRMED in all respects, with costs against the appellant.
SO ORDERED.15
Undaunted, L&J went to the CA and echoed its arguments and proposed computation as proffered before the RTC.
In a Decision16 dated February 27, 2008, the CAreversed and set aside the RTC Decision. The CA stressed that the
parties failedto stipulate in writing the imposition of interest on the loan. Hence, no interest shall be due thereon
pursuant to Article 1956 of the Civil Code.17 And even if payment of interest has been stipulated in writing, the 6%
monthly interest is still outrightly illegal and unconscionable because it is contrary to morals, if not against the law.
Being void, this cannot be ratified and may be set up by the debtor as defense. For these reasons, Rolando cannot
collect any interest even if L&J offered to pay interest. Consequently, he has to return all the interest payments of
₱576,000.00 to L&J.
Considering further that Rolando and L&J thereby became creditor and debtor of each other, the CA applied the
principle of legal compensation under Article 1279 of the Civil Code.18 Accordingly, it set off the principal loan of
₱350,000.00 against the ₱576,000.00 total interest payments made, leaving an excess of ₱226,000.00, which the
CA ordered Rolando to pay L&J plus interest. Thus:
WHEREFORE, the DECISION DATED APRIL 19, 2007 is REVERSED and SET ASIDE.
CONSEQUENT TO THE FOREGOING, respondent Rolando C. Dela Paz is ordered to pay to the petitioner the
amount of ₱226,000.00,plus interest of 12% per annumfrom the finality of this decision.
Costs of suit to be paid by respondent Dela Paz.
SO ORDERED.19
In his Motion for Reconsideration,20 Rolando argued thatthe circumstances exempt both the application of Article
1956 and of jurisprudence holding that a 6% monthly interest is unconscionable, unreasonable, and exorbitant. He
alleged that Atty. Salonga, a lawyer, should have taken it upon himself to have the loan and the stipulated rate of
interest documented but, by way of legal maneuver, Atty. Salonga, whom he fully trusted and relied upon, tricked
him into believing that the undocumented and uncollateralized loan was withinlegal bounds. Had Atty. Salonga told
him that the stipulated interest should be in writing, he would have readily assented. Furthermore, Rolando insisted
that the 6% monthly interest ratecould not be unconscionable as in the first place, the interest was not imposed by
the creditor but was in fact offered by the borrower, who also dictated all the terms of the loan. He stressed that in
cases where interest rates were declared unconscionable, those meant to be protected by such declaration are
helpless borrowers which is not the case here.
Still, the CA denied Rolando’s motion in its Resolution21 of June 6, 2008.
Rolando argues that the 6%monthly interest rateshould not have been invalidated because Atty. Salonga took
advantage of his legal knowledge to hoodwink him into believing that no document was necessaryto reflect the
interest rate. Moreover, the cases anent unconscionable interest rates that the CA relied upon involve lenders who
imposed the excessive rates,which are totally different from the case at bench where it is the borrower who decided
on the high interest rate. This case does not fall under a scenariothat ‘enslaves the borrower or that leads to the
hemorrhaging of his assets’ that the courts seek to prevent.
L&J, in controverting Rolando’s arguments, contends that the interest rate is subject of negotiation and is
agreedupon by both parties, not by the borrower alone. Furthermore, jurisprudence has nullified interestrates on
loans of 3% per month and higher as these rates are contrary to moralsand public interest. And while Rolando
raises bad faithon Atty. Salonga’s part, L&J avers thatsuch issue is a question of fact, a matter that cannot be raised
under Rule 45.
Issue
The Court’s determination of whether to uphold the judgment of the CA that the principal loan is deemed paid
isdependent on the validity of the monthly interest rate imposed. And in determining such validity, the Court must
necessarily delve into matters regarding a) the form of the agreement of interest under the law and b) the alleged
unconscionability of the interest rate. Our Ruling
The lack of a written stipulation to pay interest on the loaned amount disallows a creditor from charging monetary
interest.
Under Article 1956 of the Civil Code, no interest shall bedue unless it has been expressly stipulated in writing.
Jurisprudence on the matter also holds that for interest to be due and payable, two conditions must concur: a)
express stipulation for the payment of interest; and b) the agreement to pay interest is reduced in writing.
Here, it is undisputed that the parties did not put down in writing their agreement. Thus, no interest is due. The
collection of interest without any stipulation in writing is prohibited by law.22
But Rolando asserts that his situation deserves an exception to the application of Article 1956. He blames Atty.
Salonga for the lack of a written document, claiming that said lawyer used his legal knowledge to dupe him. Rolando
thus imputes bad faith on the part of L&J and Atty. Salonga. The Court, however, finds no deception on the partof
L&J and Atty. Salonga. For one, despite the lack of a document stipulating the payment of interest, L&J
nevertheless devotedly paid interests on the loan. It only stopped when it suffered from financial difficulties that
prevented it from continuously paying the 6% monthly rate. For another,regardless of Atty. Salonga’s profession,
Rolando who is an architect and an educated man himself could have been a more reasonably prudent person
under the circumstances. To top it all, he admitted that he had no prior communication with Atty. Salonga. Despite
Atty. Salonga being a complete stranger, he immediately trusted him and lent his company ₱350,000.00, a
significant amount. Moreover, as the creditor,he could have requested or required that all the terms and conditions
of the loan agreement, which include the payment of interest, be put down in writing to ensure that he and L&J are
on the same page. Rolando had a choice of not acceding and to insist that their contract be put in written form as
this will favor and safeguard him as a lender. Unfortunately, he did not. It must be stressed that "[c]ourts cannot
follow one every step of his life and extricate him from bad bargains, protect him from unwise investments, relieve
him from one-sided contracts,or annul the effects of foolish acts. Courts cannotconstitute themselves guardians of
persons who are not legally incompetent."23
It may be raised that L&J is estopped from questioning the interest rate considering that it has been paying Rolando
interest at such ratefor more than two and a half years. In fact, in its pleadings before the MeTCand the RTC, L&J
merely prayed for the reduction of interest from 6% monthly to 1% monthly or 12% per annum. However, in Ching v.
Nicdao,24 the daily payments of the debtor to the lender were considered as payment of the principal amount of the
loan because Article 1956 was not complied with. This was notwithstanding the debtor’s admission that the
payments made were for the interests due. The Court categorically stated therein that "[e]stoppel cannot give
validity to an act that is prohibited by law or one thatis against public policy."
Even if the payment of interest has been reduced in writing, a 6% monthly interest rate on a loan is unconscionable,
regardless of who between the parties proposed the rate.
Indeed at present, usury has been legally non-existent in view of the suspension of the Usury Law25 by Central Bank
Circular No. 905 s. 1982.26 Even so, not all interest rates levied upon loans are permitted by the courts as they have
the power to equitably reduce unreasonable interest rates. In Trade & Investment Development Corporation of the
Philippines v. Roblett Industrial Construction Corporation,27 we said:
While the Court recognizes the right of the parties to enter into contracts and who are expectedto comply with their
terms and obligations, this rule is not absolute. Stipulated interest rates are illegal if they are unconscionable and the
Court is allowed to temper interest rates when necessary. In exercising this vested power to determine what is
iniquitous and unconscionable, the Court must consider the circumstances of each case. What may be iniquitous
and unconscionable in onecase, may be just in another. x x x28
Time and again, it has been ruled in a plethora of cases that stipulated interest rates of 3% per month and higher,
are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if
not against the law.29 The Court, however, stresses that these rates shall be invalidated and shall be reduced only in
cases where the terms of the loans are open-ended, and where the interest rates are applied for an indefinite
period. Hence, the imposition of a specific sum of ₱40,000.00 a month for six months on a ₱1,000,000.00 loan is not
considered unconscionable.30
In the case at bench, there is no specified period as to the payment of the loan. Hence, levying 6% monthly or 72%
interest per annumis "definitely outrageous and inordinate."31 The situation that it was the debtor who insisted on the
interest rate will not exempt Rolando from a ruling that the rate is void. As this Court cited in Asian Cathay Finance
and Leasing Corporation v. Gravador,32 "[t]he imposition of an unconscionable rate of interest on a money debt, even
if knowingly and voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant spoliation and an
iniquitous deprivation of property, repulsive to the common sense of man."33 Indeed, "voluntariness does notmake
the stipulation on [an unconscionable] interest valid."34
As exhaustibly discussed,no monetary interest isdue Rolando pursuant to Article 1956. The CA thus correctly
1âwphi1
adjudged that the excess interest payments made by L&J should be applied to its principal loan. As computed by
the CA, Rolando is bound to return the excess payment of ₱226,000.00 to L&J following the principle of solutio
indebiti.35
However, pursuant to Central Bank Circular No. 799 s. 2013 which took effect on July 1, 2013,36 the interest
imposed by the CA must be accordingly modified. The ₱226,000.00 which Rolando is ordered to pay L&J shall earn
an interest of 6% per annumfrom the finality of this Decision.
WHEREFORE, the Decision dated February 27, 2008 of the Court of Appeals in CA-G.R. SP No. 100094 is hereby
AFFIRMED with modification that petitioner Rolando C. De La Paz is ordered to pay respondent L&J Development
Company the amount of ,₱226,000.00, plus interest of 6o/o per annum from the finality of this Decision until fully
paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 197336 September 3, 2014
MEYR ENTERPRISES CORPORATION, Petitioner,

vs.
ROLANDO CORDERO, Respondent.
DECISION
DEL CASTILLO, J.:
A question of fact cannot be raised in petitions for review on certiorari; in such appeals by petition for review on
certiorari under Rule 45, only questions of law shall be raised.
This Petition for Review on Certiorari1 seeks to set aside the November 26, 2010 Decision2 of the Court of Appeals
(CA) in CA-G.R. CV No. 02887 affirming the August 21, 2008 Decision3 of the Regional Trial Court of Cebu City,
Branch 8 in Civil Case No. CEB-28040, as well as its February 23, 2011 Resolution4 denying Meyr Enterprises
Corpo5~on's (petitioner) Motion for Reconsideration5 of the assailed judgment.
Factual Antecedents
The pertinent facts are as follows:
On August 22, 2002, plaintiff-appellant, Meyr Enterprises Corporation6 (hereafter Meyr/plaintiff-appellant) filed a
Complaint7 for Damages and Attorney’s Fees before the Regional Trial Court of Cebu City against Rolando
Cordero8 (hereafter defendant-appellee/Cordero).
Meyr claims to be the registered owner of a [4,887-square meter parcel of land covered by TCT No. T-
1198.]9Plaintiff-appellant alleged that sometime in July 2002, defendant constructed a dike in front of his land. The
[dike disrupted] the flow of the waves of the sea causing damages to[his] land. The trees in the land were allegedly
in dangerof [being uprooted]and the sand [of disappearing further]. Plaintiff-appellantprays for [O]ne Million [P]esos
actual damages, [P]600,000[.00] moral damages, [P]200,000.00 exemplary damages.
In his Answer,10 dated September 20, 2002, x x x Cordero averred that the construction of the dike began
[in]December 2001 through the authority of the Local Government of Guinsiliban, Camiguin pursuant to a
resolution11 of the Sangguniang Bayan. He added that the alleged interruption of the waves is unfounded and a lie
because the dike [does not encroach] on the plaintiff’s land and in no way will [it] interruptthe normal action of the
waves.
Cordero argued that plaintiff-appellanthas no personality to sue as the area in controversy is a foreshore land,
owned by the State and under no circumstances will plaintiff suffer any damage or injury therefrom. The area is
covered under the COMMUNITY-BASED FOREST MANAGEMENT AGREEMENT (CBFMA), between the
Department of Environment and Natural Resources and the Cantaan Centennial Multi-Purpose Cooperative
(CCMPC). Defendant-appellee stated that under the CBFMA Agreement the holder thereof has the exclusive
responsibility of protecting the area, thus, he concludes that only CCMPC has the personality to sue in court.
Defendant-appellee alleged that sometime in September 2001, the property caretaker of the plaintiff hired several
workers upon the order of Mr. Paul Rodriguez, and clandestinely quarried the white sand and finger gravel along the
shore of their land. The people of Barangay Cantaan and the DENR supposedly complained to the Sangguniang
Bayan of Guinsiliban[,] Camiguin, [which] then made an ocular inspection on the area. Mr. Deogracias Dagondon, a
DENR representative, allegedly caught in flagrante delictothree persons quarrying finger gravel and one of them is
Mr. Jadman (the property caretaker of the plaintiff), who told the former that they were under orders from Mr.
Rodriguez. As a result, the Sangguniang Bayan of Guinsiliban, Camiguin approved Resolution No. 44 informing Mr.
Paul Rodriguez to stop quarrying finger gravel.
Defendant-appellee averred that in order to "restore mother nature" without engaging plaintiff in actual court battle,
defendant sought assistance from the local government of Guinsiliban, inconstructing a dike/sea wall. He contended
that the construction thereof should be charged to the plaintiff, as it is the proximate cause of the damage. He
postulated that plaintiff filed the baseless suit against him because Meyr wanted to acquire his land. He prayed for
moral damages in the total amount of Php2,500,000.00, attorney’s fees of Php250,000.00, litigation expenses of
Php75,000.00 and exemplary damages of Php5,000,000.00.
Subsequently, on May 28, 2003 the RTC dismissed the complaint of the plaintiff based on defendant-appellee’s
affirmative defenses, the pertinent portions of which state:
"After weighing the arguments of the contending parties, this Court rules to consider defendant’s affirmative
defenses which are supported by documentary evidences on the following grounds: firstly, as the records would
show, the area under discussion is a foreshore and is a public dominion owned by the State and as such it is the
latter who has the exclusive right to file an action. Secondly, the subject area is covered with a Community Based
Forest Management Agreement between the DENR and Cantaan Fishermen Association, Inc., now known as
Cantaan [Centennial] Multi-Purpose Cooperative per agreement executed by the above-named parties way back
[on] May 20, 1998 (Annex "4"-Answer). Thirdly, defendant’s act of constructing [a] dike/seawall in front of his land
was duly authorized by the Sangguniang Bayan of Guinsiliban, Camiguin per Resolution No. 38 (Annex "1"-
Answer).
PREMISES CONSIDERED, the Court hereby grants the dismissal of the instant case for lack of legal and factual
basis.
SO ORDERED."12
Plaintiff’s motion for reconsideration ofthe said order met the same fate and was denied in an Order dated
September 8, 2003.13
The dismissal of the case became final and executory as the notice of appeal by the plaintiff-appellant was filed out
of time as can be clearly seen from the twin Orders of the trial court respectively dated October 27, 2003 and
January 12, 2004.14
Meanwhile, defendant-appellee filed a motion in court to set his counterclaim for hearing. Thus, hearing of
defendant-appellee’s counterclaim ensued. On August 21, 2008, the Regional Trial Court rendered a decision15 in
favor of the defendant’s counterclaim the dispositive portion of which states:
"WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant-counterclaimant,

ROLANDO CORDERO, and against the plaintiff-counterclaim defendant, MEYR ENTERPRISESCORPORATION,
ordering the latter to pay the former the amounts of Php50,000.00 for moral damages, Php20,000.00 as attorney’s
fees, and the costs of the suit. SO ORDERED."16
In arriving at the above pronouncement on Rolando Cordero’s (respondent’s) counterclaim, the trial court heldin its
Decision that –
The Court is inclined to believe that, indeed, there was damage, specifically erosion, in the seashore of Barangay
Cantaan. But no sufficient evidence, other than their own allegations which appear to be no more than finger
pointing, has been presented by any of the parties as tothe cause of said damage. The plaintiff says it is the
dikeconstructed by the defendant, while the latter says it is the quarrying of sand and gravel done by plaintiff’s
workers. To the mind of the Court, the determination of the cause of such erosion needs the help of experts,
especially with the conflicting claims of the parties. The Court wonders why the assistance of the DENR was not
sought on this matter, especially so [since] said Office has a Dive Camp at the area.
It must also be noted that, among the reasons relied upon by this Court in dismissing the plaintiff’s complaint are
that "the area under discussion is a foreshore and is a public dominion owned by the State and as such it is the
latter who has the exclusive right to file an action. x x x, the subject area is covered with a Community Based Forest
Management Agreement between the DENR and Cantaan Fishermen Association, Inc.now known as Cantaan
Centennial Multi-Purpose Cooperative per agreement executed by the above-named parties way back [on] May 20,
1998."
Hence, the Court cannot require the plaintiff-counterclaim defendant to reimburse the defendant-counterclaimant of
the expenses he incurred in the construction of the dike for the protection of his property.
But indeed, as previously found by this Court, the plaintiff-counterclaim defendant had no basis in filing this case
against the defendant-counterclaimant, and considering further that the latter was permitted by the Sangguniang
Bayan of Guinsiliban to construct the dike, that plaintiff-counterclaim defendant’s workers themselves quarried said
sand and gravel from the seashore and that it showed interest in buying the defendant-counterclaimant’s property,
its act has all the hallmarks of a malicious prosecution. Hence, the plaintiff-counterclaim defendant should be
sentenced to pay the defendant-counterclaimant moral damages, attorney’s feesand costs of litigation.17
Petitioner appealed the trial court’s Decision with the CA. Docketed as CA-G.R. CV No. 02887, the appeal
essentially centered on the argument that contrary to the trial court’s findings, petitioner had a valid cause of action
against respondent for damages arising from the erosion caused by the latter’s construction of a dike on foreshore
land, which petitioner claims isillegal; for this reason, it should not be found guilty of malicious prosecution for
instituting Civil Case No. CEB-28040.
On November 26, 2010, the CA issued the assailed Decision which affirmed the trial court’s August 21, 2008
Decision, stating thus:
At the outset, this Court highlights that Meyr is not assailing the dismissal of its complaint but only the award of
moral damages, attorney’s fees, and litigation cost by the trial court, which it based on malicious prosecution. "In this
jurisdiction, the term ‘malicious prosecution’ has been defined as ‘an action for damages brought by one against
whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without
probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant
therein.’ While generally associated with unfounded criminal actions, the term has been expanded to include
unfounded civil suits instituted just to vex and humiliate the defendant despite the absence of a cause of action or
probable cause." A finding of malicious prosecution requires the following elements:
(1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor, and thatthe action
was finally terminated with an acquittal;
(2) that in bringing the action, the prosecutor acted without probable cause; and
(3) the prosecutor was actuated or impelled by legal malice.
Anent the first element, it is apparentthat herein plaintiff-appellant was the one who initiated the present case for
damages against the defendantappellee. It is also crystal clear that the dismissal of the original case has long
become final and executory ascan be fairly inferred fromthe twin Orders of the trial court respectively dated October
27, 2003 and January 12, 2004.
Likewise, the second and third element[s] for malicious (prosecution) have been evidently established. The subject
in litigation which is the beach is undoubtedly a foreshore land and incapable of private ownership. As such, the only
entity that could suffer any damage thereon is the State. ThisCourt is in full agreement with the following factual
findings of the trial court and We adopt the same as Our own:
"It must be also noted that among the reasons relied upon by this Court in dismissing plaintiff’s Complaint are that
‘the area under discussion is a foreshore land and is a public dominion owned by the State and as such it is the
latter who has the exclusive right to file an action. x x x"
It is already established that hereinplaintiff-appellant had no personality to sue. Thus, plaintiff will never have
probable cause to file an action against the defendant.
In addition, it may not be amiss to point out that plaintiff-appellant did not deny defendant-appellee’s assertions that
the former made an offer to buy defendant’s land, nor did it deny the allegation that it ordered its employees to
gather sand and gravel from the seashore which resulted in damage to the beach. In fact, in its appellant’s brief it
never made any mention regarding these allegations. Petitioner’s deafening silence on the issue only highlights the
fictiveness of their [sic] claim. For failureof the plaintiff-appellant to controvert the testimony of the defendant, the
said allegation stands and remains unchallenged. x x x
Incidentally, as found by the trial court the construction of the sea wall/ dike was made with the authority of the local
government of Guinsiliban. Such authority must have been made public and of public knowledge as it was issued
pursuant to a Resolution No. 38. Hence, it is within the power of the plaintiffappellant to acquire knowledge or
information that such construction was made by virtue of the order of the local government and not by the plaintiff.
Meyr could not feign ignorance of such authority as it is made through a public resolution of the Sangguniang Bayan
of Guinsiliban, which forms part of public record. Therefore, We find no reason for plaintiff corporation to attribute
such construction of the dike to the defendant-appellee. We also note that herein Meyr Corporation also filed a case
against the defendant before the Ombudsman of the Visayas, which also dismissed the case. A convergent view of
these establishes that plaintiff-appellant had an "axe to grind" against the defendant-appellee. Plaintiff’s actions
were filed with the intention to vex, humiliate, and annoy the defendant-appellee. The alleged wrongdoing of
defendant-appellee was a product of mere speculations and conjectures, which are unsubstantiated by fact, law and
equity. Its baseless accusations, extremely prejudiced the defendant causing the latter to suffer moral damages.
Likewise, Rolando Cordero was forced to litigate in court in his defense,thereby incurring attorney’s fees. Thus, it is
the conscientious posture of the Court that not only did Meyr deliberately brought [sic] the case without probable
cause but also filed the same with legal malice as well. x x x
Penultimately, such act is also contrary to the conduct of a person who must in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. More
importantly, a person who willfully causes loss or injuryto another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for damage.
WHEREFORE, premises considered, the Decision dated August 21, 2008, by the Regional Trial Court, Branch 8,
Cebu City in CEB-28040 is hereby AFFIRMED.
SO ORDERED.18
Petitioner moved to reconsider, but ina February 23, 2011 Resolution, the CA held its ground. Hence, the present
Petition.
In a March 18, 2013 Resolution,19 this Court resolved togive due course to the instant Petition.
Issues
I. THE HONORABLE COURT OFAPPEALS AND THE TRIAL COURT GROSSLY ERRED WHEN(THEY) RULED
THAT PETITIONER FILED SUBJECT COMPLAINT WITH THE INTENTION TO VEX, HUMILIATE AND ANNOY
RESPONDENT WHICH AMOUNTED TO MALICIOUS PROSECUTION.
II. THE HONORABLE COURT OFAPPEALS AND THE TRIAL COURT ERRED WHEN (THEY) FAILED TO
CONSIDER THE FACT THAT THERE IS NOLEGAL AND FACTUALBASIS FOR THE GRANT OF MORAL
DAMAGES INFAVOR OF RESPONDENT.
III. THE HONORABLE COURT OFAPPEALS AND THE TRIAL COURT ERRED IN DIRECTING THE PAYMENT
OF ATTORNEY’S FEES AND COSTS TO RESPONDENT, WITHOUT ANY LEGAL AND FACTUAL BASES.20
In its Petition and Reply21 seeking to reverse and set aside the assailed CA dispositions and thus delete the award of
moral damages, attorney’s fees and costs, petitioner basically argues thatit had the right to resort to the courts for
redress of its grievances and the vindication of its rights for what it honestly perceived was respondent’s
transgressions, "without fear of later on standingtrial for damages where by lack of sufficient evidence, legal
technicalities or a different interpretation of the laws on the matter, the case would loseground and therein
defendants are acquitted."22 It maintains that its alleged design to vex and humiliate and cast dishonor and
disgraceupon respondent was not clearly and preponderantly established; that there is no proof that it had an "axe
to grind" against respondent, but that on the contrary, it had a valid cause of action against the latter for the damage
caused by the dike not only upon the foreshore, but on its property as well; that respondent used his power and
influence as a politician in obtaining Resolution No. 38 (series of 2001) from the Sangguniang Bayanof Guinsiliban,
Camiguin, which Resolution is nonetheless illegal because it violates Ordinance No. 19, series of 1999, prohibiting
all landowners adjacent to the seashore from constructing their buildings, fences, or whatever construction three (3)
meters from the highest tide level; that in the absence of malice and bad faith on its part, there can be no malicious
prosecution; and that since there is no malicious prosecution, respondent cannot beentitled to moral damages,
attorney’s fees, and costs of suit. Respondent’s Arguments
In his Comment,23 respondent simply maintains that the assailed dispositions of the appellate court are well-
supported by evidence on record and applicable laws and jurisprudence.
Our Ruling
The Court deniesthe Petition.
The resolution of the case hinges on the question of whether petitioner is guilty of malice and bad faith in instituting
Civil Case No. CEB-28040; if it is not so, then there is no ground to hold it liable for malicious prosecution.
However, "the existence of bad faith is a question of fact and is evidentiary; x x x it requires that the reviewing court
look into the evidence to find if indeed there is proof that is substantial enough to show such bad faith."24 However,
this Court is not a trier of facts; it is "not duty-bound to analyze again and weigh the evidence introduced in and
considered by the tribunals below. When supported by substantial evidence, the findings of fact of the CA are
conclusive and binding on the parties and are not reviewable by this Court x x x."25 This being the case, the instant
Petition must fail because a question of fact cannot properly be raised in a petition for review on certiorari.26 An
appeal by petition for review on certiorari under Rule 45 shall raise only questions of law.27 Indeed, there are
recognized exceptions to thisrule, to wit:
(a) When the findings are grounded entirely on speculation, surmises, or conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings offacts are conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee;
(g) When the CA’s findings are contrary to those [of] the trial court;
(h) When the findings are conclusions without citation of specific evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the
respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence
on record; [and]
(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.28
However, these exceptions do not obtain in the instant case. On the contrary, both the trial and appellate courts
arrived at identical findings, and took a common and undivided view of the case – that is, that petitioner is guilty of
malicious prosecution. "In the absence of compelling reasons, the Court will not disturb the rule that factual findings
of the lower tribunals are final and binding on this Court."29
It will suffice for this Court to rely on the judgment of the trial and appellate courts; "[p]revailing jurisprudence
uniformly holds that findings of facts of the trial court, particularly when affirmed by the Court ofAppeals, are binding
upon this Court."30 Their singular judgment will not be disturbed. Thus, both tribunals unanimously held that in the
first instance, petitioner had no probable cause to complain, since it had no personality to sue, given that the
affected portion is foreshore or public land; thatpetitioner did not deny thatit conducted quarrying of sand and gravel
which could have caused the erosion ofits own beach; that it offered to buy respondent’s land; thatpetitioner cannot
deny and in fact constructively knew that respondent was authorized by Resolution No. 38 to construct the dike; that
a previous casefiled by petitioner against respondent, based on the same facts, was dismissed; and that as a whole,
petitioner’s baseless accusations were particularly intended to vex and humiliate the respondent, who openly
objected to petitioner’s quarrying of sand and gravel precisely because it caused the erosion of his beach as well.
Although it may have been a bit extreme for the CA to declare that petitioner had an "axe to grind" against
respondent, this characterization is merely semantic; there is no capriciousness or arbitrariness in the description,
because the circumstances leading to the conclusion that petitioner is guilty of malicious prosecution are already
present, as far asthe tribunals below are concerned. This conclusion can no longer be questioned, given the
1âw phi1
limitations petitioner is confronted with ina recourse of this nature.
With the foregoing view, there is no need to resolve the other issues and arguments pointed out by the petitioner,
which are correspondingly discredited. Notably, the recovery of moral damages for malicious prosecution is allowed
under Article 2219 of the Civil Code,31 while attorney’s fees and expenses of litigation may be adjudged inmalicious
prosecution cases pursuant to Article 220832 of the same Code.
WHEREFORE, the Petition is DENIED. The November 26, 2010 Decision and February 23, 2011 Resolution of the
Court of Appeals in CA-G.R. CV No. 02887 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R No. 189812 September 1, 2014

vs.
REYNALDO BATURI, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This is an appeal from the July 7, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02929 that
affirmed in toto the May 30, 2007 Decision2 of the Regional Trial Court (RTC) of Rosales, Pangasinan, Branch 53, in
Criminal Case No. 4938-R, finding appellant Reynaldo Baturi (appellant) guilty beyond reasonable doubt of violating
Section 5, Article II of Republic Act (RA) No. 91653 and imposing upon him the penalty of life imprisonment and a
fine of ₱500,000.
Factual Antecedents
The Information4 contained the following accusatory allegations against appellant:
That on or about the 7th day of August, 2005, in the morning, in Brgy. Carmen East, Municipality of Rosales,
Province of Pangasinan, and within the jurisdiction of this Honorable Court, the above-named accused, with intent to
gain and without being authorized by law to possess and [sell], did then and there, willfully, unlawfully, and
feloniously[sell] ten (10) sachet[s] of heat[-]sealed transparent plastic bags containing white crystalline substance
known as "shabu" with a total weight of 49.1 grams, a dangerous drug.
Contrary to Article II, Section 5, Republic Act 9165.5
During arraignment, appellant entered a plea of "not guilty." After the pretrial conference, trial ensued.
From the testimonies6 of PO3 Marlo Velasquez (PO3 Velasquez) and Forensic Chemist P/Insp. Emelda Besarra-
Roderos (P/Insp. Roderos), the following facts emerged:
On August 6, 2005, a confidential informant reported to the Philippine Drug Enforcement Agency (PDEA) office in
Dagupan City the illegal drug activities of appellant, a.k.a. Naldong, in Brgy.Carmen East, Rosales, Pangasinan.
PO3 Velasquez received and relayed the information to SP02 Pedro Rabago (SPO2 Rabago), the Special
Enforcement Team Leader of the PDEA, who, in turn, ordered the former to conduct a surveillance to verify the
information.
Together with SPO1 Flash Ferrer (SPO1 Ferrer) and the confidential informant, PO3 Velasquez proceeded to Brgy.
Carmen East to conduct the surveillance. Upon reaching the area, the confidential informant introduced PO3
Velasquez to appellant as a buyer of shabu. The two closed a deal regarding the sale of 10 "bultos" of shabufor the
discounted price of ₱90,000.00 that would transpire the next day in appellant’s house.
SPO2 Rabago thus immediately formeda team to conduct an entrapment operation where PO3 Velasquez was to
act as poseur-buyer and SPO1 Ferrer as back-up. The buy-bust teamthen placed on top ofa bundle of boodle
money a 500-peso bill marked with the initials of PO3 Velasquez and SPO1 Ferrer which were MMV and FF,
respectively. It was further agreed that SPO1 Ferrer would give PO3 Velasquez a call in his cellularphone as a pre-
arranged signal that the sale of shabuis already consummated.
The next day, August 7, 2005, the buy-bust team coordinated with the police authorities stationed in the Municipality
of Rosales and held a final briefing before proceeding to appellant’s abode. Upon arrival thereat, PO3 Velasquez
and the confidential informant approached appellant who was sitting in front of his house while SPO1 Ferrer
positioned himself about15 meters away from them. When PO3 Velasquez informed appellantthat he already had
the payment, appellant took out a carton, opened it and showed the contentsthereof to PO3 Velasquez, who, in turn,
gave the boodle money.
PO3 Velasquez examined the contents of the carton and upon seeing that it contained plastic sachets with white
crystalline granules, he made the pre-arranged signal. SPO1 Ferrer immediately showed up and recovered the buy-
bust money from appellant, while PO3 Velasquez seizedthe carton containing the sachets of white crystalline
granules. After informing appellant of his rights, the police officers arrested and took him to the PDEA office for
further investigation.
A Certificate of Inventory was thenprepared by the police authorities which was signed by two barangayofficials and
a media representative. Appellant was requested to sign the certificate of inventory which he refused. This whole
process was photographed. Thereafter, on the basis of a formal request,7 the seized shabuwas referred and
delivered to the Philippine National Police (PNP) Provincial Crime Laboratory on August 8, 2005. P/Insp. Roderos
issued Chemistry Report No. D-121-2005-U8 stating that the white crystalline substance was positive for shabu.
Version of the Defense Appellant denied selling shabuand claimed that he was a victim of frameup by the PDEA. He
recalledthat on August 7, 2005, he was standing at the street corner near his house waiting for the funeral
processionof his deceased nephew, Ricky Baturi, to pass. Police operatives arrived shortly and asked if he is
Naldong. After he answered in the affirmative, he was asked as to the whereabouts of a former co-worker, Kamlon
Montilla (Montilla). Appellant replied that he had no knowledge of the present location of Montilla. Dissatisfied with
his answer, the police apprehended and took him inside their van. This was witnessed by his children. He was
brought to Villasis where he was repeatedlyasked at gunpoint about the whereabouts of Montilla to which he
consistently replied that he did not know. He was thereafter detained. Appellant claimed that it was only during his
arraignment that he discovered that hewas being charged with illegal sale of shabu.9
Appellant’s daughters Maribel Baturi and Rizalyn Raquedan corroborated his testimony.10
Giving credence to PO3 Velasquez’ testimony, the RTC convicted appellant of the crime charged and disposed of
the case in its May 30, 2007 Decision11 as follows:
WHEREFORE, premises considered, judgment is hereby rendered finding the accused REYNALDO
BATURIGUILTY beyond reasonable doubt of the crime of Illegal Sale of Methamphetamine Hydrochloride or
"shabu" in violation of Section 5 of Republic Act No. 9165.
Considering that the penalty of death was abolished, this Court hereby sentence[s] the accused to suffer the penalty
of life imprisonment and a fine of ₱500,000.00.
The sachets of shabu are hereby confiscated in favor of the government. Let the same be turned over to the
Philippine Drug Enforcement Agency for destruction in accordance with law.
SO ORDERED.12
Appellant filed a notice of appeal,13 which was approved by the RTC. Hence, the entire records of the case were
forwarded to the CA.14
In his Brief,15 appellant pointed out that the buy-bust team failed to comply with the procedure governing the
handling,custody and disposition of the illegal drugs. Because of this, there was failure on the part of the prosecution
to establish the corpus delicti. Hence, the RTC erred in finding him guilty of the crime charged.
Negating appellant’s claims, appellee, through the Office of the Solicitor General (OSG), averred that the
confiscated drug was properly inventoried and this was even witnessed by two barangay kagawads, a
representative of the media and appellant himself. A Certificate of Inventory was then prepared which was signed by
the said two barangay kagawadsand the media representative. Then, a request letter for laboratory examination
was signed by SPO4 Rabago. Contained in the said letter was the fact that PO3 Velasquez delivered the seized
drug to the Crime Laboratory and that P/Insp. Roderos received the same. To the OSG, these circumstances clearly
showedthat the prosecution was able to prove the unbroken chain of custody of the confiscated drug. Moreover,
there was no reason for the police to falsely testify against appellant. In view of these, the presumption that the
police authorities regularly performed their duties must be upheld.16
Finding that the seizure, handling, custody and examination of the seized drug were properly documented and
undertaken in an uninterrupted manner, and the consummation of illegal sale of shabuduly established by the
prosecution, the CA, in its July 7, 2009 Decision,17 ruled as follows:
WHEREFORE, premises considered, the instant appeal is DENIED, and accordingly, the herein assailed May 30,
2007 Decision of the trial court is hereby AFFIRMED IN TOTO.
SO ORDERED.18
Hence, this appeal.
Assignment of Error
Appellant imputes error upon the RTC19 and the CA20 in finding him guilty of the crime charged despite the
prosecution’s failureto prove his guilt beyond reasonable doubt.
Our Ruling
Elements for the Prosecution of Illegal Sale of Shabu
In a successful prosecution for illegal sale of shabu, the following elements must concur: "(1) the identity of the
buyer and the seller, the object and the consideration; and (2) the delivery of the thing sold and the payment
therefor. x x x What is material in a prosecution for illegal sale of dangerous drugs is the proof that the transaction or
saleactually took place, coupledwith the presentation in court of the corpus delicti"21 or the illicit drug in evidence.
In this case, the prosecution successfully established all the essential elements of the illegal sale of shabu. PO3
Velasquez, who acted as poseur-buyer, positively identified appellant as the seller of the shabuand categorically
testified that the shabuwas received by him, and the payment therefor by appellant, in a legitimate buy-bust
operation. He narrated, viz:
A - That on or about 11:00 o’clock the morning of August 6, 2005 a certain confidential informant reported to
ouroffice about the illegal activity of one @ "Naldong" of Carmen East, Rosales, Pangasinan, sir.
Q - Did he give you the real name of that alyas Naldong?
A - No, sir, only a.k.a. Naldong.
Q - To whom did this confidential asset report?
A - To me, sir.
Q - And what action did you take when that information was relayed to you?
A - I relayed the information to our Special Enforcement Team Leader, sir.
Q - Who is your team leader then?
A - SPO2 Pedro S.Rabago, sir.
Q - And what measures did Police Officer Rabago take, if any, upon receiving that information relayed by you?
A - They tasked us to conduct surveillance, sir.
Q - Did you conduct that surveillance asordered by your superior officer?
A - Yes, sir.
Q - How did you conduct that surveillance?
A - We went to the place and as part ofour surveillance, [I] and the CI went directly to the place ofa.k.a. Naldong, sir.
Q - Where?
A - In Brgy. Carmen East, Rosales, Pangasinan, sir.
COURT:
Q - What is that CI?
A - Confidential informant, your Honor.

PROSECUTOR MATRO: (CONTG)
Q - Aside from your confidential informant, did you have any companion at that time?
A - Yes, sir.
Q - Who?
A - SPO1 Flash Ferrer, sir.
Q - Did you reach that place of alyas Naldong?
A - Yes, sir.
Q - What transpired, if any, when you reached that place?
A - The confidential informant introduced me as a buyer, sir.
Q - To whom?
A - To a.k.a. Naldong, sir.
Q - How did you know that the CI introduced you to Naldong?
A - The CI said "this is the buyer of shabu" then Naldong said, "I will give a discount if you will buy a large amount of
shabu", sir.
Q- When alyas Naldong told you that, what was your reply?
A- I told Naldong that I am going to buy 10 bultos of shabu, sir.
Q- When you said bultos,what does that mean?
A - It was placed in a shabu [sic] weighing more or less 4.5 grams or 5 grams, sir.
Q - And what else did you talk about?
A - When I told x x x Naldong that x x x I am going to buy 10 bultos, I asked him how much is the cost of that and he
told me ₱9,500 per bulto but since I ordered large amount of shabu, he said he will give it for ₱9,000 or ₱90,000 for
ten (10) bultos, sir.
Q - So do we understand that the cost of one (1) bulto is ₱9,500 but if you order large quantity you will be given a
discount of ₱500 per bulto?
A - Yes, sir.
Q - So the 10 bultos you ordered is worth ₱90,000?
A - Yes, sir.
Q - And was that your final agreement?
A - The CI and I closed the deal and we [had] an agreement that we will come back the following day to givethe
money and pick up the shabu, sir.
Q - And what happened after that?
A - We returned to our office, sir.
Q - When you reached your office, what happened there?
A - We relayed our agreement to our Team Leader, sir.
Q - What did you relay to your Team Leader?
A - We relayed the agreement that the amount of shabu is₱90,000 and that we will be returning x x x the following
day at 11:00 A.M. for the payment and to pick up the shabu, sir.
Q - And after you relayed that to your Team Leader, what action did he take?
A - He formed a team to conduct buy[-]bust operation and I was designated as the poseur[-]buyer and SPO1 Flash
Ferrer [as] the immediate back[-]up and then they gave us the buy-bust money and we prepared the boodle money
and we agreed that the pre-arranged signal is by ringing the cellphone, sir.
Q - So the following day that is August 7, 2005, what happened then?
A - At around 10:30 A. M. of August7, 2005 we coordinated [with] the PNP Rosales and after the briefing we
immediately proceeded to the place of operation, sir.
Q - Before coming to Rosales, what happened [in] your office, if any?
A - We marked the money, sir.
Q - What money did you mark?
A - The ₱500 bill, sir.
Q - How many ₱500 bill[s] did you mark x x x?
A - One (1) piece of ₱500 bill, sir.
Q - Who made the markings, Mr. Witness?
A - [I] and SPO1 Flash Ferrer, sir.
Q - I have here x x x one (1) piece of ₱500, xerox copy, doyou know where [the original is]?
A - We submitted [it] to the Court, sir.
PROSECUTOR MATRO:
May we ask that the original of the ₱500 bill be brought out.
Q - You mentioned about the boodle money, what do you mean? We know what is boodle money but for record
purposes?
A - Paper cut[-]outs, sir.
Q - So this ₱500 plus boodle money was supposed to be the ₱90,000 to be used in buying the 10 bultos of shabu,
is that what you mean?
A - Yes, sir.
Q - After you have coordinated withthe Police Station of Rosales, Pangasinan, what happened next?
A - We [had] the final briefing and after that we immediately proceeded to the place, sir.
Q - I am showing to you this ₱500 which was previously submitted to the Clerk of Court of this Honorable Court, will
you please examine if this is the same ₱500 bill thatyou are referring to?
A - Yes, sir, this is the same money that we used in buying shabu.
Q - Where is the marking?
A - At the right upper corner below the number 500, this is my initial MMV, sir.
Q - What about the markings made by SPO1 Flash Ferrer?
A - This FF at the right lower corner of the money, sir.
PROSECUTOR MATRO:
May we ask the good counsel for the defense to make[a] comparison between the original and the xerox attached to
the record.
ATTY. NGIPOL:
We confirm that the xerox copy attached to the record is a religious reproduction of the original, your Honor.
PROSECUTOR MATRO:
Q - So after the final briefing madeat the Rosales Police Station, what happened next, Mr. Witness?
A - We proceeded to the place of operation, sir.
Q - Where you able toreach that place?
A - Yes, sir.
Q - And where was this alyas Naldong when you reached the place?
A - He was in front of the house sitting, sir.
Q - Did he have any companion at that time?
A - None, sir?
Q - And what transpired next?
A - We proceeded directly to where a.k.a. Naldong was, sir.
Q - You said "we", who was your companion?
A - The CI, sir.
Q - How about Police Officer Flash Ferrer, where was he at that time?
A - He was at a distance as myimmediate back[-]up, sir.
COURT:
Q - How far?
A - About 10 to 15 meters, sir.
PROSECUTOR MATRO:
Q - Prior to that, do you have agreement about your signal?
A - Ringing of cellphone, sir.
Q - Who will ring?
A - [I], sir.
Q - And what happened when youapproached alyas Naldong?
A - I told him that I already have the ₱90,000 then a.k.a. Naldong took a carton of medicine below and took the
shabu and showed it to me, he gave it to me, the medicine box and I handed to him the money, sir.
Q - After alyas Naldong handed to you that box of medicine where the shabu was placed inside, what did you do?
A - I examined if it is really shabu and when I found that it is x x x shabu, I gave to him the buy-bust money and
immediately I gave the [prearranged] signal which is the ringingof the cellphone then I introduced myself as PDEA
agent, sir.
Q - After that, whathappened next?
A - When I arrested him, SPO1 Flash Ferrer arrived and we conducted a body search if there is a bladed weapon,
sir.
Q - Who recovered the buy[-]bust money from his possession?
A - It was SPO1 Flash Ferrer, sir.
Q - Did you see him recover that money?
A - Yes, sir.
PROSECUTOR MATRO: (CONTG.)
Q - How about the bulto of shabu, who was in possession?
A - It [was] in my possession, sir.
Q - After you x x x apprehended him, what transpired next?
A - After telling him his constitutional right[s], we brought him to our office, sir.22
During the continuation of his direct examination, PO3 Velasquez identified appellant as the perpetrator of the crime,
viz.:
Q - In the last hearing, you were asked to identify the person of the accused but the accused was not here. Will you
please look around inside the courtroom and see if the accused Reynaldo Baturi is inside this court?
A - He is here, sir.
Q - Will you please stand and point to the accused?
A - The one wearing a white polo shirt.(Witness pointing to a person who[,] when asked his name[,] answered
Reynaldo Baturi).23 In addition, the white crystalline granules sold by appellant, when examined by Forensic Chemist
P/Insp. Roderos, were found positive for methamphetamine hydrochloride or shabu. This finding is contained in
Chemistry Report Number D-121-2005-U24 and was testified to by P/Insp. Roderos.25
Clearly, the prosecution,through the testimoniesof PO3 Velasquez and P/Insp. Roderos, was able tosuccessfully
establish the elements of illegal sale of shabu.
The Court acknowledges that "[p]rosecutions for illegal drugs depend largely on the credibility of the police officers
who conducted the buy-bust operation."26 In this case, the credibility of the prosecution witnesses cannot be
doubted. Aside from the fact that both lower courts are one in finding that the testimonies of the prosecution
witnesses were direct and definite, the said testimonies are also consistent with each other and with the physical
evidence. Besides, "the trial court’s determination on the issue of credibility of witnesses and its consequent findings
of facts must be given great weight and respect on appeal x x x. This is so because of the judicial experience that
trial courts are in a better position to decide the question of credibility, having heard the witnesses themselves and
observed their deportment and manner of testifying during trial."27
The Defenses of Denial and Frame-Up are Unavailing.
In view of the positive declarations of the prosecution witnesses, appellant’s defense of denialbecomes unavailing.
"It has been consistently held that mere denial cannot prevail over the positive testimony of a prosecution witness. A
defense of denial which is unsupported and unsubstantiated by clear and convincing evidence becomes negative
and self-serving, deserving no weight in law, and cannot be given greater evidentiary value over convincing,
straightforward and probable testimony on affirmative matters."28
Appellant’s defense of frame-up likewisefails. "[F]rame-up is viewed with disfavor since, like alibi, it can easily
beconcocted and is a common ploy in most prosecutions for violations of the Dangerous Drugs Law."29 Appellant’s
claim that he was framed by the police officers for refusing toreveal the whereabouts of a drug pusher by the name
of Montilla is not worthy of belief. For the police officers to frame him, they must haveknown appellant prior to the
incident.30 Here, the police officers do not personally know appellant prior to the incident. In fact, appellant himself
testified that whenthe police operatives approached him, they still asked him if he is Naldong. Neither did the
appellant claim that he knows the police officers who apprehended him. Also, if appellant was indeed a victim of
frame-up by police officers, he should have filed the proper charges against them. "The fact that no administrative or
criminal charges were filed lends cogency to the conclusion that the alleged frame-up was merely concocted as a
defense scheme. This inaction clearly betrays appellant’s claim of frame-up."31
Moreover, there is no allegation or evidence whatsoever that the members of the entrapment team were actuated by
improper motive or were not performing their duty in accordance with law. They are therefore entitled to the legal
presumption of regularity in the performance of official functions and their testimonies are accorded full faith and
credence.32
Failure to strictly comply with the Chain of Custody Rule is not Fatal.
The Court is not persuaded by appellant’s averment that the prosecution failed to establish that the shabuallegedly
seized from him was the same shabu submitted for laboratory examination. The following negates appellant’s claim:
(1) the police officers inventoried the confiscated shabuimmediately after its seizure from appellant. The process
was witnessed by barangayofficials and a media representative who affixed their signatures in the Certificate of
Inventory;33 (2) the inventory-taking was photographed and the photographs show that the actual conduct of
inventory was witnessed by appellant himself;34 (3) it is undisputed that appellant was asked to affix his signature in
the Certificate ofInventory but he refused;35 (4) it was shown that a PDEA personnel thereafter prepared a formal
request and the white crystalline granules contained in the plastic sachets seized from appellant were indorsed and
delivered promptly by PO3 Velasquez to P/Insp. Roderos to the crime laboratory.36
It is true that the prosecution did not formally offer in evidence the Certificate of Inventory and the formal request for
examination of the confiscated substance. Be that asit may, the Court has previouslyheld that even if an exhibit is
not formally offered, the same "may still be admitted against the adverse party if, first, it has been duly identified by
testimony duly recorded and, second, it has itself been incorporated in the records of the case."37 PO3 Velasquez
categorically testified that an inventory of the seized drugs was performed, a corresponding certificate was
prepared, and a formal request for examination was made. He further narrated that together with the formal request,
he submitted and delivered the confiscated drugs to the crime laboratory. On the basis of the said formal request,
P/Insp. Roderos examined the specimen and she likewise testified on this. Appellant’s counsel even asked the
saidprosecution witnesses regarding these documents.38 Considering the said testimoniesand the fact that the
documents were incorporated in the records of the case, they are therefore admissible against appellant.
Besides, the failure of the police officersto comply strictly with the chain of custody rule is not fatal. Itwill not render
the arrestof appellant illegal or the items seized or confiscated from him inadmissible.39 "What is of utmost
importance is the preservation of the integrity and the evidentiary value of the seized items, as the same would be
utilized in the determination of the guilt or innocence of the accused."40
In this case, the Court finds no hiatusor confusion in the confiscation, handling, custody and examination of the
shabu. The illegal drug that was inventoried at the PDEA office, subjected to qualitative examination at the crime
1âw phi 1
aboratory, and finally introduced in evidence against appellant was the same illegal drug that was confiscated from
him when he was caught injlagrante delicto selling the same. No apparent irregularity is sufficiently shown to have
attended the chain of custody of the shabu. Its identity, integrity and probative value were preserved and kept intact
by the police officers.
Penalty
All told, there is no reason to disturb the findings of the RTC, as affirmed by the CA, that appellant is guilty beyond
reasonable doubt of illegal sale of shabu, as defined and penalized under Section 5, Article II of RA 9165. Under this
law, the penalty for the unauthorized sale of shabu, regardless of its quantity and purity, is life imprisonment to death
and a fine ranging from ₱500,000.00 to ₱10 million. However, with the enactment of RA 9346,41 only life
imprisonment and fine shall be imposed42 upon appellant, without eligibility for parole pursuant to Section 2 of the
Indeterminate Sentence Law.
WHEREFORE, the Decision dated July 7, 2009 of the Court of Appeals in CA-G.R. CR-HC No. 02929 which
affirmed the Decision dated May 30, 2007 of the Regional Trial Court of Rosales, Pangasinan, Branch 53, in
Criminal Case No. 4938-R, convicting appellant Reynaldo Baturi for violation of Section 5, Article II of Republic Act
No. 9165, as amended by Republic Act No. 9346, and sentencing him to suffer the penalty of life imprisonment and
a fine of ₱500,000.00, is AFFIRMED with the MODIFICATION that he shall not be eligible for parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 177616 August 27, 2014
HEIRS OF SPOUSES JOAQUIN MANGUARDIA and SUSANA MANALO, namely: DANILO MANGUARDIA,
ALMA MANGUARDIA, GEMMA MANGUARDIA, RODERICK MANGUARDIA, MADELINE MANGUARDIA,joined
by her husband, RODRIGO VILLARANTE, ALAN MANGUARDIA, ROSE MAN GUARDIA, joined by her
husband, LEOPOLDO ADRID, JR., RONALD MANGUARDIA, JOEBERT MANGUARDIA, and RANDY
MANGUARDIA; HEIRS OF SPOUSES LEONARDO ARAZA and REBECCA ARROYO, namely: MARY
MAGDALENA ARAZA,* joined by her husband CARLITO VILLANUEVA, NENITA ARAZA, joined by her
husband, LEONARDO BADE, ANTONIO ARAZA, and the children of ENECITA ARAZAV ARGAS, namely:
GADFRY VARGAS, GINA VARGAS, JOEL VARGAS, MARY GRACE VARGAS, ANA MAE VARGAS, and the
minor JUNAR VARGAS, represented by his guardian ad litem MAGDALENA ARAZA-VILLANUEV A, and THE
REGISTER OF DEEDS OF CAPIZ, Petitioners,
vs.
HEIRS OF SIMPLICIO VALLES and MARTA VALLES, represented by GRACIANO VALLES, SULPICIO
VALLES, TERESITA VALLES, joined by her husband, LEOPOLDO ALAIR, and PRESENTACION CAPAPAS-
VALLES, Respondents.
DECISION
DEL CASTILLO, J.:
"[T]he burden of proving the status of a purchaser in good faith and for value lies upon him who asserts that
standing."1
Before this Court is a Petition for Review on Certiorari2 seeking to reverse and set aside the Decision3 dated June
22, 2006 rendered by the Court of Appeals (CA) in CA-G.R. CV No. 78302 which affirmed in toto the Decision4dated
December 19, 2002 of the Regional Trial Court (RTC) of Roxas City, Branch 15, in Civil Case No. V-7421. Also
assailed is the CA Resolution5 dated March 27, 2007 denying petitioners' Motion for Reconsideration.6 Factual
Antecedents
The facts, as culled from the records, show that Marta, Simplicio, Melquiades, Rustico, Visitacion and Catalina, all
surnamed Valles, were siblings. Simplicio and Marta were the registered owners of a 42,215-square meter property
in Barrio Cudian, Ivisan, Capiz known as Lot 835 and covered by Original Certificate ofTitle (OCT) No. R0-4017.7
Marta died in 1943 and was survived by her illegitimate daughter, Encarnacion Ordas (Encarnacion). On the other
hand, Simplicio died on April 20, 1957. He was survived by his wife Villarica8 Ordas, who passed away sometime in
1969, and his children, Felicisimo, Adelaida, Rosario, Juan, and Dominica, all surnamed Valles. With the exception
of Felicisimo, all of Simplicio's children died single and childless. F elicisimo was survived by his wife,
Presentacion9Capapas, and his children Graciano, Sulpicio, Teresita and Antonio (now deceased).
It appears, however, that on October 28, 1968, a notarized Deed of Absolute Sale10 over Lot 835 was executed by
Simplicio and Marta in favor of their brothers, Melquiades and Rustico;Simplicio’s daughter, Adelaida Valles
(Adelaida); and Marta’s daughter, Encarnacion. The Deed ofAbsolute Sale ostensibly bore the signatureof Marta
and the thumb marks of Simplicio and his wife. On even date, said deed was registered in the Registryof Deeds of
Capiz, resulting in the cancellation of OCT No. RO-4017 and the issuance of Transfer Certificate of Title (TCT)
No.T-9409.11 The following day, or on October 29, 1968, the alleged buyers and new registered owners executed a
Subdivision Agreement,12 subdividing Lot 835 into four lots. Said Subdivision Agreement was also registered on the
same day in the Registry of Deeds of Capiz. Hence, TCT No. T-9409 was cancelled and in lieuthereof, individual
titles to the subdivided lots were issued to the putative buyersas follows:
Name of Buyer Lot No. Area TCT No.

Adelaida Lot No. 835-A 10,555sqm. TCT No. T-941113
Melquiades Lot No. 835-B 10,553sqm. TCT No. T-941214
Encarnacion Lot No. 835-C 10,554sqm. TCT No. T-941315
Rustico Lot No. 835-D 10,553sqm. TCT No. T-941416
Lot 835-A
Lot 835-A remains registered in Adelaida’s name as it was never transferred or conveyed to anyone. But Graciano,
Adelaida’s nephew17 and grandson of Simplicio, possesses it since 1970.
Lot 835-B
On February 16, 1970, Melquiades sold Lot 835-B to his niece and co- vendee in the original Deed of Absolute Sale,
Encarnacion, and his nephew, Roberto Araza18 (married to Dolores De Domingo), by way of a Deed of Absolute
Sale of Realty.19 Thereafter, TCT No. T-1025520 was issued in their names.
On February 15, 1972, Encarnacion and Roberto Araza, who are cousins in the first degree, executed a Deed of
Absolute Sale21 in favor of the latter’s aunt, Soledad Manalo Araza (Soledad; married to Pedro Araza), and TCT No.
T-1123722 was issued in her name.
On November 27, 1980, Soledad sold the lot to her niece, Susana Manalo Manguardia, and her husband, Joaquin
Manguardia, (spouses Manguardia) by way of a Deed of Sale of Lots 835-B and 835-C, Ivisan
Cadastre.23Consequently, TCT No. T-1895324 covering Lot 835-B was issuedin the names of spouses Manguardia.
Lot 835-C
On January 27, 1969, Encarnacion sold Lot 835-C, which she described as property she inheritedfrom her mother,
to her uncle and co-vendee in the original Deed of Absolute Sale, Rustico (married to Petrona Bacarra).25 TCT No.
T-953126 was issued in the name of Rustico two days after the execution of the sale document.
On March 19, 1970, Rustico sold the lot to spouses Pedro Araza (Pedro) and Soledad27 by virtue of a Deed of
Absolute Sale.28 Thereafter, TCT No. T-1017029 was issued in their names.
In the aforesaid Deed of Sale of Lots 835-B and 835-C, Ivisan Cadastre30 dated November 27, 1980, Pedro and his
wife Soledad also sold Lot 835-C to the spouses Manguardia. Subsequently, TCT No. T-1895231 covering Lot 835-C
was issued in the names of the latter.
Lot 835-D
Rustico likewise sold Lot 835-D to Pedro and Soledad under the Deed of Absolute Sale32 dated March 19, 1970 and
the corresponding Torrens33 title was issued. Then on May 8, 1972, Pedro and Soledad executed a Deed of
Absolute Sale34 in favor of their nephew Leonardo Araza (Leonardo; married to Rebecca Arroyo),35 who was one of
the attesting witnesses to the original Deed of Absolute Sale. Subsequently, TCT No. T-1131536 was issued by virtue
of such sale.
As a result of the conveyances, the registered owners of Lot 835 are:
a) Adelaida (Lot 835-A);
b) Spouses Manguardia (Lots 835-B and 835-C); and
c) Leonardo and Rebecca (Lot 835-D).
As previously mentioned, Lot 835-A is presently occupied by Graciano. The other lots are presentlyoccupied by the
surviving heirs of the registered owners.
On December 13, 1999, the heirs ofSimplicio and Marta, namely, Graciano, Sulpicio and Teresita Valles, along with
their mother Presentacion and Teresita’s husband, Leopoldo Alair (respondents), commenced an action for the
Declaration of Nullity of Certificates of Title and Deeds of Sale, Cancellation of Certificates of Title, Recovery of
Possession and Damages37 against the heirs of spouses Manguardia and the heirs of spouses Leonardo and
Rebecca (petitioners) in the RTC of Roxas City. Respondents alleged thatin September 1998 they discovered the
various documents of sale and titles covering Lot 835 when Teresita and her siblings agreed to subdivide the lot
among the heirs of Simplicio and Marta and searched for the title of the property in the Registry of Deeds of Capiz.
They averred that the purported Deed of Absolute Sale dated October 28, 1968 is a forgery because Marta and
Simplicio were long dead when the said document was executed. Consequently, all titles emanating therefrom
including the titles covering the subdivided lots of Lot 835 registered in the names of spouses Manguardia,
Leonardo and Rebecca, and Adelaida, are all null and void. Respondents, therefore, prayed that petitioners be
ordered to remove the improvements introduced on the disputed lot and vacate the same, and that a new title be
issued over Lot 835 in the names of Marta and Simplicio as owners.
In their Answer,38 the heirs of spouses Manguardia39 averred that their predecessors-in-interest were innocent
purchasers in good faithand for value, having acquired Lots 835-B and 835-C in 1980 from their registered owners
and occupants, Pedro and Soledad. They further averred that their parents had been in possession of the lots since
they purchased them in 1980, and had since then constructed four buildings thereon for their poultry business,
without opposition from anyone, including Graciano who occupies the adjacent Lot 835-A. They maintained that the
titlesin the names of the spouses Manguardia are valid and legal. In addition, since the documents of sale and
Torrens titles were duly registered in the Registry of Deeds, and that actual possession by the different transferees
spanning a period of over 30 years were known to the respondents and their predecessors without any complaint or
opposition, the claim of respondents is barred by prescription, estoppel and laches. The heirs of the spouses
Manguardia moreover asserted that the Complaint against them fails to allege a cause of action and that the same
was not brought by the real parties-in-interest.
On the other hand, the heirs of Leonardo and Rebecca40 (except Antonio Araza) in their Answer,41 averred that their
Torrens title covering Lot 835-D is valid and lawful having been issued as a result of their parents’acquisition of said
lot from the registered owners, spouses Pedro and Soledad. They averred that their parents were purchasers in
good faith and for value and thatthe document of sale is genuine and authentic. The heirs of Leonardo and Rebecca
further alleged that the matter ofthe subdivision and ownership of the lots was known to respondents as they had
been, from Mindanao, coming back and forth to the subject property; and, that despite such knowledge,they never
claimed or complained about the ownership of Leonardo and his heirs over the subject lot. By way of affirmative and
special defenses, the heirs of Leonardo and Rebecca contended that the action is already barred by prescription,
estoppel and laches. This is considering that immediately after the sale in 1972, their parents possessed and
exercised all acts of dominion over Lot 835-D without opposition from anyone, including Graciano. Also, there is no
cause of action against them and the Complaint was not brought by the real parties-in-interest.
In their Answer42 to the Amended Complaint,the heirs of Enecita Araza Vargas raised the same averments,
affirmative and special defenses, and counterclaims asthose raised by the other heirs of Leonardo and Rebecca.
Likewise, Antonio Araza adopted the Answer of the other heirs in a Manifestation43 submitted to the court.
The trial resulted in the RTC rendering a Decision44 in favor of herein respondents. It declared the Deed of Absolute
Saledated October 28, 1968 void ab initiobecause there was no proof that the vendors, Marta and Simplicio, were
still alive in 1968 and had signed/thumb marked the sale document. The RTC likewise opined that the vendees in
the questioned saledocument could not feign ignorance of the death of the purported vendors because two of them
are their brothers, while each of the other two are children of each of the said vendors. Consequently, the RTC also
declared the series of documents of sale, including the Subdivision Agreements and the corresponding Torrens
titles issued subsequent to OCT No. RO-4017, as null and void. It did not consider the subsequent buyers of the
different portionsof the lot as innocent purchasers in good faith and for value because some transfers were made by
and among covendees, a witness in the void Deed of Absolute Sale, and close relatives. The transfers did not go
far, but were limited to close relatives by affinity and consanguinity, living in close proximity to each other. Because
ofthese, the trial court found it hard, if not impossible, topresume good faith among the parties to the series of
conveyances.
With regard to the issue of laches and prescription, the trial court held that it would be impractical, unjust and
patently iniquitous to apply laches against the respondents by virtue of an absolutely simulated deed which never
conveyed any right over the subject properties to the alleged original buyers. It ratiocinated that laches is an
equitable doctrine and its application iscontrolled by equitable considerations; it cannot be used to defeat justice orto
perpetrate fraud and injustice.
The trial court did not alsogive credence to petitioners’ assertion that they acquired the subject properties thru
prescription or adverse possession, ratiocinating that the right to recover possession of land registered under the
Torrens system does not prescribe. Besides, assuming that extraordinary prescription of 30 years is applicable in
the case at bar, the trial court opined that the said 30-year period from October 28, 1968 has not yet elapsed when
demands to return the property were assumed to be made in September 1998, the time when the alleged sale
transactions were discovered by the respondents. Petitioners mistakenly concluded that the respondents were
estopped from challenging their possession and ownership based on a mere presumptionof knowledge on the part
of the latter. The accidental discovery of the documents of sale and corresponding titles in 1998 confirmed
respondents’ lack of knowledge of the transactions.

WHEREFORE, premises considered, judgment is hereby rendered in favor of the [respondents] and against
[petitioners]:
1. Declaring the Deed of Absolute Sale, Exh. "B", dated October 28, 1968 purportedly executed by Marta Valles and
Simplicio Valles in favor of Rustico Valles, Melquiades Valles, Encarnacion Ordas and Adelaida Valles void ab
initioand therefore non-existent;
2. Declaring the Subdivision Agreement dated October 29, 1968 Exh. "E" executed by and among Melquiades
Valles, Rustico Valles, Adelaida Valles and Encarnacion Ordas, null and void and inexistent;
3. Deed of Absolute Saleof Realty, dated February 16, 1970, Exh. "J", executed by Melquiades Valles in favor of
Roberto Araza married to Dolores Domingo and Encarnacion Ordas married to Jose Romero, covering Lot 835-B,
null and void;
4. Declaring the Deed of Absolute Sale dated February 15, 1972 Exh. "L" executed by [Encarnacion Ordas and]
Roberto Araza [marriedto Dolores De Domingo in favor of Soledad Manalo-Araza] married to Pedro Araza, covering
Lot 835-B, as null and void;
5. Declaring the Deedof Absolute Sale, Exh."N", executed by Pedro Araza and Soledad Manalo-Araza in favor of
Joaquin Manguardia and Susana Manalo, dated November 27, 1980, covering Lots 835-B and 835-C, as null and
void;
6. Declaring the Deed of Absolute Sale, Exh. "P", dated January 27, 1969, executed by Encarnacion Ordas in favor
of Rustico Valles, covering Lot 835-C, void ab initioand inexistent;
7. Declaring the Deed of Absolute Sale, Exh. "R", dated March 19, 1970 executed by Rustico Valles and Petrona
Bacarra in favor of Spouses Pedro Araza and Soledad Manalo-Araza covering Lots Nos. 835-C and 835-[D] as void
ab initioand inexistent;
8. Declaring the Deed of Absolute Sale, Exh. "V", dated May 8, 1972, executed by Spouses Pedro Araza and
Soledad Manalo-Araza in favor of Leonardo Araza and Soledad Arroyo null and void;
9. Declaring TCT Nos. 9409 issued in the names of Melquiades Valles married to Flora Zabal; Rustico Valles
married to Pedrona Bacarra; Adelaida Valles and Encarnacion Ordas marriedto Jose Romero null and void;
10. Declaring TCT No. 9411 issued inthe name of Adelaida Valles; TCT No. T-9412 issued in the name of
Melquiades Valles; TCT No. T-9413 issued in the name of Encarnacion Ordas;TCT No. T-9414 issued in the name
of Rustico Valles married to Pedrona Bacarra; TCT No. T-10255 issued in the names of Roberto Araza and
Encarnacion Ordas; TCT No. T-11237 issued in the name of Soledad M. Araza married to Pedro Araza; TCT No. T-
18953 issued in the name of Spouses Joaquin Manguardia and Susana Manalo; TCT No. T-9531 issued in the
name of Rustico Valles married to Pedrona Bacarra; TCT No. T-10170 issued in the name of Pedro Araza and
Soledad Araza; TCT No. T-18952 issued in the names of Spouses Joaquin Manguardiaand Susana Manalo; TCT
No. T-10169 issued in the names of Pedro Araza and Soledad Manalo and TCT No. T-11315 in the name of
LeonardoAraza married to Rebecca Arroyo, null and void;
[11.] Ordering the [petitioners] Heirs of Joaquin Manguardia and Susana Manalo to remove the buildings they
constructed on the property, [to] vacate the premises and [to] surrender possession thereof to [respondents] Heirs of
Simplicio Valles, represented by Graciano Valles, Sulpicio Valles and Teresita Valles[;]
[12.] Ordering the Register of Deeds of Capiz to cancel TCT No. T-9411, TCT No. T-18953, TCT No. T-18952 and
TCT No. T-11315[;]
[13.] Ordering the [petitioners] Heirs of Joaquin Manguardia and Susana Manalo and Heirs of Leonardo Araza and
Rebecca Arroyo to jointly and solidarily pay the [respondents]:
a) ₱30,000.00 as and for attorney’s fees.

b) ₱10,000.00 as litigation expenses.
[14.] Dismissing all the counterclaims[;]
[15.] Dismissing the complaint as against the Register of Deeds of Capiz.
Costs against the [petitioners].
SO ORDERED.45
Petitioners appealed the trial court’s Decision to the CA. They attributed error on the trial court for not considering
their predecessors-in-interest as innocent purchasers for value and in good faith, and for not upholding their
ownership and possession over the subject properties. They also questioned the trial court’s ruling on the
inapplicability oflaches, prescription and estoppel as to bar the action filed by the respondents.
On June 22, 2006, the CArendered its Decision46 affirming in toto the trial court’s Decision. Just like the RTC, the CA
found that petitioners’ predecessorsin-interest are not buyers in good faith and for value. The appellate court further
held that petitioners cannot be considered to have acquired the subject properties through prescription since the
whole lot iscovered by a Torrens title under the name of Marta and Simplicio. They could not justify their ownership
and possession of the lots acquired by their predecessors-in-interest, to wit:
Besides, [petitioners] cannot justify their ownership and possession of the subject parcels of land acquired by their
predecessors-in-interest since the requisites provided in Article [1117] of the Civil Code regarding the requirement of
good faith enunciated in the first paragraph of Article 526 of the Civil Code which states, thus:
"He is deemed a possessor in good faith who is not aware that there exists in his titleor mode of acquisition any flaw
which invalidates it." [have] not been met.
In the light of the above provision, [petitioners] could not claim that their predecessors have been possessors in
good faith of the subject parcel of land in view of the finding that at the very inception the certificates of title obtained
by their predecessors, which [petitioners] now assert to be the basis of their just title, originated from a forged Deed
of Absolute Sale dated x x x October 28, 1968. Clearly, the forged deed containing the simulated signatures of
Simplicio and Marta who were known to be both dead at the time of the execution of the said document is a nullity,
and cannot serve as a just title.47
The CA did not likewise give merit to the defense put forth by petitioners that respondents’ action is already barred
by laches and prescription. Citing St. Peter Memorial Park, Inc. v. Cleofas48 and J.M. Tuason & Co., Inc. v.
Aguirre,49it held that a party who immediately filed a case upon discovery that his/her property was covered by a title
in another’s name isnot guilty of laches. Moreover, an action to recover possession of a registeredland never
prescribes. The CA further found that respondents immediately took steps to assert their rights to the subject
properties upon discovery of the various titles by demanding from petitioners that possession of the same be
returned to them, and by subsequently filing an action for the nullification of the certificates of titles in question and
recovery of possession of the propertycovered by the originaltitle, OCT No. RO-4017.
The fallo of the CA Decision reads:
[WHEREFORE], the appeal of [petitioners] is DENIED for lack of merit. Accordingly, the assailed Decision of the
Regional Trial Court of Roxas City, Branch 15, dated 19 December2002 is AFFIRMED IN TOTO.
SO ORDERED.50
Petitioners filed a Motion for Reconsideration,51 but the same was denied in a Resolution52 dated March 27,2007.
Issue
Hence, this Petition raising the sole issue of:
[WHETHER] THE HONORABLE COURT OF APPEALS TWENTIETH (20TH) DIVISION ERRED IN DENYING THE
APPEAL OF [PETITIONERS] AND [IN] AFFIRMING THE ASSAILED DECISION OF THE COURT A QUO
PETITIONERS HEREIN BEING BUYERS IN GOOD FAITH.53
Arguments of the Petitioners
Petitioners argue that the CA failed toappreciate material facts which, if properly considered, would warrant the
reversal of the Decision of the court a quo. They posit that the failure of the lower courts to appreciate relevant facts
resulted in the erroneous finding thatthey are not buyers in good faith and for value and this rendered their Torrens
titles of no value and effect. Petitioners insist that they acquired the subject lots in good faith, for value, and by
prescription or adverse possession; that their titles are valid and legal considering that they stemmed from a series
of registered sales and titles from as early as1968 when Lot 835 was first sold and subdivided into four lots;
thatrespondents are guilty of laches for neglecting to assert their alleged rights within a reasonable period of time
despite the fact that the documents of sale, subdivision agreement and various land titles are duly registered, and
despite respondents’ knowledge of petitioners’ actual possession of the properties spanning a period of 30 years;
and, that after the sale, they immediately took possession of the lots and exercised actsof dominion over the same
without any opposition from any of the respondents.
In further defending their claim of good faith, petitionersassert that they are not required to go beyond what appears
on the face of the Torrens title of the previous owner; otherwise,it would defeat the primary objective of the Torrens
System.54 Furthermore, their ownership which is rooted in good faith is independent of that of the previous owners’
title.55
Arguments of the Respondents
Respondents, on the other hand, argue thatonly questions of law may be raised in an appeal by certiorariunder Rule
45 of the Rules of Court. They contend that the lone issue raised by the petitioners dealt with the determination of
whether petitioners’ predecessors-in-interest were buyers in good faith, which is a factual issue generally outside the
scope of the Supreme Court’s power in a petition for review on certiorari. In any case, petitioners failed to prove that
their predecessors-in-interest were buyers in good faith. Hence,there exists no apparent reason for this Court to
reviewthe lower courts’ decisions.
Our Ruling
The Court finds no reason to depart from
the factual findings ofthe lower courts.
Time and again, this Court has reiteratedthat it is not a trier of facts. Well entrenched is the principle that factual
findings of the trial court, when adopted and confirmed by the CA, are final and conclusive and may not be reviewed
on appeal by this Court.56 The Court’s "role in a petition under Rule 45 is limited to reviewing or reversing errors of
law allegedly committed by the appellate court."57 This rule, however, is not without well defined exceptions.
"Findings of fact of the trial court and the CA may be set aside when such findingsare not supported by the evidence
or where the lower courts' conclusions are based on a misapprehension of facts."58 Considering the contention of
petitioners that misinterpretation of facts was committed, this Court embarked on the task of reviewing the facts of
this case.
After a painstaking review of the records, however, the Court finds no reason to reverse and set aside the factual
findings of the trial court, as affirmed by the CA, since these factual findingsare supported by and are based on
preponderant evidence.59
Petitioners failed to discharge the burden of proving that their predecessors-in-interest were buyers in good faith.
Petitioners do not dispute that the original Deed of Absolute Sale is a forgery because the alleged vendors were
already long dead when the questioned deed was executed. While their ownership rights are ultimately based upon
this forged deed, petitioners assert that the goodfaith of their predecessors-in-interest validates their title over the
lots.
The Court, however, disagrees. It must be notedthat the relationships by consanguinity or affinity, between and
among the vendors and vendees in the series of sales of the subject properties, were established by testimonial
evidence. Again, these were not contradicted by petitioners. And as aptly concluded by the trial court, it can
reasonably be assumed from these relations that the spouses Manguardia and Leonardo were not buyers in good
faith, viz:
Are the Manguardias and Leonardo Araza third persons x x x who are innocent purchasers for value?
The general rule x x x that a person dealing with registered land has a right to rely on the Torrens Certificate ofTitle
without need of inquiring further cannot apply when the party has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or
lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to [inquire] into the status of the
title of the property in litigation (Voluntad vs. Dizon, 313 SCRA 209). If circumstances exist that [require] a prudent
man to investigate and he does not, he is deemed to have acted in mala fide, and his mere refusal to believe that a
defect exists or his willful closing of his eyes to the possibility of the existence of a defect in his vendor’s title will not
make him an innocent purchaser for value (Voluntad vs. Dizon, supra).
Spouses Soledad Manalo and Pedro Araza purchased the properties in question from Roberto Araza, x x x
[Visitacion] Valles Araza’s son. The father of Roberto Araza, Panfilo Araza, was Pedro Araza’s brother, making
Pedro Araza the uncle of Roberto Araza. Encarnacion Ordas, one of the two [v]endors of the land in question to
Pedro Araza and Soledad Manalo Araza, is Roberto Araza’s cousin as the mother of Encarnacion Ordas and
Roberto’s mother, x x x [Visitacion] are sisters. Joaquin Manguardia, on the other hand, is the husband of Susana
Manalo, niece of Soledad Manalo Araza, being the daughter of Jose Manalo, Soledad’s brother. Leonardo Araza, on
the other hand is x x x [Visitacion] Valles-Araza’s son, whose father, Panfilo Araza is brother of Pedro Araza,
Soledad Araza’s husband. x x x [Visitacion] is a sister of Simplicio Valles and Marta Valles, both of whom were dead
when the Deed of Sale, exh. "B" was purportedly executed in 1968, selling the property, Lot 835, to x x x
[Visitacion’s] brothers, Rustico and Melquiades, and [Visitacion’s] nieces, namely: Encarnacion Ordas and Adelaida
Valles.
The transfers of the properties in question did not go far, but [were] limited to close family relatives by affinity and
consanguinity. Circuitous and convoluted [as they may be], and involving more than two families but belonging to a
clan which, although living in different barangays, such barangays belong to the same city and [are] adjacent to
each other. Good faith among the parties to the series of conveyances is therefore hard if not impossible to
presume.60
Unfortunately for the petitioners, they did not provide any sufficient evidence that would convince the courts that the
proximity of relationships between/among the vendors and vendees in the questioned sales was not used to
perpetrate fraud. Thus there is nothing todispel the notion that apparent anomalies attended the transactions among
close relations. Glaringly emphasized were the established facts that the parties to the alleged original sale in 1968,
and the witnesses thereto were close relatives (siblings, children and nephew of Marta and Simplicio). Similarly, the
vendors and vendees in subsequent sale transactions were either the co-vendees themselves in the original sale,
first cousins, and close relatives by consanguinity and affinity. In addition, these transactions between close
relatives happened at a time when everybody knew everyone, in a place where vendees lived in close proximity to
the vendors, and to the disputed properties. This is not to say however, that a sale between close relatives is
automatically anomalous. It is just that in this particular case, the circumstances strongly show that fraud was
committed byrelatives againstrelatives and the evidence adduced bypetitioners was insufficientto remove the cloud
of doubt pertaining to the good faith of their predecessors-in-interest in acquiring the properties in question.
It must be emphasized that "the burden of proving the status of a purchaser in good faith and for value liesupon him
who asserts that standing. In discharging the burden, it is not enough to invoke the ordinary presumption of good
faith that everyone is presumed to act in good faith. The good faith that is here essential is integral with the very
status that must beproved. x x x Petitioners have failed to discharge that burden."61
Acquisitive prescription is not applicable in the case at bar.
Petitioners’ contention of acquisitive prescription cannot prevail over the rights of respondents. To begin with, the
1âwphi1
disputed property is a duly registered land under the Torrens system. "It is well-settled that no title to registered land
in derogation of that of the registered owner shall be acquired by prescription or adverse possession. Neither can
prescription be allowed against the hereditary successors of the registered owner, because they merely step into the
shoes of the decedent and are merely the continuation of the personality of their predecessor[-]in[-]interest.
Consequently, since a certificate of registration covers it, the disputed land cannot be acquired by prescription
regardless of petitioner's good faith."62
Laches cannot be used to perpetrate injustice.
On the claim of !aches, this Court reiterates that "[!]aches is based upon equity and the public policy of discouraging
stale claims. Since !aches is an equitable doctrine, its application is controlled by equitable considerations. It cannot
be used to defeat justice or to [perpetrate] fraud and injustice. Thus, the assertion of !aches to thwart the claim of
respondents is foreclosed because the [d]eed upon which [petitioners base their] claim is[, first and foremost,] a
forgery."63
All told, the Court finds the trial court's disquisition, as affirmed by the CA, in order. WHEREFORE, the Petition is
DENIED. The June 22, 2006 Decision and March 27, 2007 Resolution of the Court of Appeals in CA-G.R. CV No.
78302 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 181541 August 18, 2014
PEOPLE OF THE PIDLIPPINES, Plaintiff/Appellee,

vs.
MARISSA MARCELO, Accused/Appellant.
DECISION
DEL CASTILLO, J.:
It is our commitment to apply the law without compassion against those who engage in illegal drug trade.1
This is an appeal from the Decision2 dated August 31, 2007 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
00858, which affirmed the Decision3 dated January 26, 2003 of the Regional Trial Court (RTC), Branch 52 of
Sorsogon City in Criminal Case No. 2003-5973 finding Marissa Marcelo y Madronero (appellant) guilty beyond
reasonable doubt of the crime of violation of Section 5, Article II ofRepublic Act (RA) No. 9165.
Factual Antecedents
On August 4, 2003, an Information4 charging appellant with violation of Section 5, Article II of RA 9165, otherwise
known as "The Comprehensive Dangerous Drugs Act of 2002," as amended, was filed in the RTC of Sorsogon City,
the accusatory portion of which reads:
That on or about the 1st day of August 2003 at about 7:30 o’clock in the evening at the Visitor’s Inn, municipality of
Donsol, province of Sorsogon, Philippines and within the jurisdiction of this Honorable Court, the said accused,
without any authority of law, did thenand there, willfully, unlawfully and feloniously, deliver and sell toHenry Tarog
METHAMPHETAMINE HYDROCHLORIDE (shabu) weighing approximately 2.3234 grams contained in a plastic
sachet, in exchange for ₱1,500.00, comprised of previously marked bills, to the damage and prejudice of the State
and the general public.
ACTS CONTRARY TO LAW.5

During arraignment, appellant entered a plea of "not guilty." After the termination of the pre-trial conference, trial
ensued.
The Prosecution’s Version
The prosecution presented Police Inspector Perfecto Rabulan (P/Insp. Rabulan), Police Officer 2 Freddie Salvatierra
(PO2 Salvatierra), Police Inspector Josephine M. Clemen (P/Insp. Clemen),Police Officer 2 Russan Jimenez (PO2
Jimenez) and BarangayChairperson Elsa Arbitria (Arbitria) as witnesses. From their testimonies,6 the following facts
emerged:
Imrie Tarog (Tarog) informed P/Insp. Rabulan that appellant would arrive at his rented unit in Visitor’s Inn,
Brgy.Punta Waling-Waling, Donsol, Sorsogon to deliver and sell an unspecified quantity of shabu. Prior thereto,
there were already reports that appellant and her husband are engaged in selling shabu. P/Insp. Rabulan thus
ordered a surveillance of the area where the transaction would take place and coordinated the matter with Arbitria,
the Barangay Chairperson of Brgy. Punta Waling-Waling. He subsequently formed a buy-bust team and requested
Tarog to participate in the operation.
On July 31, 2003, at 10 p.m., Tarog told P/Insp. Rabulanof appellant’s impending arrival. Tarog was instructed to act
asposeur-buyer and was given two 500-peso bills and five 100-peso bills as marked money.P/Insp. Rabulan then
prepared a pre-operation report dated August 1, 2003 and coordinated the buy-bust operation with the Philippine
Drug Enforcement Agency (PDEA).
On August 1, 2003 at 6 p.m., appellant arrived at the Visitor’s Inn. Meanwhile, the buy-bust teamalso arrived and
waited in front of the inn until Tarog appeared at the second floor terrace. He threw the key to the gate which is the
pre-arranged signal for the buy-bust team to enter and proceed to his unit. PO2 Salvatierra caught the key and
together with P/Insp. Rabulan used it to open the gate. They proceeded to Tarog’s rented unit and through the
slightly opened door, they had a clear view of the living room. They saw appellant sitting on a couch with her back
turned to the door as she was giving shabuto Tarog who was in turn handing to her the marked money. The police
officers thus immediately entered the unit. PO2 Salvatierra took the shabufrom Tarog and handed it to P/Insp.
Rabulan, while the latter took the buy-bust money.
About an hour later, Arbitria entered the room and saw appellant sitting on a couch with a sachet containing white
crystalline substance beside her. After being asked why she was in the premises, appellant answered that she was
collecting a debt. PO2 Jimenez conducted a body search on appellant in the comfort room and in the presence of
Arbitria, butno prohibited drug was recovered in her possession. Neither did the search on her wallet yield any illegal
substance.
Subsequently, the buy-bust team photographed appellant with the shabu and money and thereafter brought her to
the police station for further investigation. A day later, P/Insp. Rabulan and a police investigator brought appellant
and the specimen confiscated from her to the Crime Laboratory for examination. The specimen, which weighed
2.3234 grams, tested positive for shabu.
The Appellant’s Version
Appellant averred that there was no buy-bust operation conducted against her and that she was just a victim of a
frame-up. She testified that on August 1, 2003, she went to Tarog to collect from him the payment for the pork that
he purchased from her. Tarog saw her but just went upstairs to the second floor of the apartment. She heard him
say: "Here is again the person collecting the indebtedness from us." A woman by the name of Suyen allowed her to
enter the living room and told her to sit and wait. While waiting, police officers suddenly arrived. They subjected her
to a body search in the comfort room but nothing was recovered from her. PO2 Salvatierra then searched the
premises. He saw a pair of short pants, turned its pockets inside out, and found a sachet of shabuwhich he placed
beside appellant on the couch.
A certain PO Militante then searchedappellant’s bag and asked if she had money. Appellant replied that she only
had ₱900.00 for her fare, which PO Militante took. When appellant requested for the return of her money, she was
threatened with the filing of a case.
Appellant was thereafter invited to the police station for questioning but was instead incarcerated. She was brought
by the police officers to the crime laboratory for examination but the results were not given to her. She claimed to
have seen the buy-bust money for the first time only when she was brought to the PDEA to sign a document.
While under detention, appellant learned that Suyen,who turned out to be the wife of Tarog, is a cousin of PO2
Salvatierra. She theorized that she was framed to prevent her from collecting the debt of Tarog.
On January 26, 2003, the RTC rendered a Decision7 convicting appellant for violation of Section 5,Article II of
RA9165, as amended. The RTC was convinced that the prosecution’s evidenceestablished the guilt of appellant
beyond reasonable doubt since (1) appellant was positively identified by the police officers in open court as the
seller of 2.3234 grams of shabu, and (2) the delivery of the shabuto the poseur-buyer as well as the appellant’s
receipt of the marked money were attested to by the prosecution witnesses. Moreover, appellant’s denial and alibi
cannot prevail overthe testimonies of the prosecution witnesses. Besides, no improper motive can be attributed to
the police officers in imputing the crime to the appellant. Hence, their testimonies are worthy of belief coming as it
does from law enforcers who are presumed to have regularly performed their duties. The dispositive portion of its
Decision reads:
WHEREFORE, premises considered, the Court finds accused Marissa Marcelo y Madronero guilty beyond
reasonable doubt of the crime of Violation of Section 5, Article II of R.A. No. 9165 and she is hereby sentenced to
suffer the penalty of Life Imprisonment and Fine of Five Hundred Thousand (₱500,000.00) Pesos.
The shabu recovered is hereby ordered forfeited in favor of the government and the same shall be turnedover to the
Board for proper disposal without delay.
The accused having just [given] birth to a child, her immediate transfer to the Correccional Institution of Women
[in]Mandaluyong City is hereby ordered the moment she is already fit for travel.
SO ORDERED.8
The CA affirmed the RTC’s ruling in its Decision9 dated August 31, 2007, viz:
WHEREFORE, in view of the foregoing, the assailed decision of the Regional Trial Court of Sorsogon City, Branch
52, in Criminal Case No. 2003-5973, is hereby AFFIRMED.
SO ORDERED.10
Hence, this appeal.
Issues
Appellant’s assignment of errors in her Appellant’s Brief filed with the CA, which she is adopting in this appeal per
Manifestation (In Lieu of Supplemental Brief),11 is as follows:
I.
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY WITH [SIC]
VIOLATION OF SECTION 5, ARTICLE II OF R.A. 9165 DESPITE THE FAILURE OF THE PROSECUTION TO
PROVE THE OFFENSE CHARGED BEYOND REASONABLE DOUBT.
II
THE TRIAL COURT GRAVELY ERRED IN UPHOLDING THE ARREST OF THE ACCUSED-APPELLANT WHICH
WAS NOT SUPPORTED BY A WARRANT AUTHORIZING THE SAME.
III.
THE COURT A QUOGRAVELY ERRED INCONVICTING THE ACCUSED- APPELLANT ON THE BASIS OF THE
WEAKNESS OF THE DEFENSE EVIDENCE AND BY RELYING ON THE PRESUMPTION OF REGULARITY ON
THE PART OF THE POLICE OFFICERS IN THE PERFORMANCE OF THEIR OFFICIAL DUTY.12
Appellant makes issue on the fact that the poseur-buyer Tarog was never presented in court to corroborate the
other prosecution witnesses’ testimonies without a plausible reason for Tarog’s non-presentation. She also casts
doubt on the integrity of the police officers considering that they sought Tarog’s cooperation in the buy-bust
operation in exchange for their help or "assistance" in Tarog’s cases.
Appellant likewise asserts that the shabuwas not confiscated from her as testified by Arbitriathat she saw the
shabuonly on the sofa where the appellant sat. Neither was it shown that appellant was the one holding the marked
money when it was recovered by the police. To her, these prove that no buy-bust operation was ever conducted.
Appellant further asserts that assuming a surveillance on her which lasted for almost a week was indeed conducted
by the police officers, they should have secured a search warrant, but they did not. Appellant also contends that she
should not have been convicted on the basis of the weakness of her defense. Further, as the alleged buy-bust
operation is shown to berife with irregularities, the presumption of regularity in the performance of official duties
should not have been applied to the police officers concerned. She avers that she was a victim of frame-up and the
alleged buy-bust operation was a mere ploy orchestrated by the police.
The appellee People of the Philippines, on the other hand, through the Office of the Solicitor General (OSG), argues
that the elements of the crime of illegal sale of prohibited drugsare present in this case; that the presentation of an
informant in illegal drug cases is not essential for conviction nor indispensable for a successful prosecution because
an informant’s testimony would be merely corroborative and cumulative; that there was no need for the police
officers to secure a search warrant because appellant was caught in flagrante delicto; and that in the absence of
proof to the contrary, the presumption of regularity in the performance of duty of the police officers must stand.
Our Ruling
Elements for the Prosecution of Illegal Sale of Shabu.
In a prosecution for illegal sale of shabu, the following elements must concur: "(1) [the] identity of the buyer and the
seller, the object, and the consideration; and (2) the delivery of the thing sold and the payment therefor. x x x What
is material in a prosecution for illegal sale of dangerous drugs is the proof that the transaction or saleactually took
place, coupledwith the presentation in court of the corpus delicti"13 or the illicit drug in evidence.
In this case, the prosecution successfully proved the existence of all the essential elements of the illegal sale of
shabu. Appellant was positively identified by the police officers who conducted the buy-bust operation as the person
who sold the shabupresented in court. P/Insp. Rabulan testified that Tarog, their informant acting as a buyer,
purchased the shabufrom appellant during a legitimate buy-bust operation.He narrated the circumstances leading to
the consummation of the sale of the shabuand the arrest of appellant as follows:
Q. Before you conducted the operation, what did you do?
A. We prepared the necessary documentary requirements addressed to the local government executive, the letter of
coordination with the PDEA.
xxxx
Q. Now, you said that you made a pre-operational plan and in coordination with the PDEA found on page 7 of the
records is a pre-operational report signed by Police Inspector Rabulan, are you familiar with this?
A. With [regard] to the pre-operational report[,] x x x Marissa Marcelo was arriving in the area of Donsol with
undetermined quantity of shabu to be delivered to Imrie Tarog of Punta Waling-Waling, Donsol, Sorsogon.
Q. That was the basis of your plan?
A. Yes, ma’am.
xxxx
Q. After making the pre-operational plan and coordination with the PDEA, what did your team do?
A. I invited this Imrie Tarog. He committed [to help us] in our problem.
Q. Who is this Imrie Tarog?
A. He was the one who helped us [by buying] shabu from the suspect Marissa Marcelo.
Q. Who supplied to you the reliable information as stated in your preoperational report that Marissa Marcelo is
selling shabu?
A. Imrie Tarog.
Q. You said that you invited Imrie Tarog and he committed x x x to cooperate with you, now, what did you do after
hearing the commitment from him?
A. I organized the team. I coordinated with the barangay captain of Walingwaling, Donsol, Sorsogon which is the
place where the transaction will be held.
Q. What about Imrie Tarog, where was he then while you were organizing the team?
A. He was occupying the rented apartment in Visitor’s Inn, in Walingwaling, Donsol, Sorsogon.
Q. After organizing the team and after that commitment with Imrie Tarog, what did you do next?
A. We focused on surveillance and monitoring ofthe place.
Q. How long did the surveillance and monitoring of the place last [before] the operation was conducted?
A. More or less, one (1) week.
Q. Previous to that report made by Imrie Tarog that [Marissa] Marcelo will bring shabu to Donsol, Sorsogon, does
your office know this Marissa Marcelo?
A. Yes, ma’am.
Q. Why?
A. Because she was already reported tous as carrier of shabu with her husband.
Q. What kind of anti-drug operation against Marissa Marcelo were you able to hatch?
A. [A] buy[-]bust operation.

Q. Where was the supposedmoney that will be usedin buying shabu from her?
A. When Imrie Tarog informed x x x us that Marissa Marcelo was in Daraga, x x x during that time, I instructed him
on what to do in the operation and I gave him the amount of [P]1,500.00 to be used as marked money in the buy[-
]bust operation.
Q. Before you gave the money to the team, to Imrie Tarog, what were the distinguishing marks in that money?
A. Thru the serial numbers.
Q. How did you keynote the serial number, did you write it down?
A. We have the machine copies of the bills.
xxxx
Q. Mr. Witness, after giving these previously marked money to Imrie Tarog and after organizing the team, where did
you proceed?
A. We were still waiting for the information if Marissa Marcelo will arrive. Q. Did she, in fact, arrive?
A. Yes, ma’am.
Q. What time did she arrive?
A. More or less, almost 6:00 o’clock in the evening at Visitor’s Inn.
xxxx
Q. After receiving information that Marissa Marcelo will be arriving or after receiving information that Marissa
Marcelo had arrived in Donsol, Sorsogon, whatdid you do?
A. We proceeded to the area.
Q. Together with Imrie Tarog?
A. No, ma’am, Imrie Tarog was already in the apartment.
Q. What is that apartment where he was?
A. A lodging house, Visitor’s Inn.
Q. That same apartment where Marissa Marcelo will arrive [sic]?
A. Yes, ma’am and there were two rooms in that lodging house.
Q. Who occupied those two rooms in that lodging house?
A. Imrie Tarog.
xxxx
Q. After knowing that Marissa Marcelo has arrived, what transpired next?
A. We proceeded to the area with the instruction of our asset that when they were already transacting business
regarding shabu, he will get out and give us the key so that we can enter the room.
Q. That was the arrangement between you and Imrie Tarog?
A. Yes, ma’am.
Q. Then, what happened after that?
A. While we were inthe vicinity of the Visitor’sInn, Imrie Tarog came out [to] the terrace and gave us the key.
Q. Is that terrace on the second floor?
A. Yes, ma’am.
Q. And where were you while Imrie Tarog was in the terrace?
A. In front of the Visitor’s Inn.
Q. And you were outside?
A. Yes, ma’am.
Q. And how did Imrie Tarog give you the key?
A. He threw it to my companion, PO2 Salvatierra.
Q. That the key was meant for what?
A. The key was intended to open the gate.
Q. After getting [the] key from Imrie Tarog, what did you do?
A. My companion opened the padlock and proceeded to the second floor, to the room of the apartment.
Q. And whom did you come upon in that room?
A. Since the door was open, we found out that Marissa Marcelo and Imrie Tarog were actually transacting business
of shabu.
Q. How did you know that they were transacting business of shabu?
A. They were exchangingthe shabu and the money.
Q. Who was giving the shabu to whom?
A. Marissa Marcelo was giving the shabu.
Q. To whom?
A. To Imrie Tarog.
Q. So, Marissa Marcelo gave the shabu to Imrie Tarog?
A. Yes, ma’am.
Q. And who gave the money to whom?
A. Imrie Tarog gave the money to Marissa Marcelo.
Q. Upon seeing that transaction, what did you do?
A. We immediately apprehended and recovered from Marissa Marcelo the money x x x so we apprehended her.
Q. What about the shabu?
A. My companion, Freddie Salvatierrarecovered the shabu from Imrie Tarog.
Q. Can you describe to us the appearance of the shabu which your team recovered?
A. It was placed inside a transparent plastic bag, heat[-]sealed.
Q. After seeing [the] transaction taking place and after recovering the marked money from Marissa Marcelo and the
shabu from your asset, Imrie Tarog, what did you do?
A. We photographed the suspect and the shabu and also the marked money.
Q. What about the suspect, how did you deal with [her]?
A. We brought the suspected shabu together with the suspect to the police station for investigation.
Q. What did you do [to ascertain] thatthe shabu was the one recovered from Marissa Marcelo?
A. On the following day, we brought the suspected shabu to the Crime Laboratory in Legaspi City togetherwith the
suspectfor laboratory testing [and a] drug test.
xxxx
Q. How did you know that it was the shabu that you confiscated from Marissa Marcelo?
A. Through the marking ofmy investigator (witness pointing to the marking on the suspected shabu).
Q. What kind of markings?
A. The date we had submitted and the initial of the investigator.
Q. Are you referring to the blue markings "RMB"?
A. Yes, ma’am.
Q. What does "RMB" [mean]?
A. Roel Miranda Briones.
Q. Who actually brought thisto the crime laboratory?
A. I together with my investigator.
Q. So, you were personally present when this was received by the Crime Laboratory?
A. Yes, madam.
Q. What about the shabu seller, Marissa Marcelo, what did you do to her?
A. We also submitted her for drug test.
Q. So you brought her tothe Crime Laboratory?
A. Yes, madam.
Q. After taking her to the Crime Laboratory, whatdid you do to her?
A. When the PNP Crime Laboratory released the result of the laboratory examination of the shabu, we proceeded to
the Provincial Headquarter’s Office.
Q. For what purpose, Mr. Witness?
A. To file a complaint.14
PO2 Salvatierra corroborated the testimony of P/Insp. Rabulan on material points. He testified as follows:
Q. Where is that place? Where [was] the supposed operation x x x to take place?
A. At [B]arangay Punta Waling-waling, Donsol, Sorsogon.
Q. Where did it take place, at what particular place?
A. At Visitor’s Inn.
Q. And, who x x x went [to] the Visitor’s Inn?
A. The Chief of Police and myself were the ones who entered the Visitor’s Inn, the others acted as back[-]up, as
security.
Q. Why did you enter that Visitor’s Inn?
A. Because the asset x x x and/or x x x the Chief of Police was already in the terrace and when we arrived there,
he(asset) threw to us his key; and, that was the appropriate time for us (the Chief ofPolice and myself) to enter the
said premises.
Q. What part of that Visitor’s Inn did you enter?
A. We went to the second room because [there are still other rooms upstairs].
Q. What did you come upon after you entered?
A. We came upon the exchanging of the marked money by our asset, that is, the giving of the money; whereas, the
suspect in turn delivers the shabu to the asset.
xxxx
Q. What is the name of the asset who gave the marked money?
A. Imrie Tarog.
Q. And who is this Marissa Marcelo whom you said handed the suspected shabu to your asset, Imrie Tarog?
A. She is the one. (Witness pointed to a pregnant woman who identified herself as Marissa Marcelo.)
Q. Where were you then in relation to the buyer and the seller when the transaction was taking place?
A. I was beside the Chief of Police. When we entered[,] the Chief of Police was able to recover the marked money
from Marissa Marcelo while I recovered the suspected shabu from our asset.
xxxx
Q. You said, you were the one who recovered the suspected shabu from the poseur[-]buyer, Imrie Tarog, if you
recall, please describe to us, how that [suspect] shabu look[ed] like?
A. It was placed in a medium-size[d] transparent plastic sachet which weighed around 3 grams.15
Forensic Chemist P/Insp. Clemen examined the confiscated crystalline substance weighing 2.3234 grams and found
the same to be positive for methamphetamine hydrochloride or shabu. This finding is contained in Chemistry Report
No. D-321-03.16
Clearly, the prosecution, through the testimonies of the police officers as prosecution witnesses, was able to
establish the elements of illegal sale of shabu. "Prosecutions involving illegal drugs depend largely on the credibility
of the police officers who conducted the buy-bust operation."17 The Court finds no reason to doubt the credibility of
the said witnesses and their testimonies. The RTC, as sustained by the CA, found thatthe testimonies of the
prosecution witnesses were direct and definite. Their testimonies were consistenton relevant matters with each
other and the exhibits that were formally offered in evidence.
Moreover, the "findings of the trial courts which are factual in nature and which involve credibility are accorded
respect when no glaring errors; gross misapprehension of facts; orspeculative, arbitrary,and unsupported
conclusions can be gathered from such findings. The reason for this is that the trial court is in a better position to
decide the credibility ofwitnesses, having heard their testimonies and observed their deportment and manner of
testifying during the trial. The rule finds an even more stringent application where said findings are sustained by the
Court of Appeals".18
The Presentation of the Poseur-Buyer is not Indispensable.
Appellant’s insistence that the failure to present the poseur-buyer is fatal to the prosecution fails to impress.
"Therelevant information acquired by the [‘poseur-buyer’] was equally known to the police officers who gave
evidence for the prosecution at the trial.They all took part in the planning and implementation of the [buy-bust]
operation, and all were direct witnesses to the actual sale of the [shabu, the appellant’s] arrest immediately
thereafter, and the recovery from [her] x x x of the marked money x x x. The testimony of the [poseur-buyer] was not
therefore indispensable or necessary; it would have been cumulative merely, or corroborative at best."19 His
testimony can therefore be dispensed with since the illicit transaction was actually witnessed and adequately proved
by the prosecution witnesses.20
There was no Evidence of Improper
Motive on the Part of the Poseur-Buyer.
Appellant argues thatthe poseur-buyer’s cooperation in the buy-bust operation was in exchange for leniency in the
serious criminal charges filed against him thereby constituting improper motive. This argument lacks factual basis.
While PO2 Salvatierra admitted that the poseur-buyer has a pending criminal case, said case was filed after the
buy-bust operation.21
The Entrapment Established the Illicit Sale of Shabu.
Appellant’s contention that there was no direct link between her, the marked money and shabuagain fails to
impress. Inan entrapment operation, the prosecution must establish the poseur-buyer’s receipt of the shabufrom
appellant and present the same in court.22 The eyewitness testimonies of P/Insp. Rabulan and PO2 Salvatierra are
sufficient to provethe actual exchange of the marked money and the plastic sachet of shabubetween the poseur-
buyer and appellant.
These objects were presented in evidence during the trial. The existence of the illicit sale is therefore evident.
A Warrant of Arrest was not Necessary.
Appellant’s argument that her warrantless arrest was not valid is untenable. We emphasize that the prosecution
proved that appellant was apprehended after she exchanged the shabuin her possession for the marked money of
the poseurbuyer. Having been caught in flagrante delicto, the police officers were not only authorized but were
evenduty-bound to arrest her even without a warrant.23
There was no Evidence of Denial and Frame-up.
Appellant’s defenses of denial and frame-up do not deserve credence. Denial cannot prevail over the positive
testimony of prosecution witnesses.24 On the other hand, frame-up is viewed with disfavor since it can easily be
fabricated and is a common ploy in prosecution for violations of the Dangerous Drugs Law. For this defense to
prosper, it must be proved with clear and convincing evidence. There must also be evidence that the police officers
were inspired by improper motive.25
Here, aside from appellant’s self-serving testimony, her claim of frame-up is unsubstantiated by other convincing
evidence. It is alsounlikely thata team of police officers would conduct an entrapment operation and arrest the
appellant just to help the poseur-buyer avoid payment of a debt.
Besides, appellant should have filed the proper charges against the police officers if she was indeed the victim of a
frame-up. The failure to file administrative or criminal charges against them substantiates the conclusion that the
1âwphi 1
defense of frame-upwas a mere concoction.26
In the absence of evidence that the prosecution witnesses were impelled by improper motive to testify falsely,
appellant failed to overturn the presumption that the arresting officers regularly performed their duties. There is,
therefore, no basis to suspect the veracityof their statements.27
The Proper Penalty
All told, we find no reason to disturb the findings of the RTC, as affirmed by the CA, that appellant is guilty beyond
and a fine ranging from ₱500,000.00 to ₱10,000,000.00. However, with the enactment of RA 9346,28 only life
imprisonment and fine shall be imposed.29 Moreover, appellant is not eligible for parole pursuant to Section 2 of the
Indeterminate Sentence Law.
WHEREFORE, the Decision dated August 31, 2007 of the Court of Appeals, which affirmed the Decision dated
January 26, 2003 of the Regional Trial Court, Branch 52, Sorsogon City, convicting appellant Marissa Marcelo y
Madronero for violation of Section 5, Article II of Republic Act No. 9165, and sentencing her to suffer the penalty of
life imprisonment and pay the fine of ₱500,000.00, is AFFIRMED with modification that appellant is not eligible for
parole.
SO ORDERED.
SECOND DIVISION
G.R. No. 171836 August 11, 2014
DEPARTMENT OF AGRARIAN REFORM, represented by HON. NASSER C. PANGANDAMAN, in his capacity

as DAR-OIC Secretary, Petitioner,
vs.
SUSIE IRENE GALLE, Respondent.
x-----------------------x
G.R. No. 195213
LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
SUSIE IRENE GALLE, substituted by her heirs, namely HANS PETER, CARL OTTO, FRITZ WALTER, and
GEORGE ALAN, all surnamed REITH, Respondents.
DECISION
DEL CASTILLO, J.:
It has been the consistent pronouncement of this Court that the determination of just compensation is basically a
judicial function. Also, it is settled that in the computation of just compensation for land taken for agrarian reform,
both Section 17 of Republic Act No. 6657 (RA 6657 or the Comprehensive Agrarian Reform Law of 1988/CARL)
and the formula prescribed in the applicable Administrative Order of the Department of Agrarian Reform (DAR)
should be considered.
Before this Court are consolidated Petitions for Review on Certiorari1 assailing the following dispositionsof the Court
of Appeals (CA):
1. Its September 23, 2004 Decision2 and February 22, 2006 Resolution3 in CA-G.R. SP No. 80678, entitled
"Department of Agrarian Reform, as represented by Secretary Roberto M. Pagdanganan, Petitioner, versus Hon.
Reinerio (Abraham) B. Ramas, Presiding Judge, Regional Trial Court, Br. 18, Pagadian City and Susie Irene Galle,
Respondents";
2. Its July 27, 2010 Consolidated Decision4 and January 19, 2011 Resolution5 in CA-G.R. SP Nos. 00761-MIN and
00778-MIN, entitled "Land Bank of the Philippines, Petitioner, versus Susie Irene Galle, substituted by her heirs,
namely: HansPeter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents" and "Department
of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner, versus Susie Irene Galle,
substituted by her heirs, namely: HansPeter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth,
Respondents", respectively.
Factual Antecedents
Respondent Susie Irene Galle (Galle) owned two contiguous parcels of land known as the Patalon Coconut Estate
(the estate) in Patalon, Zamboanga City, with a total area of 410.2271 hectares (or 4,102,271 square meters) and
covered by two titles issued in her name – Transfer Certificatesof Title Nos. T-62,7366 (TCT T-62,736) and T-
62,7377(TCT T-62,737). The estate is a fully developed and income-producing farm, thus:
TCT T-62,736 TCT T-62,737

Land Use Area [Has.] Land Use Area [Has.]
[Coconut Plantation] 178.713 [Coconut Plantation] 168.1127 [has.]
[Coconut with Coffee Trees] 5.0 [Coconut with Coffee Trees] 3.5
Quarry 5.0 Corn 1.5
Barangay Road 1.4 Forest [Land] 15.0
Forest [Land] 15.0 National Road 2.08
The estate contained between 35,810 to 38,666 coconut trees,9 producing copra. Likewise, cattle, carabao and
horses were raised therein.10
In August 1992, petitioner Land Bank of the Philippines (LBP) valued 356.2257 hectares of the estateat
₱6,083,545.26, which valuation was rejected by Galle. The rejected amount was supposedly deposited in the name
of Galle, in the form of cash and bonds.
On November 17, 1993, the Zamboanga City Registry of Deeds cancelled Galle’s titles and transferred the entire
estate to the State; TCT Nos. T-110,927 and T-110,928 were issued in the name of the "Republic of the Philippines
– Department of Agrarian Reform."
On November 25, 1994, TCT Nos. T-110,927 and T-110,928 were cancelled and new titles – TCT Nos. T-111,098
and T-111,099 – were issued in the name of "Patalon Estate Agrarian Reform Beneficiaries Association" (PEARA).
Yet again, on May 13, 1994,the above two PEARA titles were cancelled, and new titles were issued, as follows:
1. TCT No. T-113,496 for 15.0025 hectares in Galle’s name;11
2. TCT No. T-113,499 for 37.1209 hectares in Galle’s name;12
3. TCT No. T-113,497 for 47.1739 hectares in the name of PEARA;13 and
4. TCT No. T-113,498 for 307.5369 hectares in the name of PEARA.14
The above four titles covered 406.8342 hectares of the estate’s total area of 410.2271 hectares, thus leaving 3.3929
hectares thereof unregistered. Thus, it appears that as to Galle, a total of 358.1037 hectares, or 3,581,037 square
meters – which is the sum total of the areas covered by TCT Nos. T-113,497 and T-113,498, and the 3.3929
hectaresunaccounted for but not re-titled or returned to Galle – were taken from her by the government without just
compensation. Meanwhile, the Department of Agrarian Reform Adjudication Board (DARAB) conducted summary
administrativeproceedings for the acquisition of the estate, docketed as DARAB CaseNo. JC-RIX-ZAMBO-0011-CO.
On October 15, 1996, a Decision15 was rendered in said case, the dispositive portion of which reads:
WHEREFORE, premises considered, order is hereby issued directing the Land Bank of the Philippines to determine
and include the value of the 1.4 hectares barangay road in the total valuation. It is likewise directed to pay the
landowner, Susie Irene Galle, the amount of TEN MILLION SEVEN HUNDRED SIXTY SEVEN THOUSAND FOUR
HUNDRED SIXTY NINE PESOS AND 00/100 (₱10,627,148.00) [sic] upon completion of the essential requirements.
SO ORDERED.16
Galle was notified of the above Decision on October 28, 1996. LBP filed a motion for reconsideration, which remains
unresolved to this day.17
Civil Case No. 4574
Galle instituted onNovember 12, 1996 – or within 15 days from receipt of the Decision in DARAB Case No. JC-RIX-
ZAMBO-0011-CO– a case for "Cancellation of Transfer Certificates of Title and Reconveyance, Determination and
Payment of Just Compensation, and Damages" with the Regional Trial Court (RTC) of Zamboanga City. Docketed
asCivil Case No. 4574 and assigned to RTC Branch 12, the Complaint18 - entitled "Susie Irene Galle, Plaintiff, versus
Ernesto Garilao, et al., Defendants" – prayed, amongothers, that:
The Honorable Court issue an Order:
1. Directing defendant Susana B. Muin, Register of Deeds of Zamboanga City, to cancel all certificates of title issued
subsequent to TCT Nos. T-62,736 and T-62,737, thereby rendering all subsequent certificates of title without force
and effect, and restoring in the name of plaintiff TCT Nos. T-62,736 and T-62,737; and
2. Directing the Department of Agrarian Reform and all the defendants to jointly and severally pay plaintiff the
income she lost from the time the said TCTs were cancelled on November 17, 1993 up to the time thatthe TCTs will
be restored in her name, with interest at the rate of 12% per annum, to pay lawyer’s fees and to pay the cost of the
suit.
In the alternative, it is respectfullyprayed that the Honorable Court render judgment:
1. Declaring just compensation for plaintiff’s expropriated landholdings at an amount not less than ₱345,311,112.00
and directing Land Bank of the Philippines to pay plaintiff the said amount. 2. Requiring Land Bank of the Philippines
to pay plaintiff the value of the infrastructures and waterworks system installed on plaintiff’s landholdings.
3. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly
and severally pay damages to plaintiff in the form of 12% interest [per annum] starting January 21, 1991 up to the
time the final award of compensation is paid to plaintiff, the interest to be computed based on the final award of
compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff.
and severally pay damages to plaintiff by way of attorney’s fees in the amount of 15% of the final award of
compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff.
and severally pay damages to plaintiff for all the expenses incurred to bring the instant suit before the Honorable
Court, which should not be less than ₱400,000.00, and to pay the cost ofthe suit, and directing Land Bank of the
Philippines to pay the the [sic] amounts to plaintiff.
6. To pay the cost of the suit.19
Galle likewise filed DARAB CaseNo. IX-ZC-766-96-(R) seeking annulment of the titles which were issued
subsequent to her original titles, or TCT T-62,736 and TCT T-62,737. However, the case was later dismissed in a
January 10, 1997 Decision issued by the DARAB.
The DAR moved to dismiss Civil Case No. 4574, claiming that the RTC had no jurisdiction over the case. The RTC
denied the motion, as well as DAR’s ensuing motion for reconsideration. DAR thus filed a Petition for Certiorariwith
the CA, docketed as CA-G.R. SP No. 47618. On August 21, 2001,the CA issued a Decision20 granting the Petition,
thus:
WHEREFORE, the foregoing premises considered, the petition for certiorari is GRANTED. The Orders of the public
respondent dated June 23, 1997 and September 18, 1997, and all the proceedings had thereafter including the
Decision dated March 22, 1999 and the Order dated May 19, 2000 are hereby ANNULLED and SET ASIDE. No
pronouncement as to costs.
SO ORDERED.21
The CA held that the RTC in Civil Case No. 4574 had no power to review decisions of the DARAB, and it had no
jurisdiction over the case for cancellation of titles since it was not the designated Special Agrarian Court (SAC).
Galle then came to this Court by Petition for Review on Certiorari, docketed as G.R. No. 152480. In a June 3, 2002
Resolution,22 however, the Petition was denied for failure to show that the CA committed reversible error.
Civil Case No. 4436-2K3
On January 14, 2003, Galle filed a case for "Determination and Payment of Just Compensation with Damages"
against the Secretary of the DAR, LBP, and PEARA, which was docketed as Civil Case No. 4436-2K3 and assigned
to Branch 18 of the RTC of Pagadian City, the designated SAC. The Complaint23 essentially alleged that the estate
was a fully developed and income-generating farm which was situated near the Zamboanga City Special Economic
ZoneAuthority and the Ayala de Zamboanga Industrial Estate; that the estate was a rich source of sand and gravel,
and more than 62 hectares thereof was coastal land; that at the time of taking by the State, the fair market value
thereof was no less than ₱100.00 per square meter, or ₱1 million per hectare; and that DAR and LBP offered
compensation equivalent to only ₱1.70 per square meter. Galle prayed that just compensation be fixed in the
amount of notless than ₱1 million per hectare or a total of ₱350,569,636.10; that she be granted compounded
interest on the just compensation due her,computed from the time her land was taken until she is paid; that she be
awarded 15%attorney’s fees, "actual expenses", and costs of suit.
The DAR filed a Motion to Dismiss,24 which LBP adopted. Citing prescription and forum-shopping, the DAR argued
that Galle was given only 15 days from notice of the October 15, 1996 DARAB Decision in DARAB Case No. JC-
RIX-ZAMBO-0011-CO – pursuant to Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure25 – within which to
file a just compensation case with the SAC; her filing of Civil CaseNo. 4436-2K3 on January 14, 2003, or six years
later, is tardy, and the October 15, 1996 Decision of the DARAB therefore became final and executory. It argued
further that Galle was guilty of forumshopping for filing Civil Case No. 4436-2K3 after obtaining anadverse Decision
in Civil Case No. 4574, which likewise involved a prayer – albeit in the alternative – for the fixing of just
compensation for her estate.
Galle filed an Opposition26 to the Motion to Dismiss, arguing among others that the October 15, 1996 DARAB
Decision in DARAB Case No. JC-RIXZAMBO-0011-CO did not become final and executory as there is still a
pending and unresolved Motion for Reconsideration27 filed by LBP; thatthe courts have the power to review the
Decision of the DAR, which is merely preliminary and not final; that a landowner may file a case directly with the
SAC without awaiting the DAR’s preliminary determination on justcompensation;28 that the original and exclusive
jurisdiction over cases for the determination of just compensation lies with the SAC – the DAR cannot be granted
jurisdiction over cases of eminent domain, as the valuation of property in eminent domain cases is essentially a
judicial function which cannot be vested in administrative agencies;29 that she was deprived of her property without
just and timely compensation,and her estate was placed in the name of an agrarian reform beneficiaries association
that did not exist in fact and in law; and that no forum-shopping was committed with the filing of Civil Case No. 4574
precisely since the trial court in said case had no jurisdiction to cancel the titles issued or to fix just compensation as
it was not the designated SAC that possessed the power to do so. To this Opposition, LBP filed a Reply.30
In a June 20, 2003 Order,31 the SAC denied the Motion to Dismiss. DAR and LBP moved to reconsider, butin a
September 12, 2003 Order,32 the SAC stood its ground.
LBP thereafter filed its Answer with Counterclaim.33
CA-G.R. SP No. 80678
Instead of submitting an Answer, DAR filed a Petition for Certiorariand Prohibition with the CA – docketed as CA-
G.R. SP No. 80678 – assailing the SAC’s June 20, 2003 and September 12, 2003 Orders, on the claim that they
were issued with grave abuse of discretion since Galle was already bound by the final and executory October 15,
1996 Decision of the DARAB in DARAB Case No. JC-RIX-ZAMBO-0011-CO and thus could no longer file Civil Case
No. 4436-2K3 to fix anew the just compensation for her estate.
On September 23, 2004, the CA issuedthe herein assailed Decision and February 22, 2006 Resolution respectively
dismissing the Petition and denying reconsideration thereof. The appellate court stated that DAR’s Petition was
defective as it failed to state the date ofreceipt of the SAC’s assailed June 20, 2003 Order, and that the SAC’s
Orders may not be elevated to the higher courts until the hearing in Civil Case No. 4436-2K3 has been terminated
and the case decided on the merits, pursuant to Section 59 of RA 6657 or the Comprehensive Agrarian Reform Law
of 1988 (CARL).34
Thus, the DAR filed the instant Petition, docketedas G.R. No. 171836.
Meanwhile, back in Civil Case No. 4436-2K3, the SAC conducted pretrial, where the parties jointly moved for the
creation of a commission of three that would determine the just compensation for Galle’s estate. Thus, Zamboanga
City Assessor Erwin Bernardo (Bernardo), Zamboanga City Engineer Luis Vicente Despalo (Despalo), and DBP
Property Appraiser Romel Calapardo (Calapardo) were called in to sit as commissioners.
The commission submitted a Report dated July 7, 2004, which the parties and the SAC rejected. The commission
was directed to convene and conduct a revaluation. Meanwhile, Despalo was replaced by retired City Assessor
Obdulia Manalo (Manalo), and Bernardo was replaced by retired Judge Cecilio Martin (Judge Martin).
Hearings were conducted whereby the parties presented their respective evidence. Galle presented two witnesses,
while LBP submitted only documentary evidence.
Meanwhile, one of the commissioners– Judge Martin – resigned. LBP manifested its willingness to proceed with the
revaluation with only two commissioners remaining.35
Commissioner Manalo submittedher Commissioners’ Report36 together with all the documents submitted by the
parties and the transcript of stenographic notes of the hearings and executive sessions of the commissioners.
Manalo’s Report reads, as follows:
COMMISSIONERS’ REPORT
Comes now the undersigned Commissioners, and in compliance with the Order of the Honorable Court dated
October 30, 2003, respectfully submit this REPORT
I. TASK OF THE COMMISSIONERS
As stated in the Order of the Honorable Court dated October 30, 2003, the task of the commissioners is "to conduct
the re-evaluation of the property subject of this case." The records show that plaintiff’s land titles were cancelled in
1993 hence the task of the commissionersis to determine the value of her land in 1993.
II. THE PROPERTY SUBJECT OF THIS CASE
Located in Patalon, Zamboanga City, plaintiff’s land was originally embraced under two certificates of title with a
combined total area of 410.2271 hectares (has.). These titles were cancelled on November 17, 1993. On May 13,
1994 two parcels of land with a total combined area of 52.1234 has. were reconveyed to plaintiff for being not
carpable. The total area that comprises the property subject of this case is therefore 358.1037 has. Proof of this is
given below:
Plaintiff’s original area:

TCT No. T-62,736 - 205.1130 has.
TCT No. T-62,737 - 205.1141 has.
TOTAL AREA - 410.2271 has.

Plaintiff’s reconveyed area:
TCT No. T-113,496 - 15.0025 has.
TCT No. T-113,499 - 37.1209 has.
TOTAL AREA - 52.1234 has

AREA TAKEN BY DAR - 358.1037 has.
=============
It is the function of DAR to determine the carpability of lands for agrarian reform. The commissioners therefore do
not have any authority or jurisdiction to question the carpability ofthe land that was not reconveyed to plaintiff. In
other words, whatever was not reconveyed to plaintiff is presumed to be carpable land and this area amounts to
358.1037 has.
This emphasis is being made becauseit appears from a collation of the land area in the two titles that were
reconveyed to plaintiff and the two titles given to the Patalon Estate Agrarian Reform Beneficiaries Association
(PEARA) that 3.3929 has. are not covered by a certificate of title. As stated above, the commissioners have no
authority or jurisdiction to question the lack of coverage of 3.3929 has. under a certificate of title. This is the province
of DAR and for DAR to address. Insofar as the area ofthe property subject of this case is concerned, what was not
returned to plaintiff is 358.1037 has. and this is therefore the area that is to be considered for valuation.
III. ACTIVITIES/HEARINGS OF THE COMMISSIONERS

1. Ocular Inspection
2. Hearing for the presentation of plaintiff’s evidence
3. Hearing for the presentation of defendant’s evidence
4. Organization meeting
5. Executive sessions
Because x x x plaintiff’s property was taken was some time ago x x x and her property as it was before no longer
exists, the commissioners note the following observations made during their ocular inspection:
1. There are only a few coconut trees on the property subject of this case and they are young trees. Whatever
coconut trees plaintiff had on the property have been cut down.
2. There is heavy extraction/quarrying of sand and gravel on Patalon River which bounds plaintiff’s property.
3. There is very little agricultural activity on the property.
IV. THE EVIDENCES AND PLEADINGS FILED/SUBMITTED BY THE PARTIES
The commissioners are submitting tothe Honorable Court all the pleadings and other papers filed by plaintiff and
defendant Land Bank of the Philippines (LBP) as attachments to this report, as well as the transcript of all hearings.
In view of the voluminous nature of these attachments, and because they already have copies, plaintiff and LBP will
only be provided with copies of this report without its attachments.
A. Plaintiff’s Evidence
Testimonial
1. Mr. Rodolfo Luceñada, Head, LoanAdministration Unit, Zamboanga Lending Center, Land Bank of the Philippines
He testified that in July 2004 his unit appraised a 3[-]ha. Property in Sinubung, a barangay adjacent to Patalon;
furthermore that the [price] range of [properties] in the area is ₱100 to ₱300 per square meter (sqm)
2. Mr. Rene Lacandalo, In-Charge of Sand and Gravel and Fishery Section, Office of the City Treasurer,
Zamboanga City
He testified that plaintiff’s property is bounded by two river systems, the Patalon River and the Miluao River and that
there is extraction and quarrying in the river system[s]
Documentary
Plaintiff submitted a folder of documents (Annex A of this Report) categorized, viz:
1. Prefatory Matters
a. Complaint dated Dec. 19, 2002, Civil Case No. 4436-2K3
b. Answer of LBP dated Sept. 30, 2003
c. Order dated Oct. 30, 2003
2. The Property Subject of the Complaint

a. TCT No. T-62,736
b. TCT No. T-62,737
c. TCT No. T-110,927
d. TCT No. T-110,928
e. TCT No. T-111,098
f. TCT No. T-111,099
g. TCT No. T-113,496
h. TCT No. T-113,497
i. TCT No. T-113,498
j. TCT No. T-113,499
k. Certification No. 2002-371 dated Sept. 4, 2002 issued by the Register of Deeds for Zamboanga City
l. Colored Map of Zamboanga City showing all the barangays
m. Colored Map of the property subject of the complaint
n. Another map of the property subject of the complaint
3. Improvements on the property
a. Tax Declaration No. 01 60 00017
b. Tax Declaration No. 01 60 00018
c. Statement of the Livestock
d. Certification of the City Assessor on unit value of agricultural crops
4. Compensation due Susie Irene Galle
a. Resolution No. 2003-10
b. Resolution No. 2001-90
c. Resolution No. 2001-87
d. Resolution No. 2000-35
e. Resolution No. 2000-05
all of the City Appraisal Committee of the City of Zamboanga
f. Manifestation dated Oct. 19, 1995
g. Certification dated Mar. 14, 1995 issued by the Phil. Coconut Authority
h. Copra Millgate Prices for Western Mindanao prepared by the Trade Information Relations Division, Philippine
Coconut Authority
5. Other Matters
a. Certificate of Registration of Patalon Agrarian Reform Farmers MultiPurpose Cooperative (PARFAMCO), issued
on Sept. 29, 1995
b. List of farmer-beneficiaries of PARFAMCO
c. Certificate No. 427-96, dated Sept. 19, 1996 of the Register of Deeds that no documents on the alleged PEARA
[are] on file with the registry
d. Excerpts from cases on just compensation
Pleadings
1. Memorandum dated January 24, 2005 (Annex B)
2. Counter-Manifestation and Counter-Comment dated Feb. 15, 2005 (Annex C)
B. Defendant’s Evidence
Testimonial
No witnesses were formally presented.
Documentary
LBP submitted a paper entitled Comment on Plaintiff’s Evidence (Annex D) which contained the following
attachments:
1. Field Inspection Report dated March 19, 1991 for land under TCT T-62,737
2. Appraisal Report dated March 19, 1991 for TCT T-62,737
3. Conference/Public Hearing Summary dated March 19,1991 for land covered under TCT T-62,737
4. Tax Declaration 01 16080 88 for TCT T-62,736 dated Jan. 13, 1983
5. Tax Declaration 01 16080 89 for TCT T-62,737 dated Feb. 13, 1983
6. Notice of Decision and Decision dated Oct. 13,37 1996 of the DARAB
7. Memorandum of the DAR PARO to LBP dated Dec.4, 1996 that Susie Irene Galle x x x had accepted the price
per LBP’s valuation of her land
8. Decision of the Supreme Court inLand Bank of the Philippines vs. Spouses Vicente Banal and Leonidas Arenas-
Banal
9. Field Inspection Report, undated, for TCT No. T-62,736
10. Conference/Public Hearing Summary for TCT No. T-62,736, dated March 19, 1991
Pleadings
1. Manifestations/Comments to Plaintiff’s Memorandum dated Feb. 1, 2005 (Annex E)
LBP requested that its Comment on Plaintiff’s Evidence be treated as its memorandum.
V. EVALUATION/ANALYSIS OF THE EVIDENCES PRESENTED BY THE PARTIES
In her complaint plaintiff alleged that the fair market value of her property at the time of its taking was at least ₱100
per sqm. and she prayed for compensation for 358.1037 has. Among plaintiff’s principal documentary evidences
presented to the commissioners is Resolution No. 2003.10 of the City Appraisal Committee of the City of
Zamboanga which placed the value of land the City Government was expropriating in Patalon in 2003 at the
equivalent of ₱152.52 per sqm. Using 5% as an appreciation factor, and conversely a depreciation rate, the raw
value of plaintiff’s property in 1993 would be ₱91.32 per sqm. Multiplied by 3,581,037 sqm. (358.1037 has.) this
means a raw land value of ₱327,020,299.00. Another principal documentary evidence of plaintiff is the Certification
of the City Assessor of Zamboanga City as to how much the City Government of Zamboanga would pay for
specified crops found on lands to be expropriated. Based on the crops declared in plaintiff’s tax declarations, these
improvements would be paid ₱19,384,320.00. Distributing this amount to the area involved
(₱19,384,320.00/3,581,037) would add ₱5.41 to the ₱91.32 per sqm. to add up to ₱96.73 per sqm. On the other
hand, the principal income of plaintiff was from the sale of copra to the oil mills. Using the average millgate price of
₱8.35 per kilo (average for the November 1993 to October 1994) multiplied by 12.5 kilos of copra per tree multiplied
by 38,666 coconut trees would result to a gross income from the sale of copra of ₱4,035,764 and deducting 20% as
costs will give a net income of ₱3,228,611.00 which, capitalized at 12% would add ₱7.51 per sqm. to the value of
the land for a total value of ₱104.24 per sqm. x x x.It can thus be said that plaintiff has justified the amount of her
claim for just compensation.
On the other hand, LBP stuck to its position that the amount of compensation for plaintiff should be ₱7,534,063.92,
or ₱2.10 per sqm. Considering that LBP conducted its field investigation more than two and a half years (2-1/2)
before the taking of the property and used data therefore obtaining in 1991 and tax declarations of 1983 and did not
even attempt to recompute based on the formula in the latest DAR Administrative Order, which is applicable to all
lands that have not yet been paid for, it can be said that LBP failed to support its position.
VI. VALUATION METHODS USEDBY COMMISSIONERS AND RESULTS
The valuation of land is not an exact science. Specified in Sec. 17 of R.A. 6657 and quotedin the Banal case a copy
of which was furnished the commissioners, just compensation involves the examination of these factors:
1. Cost of acquisition of the land
2. Current value of like properties
3. Nature, actual use and income
4. Tax declarations
5. Assessment made by government assessors
6. Social and economic benefits contributed by the farmers and farmworkers and by the government to the property;
and
7. Non-payment of taxes or loans secured from government financing institutions
Cost of acquisition of the propertysubject of this case cannot be determined. The land was acquired and developed
by plaintiff and her forebears into a fully developed self-sufficient estate. Since lands of the magnitude of plaintiff’s
do not exist on the west coast portion of the city, the current value of similar properties cannot be ascertained. The
commissioners instead used the appraisal value of the city government’s appraisal committee composed of the City
Assessor, the City Engineer and the City Treasurerand LBP, as well as the actual selling value of lands near
plaintiff’s. Factors 6 and 7 above are not applicable to this case.
In arriving at the raw land value of the subject property, the commissioners relied on the expertise of Commissioner
Romel Calapardo who is the Property Appraiser of the Development Bank of the Philippines, Regional Management
Office for Western Mindanao. His computation for raw land value is given below:
A. Raw Land Value
Land Data
Zamboanga City Appraisal Committee / Actual Sale

1. Land # 1 : Location - Patalon
Appraisal - [P]152.52/sqm.
Date - May 2003
Area - 16,391 sqm.
2. Land # 2 : Location - Sinubung
Appraisal - [P]200.00/sqm.
Date - October 2000
Area - 23,825 sqm.
Banks
1. LBP : Location - Sinubung
Appraisal - [P]250.00/sqm. along the road
[P]150.00/sqm interior portion
Date - 2003
Area - more than 6,000 sqm.
2. PNB : No exposure/appraisal done in the area
Comparative Adjustments
Adjustment Factor L1 L2 L3
Size -10.00 -10.00 -10.00
Location 0.00 -3.00 -3.00
Depth/Frontage -10.00 -10.00 -10.00
Time (+ or – 5% per yr 0.00 -15.00 0.00

Algebraic Sum -20.00 -38.00 -23.00
MarketData 152.50 200.00 250.00

Adjustment -30.50 -76 -57.5
Adjusted Value 122.00 124.00 192.50
Average Value of the Land at Present Time = ₱146.00/sqm.
Bank Practice - 5% appreciation of land
Raw land value in 1993 - ₱146.00 – (5%)(₱146)(11)

= ₱83.04 per sqm.
= ₱297,369,312.00
==============
B. Capitalized Net Income
To arrive at the principal income ofplaintiff, copra, the commissioners used a density of 100 trees per ha. for a total
of 35,810 trees. Multiplied by 12.5 kgs. of copra per tree at an average millgate buying price of ₱8.35, gross income
is calculated at ₱3,737,669.00 and net income, using the accepted 20% cost/expense factor, will be ₱2,990,135.00.
Capitalizing net income at 12%, the capitalized net income of plaintiff is calculated as ₱24,917,792.00.
C. Salvage Value
Considering that all the 35,810 trees have been cut down and presumably sold [as] lumber, the salvage value of
these trees at ₱495.00 per tree, the rate the City Government is paying for coconut trees, is ₱17,725,950.00.
D Summary
Raw land value - ₱297,369,312.00

Capitalized net income - 24,917,792.00
Salvage value - 17,725,950.00
TOTAL ₱340,040,054.00
vvvvvvvvvvvvvv
SUBMISSION
It is reiterated that the task of the commissioners is to value the property subject of this case. It is not the taskof the
commissionersto determine just compensation for plaintiff. This matter iswithin the exclusive jurisdiction of the
Honorable Court and the commissioners merely provide the expertise needed by the Court to arrive at a resolution.
The commissioners submit the sum of ₱340,040,054.00 asthe value of plaintiff Susie Irene Galle’s expropriated
land.
City of Zamboanga for the City of Pagadian, Zamboanga del Sur, May 06, 2005.
(signed)
ENGR. ROMEL S. CALAPARDO
MRS. OBDULIA A. MANALO
xxxx
xxxx
RET. JUDGE CECILIO G. MARTIN

x x x x38
On the other hand, Commissioner Calapardo submitted a Dissenting Opinion on Commissioners’ Report39 dated
June 3, 2005, which states thus:
DISSENTING OPINION ON COMMISSIONERS’ REPORT
The undersigned Commissioner respectfully states that:
1. He is in receipt of the Commissioner’s Report rendered by Comm. Obdulia A. Manalo, retired City Assessor of
Zamboanga City.
2. That the Commissioner’s Report was discussed in an executive session between Comm. Manalo and the
undersigned on May 11, 2005.
3. That he does not agree with the report and thus, this Dissenting Opinion, as follows:
● Commissioner Manalo use [sic] as basis for the valuation of the properties the report of the first Commission
formed by the court composed of Zamboanga City Assessor Erwin Bernardo, City Engineer Luis Despalo and the
undersigned.
It is the believed [sic] of the undersigned Commissioner that this should not have been so because the first
Commission was a failure, and in fact, the court rejected its report. The first Commission failed to observe the Rules
on Proceedings. Not a single hearing was conducted.
● The report of the first Commission was never presented as evidence in the course of the hearing of the current
Commission, and thus, it was also never discussed.
● While the raw land value as presented in the report of Comm. Manalo was indeed drafted by the
undersigned,again, some important things and issues overlooked [sic] becauseno hearing was conducted.
● As presented by Comm. Manalo in her report, the computation of the product of raw land value of ₱83.04 is
incorrect.
● The capitalized net income and salvage value as presented by Comm. Manalo in her report is her own and not of
the Commission.
4. Presented hereunder is the report ofthe undersigned Commissioner, viz:
REPORT
Plaintiff, owner of two (2) parcels of land situated at Barangay Patalon, Zamboanga City, containing an aggregate
area of 410.2271 has., alleged the following:
a. The compensation offered for her property involving an area of 356.2257 has. is unconscionable and
confiscatory. That the basis for the compensation should be the fair market value of the property at the time of the
taking, which is 1993.
b. The area reconveyed to her is only 52.1459 has. Thus, 3.3929 has. of her property were lost; that she did not
received [sic] any offer of compensation for this particular area; and that she was not informed whatsoever what
have became [sic] of this area.
The primary function of the commissionis to determine the value of the property at the time of the taking in 1993. In
this case, the area in consideration is 356.2257 has. As to the missing area of 3.3929 has., Commissioner
Calapardo is in [sic] the opinion that its legalityis beyond the Commission’s authority.
DECISION
On August 20, 1992, defendant DAR offered a compensation of Php6,083,545.26 for the property covering an area
of 356.2257 has. This offered compensation was later increased to Php7,534,063.92.
The case was then elevated to the Department of Agrarian Reform Adjudication Board. DARAB, in its decision
dated October 15, 1996, awarded the landowner the amount of Php10,627,148.00 for an equivalent area of
373.2271 has. inclusive of the 1.4 has. claim which was identified by Land Bank as barangay road.
The declared value of the property per tax declaration is Php9,056,990.00. As DARAB itself pointed out in its
decision, adopting the formula under Administrative Order No. 6 of "MV x 2", the compensation for the property
would havebeen Php20,645,445.00.
Worth noting is the fact that when the case was presented before the DARAB, the claim of the plaintiff was
Php30,681,107.68 aspresented by LBP during the hearing on January 12, 2005.
While LBP claimed that plaintiff accepted the price as determined by the DARAB, Plaintiff, through her counsel
points otherwise. LBP was not able to show proof that indeed Plaintiff accepted the DARAB valuation.
Plaintiff through her counsel, also confirmed that they have not seek [sic] the assistance of an appraisal firm to
comeup with the valuation of the property. An appraisal of the property by an independent appraisal company at the
time of the taking could have been an invaluable input in determining just compensation. No person or owner of a
property can claim that his property is worth so much because he says so. Every claim has to be back up [sic] by
acceptable and credible method of valuation.
Plaintiff’s claim over the property in her complaint with the Special Agrarian Reform Court in December 2002 is
Php350,569,636.10 which is more than 90% over her original claim during the DARAB proceedings. In her final
Memorandum to the Board of Commissioners dated January 24, 2005, her claim over the property was placed at
Php485,994,853.00.
It may be deduced that the amount ofher claim is always based on the current market value of the property, atthe
time every pleading is prepared.
On the part of the undersigned Commissioner, the appraisal of the property, using accepted principals [sic] and
banking practices, taking into consideration present market data gathered and considering improvements of the
property as declared in the tax declaration at the time of the taking, and working back to the time of the taking,
resulted to [sic] Php79,764,000.00.
The undersigned Commissioner’s computation however may proof [sic] impractical considering the span of time that
had elapse [sic] from the time of the taking, which has resulted in altered land use in surrounding areas and affected
land valuation considerably. A case in pointis the establishment of the office of the Zamboanga Economic Zone and
Freeport Authority a few kilometers before the property of the plaintiff, which was established sometime in 1997. A
single development of this nature in a locality can change the market attitude entirely. And with such change, market
data during the present time can never be comparable to the market condition during the time of the taking.
Fair Market Value of real estate isdetermined by the desirability of the property and the availability of a willing buyer
and seller. Both must possess sufficient knowledge of all the uses to which it is adapted and for which it is capable
of being used, and agrees to buy and to sell respectively without pressure.
Under this concept, the value of the property at the time of the taking cannot be more than Php30,681,107.68, the
claim of the plaintiff in 1995, two years after the time of the taking. This is because a claim has been made; it can be
assumed that this amount is the value to which the owner is willing to part with his property at that time.
Real estate, especially land, tends to appreciate in value with time. At the time of the taking therefore, the value of
the property is either equal to or less than Php30,681,107.68.
The undersigned Commissioner also cannot agree with the valuation of DARAB which priced the property at
Php10,627,148.00 simply because the property’s declared value per tax declaration is Php9,056,990.00, and as
DARAB itself pointed out, the compensation of the property should be Php20,645,445.00 per Administrative Order
No. 6.
It is common knowledge that real estate are [sic] usually declared less than their [sic] true value simply because the
declaration made by the owner is only for tax purposes. Along this line, there is no reason for the landowner to over
value her property and be burdened by realty taxes in the future.
The general rule is that real estate appreciates in value over time. As to what percentage depends upon the
development in the locality. Some Banking institution, under normal condition, considera 5% appreciation in value to
be acceptable. In the same manner, if onlya short period of time elapses, 5% decrease in price on the current
market value may be practicable to approximate value for a property several years back.
Under this condition, the claim of the Plaintiff of Php30,681,107.68 in 1995 may be recomputed. Considering the
above-stated practice, in 1993, the time of taking, the value of the property is approximately Php27,612,996.90.
Then again, the claim of the Plaintiff at Php30,681,107.68 has no basis. Based on the records, she came up with
this value on her own, which may be self-serving. But as the owner of the property, she has the right to demand her
price, after all, a sale can only be consummated upon the meeting of the minds of the seller and buyer.
The case at hand, however, is not a normal sale between a seller and a buyer in the open market. It is based on the
laws of the land as promulgated.
Premises considered, the undersigned Commissioner, after due consideration and analysis of evidence presented,
believes thatthe fair market value of the property at the time of taking in 1993 is Twenty Million Six Hundred Forty
Five Thousand Four Hundred Forty Five Pesos (Php20,645,445.00).
The undersigned Commissioner however agrees with the Plaintiff that the delay in the payment of just compensation
may be construed as an injustice. Thus, a reasonable interest should be granted to Plaintiff for the failure of
Dependants [sic] to come up with the acceptable price. Respectfully submitted this 3rd day of June, 2005, at
Zamboanga City, Philippines.
(signed)
ROMEL S. CALAPARDO
DBP Representative
Commission Member40
The SAC held a hearing on the above reports on June 17, 2005, while the parties filed their respective comments
and manifestations thereto.41
On August 15, 2005, the SAC issued a Resolution,42 the dispositive portion of which reads –
WHEREFORE, judgment is hereby rendered ordering defendants Land Bank of the Philippines and the
Departmentof Agrarian Reform to jointly and severally pay plaintiff the following:
1. Just compensation in the amount of THREE HUNDRED SIXTEEN MILLION SEVEN HUNDRED FIFTY-THREE
THOUSAND SIX HUNDRED THIRTY-TWO PESOS (₱316,752,632.00) [sic].
2. Compounded legal interest as prayed for to be reckoned from the time of taking up to the timethat plaintiff is fully
paid.
3. Commissioners fees to be taxed aspart of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil
Procedure and Section 16, A.M. No. 04-2-04-SC.
4. Attorney’s fees in an amount equivalent to 15% of the total award in items no. 1 and 2 above.
5. Cost of the suit.
SO ORDERED.43
In arriving at the above conclusion, the SAC held, as follows:
After a careful and studied scrutiny of the voluminous records of this case these facts were clearly established:
1. The area of the property subject ofthis case is 358.1037 hectares. The aggregate area in plaintiff’s44 TCT Nos. T-
62,736 and T-62,737 was 410.2271 hectares. What was eventually reconveyed or returned to plaintiff in TCT Nos.
T-113,496 and T-113,49745 totaled 52.1234 hectares. DAR therefore took 358.1037 hectares. What DAR took
constitutes the property subject of this case for which just compensation should be paid. Whether or not the area of
358.1037 hectares is fully covered under certificates of title is not for this Court to inquire into but for DAR to
address. Furthermore, there can be no other assumption but that the total area of 358.1037 hectares that DAR took
is carpable, absent a protest from the landowner that her land is not subject to the CARL. LBP has no standing to
protest that the landowner whose land was already taken by DAR should not be paid for a portion of the land taken
because that portion is not carpable.
2. Plaintiff’s land titles mentioned above were cancelled and title of the entire area covered in the titles transferred
even before plaintiff was paid compensation for her land.
3. The Patalon Estate Agrarian Reform Beneficiaries Association, the recorded beneficiary of plaintiff’s property, is
non-existent. It does not exist in fact. It does not exist in law.
4. All the coconut trees that were standing on plaintiff’s property when it was taken by DAR were eventually cut
down. Her estate no longer exists.
5. There is heavy extraction of sand and gravel on the river that abounds [sic] plaintiff’s property.
6. Commissioner Obdulia Manalo arrived at a value for the property subject of this case through a credible
methodology that was clearly presented in her report.
7. Plaintiff likewise arrived at a value for her property through a credible method that was clearlypresented in her
Memorandum.
8. Commissioner Romel Calapardo, on the other hand, did not present the methodology by which he arrived at
₱20,645,445.00 as the value of plaintiff’s property. This is the value that DARAB said was arrived at by using the
formula "MV x 2" which formula is notapplicable to plaintiff’s property but was merely used to prove the arbitrary and
confiscatory value of ₱7,534,063.91 that LBP was offering for plaintiff’s property. Commissioner Calapardo
misappreciated DARAB’s statements.
9. Commissioner Calapardo also premised his discussions on fiction, the fiction being that plaintiff claimed the
amount of ₱30,681,107.68 in 1995 as just compensation for her property. 10. LBP did not present any documentsto
show how it arrived at the value of ₱7,534,063.91. Neither did it explain in any pleading how this amount was
determined. It did not show the basis for whatever factors it used nor the authorities or sources of its data and
information. Furthermore, it did not dispute plaintiff’s assertion that no actual field inspection of her property was
conducted as it claimed it did in 1991.
11. The Zoning Ordinance of the City of Zamboanga, City Ordinance No. 29, enacted in 1978, declared large areas
of land located along the west coast portion of Zamboanga City as industrial areas which caused an upward
movement of the value of land along the west coast. Plaintiff’s property is located along the west coast.
12. The City Government of Zamboangavalued a parcel of land located in Patalon at ₱152.52 per square meter
in2003. In 2000 it valued a parcel of land located in the adjacent barangay of Sinubung at ₱200.00 per square
meter. LBP valued land at Sinubung in2003 at ₱300.00 per squaremeter along the road.
The task of this Court is to determine the amount of just compensation for plaintiff. As to what just compensation is,
this has been defined as the full and fair equivalent of the property taken from its owner by the expropriator; the
measure is not the taker’s gain [but] the owner’s loss. The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real,
substantial, full, ample. (Association of Small Landowners in the Philippines, Inc., et al., vs. Secretary of Agrarian
Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343).
As to what just compensation for plaintiff should be, in a most compelling sense the documents that she submitted
convey in no uncertain terms that the amount of ₱7,534,063.91 that LBP maintains should be paid to her and the
amount of ₱10,767,469.00 fixed by DARAB is confiscatory and tantamount to a taking.
The Court does not see merit in LBP’s contention that the compensation that the City Government of Zamboanga
City pays for land and its improvements cannot apply to land expropriated for agrarian reform because of the
revolutionary nature of land reform. It must be recalled that in Land Bank of the Philippines vs. Court of Appeals, et
al., G.R. No. 118712 and G.R. No. 118745, 249 SCRA 149 the Supreme Court said: "We agree with the observation
of the respondent court. The ruling in the ‘Association’ case merely recognized the extraordinary nature of the
expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional modeof payment of
compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that
there must be full payment of just compensation before the title to the expropriated property is transferred."
Finding both the report of Commissioner Obdulia Manalo and the Memorandum of plaintiff to be well taken the Court
rules thatthe value of the property subject of this case is itsraw land value of ₱297,369,312.00 as determined by
Commissioner Manalo and the value of its improvements of ₱19,384,320.00 as determined in the Memorandum to
be what the City Government of Zamboanga would pay, for a total of three hundred sixteen million seven hundred
fifty three thousand six hundred thirty-two pesos (₱316,753,632.00).46
Both LBP and DAR moved to reconsider. LBP’s Motion for Reconsideration47 is dated September 8, 2005, yet it set
the motion for hearing on October 28, 2005. DAR’s Motion for Reconsideration,48 dated September 12, 2005, was
likewise set for hearing on October 28, 2005. Respondent opposed the motions.49
On November 16, 2005, the SAC issued an Order50 denying reconsideration of its August 15, 2005 Resolution. It
held:
The Motion for Reconsideration of LBP is without merit. The Motion for Reconsideration of DAR is likewise without
merit. Both Motions are pro forma and are mere scraps of paper.
Section 2, Rule 37 of the 1997 Rules of Civil Procedure, 3rd paragraph require that a "Motion for Reconsideration
shall point out specifically the findings or conclusions of the judgment orfinal order which are not supported by the
evidence or which are contrary to law, making express reference to the testimonial or documentary evidence or
tothe provisions of law alleged to be contrary to such findings or conclusions." DAR and LBP aver that the Court
failed to consider Section 17 of R.A. 6657 and apply the valuation formula of DAR Administrative Order No. 6,
Series of1992, as amended. Section 17 is an enumeration of the factors that shall be considered in the
determination of just compensation. DAR and LBP contend thatbecause the Court did not determine just
1awp++i1
compensation using the formula in an administrative issuance, DAR Administrative Order No. 6, the Court
consequently failed to consider Section 17 of RA 6657. Their argument is baseless. Section 17 does not require the
Court to use the valuation formula in DAR Administrative Order No. 6. The allegation that the contested Resolution
is contrary to law is therefore ludicrous. The law vests in the Court exclusive and original jurisdiction to hear and
determine just compensation to landowners of condemned lands. The jurisdiction of the Court cannot be restricted
or undermined by administrative orders of administrative agencies. (EPZA vs. Dulay, 149 SCRA 305).
The Court is constrained to emphasize, moreover, that neither DAR nor LBP presented the formula in DAR
Administrative Order No. 6 to the commission appointed in this case or to the Court. Neither did they present to the
commission or to this Court their calculations of just compensation based on the formula in the said Order or on any
order.
The Court considers as valid the objections of plaintiff that the Motions for Reconsideration of LBP and DAR violated
Section 11, Rule 13, of the 1997 Rules of Civil Procedure. Both the Motion for Reconsideration of LBP and the
Motion for Reconsideration of DAR do notcontain a written explanation as to why the service of the motion on
plaintiff was not done personally. Accordingly, in the light of the pronouncement of the Supreme Court in Perla S.
Zulueta vs. Asia Brewery Inc., G.R. No. 138137, March 8, 2001, both motions should be expunged from the records.
Moreover, LBP and DAR set their motion for hearing on October 28, 2005, more than forty (40) days after the
motions were filed, in clear violation of Section 5, Rule 15, of the 1997 Rules of Civil Procedure. The motions are pro
forma, they are obviously intended to delay the proceedings of this case. At the time the motion was filed, LBP
already had a previously set hearing on October 14, 2005 for another land reform case and there is no cogent
reason for LBP to set the hearing of their motion for reconsideration in this case to a much later date.
On October 30, 2003 the parties agreed to refer the valuation of the property subject of this case to a commission.
The Court accepted with modification the Commissioner’sReport. The records will show that whatever objections
now being raised in the motion for reconsideration of LBP and DAR were not raised in a comment or objection to the
Commissioner’s Report.
With respect to Land Bank of the Philippines’ objection that interest should be based on market interest rates
aligned with 91-day treasury bill rates, the Court does not see any conflict with Section 18(4) R.A. 6657.
Compounded legal interest rate will be imposed onthat portion of the compensation due plaintiff that will be [sic]
should have been paid in cash if compensation had been paid at the time of the taking in 1993, and the proceeds of
the LBP bonds that should have already matured and bore market interest rates aligned with 91-day treasury bill
rates. Inasmuchas more than ten (10) years have elapsed since the time of the taking of plaintiff’s property,
compensation due her should now be paid entirely in cash.
WHEREFORE, the Motions for Reconsideration of Land Bank of the Philippines and Department of Agrarian Reform
are DENIED for being patently without merit and for being pro forma and intended merely to delay the proceedings
of this case. The Resolution dated August 15, 2005 is hereby amended insofar as [the imposition of] compounded
legal interest on compensation due. It is hereby Ordered that compounded legal interest shall be imposed not on the
entire compensation due but only on the cash portion of the compensation that should have been paid plaintiff in
1993, or at the time of the taking, and on the proceeds of the corresponding portion of the Land Bank of the
Philippines bonds that should have matured yearly and bore market interest rates aligned with 91-day treasury bill
rates starting 1994 up to the time that plaintiff shall be fully paid.
SO ORDERED.51
Rulings of the Court of Appeals
LBP instituted a Petition for Review with the CA, which was docketed as CA-G.R. SP No. 00761-MIN. For its part,
the DAR filed a separate Petition for Review, docketedas CA-G.R. SP No. 00778-MIN.
In a January 17, 2004 Order, the two petitionswere consolidated.52
On July 27, 2010, the CA issued the assailed Consolidated Decision, decreeing as follows:
FOR THE STATED REASONS, these consolidated petitions are PARTLY GRANTEDas follows:
(1) The total amount of just compensation for the Three Million Five Hundred Sixty-Eight Thousand Two Hundred
Fifty-Seven square meters (or 356.8257 hectares) of respondent’s land isRECOMPUTED and fixed at the total
amount of Two Hundred Ninety-Six Million Three Hundred Eight Thousand Sixty-One Pesos and Twenty-Eight
Centavos (₱296,308,061.28).
(2) The award of compounded legal interest is MODIFIED to 12% simple interest rate per annum in the total amount
of just compensation which is reckoned from the time of taking until respondent shall be fully paid.
(3) The award of attorney’s fees in an amount equivalent to 15% of the total award of just compensation and legal
interest is REDUCED to Three Hundred Thousand Pesos (₱300,000.00).
SO ORDERED.53
In disposing of the Petitions, the CA circumscribed the issues that needed to be resolved to 1) the total area actually
taken by the government for agrarian reform, and 2) the amount of just compensation that must be paid to Galle.
On the issue of total land area actuallyexpropriated, the appellate court held as follows:
Respondent demands compensation for a total area of 358.1037 hectares, but LBP wants to compensate her only
for 356.8257 hectares.
The original area of respondent’s land was 205.1130 hectares in TCT No. T-62,736 and 205.1141 hectares in TCT
No. T-62,737. That comprises a total area of 410.2271 hectares. The area eventually reconveyed by DAR to
respondent was 15.0025 hectares in TCT T-113,496 and 37.1209 hectares in TCT No. T-113,499, or a total
reconveyed land area of 52.1234 hectares. Thus, the area that was retained by DAR is 358.1037 hectares.
But it is not as simple as that.

xxxx
It appears from this presentation that approximately 3.4000 hectares was [sic] not included in LBP’s computation
ofthe total land area to be compensated. The 3.4000 hectares corresponds [sic] to the alleged "missing" 3.3929
hectares. The 3.4000 hectares includes the 1.4000 hectares of respondent’s land used as barangay road and the
2.000 hectares of respondent’s land which formed part of the national road. The 3.4 hectare portion of respondent’s
land classified as road portions were excluded by LBP from valuation.
xxxx
Thus, the DARAB ordered the inclusion of the 1.4000 hectares barangay road in the determination of the total
valuation. The DARAB excluded only the approximate 2.000 hectares comprisingthe existing national road. x x x
xxxx
It matters to keep in mind that the power to determine with exactitude what areas may come within the coverage of
the Comprehensive Agrarian Reform Program (CARP) is essentially lodged with the DAR. Thus, the total area of
respondent’s land covered by CARP should be 356.8257 hectares, not 358.1037 hectares.54
With regard to the issue of just compensation, the CA made the following pronouncement:
Sections 17 and 18 of RepublicAct No. 6657 provides [sic] the guideposts for the determination of just
compensation, to wit:
Sec. 17. Determination ofJust Compensation. – In determining just compensation, the cost of acquisition of the land,
the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax
declarations, and the assessment made by government assessors shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-
payment of taxes or loans secured from any government financing institution on the said land shall be considered as
additional factors to determine its valuation.
Sec. 18. Valuation and Mode of Compensation. – The LBP shall compensate the landownerin such amount as may
be agreed upon by the landowner and the DAR and LBP or as may be finally determined by the court as the just
compensation for the land.
The LBP proposed to compensate respondent for the value of the 356.8257 hectares at Seven Million FiveHundred
Thirty-Four Thousand SixtyThree Pesos and Ninety-One Centavos(₱7,534,063.91), or at Two Pesos and Eleven
Centavos (₱2.11) per square meter. The DAR did not agree with LBP’s valuation; it pegged the value of the land at
Ten Million Seven Hundred SixtySeven Thousand Four Hundred Sixty-Nine Pesos (₱10,767,469.00).
Considering the documents submitted by the respondent, the SAC found both LBP’s and DAR’s valuation as
confiscatory and tantamount to unjust taking of respondent’s land.
Indeed, it has been established thatwhen the DAR took respondent’s land, it was a fully-developed estate. x x x
No doubt, the subject land is not idle. It has been planted to coconut trees with intercrops, mango trees, bamboo
clamps [sic], coffee trees which were then fruit bearing. Respondent also raised in the land livestock such as cattle,
carabao, and horses which she proposed to sell to DAR based on normal cattle weights to be paid by LBP. In fact,
respondent’s land was fenced and patrolled by security guards prior to DAR’s taking.
It is even significant to consider thatmore than sixty-two hectares of the land is coastal fronting the Sulu Sea, while
on the south portion of the land lies the Miluao River and on the north, the Patalon River. Not only that. The subject
land is located along Zamboanga-Labuan road – a national road which covers an approximately two (2) hectare-
stretch of the land. Respondent was likewise even recognized by DAR for providing the 1.4 hectare-portion of the
land as barangay road. The undisputed presence of water and road networks in respondent’s land certainly defy
LBP’s valuation of the land at ₱7,534,063.91, which translates to the ridiculously unfair amountof ₱2.11 per square
meter.
In arriving at a valuation of ₱83.04 per square meter, the SAC meticulously evaluated the following factors:
[1] the report of the Commissioners vis-à-vis the Dissenting Opinion;
[2] the nature of the land, its actual use and income;
[3] the sworn valuation by the owner; the tax declarations;
[4] the current value of like properties or the comparative sales of adjacent land;
[5] the permanent improvements on the land and value of improvements; and
[6] the potential use.
It cannot, therefore, be said that the SAC had no basis for its valuation of respondent’s land. It took into
consideration the required important factors enumerated in Section 17 ofRepublic Act No. 6657 which, in turn, were
the very same matters that made up the DAR formula. Verily, it can be said that the SAC had substantially applied
the formula by looking into all the factors included in it, i.e., nature, actual use and income, comparable sales and
market value, assessment made by government assessors, to arrive at the proper land value.
Indeed, the valuation of respondent’s property at ₱83.04 per square meter is founded on evidence. Records show
the following "raw land value" as determined by Zamboanga City Appraisal Committee based on actual sale:
1 Land # 1: Location - Patalon

Appraisal - ₱152.52 / sqm.
Date - May 2003
Area - 16,391 sqm.
2 Land # 2 Location - Sinubung
Appraisal - ₱200.00 / sqm.
Date - October 2000
Area - 23,825 sqm.
The Commissioners’ Report even considered the value of the land located at Sinubung, Zamboanga City an
adjacent area from Pantalon [sic], Zamboanga City which LBP appraised at ₱250.00 and ₱150.00 per square meter
for land situated along the road and for interior lands, respectively. From the existing data on raw value of land, the
Commissioners’ Report makes the comparative adjustments, as follows:
Adjustment Factor
L1 L2 L3
Size -10.00 -10.00 -10.00
Location 0.00 -3.00 -3.00
Depth/Frontage -10.00 -10.00 -10.00
Time (+ or – 5% per yr 0.00 -15.00 0.00
Algebraic Sum -20.00 -38.00 -23.00

MarketData 152.50 200.00 250.00
Adjustment -30.50 -76 -57.5
Adjusted Value 122.00 124.00 192.50
This leads to the conclusion that the average value of the land at the time of the investigation of the commissioners
was ₱146.00 per square meter. The commissioners correctly point out, that the value of real property appreciates
through the years, and not otherwise, though the percentage of increase depends upon the developments in the
locality. Under normal conditions, however, banking institutions consider as acceptable a 5% appreciation in value
per annum. It matters to note that the commissioners were unanimous on the methodology of arriving at raw land
value at the time of the taking. Thus, the SAC’s application of the bank practice in determination of the raw land
value of land at the time of the taking of the land in 1993 was reasonable and proper.
Applying the bank practice of fixingannual appreciation of land at 5%, the raw value of the land has been correctly
computed at ₱83.04 per square meter. From this valuation, the total value of the Three Million Five Hundred Sixty-
Eight Thousand Two Hundred Fifty-Seven square meters (or 356.8257 hectares) of respondent’s land is Two
Hundred Ninety-Six Million Three Hundred Eight Thousand Sixty-One and 28/100 Pesos (₱296,308,061.28).
Hence, we find in order the modification of the SAC Resolution dated 15 August 2005 pertaining to the total
amountof just compensation as well as the award of compounded legal interest, attorney’s fees, and commissioner’s
fees.
On the matter of compounded legal interest, the SAC ordered the DAR and LBP to jointly and severally pay
compounded legal interest on just compensation. We cannot allow that.
The charging of compounded [interest] has been held as proper as long as its payment has been agreed upon by
the parties. There is not even a hint of such agreement. We, however, allow legal interest in the nature of damages
for the delay in payment which in effect makes the obligation on the part of the government one of forbearance.
Indeed, legal interest is the measure of damages arising from delay (mora solvendi) under the Civil Code.
The Supreme Court consistently heldthat just compensation has been defined as "the full and fair equivalent of the
property taken from its owner by the expropriator,"55 and that the gauge for computation is not the taker’s gain but
the owner’s loss. In order for the payment to be "just", it must be real, substantial, full, and ample.The concept of just
compensation embraces not only the correct determination of the amount tobe paid to the owner of the land, but
also the payment of the land within a "reasonable time" from the taking of the property.
Without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is madeto
suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more
before actually receiving the amount necessary to cope with his or her loss.
In this case, the DAR literally took respondent’s land without her knowledge and participation, and without paying
her just compensation. Worse, from the time of the taking of respondent’s land in 1993 up to the present, LBP has
not yet remunerated respondent although DAR has already distributed the lands to the farmer beneficiaries for more
than seventeen (17) years ago [sic]. It is but just and equitable that the unreasonable delay in the payment of just
compensation should warrant the award of 12% interest per annum in respondent’s favor.
On the matter of attorney’s fees, the SAC ordered the DAR and LBP to jointly and severally pay attorney’s fees in
the amount equivalent to 15% of the just compensation and compounded legal interest.
We cannot sustain such an award of attorney’s fees. The general rule is that attorney’s fees cannot be recovered
aspart of damages because of the policy that no premium should be placed on the right to litigate. In all cases, it
must be reasonable, just and equitable if the same isto be granted. It is necessary for the court to make findings of
fact and law tojustify the grant of such award. The matter of attorney’s fees must be clearly explained and justified
by the trial court in the body of its decision. In this case,the SAC failed to substantiate its award of attorney’s fees
which amounts to fifteen percent (15%) of the just compensation and legal interest.
However, we deem it proper to fix the award of attorney’s fees at ₱300,000.00. It is good to note that although the
main case was merely for determination of just compensation with damages, involving as it did modest legal issues,
that complaint had in reality generated several incidents during the close to seventeen (17) years that this case was
under litigation. Once, the DAR elevated the case to this Court seeking relief from the denial of their motion to
dismiss. Then, after the SAC had constituted the Board of Commissioners, respondent had to wriggle her way
through in presenting and defending her claim for just compensation and damages. And now, respondent has to
contend with the separate petitions for review filed by DAR and LBP. It is even sad to note that the original
respondent had already passed to the great beyond without seeing the dawn of her toils and efforts, all because of
the prolonged determination of her just compensation. In fine, taking into account the overall factual environment
upon which this casehas proceeded, we find the award of ₱300,000.00 sufficient and reasonable.56
LBP filed a Motion for Reconsideration,57 arguing that the CA erred in fixing just compensation without taking into
consideration the formula prescribed in DAR Administrative Order No. 6, Series of 1992 (AO 6), as amended by
Administrative Order No. 11, Series of 1994 (AO 11);58 that the CA erred in finding the bank liable for interest and
attorney’s fees; that Galle’s complaint for just compensation has prescribed; and that in filing Civil Case No. 4436-
2K3, Galle is guilty of forum-shopping.
On January 19, 2011, the CA issued the second assailed Resolution denying LBP’s motion for reconsideration.
Thus, the present Petition in G.R. No. 195213.
As stated earlier, on September 23, 2004, the CA issued the herein assailed Decision and February 22, 2006
Resolution respectively dismissing the DAR’s Petition in CA-G.R. SP No. 80678 and denying its motion for
reconsideration thereof, declaring that the Petition was defective as it failed tostate the date of receipt of the SAC’s
assailed June 20, 2003 Order, and that the SAC’s Orders may not be elevated to the higher courts until the hearing
in Civil Case No. 4436-2K3 is terminated and the case decided on the merits, as required under Section 59 of the
CARL.
In a June 1, 2011 Resolution of thisCourt, G.R. No. 195213 was ordered consolidated with G.R. No. 171836.
Issues
In DAR’s Petition in G.R. No. 171836
1. THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE PETITION FOR
CERTIORARIAND PROHIBITION BASED ON MERE TECHNICALITY,RATHER THAN DECIDE THE CASE ON
THE MERITS;
2. THE HONORABLE COURT OFAPPEALS ERRED WHEN IT RULED THAT PETITIONER VIOLATED SECTION
59 OF REPUBLIC ACT NO. 6657 WHEN IT FILED INSTANT (PETITION IN CA-G.R. SP No. 80678);59
In LBP’s Petition in G.R. No. 195213
1. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE COMPLAINT FOR JUST COMPENSATION
FILED BY THE RESPONDENT BEFORE THE SPECIAL AGRARIAN COURT HAS ALREADY PRESCRIBED.
2. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT IS GUILTY OF FORUM-
SHOPPING WHEN SHE FILED THE COMPLAINT BEFORE THE SPECIAL AGRARIAN COURT.
3. GRANTING ARGUENDO THAT A JUST COMPENSATION HAS TO BE DETERMINED, THE COURT OF

APPEALS COMMITTED A SERIOUS ERROR OF LAW IN AFFIRMING WITH MODIFICATION THE RESOLUTION
DATEDAUGUST 30, 2005 AND ORDER DATED DECEMBER 2, 2005 OF THE SPECIAL AGRARIANCOURT
(SAC) AND FIXED THE JUST COMPENSATIONAT ₱296,308,061.68 FOR THE 356.8257 HECTARES OF
COCONUT LANDS, THE SAME BEING NOT IN ACCORDANCE WITH THE LEGALLY PRESCRIBED VALUATION
FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR
ADMINISTRATIVE ORDER NO. 06, SERIES OF 1992, AS AMENDED BY DAR AO NO. 11, SERIES OF 1994,
AND AS RULED BY THE SUPREME COURT INTHE CASES OF SPS. BANAL, G.R. NO. 143276 (JULY 20, 2004);
CELADA, G.R.NO. 164876 (JANUARY 23, 2006); AND LUZ LIM, G.R. NO. 171941 (AUGUST 2, 2007) AND
OTHER JURISPRUDENCE ON THE MATTER.
4. THE COURT OF APPEALS ALSO ERRED IN HOLDING PETITIONER LBP LIABLE FOR:
(C) 12% SIMPLE INTEREST RATE PER ANNUMBASED ON THE TOTAL AMOUNT OF JUST COMPENSATION;
AND
(D) THE AMOUNT OF THREE HUNDRED THOUSAND (₱300,000.00) AS ATTORNEY’S FEES AND LEGAL
INTEREST.
Accordingly, Petitioner LBP raises these questions of law:
1. HAS THE PERIOD TO FILE A COMPLAINT FOR JUST COMPENSATION PRESCRIBED?
2. IS THE RESPONDENT GUILTY OF FORUM-SHOPPING?
3. CAN THE COURT OF APPEALS DISREGARD THE VALUATION FACTORS UNDER SECTION 17 OF R.A.
6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 06, SERIES OF 1992,
AS AMENDED, AND ASHELD IN THE CASES OF SPS. BANAL; CELADA; AND LUZ LIM, SUPRA., IN FIXING
THE JUST COMPENSATION OF THE SUBJECT PROPERTY OF THE RESPONDENT?
4. IS PETITIONER LBP LIABLE FOR INTEREST AND ATTORNEY’S FEES?60
In G.R. No. 171836. The DAR argues in its Petition and Reply61 that its failure to state in its Petition in CA-G.R. SP
No. 80678 the dates of its receipt of the SAC’s assailed June 20, 2003 and September 12, 2003 Orders – on July
11, 2003 and September 29, 2003, respectively – was a simpleand honest oversight, an inadvertence that may be
cured since itdid not adversely affect the substantial rights of the respondents therein. It contends that the outright
dismissal of its Petition on the basis of technical rules is too strict and rigid, considering that an issue of jurisdiction
is raised therein, specifically that since the October 15, 1996 DARAB Decision fixing just compensation in DARAB
Case No. JC-RIXZAMBO-0011-CO has become final and executory, the SAC did not have jurisdiction to act on
Galle’s petition for determination anew ofjust compensation in Civil Case No. 4436-2K3. It adds that the CA’s
application ofSection 59 of the CARL is misplaced, since what is being raised in CA-G.R. SP No. 80678 is the
SAC’s jurisdiction to take cognizance of Civil Case No. 4436-2K3, which must first be resolved if only to free the
parties from the rigors and expense of unnecessary trial. It thus prays that the assailed CA dispositions be reversed,
and that Civil Case No. 4436-2K3 be dismissed.
LBP likewise filed a Reply,62 echoing the DAR’s contention that Galle’s option for the judicial determination of just
compensation for her estate has long prescribed due to her failure to file a case within the 15-day period prescribed
by Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure; that her filing of Civil Case No. 4574 could not
have tolled the 15-day period; that her subsequent filing of Civil Case No. 4436-2K3 was improper and constituted
forum- shopping, and violated the principle of res judicataas regards the final and executory October 15, 1996
DARAB Decision inDARAB Case No. JC-RIX-ZAMBO-0011-CO; that the SAC failed to observethe proper formula in
fixing just compensation, as required under DAR AO6, as amended by AO 11; that it was erroneous for the CA to
apply the pronouncement in Apo Fruits Corporation v. Court of Appeals63 in awarding just compensation toGalle
without the benefit of applying the formula in DAR AO 6, since the ruling in said case is merely pro hac vice; that the
applicable cases would be Land Bank of the Philippines v. Spouses Banal,64 Land Bank of the Philippines v.
Gallego, Jr.,65 Land Bank of the Philippines v. Lim;66 Land Bank of the Philippines v. Suntay;67 Land Bank of the
Philippines v. Heirs of Eleuterio Cruz;68 Land Bank of the Philippines v. Dumlao;69 Allied Banking Corporation v. Land
Bank of the Philippines;70 and Land Bank of the Philippines v. Colarina,71 which mandate the application of the DAR
AO 6 formula.
In her Comment,72 which was later supplemented by a consolidated Comment,73 Galle insists that the October 15,
1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did not become final and executory as there
is still a pending and unresolved motion for reconsideration filed by LBP, which thus did not foreclose her right to
institute Civil Case No. 4436-2K3; that she is not guilty of forum-shopping in filing Civil Case No. 4574 precisely
since said case was erroneosly filed with a court which was not the designatedSAC having jurisdiction over her
complaint for the fixing of just compensation; that the CA is correct in its pronouncements; and that contrary to what
isclaimed in the Petition, her substantial rights are materially affected considering that her property had been
expropriated and awarded to a non-existent organization without payment of just compensation. Thus, she prays for
the affirmance of the questioned CA pronouncements.
In G.R. No. 195213. In its Petition, LBP advances essentially the same arguments laid down in the above Reply it
submitted in G.R. No. 171836. It additionally claims that Galle’s right to have the just compensation for her estate
determined by the SAC was foreclosed by her failure to institute the proper court action within the prescribed period
under Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure, and for this reason, the SAC in Civil Case No.
4436-2K3 had no jurisdiction to take cognizance of Galle’s complaint; that the failure of the DARAB in Case No. JC-
RIX-ZAMBO-0011-CO to resolve LBP’s pending motion for reconsideration of its October 15, 1996 Decision cannot
validate Galle’s late filing of Civil Case No. 4436-2K3, and instead indicates that the filing of said case was
premature; that LBP’s pending motion for reconsideration affected only LBP, and notGalle, against whom the
October 15, 1996 Decision should have become final and executory; that the filing of Civil Case No. 4436-2K3
following the nullification of the proceedings in Civil Case No. 4574 constituted forum-shopping; that the SAC and
CA failed to observe the proper formula in fixing just compensation, as provided underDAR AO 6, as amended by
AO 11 and applicable jurisprudence; that in fixing just compensation for the estate at the unconscionable amount of
₱83.04 per square meter (or over ₱830,000.00 per hectare), no hearing was conducted and the SAC merely relied
on the commissioners’ report; that in view of the enormous difference in the valuations of the two
commissioners(Manalo’s at ₱340,040,054.00 and Calapardo’s at ₱20,645,445.00) and the principle thatthe
determination of just compensation is ultimatelya function of the courts, the SAC should not have relied blindly on
Manalo’s findings and should have conducted its own evaluation of the evidence and computation; that the manner
of computing just compensation in agrarian reform cases differs from that in ordinary expropriation cases, in that the
taking of land for agrarian reform purposes involves the exercise of police power and thus necessarily entails loss
on the part of the landowner; and that the CA erred in awarding 12% interest per annum, attorney’s fees and legal
interest.
LBP thus prays for the nullification and setting aside of the assailed CA pronouncements on the ground of
prescription and forum-shopping. It included an alternative prayer for the Court to fix just compensation at
₱7,534,063.91 for the acquired area of 356.2257 hectares or the remand of the case to the SAC for further
proceedings to correctlydetermine just compensation.
In their consolidated Comment,74 the respondents in G.R. No. 195213 reiterate their view that the October 15, 1996
DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did not becomefinal and executory as there is still
a pending and unresolved motion for reconsideration filed by LBP, which thus did not foreclose Galle’s right to
instituteCivil Case No. 4436-2K3; that Galle is not guilty of forum- shopping in filing Civil Case No. 4574 precisely
since said case was erroneosly filed with a court which was not the designatedSAC having jurisdiction over her
complaint for the fixing of just compensation; that the CA did not err in its pronouncements; and that contrary to what
is claimed in the Petition, her substantial rights are materially affected considering that her property had been
expropriated and awarded to a non-existent organization without payment of just compensation.
Notably, respondents bewail that their mother’s estate was taken, yet there is no agrarian reform beneficiary.
Theyclaim that the beneficiary of record – PEARA – is a phantom association that is not even registered with the
Securities and Exchange Commission or the Cooperative Development Authority, as testified by representatives of
the said agencies in Civil Case No. 4574.
Respondents thus pray for the Court to affirm the assailed CA dispositions.
Our Ruling
The Court denies the Petition in G.R.No. 171836 and partially grants the Petition in G.R. No. 195213.
The existence of PEARA
In National Federation of Labor v. National Labor Relations Commission,75 the existence of PEARA as a legitimate
cooperative accredited by the DAR and beneficiary of Galle’s estate – which was then known as the Patalon
Coconut Estate – was recognized. There thusappears to exist no issue at this point regarding the authenticity and
existence of the organization.
The October 15, 1996 DARAB Decision is null and void
An examination of the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO will reveal thatin
arriving at its conclusions, the DARAB relied mainly on the claim folder profile prepared by LBP, thus:
A perusal of the claimfolder profileprepared by the Land Bank of the Philippines showed that the subject lanholdings
has [sic] the following land use:
xxxx
In its determination of the land value, LandBank has used the valuation factors on Capitalized Net Income (CNI) and
Market Value per Tax Declaration (MV/TD) multiplied by ninety percent (90%) and ten percent (10%) respectively. In
using such valuation factors, it has come up with a total land value of SEVEN MILLION FIVEHUNDRED
THIRTYFOUR THOUSAND SIXTY THREE PESOS (₱7,534,063.91) [sic] broken as follows:
xxxx
The Board agrees with the data inputs adopted in determining the capitalized net income (CNI) of coffee, corn as
well as the market value per tax declaration for each landholding including the crop improvements x x x.
It is the Board’s view to adopt all the data used by the LandBank in the revaluation except for the coconut land the
average gross production of which is 912 kilograms per hectare for both landholdings x x x.76
However, in Manalo’sCommissioners’ Report in Civil Case No. 4436-2K3, it is particularly noted that LBP’s
computations were based on field investigations which were conducted in 1991 – or more than two and a half years
(2-1/2) prior to the taking of the property in 1993, and it useddata obtaining in 1991 and 1983 tax
declarations,77which are clearly outdated and could not form the basis for an accurate and fair computation of just
compensation for Galle’s estate, given the fundamental principle ineminent domain that "the owner shall receive the
market value of his property at the time of the taking."78 These findings were not denied nor refuted by LBP in its
Manifestations/Comments79 to the Commissioners’ Report and Calapardo’s Dissenting Opinion; on the contrary, it
appears to have agreed to Calapardo’s computation of just compensation at ₱20,645,445.00.80
Indeed, in its August 15, 2005 Resolution, the SAC observed that –
10. LBP did not present any documentsto show how it arrived at the value of ₱7,534,063.91. Neither did it explain in
any pleading how this amount was determined. It did not show the basis for whatever factors it used nor the
authorities or sources of its data and information. Furthermore, it did not dispute plaintiff’s assertion that no actual
field inspection of the property was conducted as it claimed it did in 1991.81
In its Motion for Reconsideration82 of the above Resolution, LBP even admitted that from the start, it utilized 1988 tax
declarations for Galle’s estate in arriving at its computation of just compensation at ₱7,534,063.92;83 it simply
assumedthat in 1993 – the time of taking– the same values in the 1988 tax declarations still applied.
In a past pronouncement this Court finds relevant, it was held that – In this particular case, the tax declarations
presented by the petitioner as basis for just compensation were made by the Lapu-Lapu municipal, later city
assessor long before martial law, when land was not only much cheaper but when assessed values of properties
were stated in figures constituting only a fraction of their true market value. The private respondent was not even the
owner of the properties at the time. Itpurchased the lots for development purposes. To peg the value of the lots on
the basis of documentswhich are out of date and at prices below the acquisition cost of present owners would be
arbitrary and confiscatory.84
For the above reasons, the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO is patently
defective and erroneous for being based on wrong and outdated information, and thus null and void.
No prescription or forum-shopping withrespect to Civil Case No. 4436-2K3
With the above pronouncement, it becomes clear that Galle was not precluded from instituting Civil Case No. 4436-
2K3. Being null and void, it is as if the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO
was never issued. Thus, Galle was never constrained by the application of Rule XIII, Section 11 of the 1994 DARAB
Rules of Procedure requiring the filing of a case directly withthe SAC within 15 days from notice of the DARAB’s
Decision fixing just compensation.
It likewise follows that there is no forum-shopping involved. Even if we were to consider Civil Case No. 4574, still no
forum-shopping was committed; the trial court in said case did not have jurisdiction over cases for the fixing of just
compensation, and any remedy obtained by Galle in said court relative to the fixing of just compensation for her
estate is of no value, being susceptible as it is to nullification.
The SAC’s August 15, 2005 Resolution and the assailed CA Decision
As already discussed, the determination of just compensation is a judicial function. Moreover, both Section 17 of RA
6657 and the formula prescribed in the applicable AO of the DAR must be considered in the computation.
Reading the August 15, 2005 Resolution inits entirety, it readily appears that the SAC did not apply the formula in
the applicable Administrative Circulars of the DAR (AOs 6 and 11) in arriving at its own independent valuation of
Galle’s estate. It relied upon Manalo’s Commissioners’ Report, which likewise did not apply the formula in AOs 6
and 11,85 although it took into consideration some of the factors laid down in Section 17 of RA 6657.86
The CA is guilty of the same mistake.Nowhere in the appellate court’s decision can it be seen that the formula
prescribed by AOs 6 and 11 were taken into account; all that were considered were the factors enumerated in
Section 17 of RA 6657, which thus makes its pronouncement incomplete.
Thus, while this Court acknowledges that Galle’s estate was expropriated to the extent of 356.8257 hectaresas the
CA has found, the computation ofthe exact amount of just compensation remains an issue that must be resolved,
taking into consideration bothSection 17 of RA 6657 and AOs 6 and 11. In anearlier case decided by this ponente, it
was held that "the evidence to be presented by the parties before the trial court for the valuation of the property x x x
must conform to Section 17 of RA 6657 and, as far as practicable, DAR Administrative Order No. 6, series of 1992,
as amended by DAR Administrative Order No. 11, series of 1994."87 This was followed by a recent pronouncement
to the same effect, thus:
In the recent case of Land Bank of the Philippines v. Honeycomb Farms Corporation, we again affirmed the need to
apply Section 17 of R.A. No. 6657 and DAR AO 5-98 in just compensation cases. There, we considered the CA and
the RTC in grave error when they opted to come up with their own basis for valuation and completely disregarded
the DAR formula. The need to apply the parameters required by the law cannot bedoubted; the DAR’s
administrative issuances, on the other hand, partake of the nature of statutes and have in their favor a presumption
of legality. Unless administrative orders are declared invalid or unless the cases before them involve situations
these administrative issuances do not cover, the courts must apply them.
In other words, in the exercise ofthe Court’s essentially judicial function of determining just compensation, the RTC-
SACs are not granted unlimited discretion and must consider and apply the R.A. No. 6657-enumerated factors and
the DAR formula that reflectthese factors. These factors and formula provide the uniform framework or structure for
the computation of the just compensation for a property subject to agrarian reform. This uniform system will ensure
that they do not arbitrarily fix an amount that is absurd, baseless and even contradictory to the objectives of our
agrarian reform laws as just compensation. This system will likewise ensure that the just compensation fixed
represents, at the very least, a close approximation of the full and real value of the property taken that is fair and
equitable for both the farmer-beneficiaries and the landowner.
xxxx
After considering these factors and formula, we are convinced that the RTC-SAC completely disregarded them and
simply relied on Branch 36’s valuation. For one, the RTC-SAC did not point to any specific evidence or cite the
values and amounts it used in arriving at the ₱200.00 per square meter valuation. It did not even consider the
property’s market value based on the current tax declaration that Yatco insists the RTC-SAC considered in addition
to Branch 36’s valuation. Assuming that the RTC-SAC considered the property’s market value (which, again, we find
that it did not), this alone will not suffice as basis, unless justified under Item II.A.3 of DAR AO 5-98 (as provided
above). Then too, it did not indicate the formula thatit used in arriving at its valuation or which led it to believe that
Branch 36’s valuation was applicableto this case. x x x88 (Emphasis and underscoring supplied)
The SAC and the CA may have been of the opinion that reliance on either of the two – Section 17 of RA 6657 or
AOs 6 and 11– would suffice.
Remand for the proper computation of just compensation
Taking the foregoing into consideration, there is thus a need to remand the case in order to properly compute the
just compensation that Galle and her heirs are entitled to, including interest and attorney’s fees, ifany. This Court is
not the proper forum for that, asit is not a trier of facts, and it cannot receive evidence to fix the correct amount of
just compensation. For thispurpose, the CA may be commissioned to receive and evaluate the evidence of the
parties; this becomes especially relevant where the property was taken from its owners way back and the case for
just compensation has been pending for decades, not to mention that the original owner – Susie Galle – did not live
to receive what is due her, even as she fought this protracted court battle. Considering, however, that the land was
1âwphi 1
acquired in 1989 and the only surviving petitioner is now an octogenarian and is in need of urgent medical attention,
we find these special circumstances justifying in the acceleration of the final disposition of this case. This Court
deems it best pro hac viceto commission the CA as its agent to receiveand evaluate the evidence of the parties. The
CA’s mandate is to ascertain the just compensation due in accordance with this Decision, applying Section 17 of RA
6557 and applicable DAR regulations. As explained in Land Bank of the Philippines v. Gallego, Jr., the remand of
cases before this Court to the CA for the reception of further evidence is not a novel procedure. It is sanctioned by
Section 6, Rule 46 of the Rules of Court. In fact, the Court availed of this procedure in quite a few cases.89
Withdrawal of proceeds, pending determination of correct just compensation
In light of the foregoing considerations, it is but just and proper to allow, with becoming dispatch, withdrawal of the
revised compensation amount, albeit protested. The concept of just compensation contemplates of just and timely
payment; it embraces not only the correct determination of the amount to be paid to the landowner, but also the
payment ofthe land within a reasonable time from its taking. Without prompt payment, compensation cannot, as
Land Bank of the Philippines v. Court of Appeals instructs, be considered "just," for the owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for years before actually receiving
the amount necessary to cope with his loss.90
Using the foregoing pronouncement as precedent, this Court opts to grant, in the interest of justice, Galle’s heirs the
right to withdraw the amount of ₱7,534,063.91, which LBP iswilling to compensate the respondents for their
mother’s estate, in the meantime that the case is pending determination anew in the CA.
With the view taken of the case, there is no need to resolve the other issues raised by the parties. Particularly, the
procedural issues raised in G.R. No. 171836 merit no further discussion since the very soul of the Petition therein -
allegations of prescription and forum-shopping - has been struck down in this disquisition.
1. The Petition in G.R. No. 171836 is DENIED. The assailed September 23, 2004 Decision and February 22, 2006
Resolution of the Court of Appeals in CA-G.R. SP No. 80678 are AFFIRMED; 2. The Petition in G.R. No. 195213 is
GRANTED IN PART. The assailed July 27, 2010 Consolidated Decision and January 19, 2011 Resolution of the
Court of Appeals in CA-G.R. SP No. 00761-MIN and CA-G.R. SP No. 00778-MIN are REVERSED and SET ASIDE.
3. Civil Case No. 4436-2K3 is REMANDED to the Court of Appeals, which is directed to receive evidence and
immediately determine the just compensation due to Susie Irene Galle's estate/heirs - including all applicable
damages, attorney's fees and costs, if any - in accordance with this Decision, taking into consideration Section 17 of
Republic Act No. 6657, the applicable Department of Agrarian Reform Administrative Orders, including
Administrative Order No. 6, Series of 1992, as amended by Administrative Order No. 11, Series of 1994, and
prevailing jurisprudence. The Court of Appeals is further directed to conclude the proceedings and submit to this
Court a report on its findings and recommendations within 90 days from notice of this Decision; and
4. The petitioner Land Bank of the Philippines is ORDERED to PAY Susie Irene Galle's estate or heirs - herein
respondents - the amount of SEVEN MILLION FIVE HUNDRED THIRTY FOUR THOUSAND SIXTY THREE AND
91/100 PESOS (₱7,534,063.91), in cash, immediately upon receipt of this Decision.
SO ORDERED.
SECOND DIVISION
G.R. No. 191015 August 6, 2014
PEOPLE OF THE PHILIPPINES Petitioner,

vs.
JOSE C. GO, AIDA C. DELA ROSA, and FELECITAS D. NECOMEDES,** Respondents.
DECISION
DEL CASTILLO, J.:
The power of courts to grant demurrer in criminal cases should be exercised with great caution, because not only
the rights of the accused - but those of the offended party and the public interest as well - are involved. Once
granted, the accused is acquitted and the offended party may be left with no recourse. Thus, in the resolution of
demurrers, judges must act with utmost circumspection and must engage in intelligent deliberation and reflection,
drawing on their experience, the law and jurisprudence, and delicately evaluating the evidence on hand.
This Petition for Review on Certiorari1 seeks to set aside the September 30, 2009 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 101823, entitled "People of the Philippines, Petitioner, versus Hon. Concepcion Alarcon-
Vergara et al., Respondents," as well as its January 22, 2010 Resolution3 denying reconsideration of the assailed
judgment.
Factual Antecedents
The following facts appear from the account of the CA:
On October 14, 1998, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) issued Resolution No. 1427
ordering the closure of the Orient Commercial Banking Corporation (OCBC) and placing such bank under the
receivership of the Philippine Deposit Insurance Corporation (PDIC). PDIC, as the statutory receiver of OCBC,
effectively took charge of OCBC’s assets and liabilities in accordance withits mandate under Section 30 of Republic
Act 7653.
xxxx
While all the aforementioned events were transpiring, PDIC began collecting on OCBC’s past due loans receivable
by sending demand letters to its borrowers for the immediate settlement oftheir outstanding loans. Allegedly among
these borrowers of OCBC are Timmy’s, Inc. and Asia Textile Mills, Inc. which appeared to have obtained a loanof
[P]10 Million each. A representative of Timmy’s, Inc. denied being granted any loan by OCBC and insisted that the
signatures on the loan documents were falsified. A representative of Asia Textile Mills, Inc. denied having applied,
much less being granted, a loan by OCBC.
The PDIC conducted an investigation and allegedly came out with a finding that the loans purportedly in the names
of Timmy’s, Inc. and Asia Textile Mills, Inc. were released in the form of manager’schecks in the name of Philippine
Recycler’s and Zeta International, Inc. These manager’s checks were then allegedly deposited to the savings
account of the private respondent Jose C. Go with OCBC and, thereafter, were automatically transferred to his
current account in order to fund personal checks issued by him earlier.
On September 24, 1999, PDIC filed a complaint4 for two (2) counts of Estafa thru Falsification of
CommercialDocuments in the Office of the City Prosecutor of the City of Manila against the private respondents in
relation to the purported loans of Timmy’s, Inc.and Asia Textile Mills, Inc. On November 22, 2000, after finding
probable cause, the Office of the City Prosecutor of the City of Manila filed Informations5 against the private
respondents which were docketed as Criminal Case Nos. 00-187318 and 00-187319 in the RTC in Manila.
Upon being subjected to arraignment by the RTC in Manila, the private respondents pleaded not guilty to the
criminal cases filed against them. A pretrial was conducted. Thereafter, trial of the cases ensued and the
prosecution presented its evidence. After the presentation of all of the prosecution’s evidence, the private
respondents filed a Motion for Leave to File Demurrer to Evidence and a Motion for Voluntary Inhibition. The
presiding judge granted the private respondents’ Motion for Voluntary Inhibition and ordered the case to be re-raffled
to another branch. The case was subsequently re-raffled to the branch of the respondent RTC judge.6
In an Order dated December 19, 2006, the respondent RTC judge granted the private respondents’ Motion for
Leave to File Demurrer to Evidence. On January 17, 2007, the private respondents filed their Demurrer to
Evidence7praying for the dismissal of the criminal cases instituted against them due to the failure of the prosecution
to establish their guilt beyond reasonable doubt.
On July 2, 2007, an Order8 was promulgated by the respondent RTC judge finding the private respondents’
Demurrer to Evidence to be meritorious, dismissing the Criminal Case Nos. 00-187318 and 00-187319 and
acquitting all of the accused in these cases. On July20, 2007, the private prosecutor in Criminal Case Nos. 00-
187318 and 00-187319 moved for a reconsideration of the July 2, 2007 Order but the same was denied by the
respondent RTC judge in an Order9 dated October 19, 2007.10
Surprisingly, and considering thathundreds of millions of Orient Commercial Banking Corporation (OCBC)
depositors’ money appear to have been lost – which must have contributed to the bank’s being placed under
receivership, no motion for reconsideration of the July 2, 2007 Order granting respondents’ demurrer to evidence
was filed by the handling public prosecutor, Manila Prosecutor Marlo B. Campanilla (Campanilla). Only complainant
Philippine Deposit Insurance Corporation (PDIC) filed a Motion for Reconsideration, and the same lacked
Campanilla’s approval and/or conformé; the copy of the Motion for Reconsideration filed with the RTC11 does not
bear Campanilla’s approval/conformé; instead,it indicates thathe was merely furnished with a copy of the motion by
registered mail.12 Thus, while the prosecution’s copy of PDIC’sMotion for Reconsideration13 bore Campanilla’s
subsequent approval and conformity, that which was actually filed by PDIC with the RTC on July 30, 2007 did not
contain the public prosecutor’s written approval and/or conformity.
On January 4, 2008, the prosecution, through the Office of the Solicitor General (OSG), filed anoriginal Petition for
Certiorari14 with the CA assailing the July 2, 2007 Order of the trial court. Itclaimed that the Order was issued with
grave abuse of discretion amounting to lackor excess of jurisdiction; that it was issued with partiality; that the
prosecution was deprived of its day in court; and that the trial court disregarded the evidence presented, which
undoubtedly showed that respondents committed the crime of estafa through falsification ofcommercial documents.
On September 30, 2009, the CA issued the assailed Decision with the following decretal portion: WHEREFORE, in
view of the foregoing premises, the petition filed in this case is hereby DENIED and the assailed Orders of the
respondent RTC judge are AFFIRMED and deemed final and executory.
SO ORDERED.15
Notably, in dismissing the Petition, the appellate court held that the assailed July 2, 2007 Order of the trial court
became final since the prosecution failed to move for the reconsideration thereof, and thus double jeopardy
attached. The CA declared thus –
More important than the fact that double jeopardy already attaches is the fact that the July 2, 2007 Order of the trial
court has already attained finality. This Order was received by the Office of the City Prosecutor of Manila on July 3,
2007 and by the Private Prosecutor on July 5, 2007. While the Private Prosecutor filed a Motion for Reconsideration
of the said Order, the Public Prosecutor did not seek for the reconsideration thereof. It is the Public Prosecutor who
has the authority to file a Motion for Reconsideration of the said order and the Solicitor General who can file a
petition for certiorari with respect to the criminal aspect of the cases. The failure of the Public Prosecutor to file a
Motion for Reconsideration on or before July 18, 2007 and the failure of the Solicitor General to file a Petition for
Certiorarion or before September 1, 2007 made the order of the trial court final.
As pointed out by the respondents, the Supreme Court ruled categorically on this matter in the case of Mobilia
Products, Inc. vs. Umezawa (452 SCRA 736), as follows:
"In a criminal case in which the offended party is the State, the interest of the private complainant or the offended
party is limited to the civil liabilityarising therefrom. Hence, if a criminal case is dismissed by the trial court or if there
is an acquittal, a reconsideration of the order of dismissal or acquittal may be undertaken, whenever legally feasible,
insofar as the criminal aspect thereof is concerned and may be made only by the public prosecutor; or in the case of
an appeal, by the State only, through the OSG. The private complainant or offended party may not undertake such
motion for reconsideration or appeal on the criminal aspect ofthe case. However, the offended party or private
complainant may file a motion for reconsideration of such dismissal or acquittal or appeal therefrom but only insofar
as the civil aspect thereof is concerned. In so doing, the private complainant or offended party need not secure the
conformity of the public prosecutor. If the court denies his motion for reconsideration, the private complainant or
offended party may appeal or file a petition for certiorarior mandamus, if grave abuse amounting to excess or lack of
jurisdiction is shown and the aggrieved party has no right of appeal or given an adequate remedy in the ordinary
course of law."16
In addition, the CA ruled that the prosecution failed to demonstrate that the trial court committed grave abuse of
discretion in granting the demurrer, or that it was denied its day in court; that on the contrary, the prosecution was
afforded every opportunity to present its evidence, yet it failed to prove that respondents committed the crime
charged.
The CA further held that the prosecution failed to present a witness who could testify, based on personal knowledge,
that the loan documents were falsified by the respondents; that the prosecution should not have relied on "letters
and unverified ledgers," and it "should have trailed the money from the beginning to the end;"17 that while the
documentary evidenceshowed that the signatures in the loan documents were falsified, it has not been shown who
falsified them. It added that since only two of the alleged 13 manager’s checks were being questioned, there arose
reasonable doubt as to whether estafa was committed, as to these two checks; instead, there is an "inescapable
possibility that an honest mistake was made in the preparation of the two questioned manager’s checks since these
checks were made out to the names of different payees and not in the names of the alleged applicants of the
loans."18 The appellate court added –
x x x Finally, the petitioner failed to present evidence on where the money went after they were deposited to the
checking account of the private respondent Jose C. Go. There is only a vague reference that the money was used
to fund the personal checks earlier issued by x x x Go. The petitioner should have gone further and identified who
were the recipients of these personal checks and if these personal checks were negotiated and honored. With all
the resources of the public prosecutor’s office, the petitioner should have done a better job of prosecuting the cases
filed against the private respondents. It isa shame that all the efforts of the government will go for naught due to the
negligence of the public prosecutors in tying up the chain of evidence in a criminal case.19
As a final point, the CA held that if errors were made inthe appreciation of evidence, these are mere errors of
judgment – and not errors of jurisdiction – which may no longer be reviewed lest respondents be placed in double
jeopardy.
The OSG moved for reconsideration, but in the assailed January 22, 2010 Resolution, the CA stood its ground.
Hence, the instant Petition was instituted.
Issues
In the Petition, it is alleged that –
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT –
(a) NO GRAVE ABUSE OF DISCRETION WAS COMMITTED BY RESPONDENT RTC JUDGE IN GRANTING THE
DEMURRER TO EVIDENCE;
(b) THE ORDER OF ACQUITTAL HAS ALREADY ATTAINED FINALITY WHEN IT WAS NOT CHALLENGED IN A
TIMELY AND APPROPRIATE MANNER; AND
(c) THE LOWER COURT MERELY COMMITTED ERRORS OF JUDGMENT AND NOT OF JURISDICTION. 20
Petitioner argues that the public prosecutor actually filed a Motion for Reconsideration of the assailed July 2,2007
Order of the trial court granting respondents’ demurrer – that is, by "joining"the private prosecutor PDIC in the
latter’s July 20, 2007 Motion for Reconsideration. Nonetheless,it admitted that while it joined PDIC in the latter’s July
20, 2007 Motion for Reconsideration, it had only until July 18, 2007 within which to seek reconsideration since it
received the order on July 3, 2007, while the private prosecutor received a copy of the Order only on July 5, 2007; it
pleads thatthe two-day delay in filing the motion should not prejudice the interests of the State and the People.
Petitioner assumes further that, since it was belated in its filing of the required Motion for Reconsideration, it may
have been tardy as well in the filing of the Petition for Certiorariwith the CA, or CA-G.R. SP No. 101823. Still, it begs
the Court to excuse its mistake in the nameof public interest and substantial justice, and in order to maintain stability
in the banking industry given that the case involved embezzlement of large sums ofdepositors’ money in OCBC.
Petitioner goes on to argue that the CAerred in affirming the trial court’s finding that demurrer was proper. It claims
that it was able to prove the offense charged, and it has shown that respondents were responsible therefor.
In its Reply,21 petitioner claims thatthe July 2, 2007 Order of the trial court granting respondents’ demurrer was null
and void to begin with, and thus it could not have attained finality. It adds thatcontrary to respondents’ submission,
the private prosecutor’s Motion for Reconsideration contained the public prosecutor’s written conformity, and that
while it may be saidthat the public prosecutor’s motion was two days late, still the trial court took cognizance thereof
and passed upon its merits; by so doing, the trial court thus validatedthe public prosecutor’s action of adopting the
private prosecutor’sMotion for Reconsideration as his own. This being the case, it should therefore besaid that the
prosecution’s resultant Petition for Certiorariwith the CA on January 4, 2008 was timely filed within the required 60-
day period, counted from November 5, 2007,or the date the public prosecutor received the trial court’s October 19,
2007 Order denying the Motion for Reconsideration.
Petitioner submits further that a Petition for Certiorariwas the only available remedy against the assailed Orders of
the trial court, since the granting of a demurrer in criminal cases is tantamount to an acquittal and is thus
immediately final and executory. It adds that the denial of its right to due process is apparent since the trial court’s
grant of respondents’ demurrer was purely capricious and done with evident partiality, despite the prosecution
having adduced proof beyond reasonable doubt that they committed estafa through falsification of commercial
documents. Petitioner thus prays that the assailed CA dispositions be reversed and that Criminal Case Nos. 00-
187318 and 00-187319 be reinstated for further proceedings.
Praying that the Petition be denied, respondents Jose C. Go (Go), Aida C. Dela Rosa (Dela Rosa), and Felecitas D.
Necomedes (Nicomedes) – the accused in Criminal Case Nos. 00-187318 and 00-187319 – argue in their
Comment22 that the trial court’s grant of their demurrer to evidence amounts to an acquittal; any subsequent
prosecution for the same offense would thus violate their constitutional right against double jeopardy. They add
thatsince the public prosecutor failed to timely move for the reconsideration of the trial court’s July 2, 2007 Order, it
could not have validly filed an original Petition for Certiorariwith the CA. Nor can it be said that the prosecution and
the private prosecutor jointly filed the latter’s July 20, 2007 Motion for Reconsideration with the trial court because
the public prosecutor’s copy of PDIC’smotion was merely sent through registered mail. Therefore if it were true that
the public prosecutor gave his approval or conformity to the motion, he did so only afterreceiving his copy of the
motion through the mail, and not at the time the private prosecutor actually filed its Motion for Reconsideration with
the trial court.
Next, respondents submit that petitioner was not deprived of its day in court; the grant of their demurrer to evidence
is based on a fair and judicious determination of the facts and evidence bythe trial court, leading it to conclude that
the prosecution failed to meet the quantum of proof required to sustain a finding of guilt on the part of respondents.
They argue thatthere is no evidence to show that OCBC released loan proceeds to the alleged borrowers, Timmy’s,
Inc. and Asia Textile Mills, Inc., and that these loan proceeds were then deposited in the account of respondent Go.
Since no loans were granted to the two borrowers, then there is nothing for Go to misappropriate. With respect to
the two manager’s checks issued to Philippine Recycler’s Inc. and Zeta International, respondents contend that
these may not beconsidered to be the loan proceeds pertaining to Timmy’s, Inc. and Asia Textile Mills, Inc.’s loan
application because these checks were not in the name of the alleged borrowers Timmy’s, Inc.and Asia Textile Mills,
Inc. as payees. Besides, these two checks were never negotiated with OCBC, either for encashmentor deposit,
since they did not bear the respective indorsements or signatures and account numbers of the payees; thus, they
could not be considered to havebeen negotiated nor deposited with Go’s account with OCBC.
Next, respondents argue that the cash deposit slip used to deposit the alleged loan proceeds in Go’s OCBC account
is questionable, since under banking procedure, a cash deposit slip may not be used to deposit checks. Moreover, it
has not been shown who prepared the said cash deposit slip. Respondents further question the validity and
authenticity of the other documentary evidence presented, such as the Subsidiary Ledger, Cash Proof,23 Schedule of
Returned Checks and Other Cash Items (RTCOCI), etc.
Finally, respondents claim that not all the elementsof the crime of estafa under Article 315, par. 1(b) of the Revised
Penal Code have been established; specifically, it has not been shown that Goreceived the alleged loan proceeds,
and that a demand was made upon him for the return thereof.
Our Ruling
Criminal Case Nos. 00-187318 and 00-187319 for estafa through falsification of commercial documents against the
respondents are based on the theory that in 1997, fictitious loans in favor of two entities – Timmy’s, Inc. and Asia
Textile Mills, Inc. – were approved, after which two manager’s checks representing the supposed proceeds of these
fictitious loans were issued but made payable to two different entities – Philippine Recycler’sInc. and
ZetaInternational – without any documents issued by the supposed borrowers Timmy’s, Inc. and Asia Textile Mills,
Inc. assigning the supposedloan proceeds tothe two payees. Thereafter, these two manager’s checks – together
with several others totaling ₱120,819,475.0024 – were encashed, and then deposited in the OCBC Savings Account
No. 00810-00108-0 of Go. Then, several automatic transfer deposits were made from Go’s savings account to his
OCBC Current Account No. 008-00-000015-0 which were then used to fund Go’s previously dishonored personal
checks.
The testimonial and documentary evidenceof the prosecution indicate that OCBC, a commercial bank, was ordered
closed by the BSP sometime in October 1998. PDIC was designated as OCBC receiver, and it took over the bank’s
affairs, assets and liabilities, records, and collected the bank’s receivables.
During efforts to collect OCBC’s pastdue loan receivables, PDIC as receiver sent demand letters to the bank’s
debtor-borrowers on record, including Timmy’s, Inc. and Asia Textile Mills, Inc. which appeared to have obtained
unsecured loans of ₱10 million each, and which apparently remained unpaid. In response to the demand letters,
Timmy’s, Inc. and Asia Textile Mills, Inc. denied having obtained loans from OCBC. Timmy’s, Inc., through its
designated representative, claimed that while it is true that it applied for an OCBC loan, it no longer pursued the
application after it was granted a loan by another bank. When the OCBC loan documents were presented to
Timmy’s, Inc.’s officers, it was discovered that the signatures therein of the corporate officers were forgeries. In their
defense and to clarify matters, Timmy’s, Inc.’s corporate officers executed affidavits and furnished official
documents such as their passports and the corporation’s Articles of Incorporation containing their
respectivesignatures to show PDIC that their purported signatures in the OCBC loan documents were forgeries.
After its investigation into the matter, PDIC came to the conclusion that the signatures on the Timmy’s, Inc. loan
documents were indeed falsified.25
On the other hand, in a written reply26 to PDIC’s demand letter, Asia Textile Mills, Inc. vehemently denied thatit
applied for a loan with OCBC. On this basis, PDIC concluded that the AsiaTextile Mills, Inc.loan was likewise bogus.
Moreover, PDIC discovered other bogus loans in OCBC.
Through the falsified loan documents, the OCBC Loan Committee – composed of Go, who was likewise
OCBCPresident, respondent Dela Rosa (OCBC Senior Vice President, or SVP, and Chief Operating Officer, or
COO), Arnulfo Aurellano and Richard Hsu – approved a ₱10 million unsecured loan purportedly in favor of Timmy’s,
Inc. After deducting finance charges, advance interest and taxes, DelaRosa certified a net loan proceeds amounting
to ₱9,985,075.00 covered by Manager’s Check No. 000000334727 dated February 5, 1997.28 The face of the check
bears the notation "Loan proceeds of CL-484," the alpha numeric code ("CL-484")of which refers to the purported
loan of Timmy’s, Inc.29 However, the payee thereof was not the purported borrower, Timmy’s, Inc., but a certain
"Zeta International". Likewise, on even date, Manager’s Check No. 000000334030 for ₱9,985,075.00 was issued, and
on its face is indicated "Loan proceeds of CL-477", which alpha numeric code ("CL-477") refers to the purported
loan of AsiaTextile Mills, Inc.31 Manager’s Check No. 0000003340 was made payable not to Asia Textile Mills, Inc.,
but to "Phil. Recyclers Inc."
On the same day that the subject manager’s checks were issued, or on February 5, 1997, it appears that the two
checks – together with other manager’s checks totaling ₱120,819,475.00– were encashed; on the face ofthe
checks, the word "PAID" was stamped, and at the dorsal portion thereof there were machine validations showing
thatManager’s Check No. 0000003347 was presented at 6:16 p.m., while Manager’s Check No. 0000003340 was
presented at 6:18 p.m.32
After presentment and encashment, the amount of ₱120,819,475.00 – which among others included the
₱9,985,075.00 proceeds of the purported Timmy’s, Inc. loan and the ₱9,985,075.00 proceeds of the supposed Asia
Textile Mills, Inc. loan – was deposited in Go’s OCBC Savings Account No. 00810-00108-0 at OCBC Recto Branch,
apparently on instructions of respondent Dela Rosa.33 The deposit is covered by OCBC Cash Deposit Slip34 dated
February 5, 1997, with the corresponding machine validation thereon indicating that the deposit was made at 6:19
p.m.35 The funds were credited to Go’s savings account.36
It appears that previously, or on February 4, 1997, seven OCBC checks issued by Go from his personal OCBC
Current Account No. 008-00-000015-0 totaling ₱145,488,274.48 were dishonored for insufficiency of funds.37 After
Manager’s Check Nos. 0000003340 and 0000003347, along with several other manager’s checks, were encashed
and the proceeds thereof deposited in Go’s OCBC Savings Account No. 00810-00108-0 withautomatic
transferfeature to his OCBC Current Account No. 008-00-000015-0, funds were automatically transferred from the
said savings account to the current account, which atthe time contained only a total amountof ₱26,332,303.69.
Go’sOCBC Current Account No. 008-00-000015-0 was credited with ₱120,819,475.00, and thereafter the account
registered a balance of ₱147,151,778.69. The seven previously dishonored personal checks were thenpresented for
clearing, and were subsequently cleared that sameday, or on February 5, 1997.38 Apparently, they were partly
funded by the ₱120,819,475.00manager’s check deposits – which include Manager’s Check Nos. 0000003340 and
0000003347.
During the examination and inquiry into OCBC’s operations, oron January 28, 1998, Go issued and sent a letter39 to
the BSP, through Maria Dolores Yuviengco, Director of the Departmentof Commercial Banks, specifically requesting
that the BSP refrain from sending any communication to Timmy’s, Inc. and Asia Textile Mills, Inc., among others. He
manifested that he was "willing to assume the viability and full payment"of the accounts under investigation and
examination, including the Timmy’s, Inc. and AsiaTextile Mills, Inc. accounts.
Demurrer to the evidence40 is "an objection by one of the parties in an action, to the effect that the evidence which
his adversary produced is insufficient in point of law, whether true or not, to make out a case or sustain the issue.
The party demurring challenges the sufficiencyof the whole evidence to sustain a verdict. The court, in passing upon
the sufficiency of the evidence raised in a demurrer, is merely required to ascertain whether there is competent or
sufficient evidence to sustain the indictment or to support a verdict of guilt. x x x Sufficient evidence for purposes of
frustrating a demurrer thereto is such evidence in character, weight or amount as will legally justify the judicial or
official action demanded according to the circumstances. To be considered sufficient therefore, the evidence must
prove: (a) the commission of the crime, and (b) the precise degree of participation therein by the accused."41 Thus,
when the accused files a demurrer, the court must evaluate whether the prosecution evidence is sufficient enough to
warrant the conviction of the accused beyond reasonable doubt.42
"The grant or denial of a demurrer to evidence is left to the sound discretion of the trial court, and its ruling on the
matter shall not be disturbed in the absence of a grave abuse of such discretion."43 As to effect, "the grant of a
demurrer to evidence amounts to an acquittal and cannot be appealed because it would place the accused in
double jeopardy. The order is reviewable only by certiorariif it was issued with grave abuse of discretion amounting
tolack or excess of jurisdiction."44 When grave abuse of discretion is present, an order granting a demurrer becomes
null and void.
As a general rule, an order granting the accused’s demurrer to evidence amounts to an acquittal. There are certain
exceptions, however, as when the grant thereof would not violate the constitutional proscription on double jeopardy.
For instance, this Court ruled that when there is a finding that there was grave abuse of discretion on the part of the
trial court in dismissing a criminal case by granting the accused’s demurrer to evidence,its judgment is considered
void, as this Court ruled in People v. Laguio, Jr.:
By this time, it is settled that the appellate court may review dismissal orders of trial courts granting an accused’s
demurrer to evidence. This may be done via the special civil action of certiorariunder Rule 65 based on the ground
of grave abuse of discretion, amounting to lack or excess of jurisdiction. Such dismissal order, being considered
void judgment, does not result in jeopardy. Thus, when the order of dismissal is annulled or set aside by an
appellate court in an original special civil action via certiorari, the right of the accused against double jeopardy is not
violated.
In the instant case, having affirmed the CA finding grave abuse of discretion on the part of the trial court when it
granted the accused’s demurrer to evidence, we deem its consequent order of acquittal void.45
Grave abuse of discretion is defined as "that capricious or whimsical exercise of judgment which is tantamount to
lack of jurisdiction. ‘The abuse of discretion must be patent and gross as to amount to an evasion of a positive duty
or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by reason of passion and hostility.’ The party questioning the acquittal
of an accused should be able toclearly establish that the trial court blatantly abused its discretion such that it was
deprived of its authority to dispense justice."46
In the exercise of the Court’s "superintending control over inferior courts, we are to be guided by all the
circumstances of each particular case ‘as the ends of justice may require.’ So it is that the writ will be granted where
necessary to prevent a substantial wrong or to do substantial justice."47
Guided by the foregoing pronouncements, the Court declaresthat the CA grossly erred in affirming the trial court’s
July 2, 2007 Order granting the respondent’s demurrer, which Order was patently null and void for having been
issued with grave abuse of discretion and manifest irregularity, thus causing substantial injury to the banking
industry and public interest. The Court finds that the prosecution has presented competent evidence to sustain the
1avv phi 1
indictment for the crime of estafa through falsification of commercial documents, and that respondents appear to be
the perpetrators thereof. In evaluating the evidence, the trial court effectively failed and/or refused to weigh the
prosecution’s evidence against the respondents, which it was duty-bound to do as a trier of facts; considering that
the case involved hundreds of millions of pesos of OCBC depositors’ money – not to mention that the banking
industry is impressed with public interest, the trial court should have conducted itself with circumspection and
engaged in intelligent reflection in resolving the issues.
The elements of estafa through abuse ofconfidence under Article 315, par. 1(b) of the Revised Penal Code48 are:
"(a) that money,goods or other personal property is received by the offender in trust oron commission, or for
administration, or under any other obligation involving the duty to make delivery of or to return the same; (b) that
there be misappropriation orconversion of such money or property by the offender, or denial on his part of such
receipt; (c) that such misappropriation or conversion or denial is to the prejudice of another; and (d) there is demand
by the offended party to the offender."49
Obviously, a bank takes its depositors’ money as a loan, under an obligation to return the same; thus, the term
"demand deposit."
The contract between the bank and its depositor is governed by the provisions of the Civil Code on simpleloan.
Article 1980 of the Civil Code expressly provides that "x x x savingsx x x deposits of money in banks and similar
institutions shall be governed by the provisions concerning simple loan." There is a debtor-creditor relationship
between the bank and its depositor. The bank is the debtor and the depositor is the creditor. The depositor lends the
bank money and the bank agrees to pay the depositor on demand. x x x50
Moreover, the banking laws impose high standards on banks in view of the fiduciary nature of banking."This
fiduciary relationship means that the bank’s obligation to observe ‘high standards ofintegrity and performance’ is
deemed written into every deposit agreement between a bank and its depositor. The fiduciary nature of banking
requires banks to assume a degree of diligence higher than that of a good father of a family."51
In Soriano v. People,52 it was held that the President of a bank is a fiduciary with respect to the bank’s funds, and he
holds the same in trust or for administration for the bank’s benefit. From this, it may beinferred that when such bank
president makes it appear through falsification that an individual or entity applied for a loan when in fact such
individual or entity did not, and the bank president obtains the loan proceeds and converts the same, estafa is
committed.
Next, regarding misappropriation, the evidence tends to extablish that Manager’s Check Nos.0000003340 and
0000003347 were encashed, using the bank’s funds which clearly belonged to OCBC’s depositors, and then
deposited in Go’s OCBC Savings Account No. 00810-00108-0 at OCBC Recto Branch – although he was not the
named payee therein. Next, the money was automatically transferred to Go’s OCBC Current Account No. 008-00-
000015-0 and used to fund his seven previously-issued personal checks totaling ₱145,488,274.48, which checks
were dishonored the day before. Simply put, the evidence strongly indicates that Go converted OCBC funds to his
own personal use and benefit. "The words ‘convert’ and ‘misappropriate’ connote an act of using or disposing of
another’s property as if it were one’s own, or of devoting it to a purpose or use different from that agreed upon. To
misappropriate for one’s own use includes not only conversion to one’s personal advantage, but also every attempt
to dispose of the property of another without right. x x x In proving the element of conversion or misappropriation, a
legal presumption of misappropriation arises when the accused fails to deliver the proceeds of the sale or to return
the items to be sold and fails to give an account of their whereabouts.Thus, the merepresumption of
misappropriation or conversion is enough to conclude thata probable cause exists for the indictment x x x."53
As to the third element of estafa, there is no question that as a consequence of the misappropriation of OCBC’s
funds, the bank and its depositors have been prejudiced; the bank has been placed under receivership, and the
depositors’ money is no longer under their unimpeded disposal.
Finally, on the matter of demand, while it has not been shown that the bank demanded the return of the funds, it has
nevertheless been held that "[d]emand is not an element of the felony or a condition precedent tothe filing of a
criminal complaint for estafa. Indeed, the accusedmay be convicted ofthe felony under Article 315, paragraph 1(b) of
the Revised Penal Code if the prosecution proved misappropriation or conversion by the accused of the money or
property subject of the Information. In a prosecution for estafa, demand is not necessary where there is evidence of
misappropriation or conversion."54 Thus, strictly speaking, demand is not an element of the offense of estafa through
abuse of confidence; even a verbal query satisfies the requirement.55 Indeed, in several past rulings of the Court,
demand was not even included as anelement of the crime of estafa through abuse of confidence, orunder paragraph
1(b).56
On the other hand, the elements of the crime of falsification of commercial document under Art. 17257 are: "(1) that
the offender is a private individual; (2) that the offender committed any of the acts of falsification; and (3) that the act
of falsification is committed ina commercial document."58 As to estafa through falsification of public, official or
commercial documents, it has been held that –
The falsification of a public, official, or commercial document may be a means of committing Estafa, because before
the falsified document is actually utilized to defraud another, the crime of Falsification has already been
consummated, damage or intent to cause damage not being an element of the crime of falsification of public, official
or commercial document. In other words, the crime of falsification has already existed. Actually utilizing that falsified
public, official or commercial document todefraud another is estafa. But the damage is caused by the commission of
Estafa, not by the falsification of the document. Therefore, the falsification of the public, official or commercial
document is only a necessary means to commit the estafa.59
Simulating OCBC loan documents – such as loan applications, credit approval memorandums, and the resultant
promissory notes and other credit documents – by causing it to appear that persons have participated in any act or
proceeding when they did not in fact so participate, and by counterfeiting or imitating their handwriting or signatures
constitute falsification of commercial and public documents.
As to the respondents’ respective participation in the commission of the crime, suffice it to state that as the
beneficiary of the proceeds, Go is presumed to be the author of the falsification. The fact that previously, his
personal checks totaling ₱145,488,274.48 were dishonored, and the day after, the amount of ₱120,819,475.00 was
immediately credited to his account, which included funds from the encashment of Manager’s Check Nos.
0000003340 and 0000003347 or the loan proceeds of the supposed Timmy’s, Inc. and Asia Textile Mills, Inc.
accounts, bolsters this view. "[W]henever someone has in his possession falsified documents [which he used to] his
advantage and benefit, the presumption that he authored it arises."60
x x x This is especially true if the use or uttering of the forged documents was so closely connected in time with the
forgery that the user or possessor may be proven to have the capacity of committing the forgery, or to have close
connection with the forgers, and therefore, had complicity in the forgery.
In the absence of a satisfactory explanation, one who is found in possession of a forged document and who used or
uttered it is presumed to be the forger.
Certainly, the channeling of the subjectpayments via false remittances to his savings account, his subsequent
withdrawals of said amount as well as his unexplained flight at the height of the bank’s inquiry into the matter more
than sufficiently establish x x x involvement in the falsification.61
Likewise, Dela Rosa’s involvement inthe scheme has been satisfactorily shown. As OCBC SVP and COO and
member of the OCBC Loan Committee, she approved the purported Timmy’s, Inc.loan, and she certified and signed
the February 2, 1997 OCBC Disclosure Statement and other documents.62 She likewise gave specific instructions to
deposit the proceeds of Manager’s Check Nos. 0000003340 and 0000003347, among others, in Go’s OCBC
Savings Account No. 00810-00108-0 at OCBC Recto Branch.63 Finally, she was a signatory to the two checks.64
On the other hand, respondent Nicomedes as OCBC Senior Manager for Corporate Accounts – Account
Management Group, among others prepared the Credit Approval Memorandum and recommended the approval of
the loans.65
In granting the demurrer, the trial court – in its assailed July 2, 2007 Order – concluded that based on the evidence
adduced, the respondents could not have falsified the loan documents pertaining toTimmy’s, Inc. and Asia Textile
Mills, Inc. since the individuals who assert that their handwriting and signatures were forged were not presented
incourt to testify on such claim; that the prosecution witnesses – Honorio E. Franco, Jr. (Franco) of PDIC, the
designated Assisting Deputy Liquidator of OCBC, and Virginia Rowella Famirin (Famirin), Cashier of OCBC Recto
Branch – were not present when the loan documents were executed and signed, and thus have no personal
knowledge of the circumstances surrounding the alleged falsification; and as high-ranking officers of OCBC,
respondents could not be expected to have prepared the saiddocuments. The evidence, however, suggests
otherwise; it shows that respondents had a direct hand in the falsification and creation of fictitious loans. The loan
documents were even signed by them. By disregarding what is evident in the record, the trial court committed
substantial wrong that frustrates the ends of justice and adversely affects the public interest. The trial court’s act was
so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by
law.
An act of a court or tribunal may only be considered as committed in grave abuse of discretion when the same was
performed in a capricious or whimsical exercise of judgment which is equivalent to lack of jurisdiction. The abuse of
discretion must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a
duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion and personal hostility. x x x66
On the charge of estafa, the trial court declared that since the payees of Manager’s Check Nos. 0000003340 and
0000003347 were not Asia Textile Mills, Inc. and Timmy’s, Inc., respectively, but other entities– Phil. Recyclers Inc.
and Zeta International, and there are no documents drawn by the borrowers assigning the loan proceeds to these
two entities, then it cannot besaid that there were loan proceeds released to these borrowers. The trial court added
that it is doubtful that the two manager’s checks were presented and negotiated for deposit in Go’s savings account,
since theydo not contain the required indorsements of the borrowers, the signatures of the tellers and
individuals/payees who received the checks and the proceeds thereof, and the respective account numbers of the
respondents; and the checks were presented beyond banking hours. The trial court likewise held that the fact that a
cash deposit slip – and not a check deposit slip – was used to allegedly deposit the checks raised doubts as to the
truth of the allegation that the manager’s checks were deposited and credited to Go’s savings account.
The CA echoed the trial court’s observations, adding that the evidence consisted of mere "letters and
unverifiedledgers" which were thus insufficient; that there was an "inescapable possibility that an honest mistake
was made" in the preparation and issuance of Manager’s CheckNos. 0000003340 and 0000003347, since these
two checks are claimed to be just a few of several checks – numbering thirteen in all – the rest of which werenever
questioned by the receiver PDIC. The appellate court added that the prosecution should have presented further
evidence as to where the money went after being deposited inGo’s savings and current accounts, identifying thus
the recipients of Go’spersonal checks.
What the trial and appellate courts disregarded, however, is that the OCBC funds ended up in the personal bank
accountsof respondent Go, and were used to fund his personal checks, even as he was not entitled thereto. These,
if not rebutted, are indicative ofestafa, as may be seen from the afore-cited Sorianocase.
The bank money (amounting to ₱8million) which came to the possession of petitioner was money held in trust or
administration by him for the bank, in his fiduciary capacity as the President of said bank. It is not accurate to say
that petitioner became the owner of the ₱8 million because it was the proceeds of a loan. That would have been
correct if the bank knowingly extended the loan to petitioner himself. But that is not the case here. According to the
information for estafa, the loan was supposed to be for another person, a certain "Enrico Carlos"; petitioner, through
falsification, made it appear that said "Enrico Carlos" applied for the loan when infact he ("Enrico Carlos") did not.
Through such fraudulent device, petitioner obtained the loan proceeds and converted the same. Under these
circumstances, it cannot be said that petitioner became the legal owner of the ₱8 million. Thus, petitioner remained
the bank’s fiduciary with respect to that money, which makes it capable of misappropriation or conversion in his
hands.67
Thus, it is irrelevant that the proceeds of the supposed loans were made payable to entities other than the alleged
borrowers. Besides, the manager’s checks themselves indicate that they were the proceeds of the purported
1âwphi1
Timmy’s, Inc.’s and Asia Textile Mills, Inc.’s loans, through the alpha numeric codes specifically assigned to them
that are printed on the face of the checks; the connection between the checks and the purported loans is thus
established. In the same vein, the CA’s supposition that there is an "inescapable possibility that an honest mistake
was made inthe preparation of the two questioned manager’s checks" is absurd; even so, the bottom line is that
they were encashed using bank funds, and the proceeds thereof were deposited in Go’s bank savings and current
accounts and used to fund his personal checks.
Furthermore, as correctly pointed outby petitioner, it issuperfluous to require that the recipients of Go’s personal
checks be identified. For purposes of proving the crime, it has been shown that Goconverted bank funds to his own
personal use when they were deposited in his accounts and his personal checks were cleared and the funds were
debited from his account. This suffices. Likewise, the Court agrees that the prosecution’s reliance on the supposed
1âw phi 1
loan documents, subsidiary ledgers, deposit slip, cash proof, RTCOCI and other documents was proper. They are
both public and private documents which may be received in evidence; notably, petitioner’s documentary evidence
was admitted in full by the trial court.68 With respect to evidence consisting of private documents, the presumption
remains that "therecording of private transactions has been fair and regular, and that the ordinary course of
business has been followed."69
Go’s January 28, 1998 letter to the BSP stating that he was "willing to assume the viabilityand full payment" of the
accounts under examination – which included the Timmy’s, Inc. and Asia Textile Mills, Inc. accounts, among others
– is an offer of compromise, and thus an implied admission of guilt under Rule 130, Section 27 of the Revised Rules
on Evidence.70
In addition, appellant’s act of pleading for his sister-in-law’s forgiveness may be considered as analogous to an
attempt to compromise, which in turn can be received as an implied admission ofguilt under Section 27, Rule 130 x
x x.71
As a result of the Court’s declaration of nullity of the assailed Orders of the trial court, any dissection of the truly
questionable actions of Prosecutor Campanilla – which should merit appropriate disciplinary action for they reveal a
patent ignorance of procedure, if not indolence or a deliberate intention to bungle his own case – becomes
unnecessary. It is conceded that the lack of Campanilla’s approval and/or conforméto PDIC’s Motion for
Reconsideration should have rendered the trial court’s assailed Ordersfinal and executory were it not for the fact
that they were inherently null and void; Campanilla’s irresponsible actions almost cost the People its day in court
and their right to exact justice and retribution, not to mention that they could have caused immeasurable damage to
the banking industry. Just the same, "[a] void judgment or order has no legal and binding effect, force or efficacy for
any purpose. In contemplation of law, it is non-existent. Such judgment or order may be resisted in any action or
proceeding whenever it is involved. It is not even necessary to take any steps to vacate or avoid a void judgment or
final order; it may simply be ignored."72 More appropriately, the following must be cited:
x x x Clearly, the assailed Order of Judge Santiago was issued in grave abuse of discretion amounting to lack of
jurisdiction. A void order is no order at all. It cannot confer any right or be the source of any relief. This Court is not
merely a court of law; it is likewise a court of justice.
To rule otherwise would leave the private respondent without any recourse to rectify the public injustice brought
about by the trial court's Order, leaving her with only the standing to file administrative charges for ignorance of the
law against the judge and the prosecutor. A party cannot be left without recourse to address a substantive issue in
law.73
Finally, it must be borne in mind that "[t]he granting of a demurrer to evidence should x x x be exercised with
caution, taking into consideration not only the rights of the accused, but also the right of the private offended party to
be vindicated of the wrongdoing done against him, for if it is granted, the accused is acquitted and the private
complainant is generally left with no more remedy. In such instances, although the decision of the court may be
wrong, the accused can invoke his right against double jeopardy. Thus, judges are reminded to be more diligent and
circumspect in the performance of their duties as members of the Bench xx x."74
WHEREFORE, the Petition is GRANTED. The September 30, 2009 Decision and January 22, 2010 Resolution of
the Court of Appeals are REVERSED and SET ASIDE. The July 2, 2007 and October 19, 2007 Orders of the
Regional Trial Court of Manila, Branch 49 in Criminal Case Nos. 00-187318 and 00-187319 are declared null and
void, and the said cases are ordered REINSTATED for the continuation of proceedings.
SO ORDERED.
SECOND DIVISION
G.R. No. 196219 July 30, 2014
SPOUSES MAURICIO M. TABINO and LEONILA DELA CRUZ-TABINO, Petitioners,

vs.
LAZARO M. TABINO, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the August 25, 2010 Decision2 of the Court of Appeals in
CA-G.R. SP No. 107957, entitled "Lazaro M Tabina, Petitioner, versus Spouses Mauricio Tabina and Leonila dela
Cruz-Tabina, Respondents," as well as its March 18, 2011 Resolution3 denying reconsideration of the assailed
judgment.
Factual Antecedents
Proclamation No. 5184 (Proc. 518) e)(cluded from the operation of Proc. 4235 – which established the military
reservation known as Fort Bonifacio situated in the then municipalities of Pasig, Taguig, Pateros and Parañaque,
Province of Rizal and Pasay City – certain portions in said reservation known and identified as BarangaysCembo,
South Cembo, West Rembo, East Rembo, Comembo, Pembo, and Pitogo, situated in Makati, and declared the
sameopen for disposition in accordance with Republic Act (RA) No. 274,6 and RA 7307 in relation to the provisions of
Commonwealth Act No. 141.8
Among others, Proc. 518 allowed a maximum area of 300 square meters for disposition to any bona
fideoccupants/residents of said BarangaysCembo, South Cembo, West Rembo, East Rembo, Comembo, Pembo,
and Pitogo who have resided in or occupied such areas on or before January 7, 1986.
In 1985, petitioner Mauricio M. Tabino (Mauricio) – a technical sergeant in the military – and his brother, respondent
Lazaro M. Tabino – a colonel in the military – occupied a 353-square meter lot in Pembo, Makati City. Mauricio
established residence within the lot, while respondent continued to reside in Novaliches, Quezon City.9 The lot was
later subdivided into two portions, denominated as Lots 2 and 3, Block 255, Zone 12, Group 10, Sampaguita
Extension, Pembo, Makati City.
Lot 2 – containing an area of 184 squaremeters – was applied for coverage under Proc. 518 by Mauricio, while Lot 3
– containing an area of 169 square meters – was applied for by respondent. Respondent was later on issued by the
Fort Bonifacio Post Commander a Revocable Permit10 to occupy his lot, but the permit authorized him to occupy an
area of only 150 square meters.
In 1988, Lot 3 was awarded to respondent, and a Certificate11 to such effect was issued by the Bureau of Lands
(now Land Management Bureau).
On May 11, 2004, respondent filed an ejectment case against Mauricio and the latter’s wife, Leonila dela Cruz
(petitioners) with the Metropolitan Trial Court of Makati (MeTC). Docketedas Civil Case No. 85043 and assigned to
Branch 64, the ejectment case is based on the theory that respondent is the true and sole owner of the 353-square
meter lot; that he used Mauricio only for the purpose of circumventing the 300-square meter limit set by Proc. 518 by
asking the latter to apply for the purchase of a portion of the lot after subdividing the same into two smaller lots; that
Mauricio’s stay in the premises is merelyby tolerance of respondent; that petitioners introduced permanent
structures on the land; and that petitioners refused to vacate the premises upon respondent’s formal demand.
Respondent thus prayed that petitioners be ordered to vacate Lots2 and 3 and to pay the former rentals, attorney’s
fees, and costs of suit.12
Petitioners counteredin their Answer13 that respondent had no right to eject them; that the parties’ trueagreement
was that petitioners would act as caretakers of respondent’s Lot 3, and for this, respondent would pay petitioners a
monthly salary of ₱800.00; that respondent failed to honor the agreement; and that relative to Lot 2, there was a
pending Protest filed with the Regional Executive Director of the Department of Environment and Natural Resources
(DENR)National Capital Region.
Protests in the Department of Environment and Natural Resources
It appears that petitioners and respondent both filed Protests with the DENR relative to Lots 2 and 3. In a June 13,
2006 Decision, respondent’s Protest – docketed as Case No. 2004-821 and entitled "Lazaro M. Tabino, Protestant,
versus Mauricio Tabino and Leonila C. Tabino, Protestees" – was resolved as follows:
WHEREFORE, premises considered, the instant Protest should be as it is hereby "DENIED" for lack ofmerit. The
MiscellaneousSales Application filed by Mauricio Tabino over Lot 2, Block 255, Zone 12, Group 190, Sampaguita
St., Pembo, Makati should now be given due course by this Office. x x x14
The DENR held in Case No. 2004-821 that respondent is not qualified to acquire Lot 2 under Proc. 518 since he
was already awarded a home lot in Fort Bonifacio, specifically Lot 19, Block 22, Fort Bonifacio (AFPOVAI), Taguig.
Moreover, he failed to provethat Mauricio was not a bona fideresident/occupant of Lot 2; on the contrary, it has been
shown that Mauricio, and not respondent, has been in actual possession and occupation of the lot.
In an August 28, 2007 Order,15 the above disposition was reiterated after respondent’s motion for reconsideration
was denied.
On the other hand, petitioners’ Protest,docketed as Case No. 2005-939 and entitled "Leonila Tabino and Adrian
Tabino, Protestants, versus Lazaro Tabino and Rafael Tabino, Respondents", was resolved in an August 28, 2007
Order,16 which decreed thus –
WHEREFORE, premises considered, the Protest lodged before this Office on 21 January 2005 by Leonila Tabino
and Adrian Tabino as against the Application of Lazaro/Rafael Tabino over Lot 3, Blk. 255, Zone 12, Pembo, Makati
City is, as it is hereby "GRANTED". As a consequence, the MSA (Unnumbered) of Rafael H. Tabino is hereby
CANCELLED and DROPPED from the records of the Office. Thus, the Order dated July 16, 2004 re: Cancellation
Order No. 04-032 should be, as it is hereby SET ASIDE. After the finality of this Decision, Claimant-Protestant
Adrian Tabino may now file his land application over the subject lot.
SO ORDERED.17
The ruling in Case No. 2005-939 is similar to the pronouncement in Case No. 2004-821: that respondent was
disqualified from acquiring any more lots within Fort Bonifacio pursuant to Proc. 518, since he was previously
awarded a home lot therein, specifically Lot 19, Block 22, PEMBO,Fort Bonifacio (AFPOVAI), Taguig; that
respondent is not a bona fideresident/occupant of Lot 3, as he and his family actually resided in Novaliches, Quezon
City; and that Mauricio has been in actual possession and occupation of Lot 3 since 1985.
On April 4, 2008, a Decision18 was rendered in Civil Case No. 85043, as follows:
The only issue to be resolved in this action to recover possession of the subject property is the question on who is
entitled to the physical or material possession of the premises. In ejectment cases, the word "possession" means
nothing more than physical possession, not legal possession, in the sense contemplated in civil law.
It is undisputed that the revocable permit extended to the plaintiff was to occupy a parcel of land withan area of 150
square meters. Suffice it to say that beyond the 150 square meterswould be contrary to the permit extended to the
plaintiff to occupy the lot. Plaintiff therefore, would violate the provisions of the revocable permit if he goes beyond
whatwas specified therein or up to 150 square meters. When the land was declared open pursuant to the provisions
of Republic Act No. 274 and Republic Act No. 730 both parties applied in their respective name pursuant to the size
of the land which they are permitted. Since then defendants have been in possession of the subject property up to
the present pursuant to the permit to occupy the subject land. Furthermore, defendants had acquired the property in
their own name, a valid claim to establish possession.
Plaintiff’s contention thatdefendants’ stay on the premises is by mere tolerance is devoid of merit. Well-established
is the rule that findings of administrative agencies are accorded not only respect but also finality when the decision
or order is not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. The order
dated August 28, 2007 by the Department of Environment and Natural Resources affirming its previous decision in
Case No. 2004-821 dated June13, 2006 clearly stating therein that defendants are awardees of Lot 2, Block 255,
Zone 12, Sampaguita Street, Pembo, Makati City, are accorded with respect and finality. Truly, defendants are
rightful possessors of the subject property.
xxxx
WHEREFORE, above premises considered, the complaint as well as defendants’ counterclaim are herebyordered
Dismissed. No costs.
SO ORDERED.19
Respondent appealed before the Makati Regional Trial Court (RTC),20 but in a February 19, 2009 Decision21 the RTC
affirmed the MeTC in toto, thus:
WHEREFORE, premises considered, the decision of the Metropolitan Trial Court Branch 64, Makati City dated April
4, 2008 in Civil Case No. 85043 is hereby AFFIRMED in TOTO.
SO ORDERED.22
The RTC agreed with the MeTC in ruling that respondent is not entitled to possession of the disputed premises on
account of the DENR findings in Case Nos. 2005-939 and 2004-821 that petitioners are registeredclaimants and
bona fideresidents thereof, and have been in open, continuous, exclusive and notorious possession thereof under a
bona fideclaim of ownership,while respondent was permitted to occupy an area of only 150 square meters and not
more; petitioner would be in direct violation of his permit ifhe were to occupy more than the allowed area stated in
said permit.

Respondent filed his Petition for Review23 with the CA, assailing the RTC Decision and insisting that he had a better
right of possession since he was the bona fideoccupant of the disputed lot and Mauricio was merely his caretaker.
He added that in 1994, Mauricio executed an Affidavit24 (1994 affidavit) acknowledging that respondent was the true
owner of Lot 2 and that he was merely allowed by the latter to occupy the same and introduce improvements
thereon; this operated as an admission against interest which may be used against petitioners. Finally, respondent
argued that the decision in the DENR Protest is not yet final and executory on account of his pending appeal; thus,
the courts may not rely on the findings contained therein. On August 25, 2010, the CA issued the assailed Decision,
which held thus:
WHEREFORE, premises considered, the instant petition for review is GRANTED. The assailed decisions ofthe RTC
and the MeTC are hereby REVERSED and SET ASIDE. The ejectment suit filed by the petitioner against the
respondents over Lot Nos. 2 and 3 is GRANTED. Accordingly, the respondents are ordered to vacate the subject
premises.
SO ORDERED.25
In reversing the trial court, the CA held that the 1994 affidavit – which petitioners do not dispute – should be taken
as an admission by Mauricio that he was merely appointed by respondent as the caretaker of Lot 2, and that
respondent is the true possessor and owner thereof. This being the case, petitioners occupy the premises by mere
tolerance of respondent, and are boundto the implied promise that they shall vacate the sameupon demand. The
CAadded that while respondent was authorized to occupy only 150 square meters, this was irrelevant since the only
issue that must be resolvedin an unlawful detainer case is actual physical or material possession, independent of
any claim of ownership; since respondent has satisfactorily shown by preponderant evidence that he was in actual
possession of Lots 2 and 3, he is entitled to recover the same from petitioners.
The CA also held that while respondent’s application for Lot 2 was denied by the DENR in its June 13, 2006
Decision– since he was already an awardee of another lot within Fort Bonifacio, the issue of possession was not
touched upon. For this reason, the DENR Decision has no bearing on the unlawful detainer case. Additionally, the
DENR rulings are still the subject of appeals, and thus could not have conclusive effect.
Petitioners moved for reconsideration, but in a March 18, 2011 Resolution, the CA stood its ground. Hence, the
instant Petition.
Issues
1. CAN THE FINDINGS OF FACTS BY THE DENR IN RESOLVING CONFLICTING CLAIMS AS TO WHO HAS A
BETTER RIGHT OF POSSESSION BETWEEN PETITIONERS AND RESPONDENT OVER SUBJECT PARCELS
OF LOT BE NULLIFIED BY THE COURT UNDER AN EJECTMENT CASE?
2. HAS THE COURT VALIDLY ACQUIRED JURISDICTION TO HEAR AND ADJUDICATE ON REVIEW THE
FINDINGS OF FACTS BY AN ADMINISTRATIVE BODY WITHOUT HAVING ADMINISTRATIVE REMEDIES
FIRST EXHAUSTED?
3. HAS RESPONDENT VIOLATEDTHE RULE AGAINST FORUM- SHOPPING IN FILING EJECTMENT CASE
AGAINST PETITIONERS DURING THE PENDENCY OF THE MISCELLANEOUS SALES APPLICATION CASES
BEFORE THE DENR WHICH ADMINISTRATIVE BODY, IN EXERCISE OF ITS QUASI-JUDICIAL FUNCTION,
HAS FIRST ACQUIRED JURISDICTION OVER THE SAME PARTIES, SAME SUBJECT MATTER AND SAME
ISSUES OF FACT AND LAW?26
In their Petition and Reply,27 petitioners seek a reversal of the assailed CA dispositions and the reinstatement of the
MeTC’s April 4, 2008 Decision, arguing that the ejectment case constituted an attack on the DENR rulings in Case
Nos. 2004-821 and 2005-939 – which disqualified respondent from acquiring Lots 2 and 3 on the ground that he
was already an awardee of a lot within Fort Bonifacio; that Mauricio has been in actual possession and occupation
of Lots 2 and 3 since 1985; and that respondent is not a bona fideresident/occupant of Lot 2 or 3 – which is not
allowed, as it encroached on the administrative authority of the DENR. They argue that respondent should not have
resorted to the ejectment case; instead, he should have exhausted all administrativeremedies made available to him
through the DENR. Petitioners add that respondent is guilty of forum-shopping in filing the ejectment case without
awaiting resolution of the pending DENR Protests, which necessarily touched upon the issue of possession.
Respondent argues in his Comment28 that petitioners are estopped from claiming that the ejectment case
indirectlyattacked the DENR rulings and that it constituted forum-shopping, since these issues were not raised by
petitioners in their pleadings below; thatthe courts are not divested of jurisdiction over the ejectment case, since the
only issue involved therein is possession and not who is entitled to a miscellaneous sales application covering the
disputed lot – which the DENR is tasked to determine; and thatas a consequence of Mauricio’s 1994 affidavit,
petitioners are estopped from questioning respondent’s possession.
Our Ruling
The Court partially grants the Petition.
Respondent is correct in arguing that petitioners may not raise the issues of exhaustion of administrative remedies
and forum-shopping, after having voluntarily submitted themselves to the jurisdiction of the MeTC and the RTC
trying the ejectment case. Besides, these issues are being raised for the first time at this stage of the proceedings.
Moreover, petitioners in the instant Petition pray for the reinstatement of the MeTC Decision;as such, they cannot be
allowed to simultaneously attack and adopt the proceedings or actions taken by the lower courts.
Nonetheless, the Court finds that the appellate court erred in ordering petitioners to vacate the premises. With the
pendency of the DENR Protests – Case Nos. 2004-821 and 2005-939 – respondent’s claim of possession and his
right to recover the premises is seriously placed in issue. If the ejectment case – Civil Case No. 85043 – is allowed
to proceed without awaiting the result of the DENR Protests, then a situation might arise where the existing
structures thereon would have to be demolished. If petitioners’ position, as affirmed by the DENR, is further upheld
with finality by the courts, then it would mean that respondent had no right to occupy or take possession of the
subject lots, which thus negates his right to institute and maintain the ejectment case; and an injustice would have
occurred as a consequence of the demolition of petitioners’ residence and other permanent improvements on the
disputed lots.
Indeed, DENR Case Nos. 2004-821 and 2005-939 have found their way to the CA, and the pronouncementsof the
latter do not exactly favor respondent. Thus, in CA-G.R. SP No. 125056, entitled "Lazaro M. Tabino, Petitioner,
versus Mauricio M. Tabino and Leonila C. Tabino, Respondents," the CA dismissed respondent’s Petition for
Review of the DENR Secretary’s affirmance of the DENR NCR Regional Executive Director’s June 13, 2006
Decision in Case No. 2004-821. In its January 13, 2014 Decision,29 the CA’s 6th Division held as follows:
The DENR Secretary, acting through the OIC, Assistant Secretary for Legal Services, denied the appeal on the
basis that upon findings of the Regional Executive Director, Mauricio has all the qualifications and none of the
disqualifications based on the disposition of Public Lands. The DENR further ruled that upon ocular inspection
made, it was ascertained that 1) per records, Mauricio is a survey claimant of Lot 2, Block 255, Psd-a3-0054204
with an area of 184 sq.m. situated in Pembo, Makati City; 2) that the land is residential in nature, a house stands
erected in said area where Mauricio and his family reside; 3) that a portion of the said area is being utilized as a
carinderiaand a sari-sari store as their family’s business; 4) thatMauricio is occupying the area since 1985 up to the
present; 5) that Lazaro Tabino (petitioner) is actually residing in Quezon City; and, 6) the Yvonne Josephine Tabino,
petitioner Lazaro Tabino and Rafael Tabino are bonafideresidents of Quezon City for noless than twenty years, per
Certification of Barangay Chairman Almario Francisco on 2 September 2004 of Barangay San Agustin, Novaliches,
Quezon City. Further, the DENR held that the above findings were never refuted by the petitioner.
On this point, it is worth stressing that the courts generally accord great respect, if not finality, to factual findings of
administrative agencies because of their special knowledgeand expertise over matters falling under their jurisdiction.
Echoing the explanation of the private respondent DENR, citing the case of Ortua vs. Encarnacion, the findings of
facts of the Director of Land (now the Regional Director) is conclusive in the absence of any showing that such
decision was rendered in consequence of fraud, imposition or mistake, other than error of judgment in estimating the
value or effect ofevidence, regardless of whether or not it is consistent with the preponderance of evidence, so long
as there is some evidence upon which the findings in question could be made.
Moreover, notwithstanding the issue of physical possession having been ruled upon by the Court in CA-G.R. SP No.
107957, it is well to note that in the case of Estrella vs. Robles, it was explained that the Bureau of Lands
determines the respective rights of rival claimants to public lands, but it does not have the wherewithal to police
public lands. Neither does it have the means to prevent disorders or breaches of the peace among the occupants.
Its power is clearly limited to disposition and alienation and any power to decide disputes over possession is but in
aid of making the proper awards.
xxxx
In disposing of the case of Estrella, the Supreme Court held that, "Under the Public Land Act, the Director of Lands
primarily and the DENR Secretary ultimately have the authority to dispose of and manage public lands. And while
the DENR’s jurisdiction over public lands does not negate the authority of courts of justice to resolve questions of
possession, the DENR’s decision would prevail with regard to the respective rights of public land claimants. Regular
courts would have no jurisdiction to inquire intothe validity of the award of the public land."
Under the circumstances, the Court finds no reason to disturb the ruling of public respondent DENR in its disposition
of the subject property.
WHEREFORE, the petition is DENIED.
SO ORDERED.
In the second case decided by the CA – CA-G.R. SP No. 126100 entitled "Lazaro M. Tabino and Rafael H. Tabino,
Petitioners, versus Leonila C. Tabino and Adrian C. Tabino, Respondents" relative to the disposition in DENR Case
No. 2005-939, the appellate court’s 9th Division held in a June 28, 2013 Decision30 that –
We agree with the respondents and dismiss the petition for petitioners’ failure to exhaust administrative remedies.
The doctrine of exhaustion of administrative remedies is a cornerstone of Our judicial system. The thrust of the
ruleis that courts must allow administrative agencies to carry out their functions and discharge their responsibilities
within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails
lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel
courts of justice to shy away from a dispute until the system of administrative redress has been completed.
Another important reason for the doctrine of exhaustion is the separation of powers, which enjoins the Judiciary a
becoming policy of non-interference with matters coming primarily (albeit not exclusively) withinthe competence of
the other departments. The theory is that the administrative authorities are in a better position to resolve questions
addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified
by their superiors if given a chance to do so. Strict enforcement of the rule could also relieve the courts of a
considerable number of avoidable cases which otherwise would burden their heavily loaded dockets.
Thus, the party with an administrative remedy must not only commence with the prescribed administrative
procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention to give
the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and
premature resort to the court. The non-observance of the doctrine of exhaustion of administrative remedies results
in lack of cause of action, which is one of the grounds in the Rules of Court justifying the dismissal of the complaint.
Indeed, the doctrine of exhaustion of administrative remedies admits of exceptions, but none of these apply in this
case. Consequently, Lazaro and Rafael should have first appealed to the Office ofthe President, which has the
1âwphi1
power to review the orders or acts of the DENR Secretary, being his subordinate, before coming to Us through a
petition for review. x x x
xxxx
FOR THESE REASONS, WeDISMISS the petition.
SO ORDERED.
In Samonte v. Century Savings Bank,31 this Court made the following pronouncement:
Only in rare instances is suspension allowed to await the outcome of a pending civil action. In Vda. de Legaspi v.
Avendaño, and Amagan v. Marayag, we ordered the suspension of the ejectment proceedings on considerations of
equity. We explained that the ejectment of petitioners therein would mean a demolition of their house and would
create confusion, disturbance, inconvenience, and expense. Needlessly, the court would be wasting much time and
effort by proceeding to a stage wherein the outcome would at best be temporary but the result of enforcement would
be permanent, unjust and probably irreparable.32
On the other hand, Vda. de Legaspi v. Hon. Avendaño,33 which Samonte refers to, states:
x x x Where the action, therefore, [is] one of illegal detainer, as distinguished from one of forcible entry, and the right
ofthe plaintiff to recover the premises is seriously placed in issue in a proper judicial proceeding, it is more equitable
and just and less productive of confusion and disturbance of physical possession, with all its concomitant
inconvenience and expenses. For the Court in which the issue of legal possession, whether involving ownership or
not, is brought to restrain, should a petition for preliminary injunction be filed with it, the effects of any order or
decision in the unlawful detainer case in order to await the final judgment in the more substantive case involving
legal possession or ownership. It is only where there has been forcible entry that as a matter of public policy the
right to physical possession should be immediately set at rest in favor of the prior possession regardless of the fact
that the other party might ultimately be found to have superior claim to the premises involved, thereby to discourage
any attempt to recover possession thru force, strategy or stealth and without resorting to the courts.34
More significantly, Amagan v. Marayag35 dictates, thus –
As a general rule, an ejectment suit cannot be abated or suspended by the mere filing before the regional trial court
(R TC) of another action raising ownership of the property as an issue. As an exception, however, unlawful detainer
actions may be suspended even on appeal, on considerations of equity, such as when the demolition of petitioners'
house would result from the enforcement of the municipal circuit trial court (MCTC) judgrnent.36
In light of the developments in the DENR Protests, the Court cannot in good conscience order the petitioners to
vacate the premises at this point. The better alternative would be to await the outcome of these Protests, before any
action is taken in the ejectment case.
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed August 25, 2010 Decision of the Court of
Appeals in CA-G.R. SP No. 107957 is MODIFIED, in that the directive for petitioners to vacate the suqject premises
is REVERSED and SET ASIDE.
Accordingly, the proceedings in the ejectment case, Civil Case No. 85043, are ordered SUSPENDED until the
proceedings in DENR Case Nos. 2004-821 and 2005-939 are concluded. No costs.
SO ORDERED.
SECOND DIVISION
G.R. No. 195190 July 28, 2014
ROYALE HOMES MARKETING CORPORATION, Petitioner,

vs.
FIDEL P. ALCANTARA [deceased], substituted by his heirs, Respondent.
DECISION
DEL CASTILLO, J.:

Not every form of control that a hiring party imposes on the hired party is indicative of employee-employer
relationship. Rules and regulations that merely serve as guidelines towards the achievement of a mutually desired
result without dictating the means and methods of accomplishing it do not establish employer-employee
relationship.1
This Petition for Review on Certiorari2 assails the June 23, 2010 Decision3 of the Court of Appeals (CA) in CA-G.R.
SP No. 109998 which (i) reversed and set aside the February 23, 2009 Decision4 of the National Labor Relations
Commission (NLRC), (ii) ordered petitioner Royale Homes Marketing Corporation (Royale Homes) to pay
respondent Fidel P. Alcantara (Alcantara) backwages and separation pay, and (iii) remanded the case to the Labor
Arbiter for the proper determination and computation of said monetary awards.
Also assailed in this Petition isthe January 18, 2011 Resolution5 of the CA denying Royale Homes’ Motion for
Reconsideration,6 as well as its Supplemental7 thereto.
Factual Antecedents
In 1994, Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara asits Marketing
Director for a fixed period of one year. His work consisted mainly of marketing Royale Homes’ realestate inventories
on an exclusive basis. Royale Homes reappointed him for several consecutive years, the last of which covered the
period January 1 to December 31, 2003 where he held the position of Division 5 Vice-President-Sales.8
On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal9 against Royale Homes and its President
Matilde Robles, Executive Vice-President for Administration and Finance Ma. Melinda Bernardino, and Executive
Vice- President for Sales Carmina Sotto. Alcantara alleged that he is a regular employee of Royale Homes since he
is performing tasks that are necessary and desirable to its business; that in 2003 the company gave him ₱1.2 million
for the services he rendered to it; that in the first week of November 2003, however, the executive officers of Royale
Homes told him that they were wondering why he still had the gall to come to office and sit at his table;10 and that the
actsof the executive officers of Royale Homes amounted to his dismissal from work without any valid or just cause
and in gross disregard of the proper procedure for dismissing employees. Thus, he alsoimpleaded the corporate
officers who, he averred, effected his dismissal in bad faith and in an oppressive manner.
Alcantara prayed to be reinstated tohis former position without loss of seniority rights and other privileges, as well as
to be paid backwages, moral and exemplary damages, and attorney’s fees. He further sought that the ownership of
the Mitsubishi Adventure with Plate No. WHD-945 be transferred to his name.
Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It argued that the appointment
paper of Alcantara isclear that it engaged his services as an independent sales contractorfor a fixed term of one
year only. He never received any salary, 13th month pay, overtime pay or holiday pay from Royale Homes as hewas
paid purely on commission basis. In addition, Royale Homes had no control on how Alcantara would accomplish his
tasks and responsibilities as he was free to solicit sales at any time and by any manner which he may deem
appropriateand necessary. He is even free to recruit his own sales personnel to assist him in pursuance of his sales
target.
According to Royale Homes, Alcantara decided to leave the company after his wife, who was once connectedwith it
as a sales agent, had formed a brokerage company that directly competed with its business, and even recruited
some of its sales agents. Although this was against the exclusivity clause of the contract, Royale Homes still offered
to accept Alcantara’s wife back so she could continue to engage in real estate brokerage, albeit exclusively for
Royale Homes. In a special management committee meeting on October 8,2003, however, Alcantara announced
publicly and openly that he would leave the company by the end of October 2003 and that he would no longer finish
the unexpired term of his contract. He has decided to join his wifeand pursue their own brokerage business. Royale
Homes accepted Alcantara’s decision. It then threw a despedidaparty in his honor and, subsequently, appointed a
new independent contractor. Two months after herelinquished his post, however, Alcantara appeared in Royale
Homes and submitted a letter claiming that he was illegally dismissed.

On September 7, 2005,the Labor Arbiter rendered a Decision11 holding that Alcantara is an employee of Royale
Homes with a fixed-term employment period from January 1 to December 31, 2003 and that the pre-termination of
his contract was against the law.Hence, Alcantara is entitled to an amount which he may have earned on the
average for the unexpired portion of the contract. With regard to the impleaded corporate officers, the Labor Arbiter
absolved them from any liability.
The dispositive portion of the Labor Arbiter’s Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Royale Homes
Marketing Corp. to pay the complainant the total amount of TWO HUNDRED SEVENTY SEVEN THOUSAND
PESOS (₱277,000.00) representing his compensation/commission for the unexpired term of his contract.
SO ORDERED.12
Both parties appealed the Labor Arbiter’s Decision to the NLRC. Royale Homes claimed that the Labor Arbiter
grievously erred inruling that there exists an employer-employee relationship between the parties. It insisted that the
contract between them expressly statesthat Alcantara is an independent contractor and not an ordinary employee.
Ithad no control over the means and methods by which he performed his work. RoyaleHomes likewise assailed the
award of ₱277,000.00 for lack of basis as it did not pre-terminate the contract. It was Alcantara who chose not to
finish the contract.
Alcantara, for his part, argued that the Labor Arbiter erred in ruling that his employment was for a fixed-term and that
he is not entitled to backwages, reinstatement, unpaid commissions, and damages.
On February 23, 2009, the NLRC rendered its Decision,13 ruling that Alcantara is not an employee but a mere
independent contractor of Royale Homes. It based its ruling mainly on the contract which does not require Alcantara
to observe regular working hours. He was also free to adopt the selling methods he deemed most effective and can
even recruit sales agents to assist him in marketing the inventories of Royale Homes. The NLRC also considered
the fact that Alcantara was not receiving monthly salary, but was being paid on commission basis as stipulated in
the contract. Being an independent contractor, the NLRC concluded that Alcantara’s Complaint iscognizable by the
regular courts.
The falloof the NLRC Decision reads:
WHEREFORE, premises considered, the Decision of Labor Arbiter Dolores Peralta-Beley dated September 5, 2005
is REVERSED and SET ASIDE and a NEW ONE rendered dismissing the complaint for lack of jurisdiction.
SO ORDERED.14
Alcantara moved for reconsideration.15 In a Resolution16 dated May 29, 2009, however, the NLRC denied his motion.
Alcantara thus filed a Petition for Certiorari17 with the CA imputing grave abuse of discretion on the partof the NLRC
in ruling that he is not an employee of Royale Homes and that it is the regular courts which have jurisdiction over the
issue of whether the pre-termination of the contract is valid.
On June 23, 2010, the CA promulgated its Decision18 granting Alcantara’s Petition and reversing the NLRC’s
Decision. Applying the four-fold and economic reality tests, it held thatAlcantara is an employee of Royale Homes.
Royale Homes exercised some degree of control over Alcantara since his job, as observed by the CA, is subject to
company rules, regulations, and periodic evaluations. He was also bound by the company code of ethics. Moreover,
the exclusivity clause of the contract has made Alcantara economically dependent on Royale Homes, supporting the
theory that he is anemployee of said company.
The CA further held that Alcantara’s termination from employment was without any valid or just cause, and it was
carried out in violation of his right to procedural due process. Thus, the CA ruled that he isentitled to backwages and
separation pay, in lieu of reinstatement. Considering,however, that the CA was not satisfied with the proofadduced
to establish the amount of Alcantara’s annual salary, it remanded the caseto the Labor Arbiter to determine the
same and the monetary award he is entitled to. With regard to the corporate officers, the CA absolved them from
any liability for want of clear proof that they assented to the patently unlawful acts or that they are guilty of bad faith
orgross negligence. Thus:
WHEREFORE, in view of the foregoing, the instant PETITION is GRANTED. The assailed decision of the National
Labor Relations Commission in NLRC NCR CASE NO. 00-12-14311-03 NLRC CA NO. 046104-05 dated February
23, 2009 as well as the Resolution dated May 29, 2009 are hereby SET ASIDE and a new one is entered ordering
the respondent company to pay petitioner backwages which shall be computed from the time of his illegal
termination in October 2003 up to the finality of this decision, plus separation pay equivalent to one month salary for
every year of service. This case is REMANDED to the Labor Arbiter for the proper determination and computation of
back wages, separation pay and other monetary benefits that petitioner is entitled to.
SO ORDERED.19
Royale Homes filed a Motion for Reconsideration20 and a Supplemental Motion for Reconsideration.21 In a
Resolution22 dated January 18, 2011, however, the CA denied said motions.
Issues
Hence, this Petition where Royale Homes submits before this Court the following issues for resolution:
A.
WHETHER THE COURT OF APPEALS HAS DECIDED THE INSTANT CASE NOT IN ACCORD WITH LAW AND
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT REVERSED THE RULING OF THE NLRC
DISMISSING THE COMPLAINT OF RESPONDENT FOR LACK OF JURISDICTION AND CONSEQUENTLY, IN
FINDING THAT RESPONDENT WAS ILLEGALLY DISMISSED[.]
B.
WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DISREGARDING THE EN
BANCRULING OF THIS HONORABLE COURT IN THE CASEOF TONGKO VS. MANULIFE, AND IN BRUSHING
ASIDE THE APPLICABLE RULINGS OF SONZA VS. ABS CBN AND CONSULTA V. CA[.]
C.
WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DENYING THE MOTION
FOR RECONSIDERATION OF PETITIONER AND IN REFUSING TO CORRECT ITSELF[.]23
Royale Homes contends that its contract with Alcantara is clear and unambiguous −it engaged his services as an
independent contractor. This can be readily seen from the contract stating that no employer-employee relationship
exists between the parties; that Alcantara was free to solicit sales at any time and by any manner he may deem
appropriate; that he may recruit sales personnel to assist him in marketing Royale Homes’ inventories; and, thathis
remunerations are dependent on his sales performance.
Royale Homes likewise argues that the CA grievously erred in ruling that it exercised control over Alcantara based
on a shallow ground that his performance is subject to company rules and regulations, code of ethics, periodic
evaluation, and exclusivity clause of contract. RoyaleHomes maintains that it is expected to exercise some degree
of control over its independent contractors,but that does not automatically result in the existence ofemployer-
employee relationship. For control to be consideredas a proof tending to establish employer-employee relationship,
the same mustpertain to the means and method of performing the work; not on the relationship of the independent
contractors among themselves or their persons or their source of living.
Royale Homes further asserts that it neither hired nor wielded the power to dismiss Alcantara. It was Alcantara who
openly and publicly declared that he was pre-terminating his fixed-term contract.
The pivotal issue to be resolved in this case is whether Alcantara was an independent contractor or anemployee of
Royale Homes.
Our Ruling
The determination of whether a party who renders services to another is an employee or an independent contractor
involves an evaluation of factual matters which, ordinarily, is not within the province of this Court. In view of the
conflicting findings of the tribunals below, however, this Court is constrained to go over the factual matters involved
in this case.24
The juridical relationship of the parties based on their written contract
The primary evidence of the nature of the parties’ relationship in this case is the written contract that they signed
and executed in pursuanceof their mutual agreement. While the existence of employer-employee relationship is a
matter of law, the characterization made by the parties in their contract as to the nature of their juridical relationship
cannot be simply ignored, particularly in this case where the parties’ written contractunequivocally states their
intention at the time they entered into it. In Tongko v. The Manufacturers LifeInsurance Co. (Phils.), Inc.,25 it was held
that:
To be sure, the Agreement’s legal characterization of the nature of the relationship cannot be conclusive and
binding on the courts; x x x the characterization of the juridical relationship the Agreement embodied is a matter of
law that is for the courts to determine. At the same time, though, the characterization the parties gave to their
relationship in the Agreement cannot simply be brushed aside because it embodiestheir intent at the time they
entered the Agreement, and they were governed by this understanding throughout their relationship. At the very
least, the provision on the absence of employer- employee relationship between the parties can be an aid in
considering the Agreement and its implementation, and in appreciating the other evidence on record.26
In this case, the contract,27 duly signed and not disputed by the parties, conspicuously provides that "no employer-
employee relationship exists between" Royale Homes and Alcantara, as well as his sales agents. It is clear that they
did not want to be bound by employer-employee relationship atthe time ofthe signing of the contract. Thus:
January 24, 2003
MR. FIDEL P. ALCANTARA
13 Rancho I
Marikina City
Dear Mr. Alcantara,
This will confirm yourappointment as Division 5 VICE[-]PRESIDENTSALES of ROYALE HOMES MARKETING

CORPORATION effective January 1, 2003 to December 31, 2003.
Your appointment entails marketing our real estate inventories on an EXCLUSIVE BASIS under such price, terms
and condition to be provided to you from time to time.
As such, you can solicit sales at any time and by any manner which you deem appropriate and necessary to market
our real estate inventories subject to rules, regulations and code of ethics promulgated by the company. Further,
you are free to recruit sales personnel/agents to assist you in marketing of our inventories provided that your
personnel/agents shall first attend the required seminars and briefing to be conducted by us from time to time for the
purpose of familiarizing them of terms and conditionsof sale, the natureof property sold, etc., attendance of which
shall be a condition precedent for their accreditation by us.
That as such Division 5 VICE[-]PRESIDENT-SALES you shall be entitled to:
1. Commission override of 0.5% for all option sales beginning January 1, 2003 booked by your sales agents.
2. Budget allocation depending on your division’s sale performance as per our budget guidelines.
3. Sales incentive and other forms of company support which may be granted from time to time. It is understood,
however, that no employer-employee relationship exists between us, that of your sales personnel/agents, and that
you shall hold our company x x x, its officers and directors, free and harmless from any and all claims of liability and
damages arising from and/or incident to the marketing of our real estate inventories.
We reserve, however, our right to terminate this agreement in case of violation of any company rules and
regulations, policies and code of ethics upon notice for justifiable reason.
Your performance shall be subject toperiodic evaluation based on factors which shall be determined by the
management.
If you are amenable to the foregoing terms and conditions, please indicate your conformity by signing on the space
provided below and return [to] us a duplicate copy of this letter, duly accomplished, to constitute as our agreement
on the matter.(Emphasis ours)
Since "the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal
meaning of itsstipulations should control."28 No construction is even needed asthey already expressly state their
intention. Also, this Court adopts the observation of the NLRC that it is rather strange on the part of Alcantara, an
educated man and a veteran sales broker who claimed to be receiving ₱1.2 million as his annual salary, not to have
contested the portion of the contract expressly indicating that he is not an employee of Royale Homes if their true
intention were otherwise.
The juridical relationship of the parties based on Control Test
In determining the existence of an employer-employee relationship, this Court has generally relied on the four-fold
test, to wit: (1) the 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 with respect to the means and methods by which the work is
to be accomplished.29 Among the four, the most determinative factor in ascertaining the existence of
employeremployee relationship is the "right of control test".30 "It is deemed to be such an important factor that the
other requisites may even be disregarded."31 This holds true where the issues to be resolved iswhether a person
who performs work for another is the latter’s employee or is an independent contractor,32 as in this case. For where
the person for whom the services are performed reserves the right to control not only the end to beachieved, but
also the means by which such end is reached, employer-employee relationship is deemed to exist.33
In concluding that Alcantara is an employee of RoyaleHomes, the CA ratiocinated that since the performance of his
tasks is subject to company rules, regulations, code of ethics, and periodic evaluation, the element of control is
present.
The Court disagrees.
Not every form of control is indicative of employer-employee relationship. A person who performs work for another
1âwphi 1
and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee.34 As long as
the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules
imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of
employer-employee relationship. In Insular Life Assurance Co., Ltd. v. National Labor Relations Commission35 it was
pronounced that:
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the
mutually desired result without dictating the means or methods to be employed in attaining it, and those that control
or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employeremployee relationship unlike the second, which address both the result and
the means used to achieve it. x x x36
In this case, the Court agrees with Royale Homes that the rules, regulations, code of ethics, and periodic evaluation
alluded to byAlcantara do not involve control over the means and methods by which he was to performhis job.
Understandably, Royale Homes has to fix the price, impose requirements on prospective buyers, and lay down the
terms and conditionsof the sale, including the mode of payment, which the independent contractors must follow. It is
also necessary for Royale Homes to allocateits inventories among its independent contractors, determine who has
priority in selling the same, grant commission or allowance based on predetermined criteria, and regularly monitor
the result of their marketing and sales efforts. But tothe mind of this Court, these do not pertain to the means and
methods of how Alcantara was to perform and accomplish his task of soliciting sales. They do not dictate upon him
the details of how he would solicit sales or the manner as to how he would transact business with prospective
clients. In Tongko, this Court held that guidelines or rules and regulations that do notpertain to the means or
methodsto be employed in attaining the result are not indicative of control as understood inlabor law. Thus:
From jurisprudence, an important lesson that the first Insular Lifecase teaches us is that a commitment to abide by
the rules and regulations of an insurance company does not ipso factomake the insurance agent an employee.
Neither do guidelines somehow restrictive of the insurance agent’s conduct necessarily indicate "control" as this
term is defined in jurisprudence. Guidelines indicative of labor law "control," as the first Insular Lifecase tells us,
should not merely relate to the mutually desirable result intended by the contractual relationship; they must have the
nature of dictating the means or methods to beemployed in attaining the result, or of fixing the methodology and of
binding or restricting the party hired to the use of these means.In fact, results-wise, the principal can impose
production quotas and can determine how many agents, with specific territories, ought to be employed to achieve
the company’s objectives. These are management policy decisions that the labor law element of control cannot
reach. Our ruling in these respects in the first Insular Lifecase was practically reiterated in Carungcong. Thus, as will
be shown more fully below, Manulife’s codes of conduct, all of which do not intrude into the insurance agents’
means and manner of conducting their sales and only control them as to the desired results and Insurance Code
norms, cannot be used as basis for a finding that the labor law concept of control existed between Manulife and
Tongko.37 (Emphases in the original)
As the party claiming the existence of employer-employee relationship, it behoved upon Alcantara to prove the
elements thereof, particularly Royale Homes’ power of control over the means and methods of accomplishing the
work.38 He, however, failed to cite specificrules, regulations or codes of ethics that supposedly imposed control on
his means and methods of soliciting sales and dealing with prospective clients. On the other hand, this case is
replete with instances that negate the element of control and the existence of employer-employee relationship.
Notably, Alcantara was not required to observe definite working hours.39 Except for soliciting sales, RoyaleHomes
did not assign other tasks to him. He had full control over the means and methods of accomplishing his tasks as he
can "solicit sales at any time and by any manner which [he may] deem appropriate and necessary." He performed
his tasks on his own account free from the control and direction of Royale Homes in all matters connected therewith,
except as to the results thereof.40
Neither does the repeated hiring of Alcantara prove the existence of employer-employee relationship.41 As discussed
above, the absence of control over the means and methodsdisproves employer-employee relationship. The
continuous rehiring of Alcantara simply signifies the renewal of his contract with Royale Homes, and highlights his
satisfactory services warranting the renewal of such contract. Nor does the exclusivity clause of contract establish
the existence of the labor law concept of control. In Consulta v. Court of Appeals,42 it was held that exclusivity of
contract does not necessarily result in employer-employee relationship, viz:
x x x However, the fact that the appointment required Consulta to solicit business exclusively for Pamana did not
mean that Pamana exercised control over the means and methods of Consulta’s work as the term control is
understood in labor jurisprudence. Neither did it make Consulta an employee of Pamana. Pamana did not prohibit
Consulta from engaging in any other business, or from being connected with any other company, for aslong as the
business [of the] company did not compete with Pamana’s business.43
The same scenario obtains in this case. Alcantara was not prohibited from engaging in any other business as long
as he does not sell projects of Royale Homes’ competitors. He can engage in selling various other products or
engage in unrelated businesses.
Payment of Wages
The element of payment of wages is also absent in thiscase. As provided in the contract, Alcantara’s remunerations
consist only of commission override of 0.5%, budget allocation, sales incentive and other forms of company support.
There is no proof that he received fixed monthly salary. No payslip or payroll was ever presented and there is no
proof that Royale Homes deducted from his supposed salary withholding tax or that it registered him with the Social
Security System, Philippine Health Insurance Corporation, or Pag-Ibig Fund. In fact, his Complaint merely states a
ballpark figure of his alleged salary of ₱100,000.00, more or less. All of these indicate an independent contractual
relationship.44 Besides, if Alcantara indeed consideredhimself an employee of Royale Homes, then he, an
experienced and professional broker, would have complained that he was being denied statutorily mandated
benefits. But for nine consecutive years, he kept mum about it, signifying that he has agreed, consented, and
accepted the fact that he is not entitled tothose employee benefits because he is an independent contractor.
This Court is, therefore,convinced that Alcantara is not an employee of Royale Homes, but a mere independent
contractor. The NLRC is, therefore, correct in concluding that the Labor Arbiter has no jurisdiction over the case and
that the same is cognizable by the regular courts.
WHEREFORE, the instant Petition is hereby GRANTED. The June 23, 2010 Decision of the Court of Appeals in CA-
G.R. SP No. 109998 is REVERSED and SET ASIDE. The February 23, 2009 Decision of the National Labor
Relations Commission is REINSTATED and AFFIRMED. SO ORDERED.
SECOND DIVISION
G.R. No. 178115 July 28, 2014

vs.
JOJO SUMILHIG, RICARDO SUMILHIG alias CARDING SUMILHIG, PASOT SALOLI, ERIC ENOC, WARLITO
MONTEBON,* and CIO LIMAMA, Accused,
JOJO SUMILHIG, RICARDO SUMILHIG alias CARDING SUMILHIG, and PASOT SALOLI, Accused-Appellants.
DECISION
DEL CASTILLO, J.:
This is an appeal from the Decision1 dated July 28, 2006 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
00187-MIN, which affirmed with modifications the Regional Trial Court's (RTC) conviction2 of appellants Jojo
Sumilhig (Jojo), Ricardo Sumilhig alias Carding Sumilhig (Carding), and Pasot Saloli (Pasot) in Criminal Case No.
3(99).
Factual Antecedents
Appellants, together with the accused Eric Enoc, Warlito Montibon and Cio Limama, were charged with double
murder and double frustrated murder in an Amended Information,3 the accusatory portion of which reads:
That on or about October 31, 1998, inthe Municipality of Kiblawan, Province of Davao del Sur, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and helping one
another, armed with assortedfirearms, with intent to kill with treachery and evident premeditation, did, then and there
willfully, unlawfully and feloniously, simultaneously strafe the house of Eugenio Santander resulting to death of
[Cresjoy] Santander and RollySantander and seriously wounding Marissa Santander and Micel Santander, which
would have caused their death had there been no timely and able medical assistance rendered to them, to the
damage and prejudice of the offended parties.
CONTRARY TO LAW.4
Only Jojo, Carding and Pasot, who entered separate pleas of "not guilty" during their arraignment,5 faced trial. The
other accused could not be located and remain at-large to this day.
Factual Antecedents
The prosecution established that onOctober 31, 1998, at around 6:30 p.m., Jerry Masaglang (Jerry), together with
Eugenio Santander (Eugenio) and his son Mario, were in the living room of Eugenio’s house in SitioOverland,
Kimlawis, Kiblawan, Davao del Sur. Suddenly, they heard gun bursts and saw six persons firing at the kitchen where
members of the Santander family werehaving dinner. Jerry and Mario recognized the assailants to be the appellants
and their co-accused.
The strafing of the kitchen lasted for about two minutes. Before the gunmen dispersed, Jojo shouted, "At last, I have
retaliated!" In the aftermath, the children of Eugenio’s other son Remegio6 Santander (Remegio), 3-year old
Cresjoy,7 8-year old Rolly, and teeners Marissa and Micel, sustained gunshot wounds. Unfortunately, Cresjoy
expired while on the way to the hospital while Rolly was pronounced dead-on-arrival. Marissa sustained gunshot
wounds atthe right breast area and left wrist, while Micel was wounded inthe left sternal area and elbow.
Jojo denied involvement in the incident and interposed the defense of alibi. At the time of the incident, he claimed to
be in the house of his parents-in-law in SitioOlogo-o, BarangayTacub, Kiblawan, Davao del Sur. He further asserted
that it was impossible for him to be at the scene of the crime on October 31, 1998 since he could not walk briskly
due to a gunshot wound he earlier sustained in his left knee and anus. He maintained that it was only in January
1999 that he was able to walk without the aid of crutches. However, Jojo admitted harboring ill-will against the
Santander clan since he believed that they were the ones responsible for the massacre of his family in February
1998.
Carding, for his part, claimed to be illiterate and unaware of the incident. He contended that at the time of the
shooting, he was in Dalmandang, Tacub, Kiblawan, Davao del Sur, which is four-hours walk away from the crime
scene. Pasot, on the other hand, maintained that he was withhis wife at the house of Pablo Mot in Lampara,
Balasiao, Kiblawan, Davao atthe time the crime was committed. Bothclaimed total ignoranceof the incident.
The RTC convicted the appellants ofthe complex crime of double murder and double frustrated murder and
sentenced them to suffer the penalty of death. It further ordered them to indemnify, jointlyand severally, the heirs of
Cresjoy and Rolly the sum of ₱100,000.00 as civil indemnity, and the surviving victims, Marissa and Micel, the sums
of ₱50,000.00 and ₱30,000.00 as moral and exemplary damages, respectively.8
On appeal, the CA did not find any reason to disturb the findings of the RTC. However, it found merit in appellants’
argument that the crime committed could not have been a complex crime since the death and injuries complained of
did not result from a single act but from several and distinctacts of shooting. And as treachery was alleged in the
Amended Information and sufficiently proven during trial, appellants should be convicted instead of two counts of
murder and two counts of frustrated murder. Thus, in rendering its Decision9 dated July 28, 2006, the CA disposed
ofthe case as follows:
WHEREFORE, the judgment of conviction of appellants Jojo Sumilhig, Alias Carding Sumilhig and Pasot Saloli is
affirmed butmodified as follows –
Appellants Juan "Jojo" Sumilhig, Alias Carding Sumilhig and Pasot Saloli, are found guilty beyondreasonable doubt
of:
a. Murder for killing Crisjoy Santander, and x x x are sentenced to suffer the penalty of reclusion perpetua;
b. Murder for the killing of Rolly Santander, and x x x are sentenced to suffer the penalty of reclusion perpetua;
c. Frustrated Murder for the shooting of Marissa Santander and x x x are sentenced to suffer an imprisonment ofsix
(6) years, four (4) months and [ten] (10) days of prision mayoras minimum to fourteen (14) years, eight (8) months
and twenty (20) days of reclusion temporalas maximum; d. Frustrated Murder for the shooting of Micel Santander
and x x x are sentenced to suffer an imprisonment ofsix (6) years, four (4) months and ten (10) days of prision
mayoras minimum to fourteen (14) years, eight (8) months and twenty (20) days of reclusion temporalas maximum.
All accused are ordered to indemnify jointly and severally the heirs of Crisjoy Santander and Rolly Santander the
sum of ₱100,000.00 and the surviving victims Marissa Santander and Micel Santander ₱50,000.00 as moral
damages and ₱30,000.00 as exemplary damages, without subsidiary imprisonment in case of insolvency.
Costs de officio.
SO ORDERED.10
Hence, this appeal.
Since there is no more dispute that appellants should not have been convicted of the complex crime of double
murder and frustrated murder as the Office of the Solicitor General (OSG) already concedes to the same,11 the only
error left from those raised by appellants in their brief is as follows:
GRANTING ARGUENDO THAT THE ACCUSED-APPELLANTS ARE GUILTY, THE COURT A QUO GRAVELY
ERRED IN FINDING THAT CONSPIRACY WAS PRESENT AND INFINDING THAT THE CRIMES COMMITTED
WERE MURDER AND FRUSTRATED MURDER.12
It must be noted at the outset that Carding diedon June 24, 2011 during the pendency of this appeal.13 "[I]n view of
[this] supervening event, it is unnecessary for the Court to rule on [Carding’s] appeal. Whether x x x he was guilty of
the [crimes] charged has becomeirrelevant since, following Article 89(1) of the Revised Penal Code, x x x, even
assuming [that Carding] had incurred any criminal liability, it was totally extinguished by his death. Moreover,
because [the] appeal was still pending and no final judgment of conviction had been rendered against him [before]
he died, his civil liability arising from the crime, being civil liability ex delicto,was likewise extinguished by his
death."14
Appellants’ Arguments
Appellants claim that the RTC erred in relying heavily on the ill-feelings and vendetta Jojo harbored against the
Santander family. They contend that this motive for committing the crime is not a substitute for proof beyond
reasonable doubt. Moreover, Jojo’salibi that it was impossible for him to be at the crime scene due to the gunshot
wounds in his knee and anus is amply corroborated by a medical prognosis.
Anent Pasot, appellants argue that although the trial court found his claim of total ignorance on almost about
everything to beincredulous, still, his conviction must not rest on the weakness of his defense but on the strength of
the prosecution’s evidence.
Appellants likewise question the finding of conspiracyand treachery.
Our Ruling

Appellants’ conviction was based on
their positive identification by the
prosecution witnesses.
True, the RTC noted in its Decision the existence of motive on the part of Jojo for committing the crime as well as
Pasot’s incredulous claim of ignorance on almost about everything. It is well to note, however, that the said court
neither based the appellants’ conviction on the existence of such motive nor on Pasot’s weak defense of ignorance
alone, but upon the prosecution witnesses’ identification of appellants as the assailants, viz:
Assessing the evidence presented by both [P]rosecution and defense, we see a less than glaring hint of vendetta.
As part of his defense, the accused Jojo Sumilhig narrated that his family was massacred by Jerry Santander,
brother of Remigio Santander [in] February 1998. Short of admitting the crime, Sumilhig stated that because of this,
he harbored ill feelings not only against Jerry and Carlos Santander but also against their family. Thus a clear
motive for killing the Santander family has been established giving credence to prosecution witnesses’ allegation
that after the strafing Jojo Sumilhig shouted"Nakabalos na ko!" The likelihood of his intention to wipe out the said
family became even more apparent.
Despite his positive assertion that it was the Santanders that killed his family, he did not file any case against them.
It was only after he was arrested that he filed a complaint against Jerry and Carlos Santander.
His alibi likewise failed to meet the stringent requisites of the Rules. Even as Dr. Quirapas appeared determined to
rule out the possibility that he could walk without crutches five months after his discharge, the same was based on
general medical prognosis. Such prognostication admits certain exception[s], as could be gleaned from the
testimony of the doctor himself that the healing period may vary depending on the age and physical condition of the
patient. Notably Jojo Sumilhig was then 23 years old.
What was certain was the positive identification made by Jerry Masaglang and Remegio Santander of all of the
accused.
The "overkill" by which the accused Pasot Saloli and Carding Sumilhig claimed total ignorance of almost anything
only served to arouse incredulity. Both accused claimed they could not read, write, tell time, day, month or year.
Neither could [they] allegedly speak [or] understand Visayan, which is of common knowledge to be widely spoken in
almost every part of Mindanao. Saloli claimed he did not know what day [it] was when he was testifying, or the day
before and after that. Both claimed they did not know the complainants or of the massacre that took place.
xxxx
More importantly, these claims [of] utter ignorance are belied by the evasiveness by which all three accused
answered in obvious effort to avoid criminal responsibility. Behind the façade of ignorance and lack of education
lurks a calculating mind. We find [it] difficult to ascribe innocence to the accused when traces of ingenuity and
craftiness characterize their testimonies.
All these observations however become insignificant in the face of the positive and spontaneous identification of the
assailants/accused by credible witnesses Jerry Masaglang and Remigio Santander.15
There is no reason to doubt Jerry and Mario’s identification of the appellants considering that (1) Jerry was just six
meters away from them;16 (2) the moon was bright and Jerry was familiar with all the accused as most of them are
his relatives;17 and, (3) Mario knows Jojoever since he was small.18 Besides, "[t]ime-tested is the rulethat between the
positive assertions of prosecution witnesses and the negative averments of the accused, the former undisputedly
[deserve] more credence and [are] entitled to greater evidentiary weight."19
Anent the respective alibis interposed by appellants, suffice it to say that "[a]libi cannot prevail over the positive
identification of a credible witness."20
There was conspiracy among the accused.
"[C]onspiracy exists when two or more persons come to an agreement concerning the commission of a felony and
decide to commit it."21 It is not necessary to adduce evidence of a previous agreement to commit a
crime.22"Conspiracy may be shown through circumstantial evidence, deduced from the mode and manner in which
the offense was perpetrated, or inferred from the acts of the accused themselves when such leadto a joint purpose
and design, concerted action, and community of interest."23
Here, there is no proof of a previous agreement among the accused but there is a series of events that clearly
established conspiracy among them. First, they were all armed with firearms. Second, they surreptitiously
approached the crime scene. Third, when they were within close range of the intended victims, they simultaneously
discharged their firearms. Fourth, they ceased firing at the same time and fled together. Undoubtedly, their acts
before, during and immediately after strafing the house of Eugenio evince their unanimity in design, intent and
execution.24 Treachery attended the commission of the crime.
"There is treachery whenthe offender commits any of the crimes against the person, employing means, methods
orforms in the execution thereof which tend directly and specially to insure the execution, without risk to himself
arising from [any] defense which the offended party might make."25
Treachery is evident in this case as the suddenness and unexpectedness of the assault deprived the victims of an
opportunity to resist it or offer any defense of their persons. This is considering that the victims were unaware that
they would be attacked by appellants with a hailof bullets from their firearms fired at close range. Indeed, "[t]he
suddenness of the attack, without the slightest forewarning thereof, placed the [victims] x x x in such a position that
they could not have defended themselvesfrom the aggression x x x."26
The crime committed is two counts of

murder and two counts of frustrated
murder.
As earlier discussed, treachery attendedthe commission of the crime. This qualifies the killing of Cresjoy and Rolly
to murder.
With regard to Marissa and Micel, the Court notes that while the RTC was silent as to the nature of injuries
sustained by them, the CA correctly ruled on the seriousness thereof. The Medico Legal report of Marissa shows
that she suffered multiple gunshot wounds in her right breast and left wrist27 while the Certificate of
Treatment/Confinement of Micel states that she sustained gunshot wounds in the area of the sternum and
elbow.28As aptly found by the CA, the girls would have died if not for the timely medical attention provided to them.
The crimes committed by the appellants against them were thus frustrated murders.
The Penalty
Under Article 248 of the Revised Penal Code, the penalty for the crime of murder is reclusion perpetuato
death. With both penalties being indivisible and there being no aggravating circumstance other than the qualifying
1âwphi1
circumstance of treachery, the lower of the two penalties which is reclusion perpetua was properly imposed by the
CA on appellants for each count of murder.29 However, appellants are not eligible for parole.30
As regards the frustrated murders of Marissa and Micel, the penalty lesser by one degree shall be imposed on
appellants.31 Accordingly, the penalty that must be imposed is reclusion temporalfor each count of frustrated murder.
Applying the Indeterminate Sentence Law and in the absence of modifying circumstances other than the qualifying
circumstance of treachery, the maximum penalty shall be taken from the medium period of reclusion temporal,
which has a range of fourteen (14) years, eight (8) months and one (1) day to seventeen (17) years and four (4)
months, while the minimum shall be taken from the penalty next lower in degree which is prision mayorin any of its
periods, the range of which is from six (6) years,one (1) day to twelve (12)years. The prison term imposed by the CA
on appellants must therefore be modified to six (6) years and one (1) day of prision mayoras minimum to fourteen
(14) years, eight (8) months and one (1) day of reclusion temporalas maximum, which is within these ranges,32 for
each count of frustrated murder.
Awards of Damages
For the murders of Cresjoy and Rolly, the CA correctly held that their heirs are entitled to an award of civil indemnity,
however, the amount of the award must be ₱75,000.00 for each death pursuant to prevailing jurisprudence.33 The
awards of moral damages in the amount of ₱50,000.00 each and exemplary damages in the amount of ₱30,000.00
each are proper.34 In addition, the heirs of the victims are entitled to temperate damages in the sum of ₱25,000.00
for each death in lieu of actual damages.35
For the frustrated murders of Marissa and Micel, the awards of moral and exemplary damages by the CA must be
decreased to ₱40,000.00 and ₱20,000.00, respectively for each victim.36 They are likewise entitled to temperate
damages in the amount of ₱25,000.00 each in lieu of actual damages.37
All damages awarded shall earn interest at the rate of 6% per annumfrom the date of finality of thisjudgment until
fully paid.38
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CRH.C. No. 00187-MIN which affirmed
withmodification the Decision of the Regional Trial Court of DigosCity, Davao del Sur, Branch 19, finding appellants
Jojo Sumilhig and Pasot Saloli guilty beyond reasonable doubt of two counts of murder and two counts offrustrated
murder is AFFIRMED with MODIFICATIONSas follows:
For the murders of Cresjoy Santander and Rolly Santander:
(1) appellants Jojo Sumilhig and Pasot Saloli shall suffer the prison tenn of reclusion perpetua for each count of
murder without eligibility for parole;
(2) appellants Jojo Sumilhig and Pasot Saloli shall pay the heirs of the victims the amount of ₱5,000.00 as civil
indemnity for the death of each victim;
(3) appellants Jojo Sumilhig and Pasot Saloli shall pay the heirs of the victims ₱25,000.00 as temperate damages
for each death.
For the frustrated murders of Marissa Santander and Micel Santander:
(1) appellants Jojo Sumilhig and Pasot Saloli are sentenced to suffer the indeterminate penalty of six ( 6) years and
one (1) day of prision mayor, as minimum, to fourteen (14) years, eight (8) months and one (1) day of reclusion
temporal, as maximum, for each count of frustrated murder; and,
(2) appellants Jojo Sumilhig and Pasot Saloli are ordered to pay moral damages and exemplary damages to each of
the victims in the reduced amounts of ₱40,000.00 and ₱25,000.00, respectively.
All amounts of damages awarded shall earn interest at the legal rate of 6% per annum commencing from the date of
finality of judgment until fully paid.
Due to the death of Ricardo Swnilhig alias Carding Sumilhig prior to final judgment, his criminal liability and civil
liability ex delicto as found by the Regional Trial Court and affirmed by the Court of Appeals, are extinguished.
Consequently, Criminal Case No. 3(99) is ordered dismissed insofar as Ricardo Sumilhig alias Carding Sumilhig is
concerned.
Costs against appellants Jojo Sumilhig and Pasot Saloli.
SO ORDERED.
SECOND DIVISION
G.R. No. 196786 July 23, 2014

vs.
STANLEY BUNAGAN y JUAN, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Stanley Bunagan y Juan was charged with the crime of rape in an Information1 which reads as follows:
That on or about and during the period from 1998 to August 2001, in the City of Parafiaque, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, being then the uncle of "AAA",2 minor, 16 years
of age, by means of force and intimidation, did then and there wilfully, unlawfully and feloniously have carnal
knowledge of the complainant against her will and consent.
CONTRARY TO LA W.3
Appellant pleaded not guilty during his arraignment on October 10, 2001.4 During trial, "AAA" testified thatappellant
is the husband of her grandmother; that she resided in the house of her grandmother since she was nine years old;
that in 1998 when she was already 13 years of age, appellant started raping her; that her grandmother leaves the
house to work while appellant is unemployed and just stays at the house; thatthe last rape incident happened in
August 20015 when she was 16 years old; that appellant threatened to kill her mother and grandmother if she would
not succumb to his desire; that after the last rape incident, she got pregnant; that whenher mother and grandmother
confronted her about her pregnancy, she told them that appellant raped her several times; and that her mother and
grandmother reported the incident to the police authorities resulting in the arrest of the appellant.
Dr. Irene Baluyot (Dr. Baluyot) of the Child Protection Unit of the Philippine General Hospital was presented
asanother witness for the prosecution. She testified that when she examined "AAA" on September 11, 2001, she
noted that her genitals showed clear evidence of blunt force or penetrating trauma and that she was 25-26 weeks
pregnant.
The defense relied solely on the testimony of appellant. Appellant testified that "AAA" is the niece of his live-in
partner; that "AAA" lived with them since 1992; that he did not rape"AAA" from 1998 to 2001; that he and "AAA" had
a relationship when the former was 14 years of age; that "AAA" got pregnant and that he is the father of "AAA’s"
child; and that he was charged with rape when his live-in partner discovered "AAA’s" pregnancy.
Ruling of the Regional Trial Court6 (RTC)
On October 25, 2007, the RTC rendered Judgment7 finding appellant guilty as charged. It found the testimony
of"AAA" to be positive, categorical and lacking in ill-motive8 and the same was corroborated by the reliable medical
findings of Dr. Baluyot.9 The trial court disregarded appellant’s "sweetheart defense" because it was not supported
by evidence suchas pictures or love letters.10
The dispositive portion of the RTC’s Judgment reads as follows:
WHEREFORE, this Court finds the accused, Stanley Bunagan y Juan, GUILTY beyond reasonable doubt of the
crime of Rape in relation to RA 7610 and is hereby sentenced to suffer the penalty of reclusion perpetua. In addition,
the accused is ordered to pay the victimthe amount of ₱50,000.00 as moral damages and ₱50,000.00 as civil
indemnity.
SO ORDERED.11
Aggrieved, appellant appealed12 to the Court of Appeals (CA).
In his Brief,13 appellant insisted that he did not force himself upon "AAA" and that their sexual congress was
consensual.
Unswayed, the CA, in its September 9, 2010 Decision14 dismissed appellant’s appeal and affirmed in full the RTC’s
Judgment.
In a Resolution15 dated July 4, 2011, we required the parties to file their respective supplemental briefsbut both
manifested that they are no longer filing the same as they are adopting the arguments they raisedbefore the CA.16
Our Ruling
The appeal is dismissed for lack of merit.

The sexual congress between "AAA" and appellant isundisputed. In fact, appellant admits the same. However,
1âwphi1
heclaims that it is consensual because "AAA" was his girlfriend. Both the trial court and the CA correctly disregarded
the "sweetheart theory" proffered by the appellant for being self-serving and uncorroborated. No evidence such as
love letters, pictures, gifts, etc. was offered to show the existence of such relationship.Besides, such claim is totally
absurd and preposterous. Going by the testimony of the appellant that his love relationship with "AAA" started
sometime in 1997, "AAA" would havebeen only 12 years of age while appellant would be about 46 years old.17 It is
also on record that "AAA" vehemently denied her alleged love relationship with the appellant.
Rape may be committedby a man having carnal knowledge of a woman through threat or intimidation.18 According to
"AAA," every time appellant will have sexual intercoursewith her, he would issue threats that he would kill her, her
mother and grandmother.19 Thus, both the RTC and the CA correctly found appellant guilty of the crime of rape.
Although "AAA’s" minority was alleged, the same was not proved during trial; neither was her Birth Certificate
submitted in evidence. Her relationship with the appellant was likewise not established. Although the Information
alleged that appellant is an uncle of "AAA," such relationship was not proved during trial. Based on appellant’s
testimony, he was never married to "AAA’s" relative. In fact, appellant was merely the live-inpartner of the sister of
"AAA’s" grandmother. As such, the "[appellant]" and the victim cannot be said to be related by affinity within the third
civil degree at the time of the commission of the crime."20 Besides, the Information failed to specifically allege that
appellant is a relative by consanguinity or affinity within the third civil degree as required by the rules. As such, both
the RTC and the CA properly disregarded minority and relationship as qualifying circumstances and correctly
imposed the penalty of reclusion perpetua.21 Appellant, however, isnot eligible for parole.22
The awards of moral damages and civil indemnity in the amount of ₱50,000.00 each is proper. "AAA" is also entitled
to an award of exemplary damages in the amount of ₱30,000.00 in line with prevailing jurisprudence. In addition, all
the damages awarded shall earn legal interest at the rate of 6% per annum from date of finality of thisjudgment until
fully paid.23
WHEREFORE, the appeal is DISMISSED. The September 9, 2010 Decision of the Court of Appeals in CA-G.R. CR-
H.C. No. 03127 finding appellant Stanley Bunagan y Juan guilty beyond reasonable doubt of the crime of rape and
sentencing him tosuffer the penalty of reclusion perpetua and to pay "AAA" ₱50,000.00 as civil indemnity and
another ₱50,000.00 as moral damages is AFFIRMED with MODIFICATIONS that appellant is noteligible for parole,
that appellant is ordered to pay "AAA" exemplary damages in the amount of ₱30,000.00 and all damages awarded
shall earn interest at the rate of 6% per annumfrom date of finality of judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 197046 July 21, 2014

vs.
GEORGE ZAPATA y VIANA,** Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant George Zapata y Viana was charged with the crime of parricide in an Information1 that reads:
That on or about the 11th day of May 2002, in the Municipality of Rodriguez, Province of Rizal, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, while armed with a .45 caliber pistol,
being the husband of victim QUEENY ZAPATA Y ERESPE, with intent to kill, treachery and evident premeditation,
during nighttime, did then and there willfully, unlawfully and feloniously attack, assault and [shoot] said victim
QUEENY ZAPATA Y ERESPE on [her left chest] thereby causing mortal wounds which caused her death soon
thereafter. CONTRARY TO LAW.
Appellant entered a plea of not guilty when arraigned on June 25, 2002.2
Factual Antecedents
The facts of the case as summarized by the prosecution are as follows:
On May 11, 2002, around 3 o’clock in the afternoon, appellant George Zapata was having a drinking spree with his
brother Manny Zapata and his cousin Edwin Bautista in their family home at Block 1, Lot II, Phase 1-C, Kasiglahan
Village, San Jose, Rodriguez, Rizal. After several hours of continuous alcohol splurge or at around 7 o’clock in the
evening, a gunshot was heard emanating from the bedroom of George Zapata and his wife Queeny. It appears that
George killed his wife Queeny using his .45 caliber pistol with a single gunshot fired at close range [at] Queeny’s
chest. George brought Queeny’s bloodied body [to] the sala. Seconds later, Edwin immediately left Zapata’s house
and proceeded to the house of his brother nearby while Manny likewise went to the house of their cousinnext door.
Appellant fled from the scene of the crime without seeking help for his wife. Queeny was left alone in the sala
soaked in her very own blood.
x x x [T]he same gunshot alerted appellant’s neighbors. Queeny’s body was later discovered and brought to the
Amang Rodriguez Medical Center while appellant and the victim’s three (3)[-]year old daughter named Angel was
brought to the Municipal Hall of San Mateo, Rizal by a certain ‘Lucia’ (Queeny’s friend and neighbor). Lucia likewise
called Queeny’s brother, Edralin Erespe, to pick up Angel as Queeny specifically instructed her not to give Angel to
any of appellant’s relatives.
In the meantime, the police officers of Montalban, Rizal learned of the incident from the security guard ofAmang
Rodriguez Medical Center who called the police station to report that a gunshot victim was brought to the hospital.
SPO1 Onofre C. Tavas proceeded to the crime scene. He recovered an empty shell of a caliber .45 semi-automatic
pistol inside appellant’s and the victim’s bedroom.
Dr. Mary Ann Gajardo of the Philippine National Police Crime Laboratory testified that a single gunshotwound fired
at close-range [at] the victim’s chest entered her epigastric region, slightly hit her heart, fractured the sternum at the
level of her 6th interior ribs and traversed downwards lacerating parts of the diaphragm, left lobe of the liver,
pancreas and the left kidney, before making an exit [from] the victim’s left lumbar region. Tattooing appeared on the
victim’s body indicating that the shot was fired at a distance of at least three (3) to four (4) inches. Cardio respiratory
arrest secondary to hemorrhage and shock as a result of the same gunshot wound ultimately caused the victim’s
death.3
During trial, appellant claimed that the shooting of his wife was accidental. He alleged that he wanted toshow his
gun to his cousin but it fell when he tried to retrieve the gun from the cabinet. In his attempt tocatch the gun, he
accidentally squeezed the trigger hitting his wife in the process.
However, the trial court did not lend credence to his contentions. On the contrary, it found that based on the
evidence presented, appellant deliberately pulled the trigger of his gun and shot his wife.
The dispositive portion of the trial court’s Decision4 reads as follows:
WHEREFORE[,] premises considered, judgment is hereby rendered finding accused GEORGE ZAPATA Y VIAÑA
guilty beyond reasonable doubt of the crime of PARRICIDE under Art. 246 of the Revised Penal Code as amended
by R.A. 7659 and sentencing him to suffer the penalty of RECLUSION PERPETUA, to indemnify the heirs of the
victim Queeny Zapata y Erespe in the amount of ₱42,983.80 as actual damages, ₱50,000 as death indemnity,
₱50,000.00 as moral damages and the costs of suit.
SO ORDERED.5
Aggrieved, appellant filed a Notice of Appeal.6

In his Brief,7 appellant argued that the trial court erred in finding him guilty of the charge considering the
prosecution’s failure to prove criminal intent on his part. He asserted that the shooting of his wife was accidental,
i.e., he unintentionally pulled the trigger while in the act of catching the gun when it fell from the cabinet.
The appellate court, however, did not lend credence to appellant’s assertion that the killing was accidental. Just like
the trial court, it found that the evidence presented satisfactorily showed that appellant intentionally shot his wife.
The dispositive portion of the appellate court’s Decision8 reads as follows:
WHEREFORE, the appealed Decision dated December 9, 2004 of the trial court is affirmed, subject to the
modification that accused-appellant is further ordered to pay the victim’s heirs exemplary damages in the amount of
₱25,000.00.
SO ORDERED.9
Hence, this appeal.
On July 18, 2011, we required the parties to file their respective supplemental briefs.10 Both parties, however, found
no necessity to file supplemental briefs as they have already exhaustively discussed all the issues in the briefs they
filed before the CA.11
Our Ruling
Appellant does not dispute having killed his wife. However,he insists that the shooting was accidental.
There is no doubt that appellant intentionally killed his wife; the shooting was not accidental. Both the trial court and
the appellate court correctly found appellant guilty beyond reasonable doubt of the crime of parricide.
Appellant’s claim that he accidentally pulled the trigger while attempting to catch the same when it fell from the
cabinet is incredible. First, as correctly noted by the CA, appellant was a former Corporal in the Philippine Marines
and is thus "assumed to know and undertake all safety precautions in storing his firearm."12 In this case, appellant
apparently threw caution to the wind when he placed the gun on top of a cabinet and not insidea locked draweror
cabinet. Second, the gun was loaded. Third, the gun is equipped with several safety measures. Interestingly, all
these safety measures werenot in place at the time of the shooting making appellant’s claim of accident highly
unbelievable. As aptly noted by the trial court:
x x x The gun including the magazine in this case was carelessly placed on top of a cabinet and not on a locked
drawer orshelf. x x x Secondly, the gun was loaded. x x x Third, the gun was cocked. The hammer of the gun was
set to a firing position. Accused argued that the gun may have been cocked when the same hit the side of the
cabinet when it slipped while he was getting it. x x x How convenient that the gun had by plain mishap of hitting the
side [of] the cabinet x x x cocked itself. Fourth, the accused accidentally squeezed the trigger when he tried to catch
the gun to prevent it from falling on the ground. There is physical impossibility for the accused to have squeezed the
trigger when he was allegedly trying to catch the gun. Instinct dictates that to be able to catch a falling object, you
have to catch it with both handsor at least with an open hand with fingers spread or moved apart. It is surprising that
the finger x x x found itself on the gun trigger and instinctively squeezed the same. The probability that the finger
would accidentally slipon the minute hole of the trigger at such spur of the moment and at an awkward position is
veryremote, if not virtually impossible.
It is astoundingly impossible for all safety features of the gun to go off at precisely the same time or in succession.
As admitted by the accused, a .45 caliber pistol has four or five safety features to prevent any accidental discharge
of the firearm. First, the user must loadthe magazine. Second, you have to put a round in the firing chamber.Third,
the gun must be cocked. Fourth, the safety grip was held and was put off. Fifth, the user must beable to squeeze the
trigger despite the presence of a trigger guard. Considering that herein accused is a soldier, adept or skilled in the
handling of guns, it is highly disturbing why he allowed all safety features of the gun to falter causing it to fire
[accidentally]. With all safety mechanismsinstalled in the gun, the occurrence of such a misfortune is only possible if
there is human intervention, purposely done and not by mere chance or stroke of bad luck.13
Fourth, the trajectory of the bullet and the point of entry negate appellant’s claim that he pressed the trigger when
the gun fell on the floor. As correctly pointed out by the CA, "[i]f the shot came from the floor where the gun allegedly
fell, the shot should have beenin an upward direction."14 However, as testified to by the medico-legal officer, the
bullet’s point of entry was at the breast region and it exited at the lower back of the body.15 In short, the assailant
was in front of the victim and the shot was directed posteriorwards.
Moreover, appellant’s actions immediately after the shooting is contrary to his assertion that he did not intend to
harm his wife. Indeed, if the shooting was accidental, appellant would have immediately sought help from his
relatives and neighbors to bring the victim to the hospital.Instead, he just left her sitting on a chair soaked in her
blood.Appellant would not have become alarmed by the arrival of the police authorities. Instead,he fled from the
crime scene leaving his neighbors to tend to his bleeding wife. We concur with the observation of the trial court that -
It was this accidental firing that accused x x x had allegedly hit his wife fatally. According to the accused, upon
seeing his wife, he embraced her and let her sit. He saw that his daughter was crying so he first brought her to his
cousin Edwin. He went back to his wife and let her [sit] on a plastic chair. He shouted to his companions to get a
1âwphi 1
vehicle. His wife was already motionless. His wife fell down and his brother [seated] her again. When he got
impatient, he went out of the house. He heard a siren so hegot confused and left the house and proceeded to Fort
Bonifacio. x x x Having seen his wife bleeding, it baffles the Court why he did not immediately carry and rush his
own wife to the hospital for immediate medical care and attention. It was a most unusual reaction for a man who has
accidentally shot his wife to just[seat] her on a chair and leisurely wait for a vehicle to bring his wife to a hospital. x x
x Being the husband, he is expected to come to the succor of his wife. Laying seriously ill and hovering between life
and death, x x x accused even left his wife. x x x Such actuations of the accused is a clear manifestation that
heintended all the consequences of his nefarious acts. x x x If he was truly innocent, he would not have fled. By
having opted to escape instead of attending to his wife, accused’s guilt had been indubitably established. Accused’s
flight from the scene of the crime sealed his fate. x x x
It is likewise noteworthy to point out that neither one of the relatives of the accused, Manny Zapata (brother) and
Edwin Bautista (cousin) who were at the scene volunteered to bring the victim to the hospital. x x x16
In the crime of parricide, only the following elements need to be satisfactorily established: "(1) the death of the
deceased; (2) that he or she was killed by the accused; and (3) that the deceased was a legitimate ascendant or
descendant, or the legitimate spouse of the accused."17 All these elements have been proven beyond doubt.
Both the trial court and the appellate court properly sentenced appellant to suffer the penalty of reclusion perpetua.
Appellant, however, is not eligible for parole.18 The award of ₱42,983.80 as actual damages islikewise proper as the
same is supported by receipts. The award of ₱50,000.00 as moral damages is also proper. However, the awards of
civil indemnity must be increased to ₱75,000.00 and exemplary damages to ₱30,000.00 inline with prevailing
jurisprudence.19 In addition, all monetary awards shall earn interest at the rate of 6% per annumfrom the date of
finality of thisResolution until fully paid.
WHEREFORE, the appeal is DISMISSED. The assailed December 8, 2010 Decision of the Court of Appeals in CA-
G.R. CR-HC No. 01376 is AFFIRMED with MODIFICATIONS that appellant is not eligible for parole; the awards of
civil indemnity are increased to ₱75,000.00 and exemplary damages to ₱30,000.00; and all monetary awards shall
earn interest at the rate of 6% per annumfrom the date of finality of this Resolution until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 196249 July 21, 2014
ROSE HANA ANGELES, doing business under the name and style [of] LAS MARIAS GRILL AND
RESTAURANT[,] and ZENAIDA ANGELES[,] doing business, under the name and style [of] CAFE TERIA
BAR AND RESTAURANT, Petitioners,
vs.
FERDINAND M. BUCAD, CHARLESTON A. REYNANTE, BERNADINE B. ROAQUIN, MARLON A. OMPOY,
RUBEN N. LAROZA, EVAGELINE B. BUMACOD, WILMA CAINGLES, BRIAN OGARIO, EVELYN A.BASTAN,
ANACLITO A. BASTAN, MA. GINA BENITEZ, HERMINIO AGSAOAY, NORBERTO BALLASTEROS, DEMETRIO
L. BERDIN, JR., JOEL DUCUSIN, JOVY R. BALATA, and MARIBEL ROAQUIN, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the November 30, 2010 Decision2
and March 22, 2011 Resolution3 of the Court of Appeals (CA) in CAG.R. SP No. 109083, which affirmed,
withmodification, the December 28, 2007 Decision4 and March 30, 2009 Resolution5 of the National Labor Relations
Commission (NLRC) in NLRC CASE CA No. 026347-00.6
Factual Antecedents
The facts, as summarized by the appellate court, are as follows:
This Petition for Certiorarihas its precursor in the consolidated Complaints for Illegal Dismissal and Money
Claimsfiled by x x x respondents against petitioners Las Marias Grill and Restaurant and Café Teria Bar and
Restaurant, single proprietorships owned by petitionersRose Hana Angeles and Zenaida Angeles, respectively.
x x x [R]espondents bewailed thatthey were underpaid workers employed on various dates [for] the following
positions, viz:
"Name Date Hired Position Daily Rate Date Dismissed

1. Ferdinand Bucad 4-30-97 Manager ₱7,000.00/month 1-31-2000
2. Charleston Reynante 9-1-98 Supervisor P 130.00 1-31-2000
3. Bernardine7 Roaquin 9-7-99 Cook/helper 60.00 still employed
4. Marlon Ompoy 4-1-99 Driver 75.00 still employed
5. Ruben Laroza 8-6-99 Janitor 60.00 2-4-2000
6. Evangeline Bumacod 10-10-99 Stock clerk 70.00 still employed
7. Wilma Caingles 5-19-99 Waitress 70.00 7-1-99
9-7-99 -do- 70.00 still employed
8. Brian Ogario 5-19-99 Waiter 70.00 2-19-2000
9. Joel Ducusin 1-1-2000 Dishwasher 170.00 1-17-2000
10. Evelyn A. Bastan 7-29-96 Stock clerk 105.00 5-8-99 resigned
11. Anacleto8 Bastan 8-10-97 Helper Cook 80.00 5-8-98 resigned
12. Ma. Gina Benitez 1-13-96 Waitress/Cashier 83.33 10-20-98 resigned
10-7-99 -do- 83.33 4-6-2000
13. Herminio Agsaoay 11-24-99 Dishwasher 60.00 presently employed
14. Norberto Ballesteros9 8-6-99 Cook helper 60.00 2-4-2000
15. Demetrio Berdin, Jr. 2-22-97 -do- 100.00 Oct. 99
16. Jovy R. Balanta10 9-22-99 Waitress 60.00 10-31-99 resigned
17. Maribel Roaquin 9-22-99 -do- 60.00 still employed"
The employees hurled, inter alia, a litany of charges against petitioners, namely: 1) payment of salaries below the
minimum wage and which were oftentimes paid after much delay; 2) non-coverage under the Social Security
System (SSS); 3) termination from employment without giving just benefits despite long service; 4) signing of blank
payroll without indicating the amount; and, 5) non-payment of night differential, holiday pay, COLA, commutation
pay for sick leave and annual leave, 13th month pay and service charges.
x x x [R]espondents likewise charged petitioners with enforcing long hours of service so that stay-in employees
rendered a minimum of 10 hours of work while stay-out employees were required to work for a minimum of 9 hours.
They avowed that petitioners heaped verbal abuses upon them, and worse, maltreated them by splashing water to
wakethem up when anyone fell asleep at work. Petitioners forced sick employees to go home totheir respective
provinces despite their illness. They professed that petitioners failed to provide them security of tenure but only
private respondents Joel Ducusin x x x, Ma. Gina Benitez x x x and Demetrio Berdin, Jr. x x x sued for illegal
dismissal.
In the midst of these imputations, petitioners offered not a tinge of explanation as they failed to submit their Position
Paper.
Ensuingly, the Labor Arbiter rendered a Decisiondated 30 June 2000 plowing solely through the submissions of the
x x x respondents, viz –
"WHEREFORE, the (petitioner) Zenaida Angeles, doing business under the name and style (of) Las Marias Grill and
Restaurant is hereby adjudged guilty of illegal dismissal with respect to (respondents) Joel Ducusin, Ma. Gina
Benitez and Demetrio Berdin, Jr. and is hereby ordered to pay their backwages computed from the time they were
illegally dismissed on January 17, 2000, April 6, 2000and October 1999 respectively up to the date of this Decision
and separation pay of one-month salary for every year of service in lieu of reinstatement considering the strained
relationship that exists between the parties; salary differentials; overtime pay; premium pay for holidays and rest
days; night shift differentials; 13th month pay; service incentive leave pay; unpaid salaries of complainant Jovy
Balanta for the month of October 1999, summarized as follows:
Name
1. Ferdinand M. Bucad ₱19,250.00

2. Charleston A. Reynante 143,199.98
3. Bernadine B. Roaquin 76,240.01
4. Marlon A. Ompoy 182,515.03

5. Ruben N. Laroza 45,247.96
6. Evangeline B. Bumacod 66,465.10

7. Wilma Caingles 73,499.39
8. Brian Ogario 64,298.90

9. Joel Ducusin 37,717.33
10. Evelyn A. Bastan 114,790.57
11. Anacleto A. Bastan 38,801.68
12. Ma. Gina Benitez 130,070.88

13. Herminio Agsaoay 65,191.25
14. Norberto Ballesteros 30,767.55

15. Demetrio L. Berdin, Jr. 150,967.56
16. Jovy R. Balanta 9,624.87

17. Maribel B. Roaquin 38,472.65
Total ₱1,287,120.71
The Computation Sheet is hereto attached and forms part of this Decision.
All other claims are hereby Denied for lack of merit.
SO ORDERED."
Aggrieved, petitioners seasonably appealed to the National Labor Relations Commission ("NLRC") flatly denying the
charges against them. They were surprised to discover that their former counsel did not file any pleading in their
behalf to refute x x x respondents’ accusations. Petitioners theorized that the Complaintswere instigated by x x x
respondent Ferdinand Bucad ("Bucad"),restaurant manager of petitioner Las Marias Grill and Restaurant ("Las
Marias"). Bucad had been performing unsatisfactorily prompting management to conduct an inquiry as to his
performance. Bucad feared that the results of the investigation might implicate him so he convinced his fellow
employees to fabricate baseless inculpations against their employers. Petitioners proceeded to proffer documentary
evidence against each of the x x x respondents. Bucad was given a notice to explain certain violations he had
allegedly committed. He answered and explained his side but the management decided to conduct a hearing giving
him the opportunity to adduce his evidence. He replied that he would not attend the investigation for he had already
sought recourse before the Labor Arbiter which scheduled the hearing on 28 January 2000. With Bucad’s absence
on the day of the investigation, petitioners sent him a Notice of Terminationdated 31 January 2000.
Petitioners adduced the same documentary evidence with respect to x x x respondents Charleston Reynante
("Reynante"), Brian Ogario, and Marlon Ompoy, to wit: the notice toexplain, notice of hearing and of termination.
Petitioners likewise propounded documentary evidence to prove that x x x respondents Ruben Laroza, Marvin
Ballesteros, Evangeline Bumacod, and Maribel Roaquin were probationary employees whose employment were
terminated only after they were servednotices of their respective violations.
As for x x x respondents Bernadine Roaquin ("Roaquin") and Albert Agsaoay ("Agsaoay"), petitioners insisted they
voluntarily resigned from their posts. Roaquin signed a Release, Waiver and Quitclaimwhile Agsaoay signed a
Certificationto confirm that he received his salary and benefits and had no complaints against petitioners. Along the
same strain, petitioners presented the respective Sinumpaang Salaysayof one Melba Pacheca and Nida Bahe. They
were the employees who averred that Berdin likewise resigned when he was caught surreptitiously taking food out
of the kitchen for his girlfriend.
The Sinumpaang Salaysayof a certain Lando Villanueva, another employee, affirmed that x x x respondent Ma.
Gina Benitez ("Benitez") was caught sleeping with x x x respondent Reynante at the workers’ quarters, in violation of
management rules. The couple immediately left their jobs, but returned a year later beseeching petitionersto accept
them back. Petitioners took pity on them giving Reynante a job albeit there was no vacancy at that time, and
allowing the couple to live in the workers’ quarters. When Reynante’s employment was terminated on 31 January
2000, Benitez went with him voluntarily and left her job.
Petitioners then claimed that x x x respondents-spouses Evelyn and Anacleto Bastan had a misunderstanding with
their co-employees. They decided to leave their posts, despite the management’s pleas for them to stay.
Still and all, the NLRCremained unperturbed and dismissed the Appeal in the assailed Decisiondated 28 December
2007. Petitioners moved for reconsideration thereof but obtained no favorable relief in the challenged
Resolutiondated 30 March 2009.11
In dismissing the petitioners’ Appeal, the NLRC held in its December 28, 2007 Decision that – After considering the
arguments presented by the respondents12 in their memorandum of appeal, it appears that the respondents failed to
submit sufficient evidence to compel Us to reverse the findings of the Labor Arbiter. There is no substantial proof
presented that the money claims were paid to the complainants.13 The best evidence of such payment is the payroll,
whereas in this case, respondents merely allege payment.
Moreover, respondents indirectly admit that they give less than the statutory benefits to the employees on the
ground that the latter were provided facilities computed in the amount of [P]75.00 per day x x x and for advances
and transportation expenses x x x. Article 97[f] of the Labor Code provides that wages include the fair and
reasonablevalue of board and lodging or other facilities customarily provided by the employerto the employee. It is
also wellsettled that in deducting the value of facilities from the employees’ wages, three (3) requirements must first
be complied with, to wit: 1) proof must be shown that such facilities are customarily furnished by the trade; 2) the
provision of deductible facilities must be voluntarily accepted in writing by the employee; finally, 3) facilities must be
charged atfair and reasonable value (Mabeza vs. NLRC, et al., G.R. No. 118506, April 18, 1997). In this case, there
is no showing that these requirements were complied withby the respondents before deductions were made from
the employees’ wages. Respondents failed to prove that such deductions were voluntarily accepted in writing by the
employees and that these were customarily furnished by the trade. As such, deduction [from] the salaries is
erroneous.
Anent the issue of payment of backwages, the same is proper considering that the complainants wereterminated
without proof that their termination was with just cause and after observance of due process.
WHEREFORE, premises considered, the appeal is DISMISSED for lack of merit, and the Decision of the Labor
Arbiter dated June30, 2000 is hereby AFFIRMED.
SO ORDERED.14
Petitioners filed a Motion for Reconsideration15 of the above decision, but the NLRC denied the same via its March
30, 2009 Resolution.16
Respondents went up to the CA viaan original Petition for Certiorari17 questioning the above pronouncements of the
NLRC. On November 30, 2010, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the Decisiondated 28 December 2007 and Resolution dated 30 March 2009 of the National Labor
Relations Commission are AFFIRMED with MODIFICATION in that (1) the ruling that private respondents Ma. Gina
Benitez and Demetrio Berdin, Jr. were illegally dismissed is VACATED; and (2) the awards of backwages and
separation pay to private respondents Ma. Gina Benitez and Demetrio Berdin, Jr. are DELETED.
SO ORDERED.18
The CA held that contrary to petitioners’ submission in their Petition, there is no proof that herein respondent Joel
Ducusin (Ducusin) – who petitioners claimed hatched the plan to harass them through the filing of labor complaints
– abandoned his employment. On the contrary, Ducusin’s immediate filing of the labor complaint indicated that he
did not abandon his employment; it characterizes him as one who deeply feltwronged by his employer.
With regard to respondents Ma. Gina Benitez (Benitez) and Charleston A. Reynante, however, the CA believed that
based on the evidence, they voluntarily left their jobs in 1998 when they were caught by managementhaving an illicit
affair. This showedthat they abandoned their employment, which does not entitle Benitez to an award of backwages
and separation pay.
The CA further held that petitioners did not commit illegal dismissal with respect to respondent Demetrio L. Berdin,
Jr. (Berdin), since Berdin resigned from his position on September 25, 1999 after management caught him sneaking
food out for his girlfriend. There is thus no ground for awarding Berdin backwages and separation pay as well.
On the issue of money claims, the CA ruled that apart from bare allegations of payment, petitioners have not
satisfactorily shown – by adequate documentary evidence which should be in its custody and possession – that the
salaries, benefits and other claims due to the respondents have been accordingly paid; that petitioners failed to
discharge the burden of proving payment; that their defense that the relevant payroll and daily timerecords were
stolenconstitutes a lame excuse which cannot excuse them from proving that theyhave paid what they owed
respondents.
Petitioners filed a Motion for Partial Reconsideration,19 but in its assailed March 22, 2011 Resolution, the CA stood
itsground. Thus, the instant Petition.
Issue
Petitioners submit that the CA committed the following error:

THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT PRIVATE RESPONDENT JOEL
DUCUSIN WAS ILLEGALLY TERMINATED AND THAT PETITIONERS HAVE FAILED TO OVERCOME THE
BURDEN OF PAYMENT OF THE MONEY CLAIMS OF PRIVATE RESPONDENTS.20
In their Petition and Reply,21 petitioners insist that Ducusin abandoned his employment when he chose not to report
for work after January 15, 2000, after having worked with petitioners for only two weeks; that it was only upon
Bucad’s instigation that Ducusin and the other respondents filed unfounded labor complaints against petitioners–
and not because they actually felt wronged; that in the first place, Ducusin has not shown that he was terminated –
which is a prerequisite to a claim of illegal dismissal; that being a stay-in employee, Ducusin’s failure to report for
work and his having lefthis quarters bolster the theory of abandonment; and that Ducusin’s filing of a labor complaint
does not necessarily negate abandonment, per thisCourt’s ruling in Leopard Integrated Services, Inc. and/orPoe v.
Macalinao.22
With respect to the awards on respondents’ money claims, petitioners maintain that they have paid what is dueand
owing to the respondents, and that the Labor Arbiter, the NLRC, and the CAawarded more than what was being
claimed. Petitioners direct the Court’s attention to pieces of documentary evidence attached to their Memorandum of
Appeal23 with the NLRC – consisting of daily time records, cash vouchers, signed receipts for the payment of 13th
month pay, SSS records, releases and quitclaims, and computation of monetary claims24 – supposedly indicating
that they have settled their pecuniary obligations to respondents. Petitioners claim that the CA failed to appreciate
such evidence, which led the appellate court to an erroneous conclusion.
Petitioners thus pray for the reversal of the assailed dispositions, as well as a declaration that Ducusin was legally
terminated and the deletion of the monetary awards in favor of respondents. Respondents’ Arguments
In their Comment,25 respondents simply point out that petitioners do not present valid reasons that would warrant a
reversal; that petitioners have not sufficiently shown that indeed, Ducusin abandoned his job; and that the CA is
correct in finding that petitioners failed to discharge the burden of proving that respondents have been paidtheir
monetary claims.
Our Ruling
The Court affirms.
The petitioners would have this Court resolve issues which require a reevaluation of the evidence; issues of fact
relating to the dismissal of their employees – respondent Ducusin particularly – and the computation of monetary
claims, which have been passed upon by the Labor Arbiter, the NLRC, and the CA.
What must be realized, however, is that this Court is not a trier of facts. "[T]he jurisdiction of the Supreme Court in
cases brought before it from the CA viaRule 45 of the 1997 Rules of Civil Procedure is generally limited to reviewing
errors of law. This Court is not a trier offacts. In the exercise of its power of review, the findings of fact of the CA are
conclusive and binding and consequently, it is not our function to analyze or weigh evidence all over again."26 This
principle applies with greater force in labor cases, where this Court has consistently held that findings of fact of the
NLRC are accorded great respect and even finality,27 especially if they coincide withthose of the LaborArbiter and
are supported by substantial evidence.28 "Judicial review by this Court does not extend to a reevaluation of the
sufficiency ofthe evidence uponwhich the proper labor tribunal has based its determination."29 Factual issues are
beyond the scope of this Court’s authority to review on certiorari.30
Moreover, "[f]actual findingsof administrative bodies charged with their specific field of expertise, are affordedgreat
weight by the courts, and in the absence of substantial showing that suchfindings were madefrom an erroneous
estimation of the evidence presented, they are conclusive, and in the interest of stability of the governmental
structure, should not be disturbed."31
Likewise, the Petition fails in light ofthe Labor Arbiter’s and the NLRC’s identical findings, which were affirmed by the
CA.32 The consistent rebuff of petitioners’ position convinces this Court of the weakness of their arguments. This can
only mean that their evidence – which ismerely reiterated here for the fourth time – will not stand scrutiny by this
Court, since it could not even convince the NLRC and CA to take a view contrary to that taken by the Labor Arbiter.
Finally, there exists serious doubt with respect topetitioners’ proffered evidence, considering that the relevant payroll
and daily time records are missing as they were, according to petitioners, stolen. Setting aside for a moment the
CA’s pronouncement that the "stolen records" angle is nothing but a lame excuse, it would nonetheless be difficult if
not impossible to validate and reconcile petitioners’ documentary evidence and unilateral claims of payment, if the
official payroll and daily time records are not taken into account. Without them, there could be no sufficient basis for
this Court to overturn the assailed Decision; the Court can only rely on the findings of the Labor Arbiter, the NLRC,
and the CA.
x x x The purpose of a time record is to show an employee’s attendance in office for work and to be paid
accordingly, taking into account the policy of "no work, no pay". A daily time record is primarily intended to prevent
damage or loss to the employer, which could result in instances where it pays an employee for no work done; it is a
mandatory requirement for inclusion in the payroll, and in the absence of an employment agreement, it constitutes
evidence of employment.33 (Emphasis supplied)
x x x The punching of time card is undoubtedly work related. It signifies and records the commencement of one's
work for the day. It is from that moment that an employee dons the cape of duties and responsibilities attached to
1âw phi 1
his position in the workplace. It is the reckoning point of the employer's corresponding obligation to him - to pay his
salary and provide his occupational and welfare protection or benefits. x x x34 (Emphasis supplied)
What "daily time records" petitioners refer to in this Petition pertain to the supposed attendance record of several of
the respondents, which however do not contain the latter's respective signatures and those of their superiors. They
appear to be incomplete as well; indeed, some are barely readable.35 They can hardly be considered proof sufficient
enough for this Court to consider.
If petitioners believe that they have been prejudiced, then they only have themselves to blame, for not offering
sufficient proof to prove their case. For their blunder, they may not expect this Court to resort to unnecessary factual
nitpicking in an attempt to forestall the effects of an adverse judgment.
WHEREFORE, the Petition is DENIED. The November 30, 2010 Decision and March 22, 2011 Resolution of the
SO ORDERED.
SECOND DIVISION
G.R. No. 186589 July 18, 2014
RICARDO C. SILVERIO, SR. and LORNA CILLAN-SILVERIO, Petitioners,

vs.
RICARDO S. SILVERIO, JR., Respondent.
DECISION
DEL CASTILLO, J.:
A hearing is required in order to resolve a charge of indirect contempt; the respondent to the charge may not be
convicted on the basis of written pleadings alone.
(CA) in CA-G.R. SP No. 104060, entitled "Ricardo C. Silverio, Sr. and Lorna Cillan-Silverio, Petitioners, versus
Ricardo S. Silverio, Jr., Respondent."
Factual Antecedents
In an October 31, 2006 Omnibus Order3 issued by Branch 57 of the Regional Trial Court of Makati in Spec. Proc. M-
2629 entitled "In re: Intestate Estate of the Late Beatriz S. Silverio, Ricardo C. Silverio, Sr., Petitioner, versus
Ricardo S. Silverio, Jr., Heir-Administrator Designate,Edmundo S. Silverio, Heir-Movant, and Ligaya S. Silverio,
represented by her Legal Guardian Nestor Dela Merced II, Heir-Intervenor," it was decreed as follows:
WHEREFORE, above premises considered, this Court for the foregoing reasons resolves to grant the following:
(1) Partially reconsidering Nos. 1 and 5 of its Order dated December 12, 2005, thus upholding the granting of Letters
of Administration to Ricardo S. Silverio, Jr. anent the Estate of Beatriz S.Silverio in lieu of Ricardo C. Silverio, Sr.,
who is removed as Administrator for gross violation of his duties and functions under Section 1, Rule 81 of the Rules
of Court;
(2) Allowing Ricardo S. Silverio, Jr. to immediately take his oath as Administrator and exercise his duties and
functions under his Administrator’s Bond Utassco No. JCL(1)-001-1001, if still valid, or upon posting a new
Administrator’s Bond of PH₱1,000,000.00;
(3) Allowing the sale of the properties located at (1) No. 82 Cambridge Circle, Forbes Park, Makati City, covered by
T.C.T. No. 137155 issued by Register of Deeds of Makati City; (2) No. 3 Intsia Road, Forbes Park, Makati City
covered by T.C.T. No. 137154 issued by the Register of Deeds of Makati City; and (3) No. 19 Taurus St., Bel-Air
Subd., Makati City covered by TCT No. 137156 issued by the Register of Deeds of Makati City to partially settle the
intestate estate of the late Beatriz S. Silverio, and authorizing the Administrator to undertake the proper procedure of
transferring the titles involved to the name of the estate; and
(4) To apply the proceeds of the salementioned in Number 3 above to the payment of the taxes, interests, penalties
and other charges, if any, and to distribute the residue among the heirs Ricardo [C.] Silverio, Sr., Ricardo S. Silverio,
Jr., Ligaya S. Silverio represented by Legal Guardian Nestor S. Dela Merced II, Edmundo S. Silverio and Nelia S.
Silverio-Dee in accordance with the law on intestacy.
SO ORDERED.4
Petitioner Ricardo C. Silverio, Sr. (Ricardo Sr.) is the surviving spouse of the decedent Beatriz S. Silverio, with
whomhe has children: herein respondent Ricardo Jr. (Ricardo Jr.); Edmundo; Ligaya; and Nelia Silverio-Dee (Nelia).
Lorna Cillan-Silverio (Lorna) is Ricardo Sr.’s second wife. The subject matter of Spec. Proc. M-2629 is the
decedent’s intestate estate (the estate), which includes, among others, shares of stock in Pilipinas Development
Corporation (PDC) and a residential house in Urdaneta Village (house atUrdaneta Village).
Nelia filed a Petition for Certiorariwith the CA – docketed as CA-G.R. SP No. 971965 – questioning the trial court’s
October 31, 2006 Omnibus Order, particularly Ricardo Jr.’s appointment as the new administrator. The CA later
issued two Resolutions, which granted Nelia’s application for a writ of preliminary injunction, to wit:
1. A July 4, 2007 Resolution,6 with the following decretal portion:
WHEREFORE, premises considered, the Private Respondents’ motion(s) for the reconsideration of Our February 5,
2007 Resolution are DENIED. The Petitioner’s application for a writ of injunction is hereby GRANTED.
Accordingly, let a Writ of Preliminary Injunction issue upon posting of the bond in the amount of two million pesos
(Ph₱2,000,000.00) enjoining the Respondents from enforcing the October 31, 2006 Omnibus Orderissued in Sp.
Proc. M-2629; and, allowing Ricardo [C.] Silverio, Sr. to continue as administrator, pending resolution of the instant
petition.
It appearing that the required pleadings have already been filed and no other pleading may be forthcoming per the
Judicial Records Division’s verification report of June 19, 2007, the main petition may be considered submitted for
resolution.
SO ORDERED.7
2. A February 29, 2008 Resolution,8 which decreed:

WHEREFORE, the ten million[-]peso (Ph₱10,000,000.00) bond posted by the Petitioner under PSIC Bond No. JCL
(8) 00207102119 is APPROVED. Accordingly, by this WRIT OF PRELIMINARY INJUNCTION, the Respondents,
their agents or anybody acting in their behalf, are ENJOINED from executing, enforcing or implementing any writ of
execution, order, or resolution for the enforcement ofthe October 31, 2006 Omnibus Orderissued by the Respondent
Court in Sp. Proc. M-2629 thereby allowing Ricardo [C.] Silverio, Sr. to continue as administrator during the
pendency of this case.
The Petitioner’s motion seeking the reconsideration of Our January 3, 2008 Resolution increasing the amount ofthe
bond from two (2) million to ten (10) million pesos, having been rendered mootand academic by her subsequent
submission of a bond in the increased amount, is DENIED.
SO ORDERED.9
On September 3, 2007, Ricardo Jr. filed with this Court an "Appeal under Rule 45 and/or Certiorariunder Sec. 1,
Rule 65" with a prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction,
docketed as G.R. No. 178676,10 seeking among others a reversal of the CA’s July 4, 2007 Resolution and the
issuance of injunctive relief. Respondentcontended therein that the CA acted with grave abuse of discretion
inissuing the July 4, 2007 Resolution and in granting injunctive relief against him.
On June 13, 2008, Ricardo Jr. wrote and sent two letters, one each to petitioners. Ricardo Jr. demanded in the first
letter that Ricardo Sr. cease and desist from 1) exercising the rights of a stockholder in PDC; 2) managing PDC’s
affairs and business; and 3) transacting withthird persons for and in behalf of PDC and to turn over all of its books
and records. In the second letter, Ricardo Jr. demanded that Lorna immediately vacate the house at Urdaneta
Village.11 Ruling of the Court of Appeals
On June 25, 2008, petitioners filed with the CA a Petition for Indirect Contempt,12 docketed as CA-G.R. SP No.
104060, seeking that herein respondent Ricardo Jr. be declared in indirect contempt of court and punished
accordingly. They charged that respondent’s June 13, 2008 demand letters violate and defy the CA’s July 4, 2007
and February 29, 2008 Resolutions in CA-G.R. SP No. 97196, which enjoined respondent’s appointment as
administrator pursuant to the October 31, 2006 Omnibus Order; allowed petitioner Ricardo Sr. to continue as
administrator of the estate; and enjoinedRicardo Jr. and his co-respondents in Spec. Proc. M-2629 from executing,
enforcing or implementing any writ of execution, order, or resolution for the enforcement of the Omnibus Order.
Petitioners likewise charged that –
14. [Last] June 20, 2008 at about 2:00 in the afternoon, respondent Silverio Jr., accompanied by his two lawyers:
Attys. Efren Vincent M. Dizon and Charlie Mendoza and some John Does, without the benefit of a final court order
or writ of execution and without the assistance of a sheriff, attempted to enforce the Decision of the Regional Trial
Court of Makati City, Branch 145 which was appealed to the Court of Appeals by way of Notice of Appeal, by trying
to forcibly evict against their will, the occupants of one of the residence(s) of his petitioner father Silverio Sr. at #21
Cruzada, Urdaneta Village, Makati City, covered by the Testate Intestate Case appealed to this Honorable Court
which issued the aforementioned injunction. In the process, respondent Silverio Jr. created quite a commotion and
public disturbance inside the subdivision. Only [with] the timely intervention of the officers of the homeowners
association, barangay officials, some policemen and this representation was respondent Silverio Jr. prevailed upon
topeacefully leave the place.
15. Such acts of respondent Ricardo S. Silverio, Jr. in trying to eject his father from his residence without the benefit
of a final court order/writ of execution, [are] not only x x x illegal and show disrespect for elders, but also smack a lot
of bad taste in contravention [of] our established customs and tradition[s].13
Petitioners argued further that PDC and the house at Urdaneta Village are assets of the estate placed under
Ricardo Sr.’s charge as administrator through the July 4, 2007 and February 29, 2008 Resolutions, which
characterize respondent’s acts as undue interferencewith Ricardo Sr.’s administratorship; moreover, respondent’s
acts contravene Philippine customs and traditions. Thus, respondent’s acts constitute indirect contempt as defined
and punished under Rule 71, Section 3 of the 1997 Rules of Civil Procedure14 (1997 Rules).
On February 25, 2009, the CA issued the assailed Decision, which held thus –
After a careful evaluation of the evidentiary records, this Court finds it inappropriate to make a ruling on whether or
not the Respondent has committed certain acts, supra., violative of Revised Rule 71 of the Rules.
Records show that on 3 September 2007, the Respondent has interposed an appeal from the CA Resolution dated
4 July 2007, supra., before the Supreme Court questioning in essence said resolution as having been granted to the
Petitioners with grave abuse of discretion amounting to lack or in excess of jurisdiction, hence, allegedly null and
void.
Accordingly, in the light of the foregoing development, this Court is compelled to restrain itself from resolving the
issuesin the instant petition.
Otherwise put, it is imperative that We instantly pull the plug and let the High Tribunal settle the controversy
surrounding the propriety in the issuance of CA Resolution dated 4 July 2007, supra., from which order the
Respondent has allegedly committed acts indefiance thereof.
As laid down by the High Tribunal in Manila Electric Company v. Phil. Consumers Foundation, Inc. et al., thus:
…it is the duty of the lower courts to obey the Decisions of this Court and render obeisance toits status as the apex
of the hierarchy of courts. "A becoming modesty of inferior courts demands conscious realization of the position that
they occupy in the interrelation and operation of the integrated judicial system of the nation." "There is only one
Supreme Court from whose decisions all other courts should take their bearings"…
WHEREFORE, premises considered, the instant Petition is hereby DISMISSED.
SO ORDERED.15
On this account, petitioners filed the present Petition.
Issue
In the Petition, it issubmitted that –
THE PENDENCY OF AN APPEAL BEFORE THE [SUPREME COURT] ON THE VALIDITY OF AN INJUNCTION
ISSUED BY THE COURT OF APPEALS DOES NOT PRECLUDE THE [LATTER] FROM ADJUDICATING THE
QUESTION OFWHETHER X X X SUPERVENING ACTS COMMITTED BY ONE OF THE PARTIES IN THE
COURT OF APPEALS CASE CONSTITUTE INDIRECT CONTEMPT BASED ON THE PRINCIPLE OF RESPECT
FOR HIERARCHY OF COURTS. THUS, THE COURT OF APPEALS ERRED WHEN IT INVOKED THE
PRINCIPLE OF RESPECT FOR HIERARCHY OF COURTS IN DISMISSING THE PETITION FOR INDIRECT
CONTEMPT.16
Petitioners, in praying that the assailed Decision be set aside and that the Court declare respondent guilty of
indirectcontempt, maintain that the July 4, 2007 and February 29, 2008 CAResolutions in CA-G.R. SP No. 97196
are valid and standing orders that must be obeyed unless and until they are reversed or set aside, and despite the
pendency of the petition in G.R.No. 178676; respondent is bound by what is decreed in the July 4, 2007 Resolution,
and without injunctive relief from this Court, any act performed incontravention thereof constitutes indirect contempt.
Petitionersthus conclude that in refusing to take cognizance of their petition for indirect contempt, the CA in CA-G.R.
SP No. 104060 committed error.
Finally, petitioners urge this Court to take the initiative in finding respondent guilty of indirect contempt for issuing the
June 13, 2008 letters and for attempting to evict them from their Urdaneta Village home on June 20, 2008, which
acts they believe amount to a defiance and disobedience of the CA’s dispositions in CA-G.R. SP No. 97196.
Arguing for the denial of the Petition, respondent in his Comment17 submits that the mere act of writing and sending
the June 13, 2008 letters to petitioners does not make him liable for indirect contempt of court, as they "do not deal
directly or indirectly with any of the enjoined acts enumeratedin the 31 October 2006" Omnibus Order. Respondent
adds that petitioners have not shown that petitioner Ricardo Sr. has filed an administrator’s bond and has taken his
administrator’s oath; because ifhe has not, then it may notbe said that respondent acted in defiance of the appellate
court’s Resolutions since he continued to act as the administrator on the strength of the October 31, 2006 Omnibus
Order in Spec. Proc. M-2629. Finally, respondent submits that he may not be found guilty of indirect contempt in the
absence of proof that he physically carried out the demands contained in his June 13, 2008 letters; though he
admits that he wrote the letters, he nonetheless claims that hedid nothing more beyond sending them.
Our Ruling
The Petition is granted in part.
The pendency of a special civil action for certiorariinstituted in relation to a pending case does not staythe
proceedings therein in the absence of a writ of preliminary injunction or temporary restraining order. Rule 65,
Section 7 of the 1997 Rules makes this clear:
The court in which the petition is filed may issue orders expediting the proceedings, and it may also grant a
temporary restraining order or a writ of preliminary injunction for the preservation of the rights of the parties pending
such proceedings. The petition shall not interruptthe course of the principal case unless a temporary restraining
order or a writ of preliminary injunction has been issued against the public respondent from further proceeding in the
case.
The public respondent shall proceed with the principal case within ten (10) days from the filing of a petition for
certiorariwith a higher court or tribunal, absent a temporary restraining order or a preliminary injunction, or upon its
expiration. Failure of the public respondent to proceed with the principal case may be a ground for an administrative
charge. (Emphasis supplied) Petitioners are thus correct in arguing that the pendency of G.R. No. 178676 did not
interrupt the course of CA-G.R. SP No. 97196, in the absence of a temporary restraining order orwrit of preliminary
injunction issued in the former case. This is because "an original action for certiorariis an independent action and is
neither a continuation nor a part of the trial resulting in the judgment complained of."18 The CA therefore committed
error in dismissing CA-G.R. SP No. 104060, or petitioners’ indirect contempt petition, on the ground of pendency of
G.R. No. 178676. It need not wait for this Court to resolve G.R. No. 178676 before the petitioners’ contempt charge
1âwphi1
may be heard.
However, at this point, this Court cannot grant petitioners’ plea to resolve the merits of their petition for indirect
contempt; it is the CA that should properly try the same. Aside from the fact that the CA is the court against which
the alleged contempt was committed, a hearing is required in resolving a charge for indirect contempt. The1âw phi 1
respondent in an indirect contempt charge may not be convicted on the basis ofwritten pleadings alone.19
Sections 3 and 4, Rule 71 of the Rules of Court, specifically [outline] the procedural requisites before the accused
may be punished for indirect contempt. First, there must be an order requiring the respondent to show cause why he
should not be cited for contempt. Second, the respondent must be given the opportunity to comment on the charge
against him. Third, there must be a hearingand the court must investigate the charge and consider respondent's
answer. Finally, only if found guilty will respondent be punished accordingly. The law requires that there be a charge
in writing, duly filed in court, and an opportunity given to the person charged tobe heard by himself or counsel. What
is most essential is that the alleged contemner be granted an opportunity to meet the charges against him and to be
heard in his defenses. This is due process, which must be observed at all times.
xxxx
In contempt proceedings, the prescribed procedure must be followed. To be sure, since an indirectcontempt charge
partakes the nature of a criminal charge, conviction cannot be had merely on the basis of written pleadings. A
respondent in a contempt charge must be served with a copy of the motion/petition. Unlike in civil actions, the Court
does not issue summons on the respondent. While the respondent is not required to file a formal answer similar to
that in ordinary civil actions, the court must set the contempt charge for hearing on a fixed date and time on which
the respondent must make his appearance to answer the charge. x x x20 (Emphasis supplied)
To be sure, there are more pressing matters that require the attention of this Court; petitioners' complaint for indirect
contempt could very well be resolved by the appellate court. WHEREFORE, the Petition is GRANTED IN PART.
The February 25, 2009 Decision of the Court of Appeals in CA-G.R. SP No. 104060 is SET ASIDE. The Court of
Appeals is ORDERED to take cognizance of petitioners' June 25, 2008 Petition for Indirect Contempt.
SO ORDERED.
SECOND DIVISION
G.R. No.177484 July 18, 2014
SPOUSES ALEJANDRO MANZANILLA AND REMEDIOS VELASCO, Petitioners,

vs.
WATERFIELDS INDUSTRIES CORPORATION, represented by its President, ALIZA MA, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari is the September 15, 2006 Decision1 of the Court of Appeals (CA) in
CA-G.R. SP No. 60010. Said Decision granted respondent Waterfields Industries Corporation's (Waterfields)
Petition for Review of the July 14, 2000 Decision2 of the Regional TriaJ Court (RTC) of Manila, Branch 42 in Civil
Case No. 00-96228, which in tum affirmed the May 7, 1999 Decision3 of the Metropolitan Trial Court (MTC) of
Manila, Branch 4 in Civil Case No. 160443-CV granting petitioners spouses Alejandro Manzanilla and Remedios
Velasco's (spouses Manzanilla) Complaint for Unlawful Detainer against Waterfields. Likewise questioned is the CA
April 12, 2007 Resolution4 denying the Motion for Reconsideration thereof.
Factual Antecedents
The spouses Manzanilla are the owners of a 25,000-square meter parcel of land in BarangaySan Miguel, Sto.
Tomas, Batangas, covered by Transfer of Certificate of Title No. T-35205. On May 24, 1994, they leased a 6,000-
square meter portion of the above-mentioned property to Waterfields, as represented by its President Aliza R. Ma
(Ma). Pertinent portions of their Contract of Lease5 provide, viz:
Section 2. TERM OF LEASE. The Lease shall be for a period of TWENTY FIVE (25) YEARS from May 16, 1994 to
May 15, 2019, renewable upon the option of the LESSEE;
Section 3. MONTHLY RENTALAND ESCALATION. In consideration of the lease herein constituted, LESSEE shall
pay unto the LESSORS a monthly rental in the gross amountof EIGHTEEN THOUSAND (₱18,000.00) payable
within the first TEN (10) days of each month x x x.
Section 4. DEPOSIT. LESSORS hereby acknowledge receipt from LESSEE a rental deposit in the amount ofTWO
HUNDRED SIXTEEN THOUSAND (₱216,000.00) PESOS, Philippine currency, to answer for any unpaid rentals,
damages, penalties and unpaid utility charges.Such deposit or any balance thereof shall be refunded to the
LESSEE immediately upon the termination or expiration of this contract.6
The parties executed on June 6, 1994 an Amendment to the Contract of Lease.7 Save for the commencement of the
lease which they reckoned on the date of the execution of the amendment and the undertaking of the spouses
Manzanilla to register the agreements, the parties agreed therein that all other terms and conditions in the original
Contract of Lease shall remainin full force and effect.
Beginning April 1997, however, Waterfields failed to pay the monthly rental. Hence, Ma sent the spouses Manzanilla
a letter8 dated July 7, 1997 which reads as follows:
Spouses Mr. & Mrs. Alejandro Manzanilla
Sto. Tomas, Batangas

I promise to pay the following rentals in arrears:
10 April 97 8,000.00
10 May 97 18,000.00
10 June 97 18,000.00
10 July 97 18,000.00
check replacement 8,000.00
₱70,000.00
by way of check payment dated July 15, 1997.
In addition to the aforementioned, I will give a check for the amount of ₱18,000, representing advance rental for the
month ofAugust 1997.
From hereon, notwithstanding the terms of the lease contract, I shall pay rentals (eve) on or before the 10th day of
each month, (30-day) representing advance rental.
The deposit stipulated in our lease contract shall be used exclusively for the payment of unpaid utilities,if any, and
other incidental expenses only and applied at the termination of the lease.
The lease contract dated 5/24/94 shall be amended according to the above provision.
(Signed)
ALIZA MA
President
Waterfields Industries Corporation
7/9/97
Quezon City9
On July 30, 1998, the spouses Manzanilla filed before the MTC a Complaint10 for Ejectment against Waterfields.
They alleged in paragraph 4 thereof that they entered into a Contract of Lease with Waterfields on May 24, 1994,
and in paragraph 5, that the same was amended on June 6, 1994 and July 9, 1997.11 However, Waterfields had
committedviolations of the lease agreement by not paying the rentals on time. And in yet another violation, it failed
to pay the ₱18,000.00 monthly rental for the past six months prior to the filing of the Complaint, that is, from
December 1997 to May 1998 or in the total amount of ₱108,000.00. Demands upon Waterfields to pay the accrued
rentals and vacate the property were unheededso the spouses Manzanillaconsidered the contract terminated and/or
rescinded.12 And since Waterfields still failed to comply with their final demand to pay and vacate,13 the spouses filed
the Complaint and prayed therein that the former be ordered to (1) vacate the subject property and, (2) pay the
accrued rentals of ₱108,000.00 as of May 1998, the succeeding rentals of ₱18,000.00 a month until the property is
vacated, the interest due thereon, attorney’s fees, and cost of suit.
In its Answer,14 Waterfields admitted paragraphs 4 and 5 of the Complaint and alleged that: (1) when the lease
agreement was executed, the property subject thereof was just bare land; (2) it spent substantial amounts of money
in developing the land, i.e., building of water dikes, putting up of a drainage system, land filling and levelling; (3) it
built thereon a processing plant for fruit juices, preserved vegetables and other frozen goods for which it spent
around ₱7,000,000.00; and (4) it caused the installation in the said premises of an electrical system for ₱80,000.00
and water system for ₱150,000.00. Waterfields further alleged that although the first two years of its operation were
fruitful, it later suffered from business reverses due to the economic crisis that hit Asia. Be that as it may, Waterfields
claimed that it did not fail or refuse to pay the monthly rentals but was just utilizing the rental deposit in the amount
of ₱216,000.00 (equivalent to one year rentals) as rental payment in accordance with Section 4 of the original
Contract of Lease. Hence,it argued that the spouses Manzanilla have no cause of action against it. Waterfields also
asserted that the precipitate filing of the Complaint against it is tainted with bad faith and intended to cause it grave
injustice considering that it already spent an enormous amount of almost ₱10,000,000.00 in developing the
property. By way of compulsory counterclaims, Waterfields sought that the spouses Manzanilla be ordered to pay it
moral damages and attorney’s fees.
In its Decision15 of May 7, 1999, the MTC found Ma’s letter of July 9, 1997 to have amended the Contract of Lease.
In particular, Section 4 of the Contract of Lease which provides that the rental deposit shall answer for any unpaid
rentals, damages, penalties and unpaid utility charges was superseded by the portion in Ma’s July 9, 1997 letter
which states that "the deposit stipulated in our lease contract shall be used exclusively for the payment of unpaid
utilities, if any, and other incidental expenses only and applied at the termination of the lease".Hence, the MTC
found no merit in Waterfield’s claim that it did not fail or refuse to pay the monthly rentals as it was applying the
rental deposit to its payment of the same. Consequently, the MTC declared that Waterfields violated the lease
agreement due to non-payment of rentals and disposed of the case as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of [the spouses Manzanilla] and against
[Waterfields], ordering the latter to –
1. vacate subject premises and surrender same peacefully to [the spouses Manzanilla;
2. to pay [the spouses Manzanilla] the sum of ₱108,000.00 representing rental arrears from December, 1997 to
May, 1998, and the sum of ₱18,000.00 a month thereafter, until it has actually vacated and surrendered subject
premises;
Toward this end, whatever rentaldeposit [Waterfields] may have, shall be taken into account to answer for the
latter’s arrearages.
3. to pay the costs of suit.
SO ORDERED."16
Before the RTC, Waterfields questioned the MTC’s ruling that Ma’s letter of July 9, 1997 effectively amended the
Contract of Lease. It argued that the said letter is unenforceable under the Statute of Frauds since the same was
merely in the handwriting of Ma, unsubscribed by both parties, and unacknowledged before a notary public. Hence,
the rental deposit should havebeen applied as payment for monthly rentals pursuant to the original Contract of
Lease.
The RTC, however, was unimpressed. It noted in its Decision17 dated July 14, 2000 that in its Answer, Waterfields
admitted paragraph 5 of the Complaint which states that the Contract of Lease was amended on June 6, 1994 and
July 9, 1997. Further, the very existence of Ma’s July 9, 1997 letter negated the applicability of the Statute of
Frauds. The RTC thus disposed of the case as follows:
WHEREFORE, finding no reversible error, the judgment of the trial court is affirmed in toto.
SO ORDERED.18
The CA, however, had a different take. In its Decision19 dated September 15, 2006, it gave weight tothe spouses
Manzanilla’sallegation that they terminated the Contract of Lease. Upon such termination, it held that the rental
deposit should have been applied as payment for unpaid utilities and other incidental expenses, if any, in view of the
following portion of the July 9, 1997 letter:
The deposit stipulated in our lease contract shall be used exclusively for the payment of unpaid utilities, if any, and
other incidental expenses only and applied at the termination of the lease.20
And since the spouses Manzanilla did not allege that there were unpaid utilities or incidental expenses for the
account of Waterfields as of the termination of the contract, the whole amount of ₱216,000.00 should have been
returned by the former to the latter when the contract was terminated. Not having done so, the spouses Manzanilla
therefore,became debtors of Waterfields insofar as the said amount is concerned. And since Waterfields is also a
debtor of the spouses Manzanilla with respect to the unpaid rentals, compensation should take place. It ratiocinated:
Compensation shall take place when two persons, in their own right, are creditors and debtors of each other (Art.
1278, Civil Code). Asof the filing of the action, [Waterfields] was indebted to [the spouses Manzanilla] in the amount
of ₱144,000.00 as unpaid rentals covering the period December 1997 to July 1998, while [the SpousesManzanilla]
owed [Waterfields] the sum of ₱216,000.00 representing its rental deposit. Offsetting the ₱144,000.00 unpaid
rentals against the ₱216,000.00 rental deposit, [Waterfields] emerges as the creditor to the tune of ₱72,000.00. In
other words, as of the filing of the action, respondents were even overpaid in the sum of ₱72,000.00.21
The CA thereafter concluded that the spouses Manzanilla haveno cause of action against Waterfields, viz:
Consequently, [the spouses Manzanilla] had no cause of action against [Waterfields] for alleged violation of the
Contract, particularly non-payment of rentals.22
Hence, the falloof the CA’s September 15, 2006 Decision:
WHEREFORE, the petition is GRANTED. The decision dated May 7, 1999 of the Metropolitan Trial Court of Manila
(Branch 4), as affirmed by the Regional Trial Court of Manila (Branch 42), is REVERSED and SET ASIDE and
judgment is rendered DISMISSING [the spouses Manzanilla’s] action for unlawful detainer against [Waterfields].
Costs against [the spouses Manzanilla].
SO ORDERED.23
The spouses Manzanilla filed a Motion for Reconsideration,24 which was denied by the CA in a Resolution25 dated
April 12, 2007.
Issues
THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD

WITHLAWS AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT HELD THAT THE
PROVISIONS OF ARTICLE 1278 OF THE NEW CIVIL CODE WAS [SIC] APPLICABLE AND THAT
COMPENSATION HAD TAKEN PLACE.
THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD

WITHLAWS AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT DISMISSED HEREIN
PETITIONER[S’] ACTION FOR UNLAWFUL DETAINER.26 The Parties’ Arguments
The spouses Manzanilla contend that there can be no issue as to the due execution, effectivity and enforceability of
Ma’s July 9, 1997 letter since aside from the fact that Waterfieldsitself admitted in its Answer that the Contract of
Lease was amended on July9, 1997, the MTC and the RTC had uniformly ruled that the said letter operates as an
amendment to the original contract. And as the rental deposit cannot be applied as payment for the monthly rentals
pursuant to the amendment, Waterfields is considered in default in its payment thereof. Conversely, Waterfields has
committed a violation of the Contract of Lease which gave rise to a cause of action for ejectment against it.
The spouses Manzanilla likewise question the CA’sapplication of the principle of compensation. To them,
compensation cannot take place in this case because (1) the parties are not principal creditors of each other; (2) the
₱216,000.00 rental deposit cannot be considered as debt; and (3) the said amount has not yet been liquidated.
Waterfields, for its part, continues to stress that Ma’s letter of July 9, 1997 was merely in the latter’s
handwriting,unsigned by both parties, and unsubscribed before a notary public. Being so, it could not have the effect
of amending Section 4 of the original contract. This therefore negates the spouses Manzanilla’s claim that
Waterfields was in default in its payment of the monthly rentals since the rental deposit could very well be utilizedfor
the same per the said Section 4. Besides, sustaining the rulings of the MTC and RTC will result in unjust enrichment
considering that Waterfields will be constrained to hand over to the spouses Manzanilla the subject property for
which it had spent almost ₱10,000,000.00 in improvements. Waterfields surmises that the CA must have seen this
inequitable situation such that itreversed the rulings of the trial courts. Further, it concurs with the CA when itapplied
the principle of compensation.
Our Ruling
There is merit in the Petition.
The CA has confused itself in resolving the basic issue involved in this case.
It is quite unfortunate that the CAhas apparently confused itself in resolving the basic issue involved in this case.
As may be recalled, the spouses Manzanilla, on account of Waterfields’ alleged violation of the contract of lease by
non-payment of rentals, considered the contract terminated and demanded for the latter to pay its obligation and
vacate the property. As demand proved futile, the said spouses filed the Complaint for ejectment [unlawful detainer].
In Fideldia v. Sps. Mulato,27 the Court held that:
For the purpose of bringing an unlawful detainer suit, two requisites must concur: (1) there must be failure to pay
rent or comply with the conditions of the lease, and (2) there must be demand both to pay or to comply and vacate.
The first requisite refers tothe existence of the cause of action for unlawful detainer, while the second refers to the
jurisdictional requirement of demand in order that said cause of action may be pursued. Implied in the first requisite,
which is needed to establish the cause ofaction of the plaintiff in an unlawful detainer suit, is the presentation of the
contract of lease entered into by the plaintiff and the defendant, the same being needed to establish the lease
conditions alleged to have been violated. Thus, in Bachrach Corporation v. Court of Appeals, the Court held that the
evidence needed to establish the cause of action in an unlawful detainer case is (1) a lease contract and(2) the
violation of that lease by the defendant.28
Here, there is no issue with respect to demand. What is in question is the presence of a cause of action. As
mentioned above, courts, in order to ascertain whether there is cause of action for unlawful detainer, must inquire
into (a) the existence of the lease contract and, (b) the violation of that lease by the lessee. Since in this case the
existence of a lease contract between the parties is undisputed, the focus is on the supposed violation of the lease,
that is, Waterfields’ alleged non-payment of rent. The basic question that thus presents itself for determination is:
Did Waterfields fail to pay rent?The answer to this is crucial as from the same will depend the existence ofthe cause
of action.However, since Waterfields denies that it failed to pay rent and puts up the claim that it was utilizing the
rental deposit as rental payment, a preliminary question emerges, viz: May the rental deposit be utilized as rental
payment?
Accordingly, the MTC in resolving the case first determined if the July 9, 1997 letter operates as an amendment to
the original contract. Finding in the affirmative, it declared that the rental deposit cannot be utilized as payment for
the rentals in view of the saidamendment. As things thusstood, the rental for the months of December 1997 to May
1998, as statedin the Complaint, remained unpaid. Clearly, there was failure on the part of Waterfields to pay rent
and, consequently, it committed a violation of the lease. It is this violation which gave rise to a cause of action for
unlawful detainer against Waterfields as well as to the right of the spouses Manzanilla to consider the contract
terminated. And as the two requisites of an unlawful detainer suit are obtaining in this case, i.e.,cause of action and
demand, the MTC ultimatelysustained the spouses Manzanilla’s Complaint. Finding this in order, the RTC affirmed
in totothe MTC’s Decision.
Surprisingly, the CA in resolving the Petition for Review before it, veered from the incisive approach by which the
trial courts determinedif there exists a cause of action. Itgave credit to the spouses Manzanilla’s allegation in the
Complaint that they terminated the contract of lease, viz: Prior to the institution of the action, [the spouses
Manzanilla] terminated the Contract. Thus, par. 8 ofthe complaint states that ‘(i)n view of [Waterfield’s] aforesaid
violations, the lease contract of the parties was terminated and/or rescinded’ per [the spouses Manzanilla’s] ‘final
letter terminating (the) subject lease contract.’29
Without first finding for itself whether there is a violation of the contract through non-payment of rent as to justify the
alleged termination, the CA impliedly considered the contract validly terminated and based on this premise applied
the following portion of Ma’s July 9, 1997 letter:
The deposit stipulated in our lease contract shall be used exclusively for the payment of unpaid utilities, if any, and
other incidental expenses only and applied at the terminationof the lease. Accordingly, the CA ruled that the
spouses Manzanilla should have returned the whole amount of the rental deposit to Waterfields upon the
termination of the contract there being no allegation of unpaid utilities and expenses in the Complaint. Not having
done so, it considered the spouses Manzanilla as debtors of Waterfields with respect to the rental deposit, and
Waterfields, in turn, as debtor of the spouses Manzanilla anent the unpaid rentals for the months of December 1997
to July 1998.30 Applying the principle of compensation, it then declared that the spouses Manzanilla haveno cause of
action against Waterfields since the rental deposit was sufficient to cover the unpaid rentals for the said months.
The Court, however, finds the CA disquisition flawed.
First, the CA should not have immediately assumed as true the spouses Manzanilla’s allegation that the contract
was already terminated. Aside from the fact that this termination was specifically denied by Waterfields in its
Answer,31 it is settled that a mereassumption cannot be made the basis of a decision in a case or in granting relief. A
judgment must always be based on the court’s factual findings.32
Second, it must be stressed that in this case, the violation of the lease through non-payment of rent is
whatconstitutes the cause of action.33 Hence, once the failure to pay rent is established, a cause of action for
unlawful detainer arises. The CA should have therefore limited itself to the determination of whether Waterfields
failed to pay rents for the months of December 1997 to May 1998 as complained of by the spouses Manzanilla.
Upon coming up with ananswer to this, the CA should have stopped there since at that point, it can already
conclude whether there exists a cause of action for unlawful detainer, which as mentioned is the only contentious
issue involved in this case.
The problem, however, is that the CA acted on its mistaken notion as to when a cause of action arises. It did not
base its determination of the existence of the cause of action from the fact thatWaterfields failedto pay rents from
December 1997 to May 1998. Toit, the cause of action in this case only arose after the contract was terminated and
the rental deposit was found sufficient to cover the unpaid rentals. This is erroneous since as already discussed, it is
the failure to pay rent which gives rise to the cause of action. Prescinding from this, the CA’s acknowledgement that
Waterfieldsfailed to pay rent, as shown by its declaration that the latter is the debtor of the spouses Manzanilla with
respect to the unpaid rentals, is clearly inconsistent with the conclusion that no cause of action for ejectment
existsagainst Waterfields.
Failure to pay the rent must precede termination of the contract due to nonpayment of rent. It therefore follows
1âwphi1
thatthe cause of action for unlawful detainer in this case must necessarily arise beforethe termination of the contract
and not the other way around as what the CA supposed. Indeed, in going beyond the termination of the contract, the
CA went a bit too far in its resolution of this case.
In view of the foregoing, the Court need not belabor the parties’ arguments respecting the principle of compensation,
the same having been anchored by the CA on its mistaken premise as discussed above.
Be that as it may, this Court, in line with its bounden-duty, shall in the following discussion put things in their proper
light.
Waterfields cannot now contradict its judicial admission that the Contract of Lease was amended on July 9, 1997;
the doctrine of estoppel likewise bars it from falsifying Ma’s July 9,1997 letter in this litigation.
SEC. 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 suchadmission was made. "A party may make judicial admissions in (a) the
pleadings, (b) during trial, either by verbal or written manifestations orstipulations, or (c) in other stages of the
judicial proceeding."34
Here, paragraph 5 of the Complaint alleges:
5. That, subsequently, the said Contract of Lease was amended on 06 June 1994 and on 09 July 1997x x x.35
Whereas, paragraph 2 of Waterfields’ Answer reads:
2. Paragraphs 4, 5, and 6 of the Complaint are admitted.36
Clearly, Waterfields admitted in its Answer the truth of the material allegation that the Contract of Lease was
amended on July 9, 1997. "It is wellsettled that judicialadmissions cannot be contradicted by the admitter who is the
party [itself] and binds the person who makes the same, and absent any showing that this was made thru palpable
mistake (as in this case), no amount of rationalization can offset it."37
Moreover, "[u]nder the doctrine of estoppel, an admission or representation is rendered conclusive upon the person
making it, and cannotbe denied or disproved as against the person relying thereon. A party may not go back on his
own acts and representationsto the prejudice of the other party who relied upon them. In the law of evidence,
whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a
particular thing [to be] true, and to act upon such belief, he cannot, in any litigation arising out of such declaration,
act, or omission,be permitted to falsify it."38
In view of these, any effort on the part of Waterfields to impugn the July 9, 1997 letter is futile.
Even without the above-mentioned admission of Waterfields, the contemporaneous and subsequent acts of the
parties reveal their intention to amend the original Contract of Lease.
Article 1371 of the Civil Code provides that "to judge the intention of the contracting parties, their contemporaneous
and subsequentacts shall be principally considered." "[I]n doing so, the courts may consider the relations existing
between the parties and the purpose of the contract."39
As aptly opined by the MTC, the intention of Waterfields in coming up with the July 9, 1997 letter isto repress its
violation of the contract since at that time it was already in default in the payment of rent since April 1997. Hence,
aside from promising to pay its rental arrears from April 1997to July 1997, Waterfields, in order to assuage the
spouses Manzanilla, likewise pledged to pay rent in advance starting August 1997. More significantly, it undertook to
amend the original contract by stating that the rental deposit shall be used exclusively for payment of unpaid utilities
and incidental expenses. Clearly, Waterfields intended to give the spouses Manzanilla extra advantage by virtue of
the said letteramendment. This is considering that during those times, the said spouses may at any time opt to
enforce their right to eject Waterfields from the premises since Waterfields was then admittedly in default. Obviously,
Waterfields got what it wanted as it was not ejected from the premises and instead, its payment in arrears was
accepted by the spouses Manzanilla. On the other hand, the spouses Manzanilla, by so doing, agreed to the
amendment as contained in the July 9, 1997 letter and was supposed to enjoy the advantage of receiving advanced
rental payment and of applying the rental deposit only against the unpaid utilities and incidental expenses. Plainly,
both parties expected to benefit from the July 9, 1997 letter such that their intention to give effect to the same,
including the part that amends the original contract which is the one in issue in this case, is evident.
Waterfields’ claim of unjust enrichment is unworthy of credence.
Waterfields avers that sustaining the trial courts’ ruling would amount to unjust enrichment since it would be
constrained to hand over to the spouses Manzanilla, even before the expiration of the lease, the subject premises
for which it had already spent substantial amounts in terms of improvements.
"The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or
justification,and (2) that such benefit is derived at the expense of another."40 It does not, however, apply in this case
since any benefit that the spouses Manzanilla may obtain from the subject premises cannot be said to be without
any valid basis or justification. It is well to remind Waterfields that they violated the contract of lease and that they
failed to vacate the premises upon demand. Hence, the spouses Manzanilla are justified in recovering the physical
possession thereof and consequently, in making use of the property. Besides, in violating the lease by failing to pay
the rent, Waterfields took the risk of losing the improvements it introduced thereon in favor of the spouses
Manzanilla. This is because despite the fact that the lease contract provides that in case of termination of the lease
agreement all permanent improvements and structures found in the subject premises shall belong to the lessors,41 it
still violated the lease.
All told, the Court sustains the RTC in affirming the MTC's grant of the spouses Manzanilla's Complaint for
ejectment against Waterfields.
WHEREFORE, the Petition is GRANTED. The Decision dated September 15, 2006 and Resolution dated April 12,
2007 of the Court of Appeals in CA-G.R. SP No. 60010 are REVERSED and SET ASIDE. The Decision dated July
14, 2000 of the Regional Trial Court of Manila, Branch 42 in Civil Case No. 00-96228, which affinned the Decision
dated May 7, 1999 of the Metropolitan Trial Court of Manila, Branch 4 in Civil Case No. 160443-CV granting the
Complaint, is REINSTATED and AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No.169745 July 18, 2014
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE SECRETARY OF LABOR AND

EMPLOYMENT (DOLE), Petitioner,
vs.
NAMBOKU PEAK, INC., Respondent.
x-----------------------x
G.R. No.170091
PHIL-JAPAN WORKERS UNIONSOLIDARITY OF UNIONS IN THE PIDLIPPINES FOR EMPOWERMENT AND

REFORMS (P JWU-SUPER), MEDARBITER CLARISSA G. BELTRANLERIOS and SECRETARY PATRICIA A.
STO. TOMAS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, Petitioners,
vs.
PHIL-JAPAN INDUSTRIAL MANUFACTURING CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
The court or tribunal exercising quasi-judicial functions is bereft of any right or personality to question the decision of
an appellate court reversing its decision.1
These consolidated Petitions for Review on Certiorari2 assail the Decisions of the Court of Appeals (CA)issued in
two separate petitions, but involving the same issue of whether Section 17, Rule VIII of Department Order No. 40-03
is unconstitutional. The first is the Decision3 dated March 18, 2005 in CA-G.R. SP No. 80603, which granted the
Petition for Certiorari4 filed by herein respondent Namboku Peak, Inc. (Namboku) challenging the October 22, 2003
letter-resolution5 of Secretary of Labor and Employment Patricia A. Sto. Tomas. Said letter-resolution affirmedthe
Med-Arbiter’s Order6 dated June 17, 2003 denying Namboku’s motion to defer the conduct of certification election
pending resolution of its appeal.
The second is the Decision7 dated January 19, 2005 in CA-G.R. SP. No. 80106, which granted the Petition for
Certiorari8 filed by hereinrespondent PhilJapan Industrial Manufacturing Corporation (Phil-Japan) seeking to declare
Section 17, Rule VIII of Department Order No. 40-03 unconstitutional for unduly depriving it of its right to appeal the
August 25, 2003 Decision9 of the MedArbiter. Said Decision of the Med-Arbiter, in turn, granted the Petition 10 of
PhilJapan Workers Union-Solidarity of Unionsin the Philippines for Empowerment and Reforms (PJWU-SUPER)
seeking to determine the exclusive bargaining representative in Phil-Japan and ordered the conduct of certification
election.
Factual Antecedents
The facts, insofar as G.R. No. 169745 is concerned and as culled from the records, are as follows:
Namboku is a domestic corporation engaged in the business of providing manpower services to variousclients,
mainly airline companies. On April 28, 2003, the Philippine Aircraft Loaders and Cargo Employees
AssociationSolidarity of Unions in the Philippines for Empowerment and Reforms (PALCEA-SUPER) filed a
Petition11 for direct certification election before the Med-Arbiter seeking to represent the rank-and-file employees of
Namboku assigned at the Cargo and Loading Station of the Philippine Airlines (PAL) in Ninoy Aquino International
Airport. In support of its Petition, PALCEA-SUPER alleged that it is a local chapter affiliate of Solidarity of Unions in
the Philippines for Empowerment and Reforms; that its members are composed of regular rank-and-file employees
of Namboku assigned at said Cargo and Loading Station of PAL; that out of the 155 regular rank-and-file employees
of Namboku, 122 or 78% are its members; and, that Namboku is an unorganized establishment.
Namboku opposed the Petition12 on the ground of inappropriateness. It claimed that the members of the PALCEA-
SUPER are project employees. Hence, they cannot represent its regular rank-and-file employees. It emphasized
that their individual ProjectEmployee Contract clearly provides that their employment is for a fixed period of time and
dependent upon its Services Agreement13 with PAL. However, PALCEA-SUPER misrepresented the status of its
members by claimingthat they are regular employees of Namboku.
On June 17, 2003, the Med-Arbiter issued an Order14 holding that the members of PALCEA-SUPER are regular
employees of Namboku. She explained that while Namboku informed them at the time of their engagement that their
employment is for a fixed period of time, it did not, however, apprise them that the same is for a specific activity, nor
was the completion or termination made known to them at the time oftheir engagement. Also, asopposed to the
nature of its business, the tasks for which Namboku engaged their services do not appear to be separate and
independent activities with pre-determined duration or completion. The Med-Arbiter thus granted the Petition and
ordered the conduct of certification election. The dispositive portion of the Order reads:
WHEREFORE, premises considered, certification election is hereby ordered among the regular rank and file
employees of NAMBOK[U] PEAK, INC., subject to pre-election conference, with the following choices:
1. Philippine Aircraft Loaders and Cargo Employees Association – Solidarity of Unions in the Philippines for
Empowerment and Reforms (PALCEA-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days from receipt hereof, the
certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the
bargaining unit for the last three months prior to this issuance.
SO ORDERED.15
Namboku appealed16 the Med-Arbiter’s Order to the Secretary of the Labor, maintaining that the members of
PALCEA-SUPER are mere project employees. It insisted that the combination of project and regular employees
would render a bargaining unit inappropriate for lack of substantial-mutual interest.
In the meantime, on July 29, 2003, Namboku received a summons setting the pre-election conference on July 31,
2003 and stating that the Order granting the conduct of a certification election in an unorganized establishment is
not appealable.17
Whereupon, Namboku filed a Manifestation and Motion,18 as well as a Supplemental Motion and
Manifestation,19seeking to suspend the conduct of certification election pending resolution of its appeal. It contended
that Section 17,20 Rule VIII of Department Order No. 40-03 prohibiting the filing of an appeal from an order granting
the conduct of a certification election in an unorganized establishment is unconstitutional because it runs counter to
Article 25921of the Labor Code.
In a letter-resolution 22dated October 22, 2003, however, the Secretary of Labor denied the appeal and affirmed the
Med-Arbiter’s June 17, 2003 Order. In rejecting Namboku’s contention that Section 17, Rule VIII of Department
Order No. 40-03 is unconstitutional, the Secretary of Labor ratiocinated that unless said Department Order is
declared by a competent court as unconstitutional, her office would treat the same as valid.
Undeterred, Namboku filed before the CA a Petition for Certiorari,23 which was docketed as CA-G.R. SP No. 80630.
Namboku imputed grave abuse of discretion on the part of the Secretary ofLabor in (i) not resolving the issue of
appropriateness and (ii) rejecting its appeal based on an invalid provision of Department Order 40-03.
With regard to G.R. No. 170091, an examination ofthe records reveals the following facts:
Phil-Japan is a domestic corporation engaged in manufacturing mufflers, chassis and other car accessories for local
and international markets. On June 6, 2003, PJWU-SUPER filed before the Med-Arbiter a Petition24 seeking to
determine the sole and exclusive bargaining representative of rank-and-file employees in Phil-Japan. PJWU-SUPER
alleged that it is a legitimate labor organization; that out of the 100 rank-and-file employeesof Phil-Japan, 69 or 69%
are members of PJWU-SUPER; that Phil-Japan is an unorganized establishment; and, that there has been no
certification election conducted during the last 12 months prior to the filing of its Petition.
Phil-Japan opposed the Petition,25 claiming that the members of PJWUSUPER are not its employees. It alleged that
the listed members of PJWUSUPER have either resigned, finished their contracts, orare employees of its job
contractors CMC Management and PEPC Management Services. Itthus prayed for the dismissal of the Petition or,
inthe alternative, suspension of the proceedings pending determination of the existence of employer-employee
relationship.
On August 25, 2003, the Med-Arbiter rendered a Decision26 ordering the conduct of certification election. It held,
among others, that the documents submitted are not sufficient to resolve the issue of the existence of
employeremployee relationship.Considering, however, that Section 15,Rule VIII of the Rules Implementing Book V
ofthe Labor Code prohibits the suspension of proceedings based on the pendency of such issue, she allowed the
employees to vote. Their votes, however, shall be segregated, and the determination of whether the number of such
segregated ballots is material to the outcome of the election shall be made after the conduct of the election. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, this petition for certification election is hereby GRANTED. Certification
election is hereby ordered conducted among the regular rank-and-file workers of Phil-Japan Ind. Mfg. Corporation
with the following choices:
1. Phil-Japan Workers Union-Solidarityof Unions in the Philippines for Empowerment and Reforms (PJWU-SUPER);
and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days from receipt hereof, the
certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the
bargaining unit for the last three months prior to this issuance.
SO ORDERED.27
Aggrieved, Phil-Japan appealed28 the Decision of the Med-Arbiter to the Office of the Secretary of Labor asserting
that the Med-Arbiter gravely abused her discretion in not resolving the issue ofwhether employer-employee
relationship existed between the parties.
In a hearing held on October 7, 2003, Hearing Officer Lourdes T. Ching informed Phil-Japan that its appeal will not
be acted upon pursuant to Section 17, Rule VIII of Department Order No. 40-03and that the certification election will
proceed accordingly.
Undaunted, Phil-Japan filed before the CA a Petition for Certiorari,29 which was docketed asCA-G.R. SP No. 80106.
Phil-Japan ascribedgrave abuse of discretion on the part of the Med-Arbiter in refusing torule on the existence of
employer-employee relationship despite the presence of sufficient evidence on the matter. It also claimed thatthe
Secretary of Labor gravely abused her discretion in refusing to act on its appeal despite the existence of such right.
As to the Secretary of Labor’s reliance on Section 17, Rule VIII of Department Order No. 40-03, PhilJapan asserted
that the samecannot overturn the clear provision of Article 259 of the Labor Code.
Rulings of the Court of Appeals
On March 18, 2005, the CA issued its Decision30 in CA-G.R. SP No. 80603 (now subject of G.R. No.
169745)granting Namboku’s Petition and reversing the October 22, 2003 letter-resolution of the Secretary of Labor.
It sustained Namboku’s position that the members of PALCEA-SUPER are project employees and, hence, they are
not similarly situated with the company’s regular rank-and-file employees. The CA also nullified Section 17, Rule VIII
of Department Order No. 40-03 for being in conflict with Article 259 of the Labor Code.
The Secretary of Labor filed a Motion for Reconsideration.31 This prompted Namboku to file a Motion to Expunge32on
the ground that the Secretary of Labor is a mere nominalparty who has no legal standing to participate or prosecute
the case. It argued that the Secretary of Labor should have refrained from filing the said Motion for Reconsideration
and should havemaintained the cold neutrality of an impartial judge.
On September 15, 2005, the CA issued a Resolution33 denying the Secretary of Labor’s Motion for Reconsideration
on the ground, among others, that she is merely a nominal party to the case and has no personal interest therein.
Anent CA-G.R. No. 80106 (now subject of G.R.170091), the CA, in its January 19, 2005 Decision,34 reversed and set
aside the ruling of the Med-Arbiter. It likewise agreed with Phil-Japan that before extending labor benefits, the
determination of whether anemployer-employee relationship exists is a primordial consideration. And based on the
documents submitted, the CA was convinced that out of the 69 members of PJWU-SUPER, 67 were not employees
of Phil-Japan.
The CA further declared that for being violative of Article 259 of the Labor Code, Section 17, Rule VIII of Department
Order No. 40-03 has no legal force and effect.
PJWU-SUPER and DOLE filed separate Motions for Reconsideration.35 On September 12, 2005, the CA issued a
Resolution36 denying both motions and upholding its January 19, 2005 Decision.
Issues
On November 3, 2005, the Secretary of Labor filed before this Court a Petition for Review on Certiorari docketed as
G.R. No. 170091 assailing the January 19, 2005 Decision in CA-G.R. SP No. 80106. She avers that:
THE COURT OF APPEALS ERRED IN DECLARING AS OF NO LEGAL FORCE AND EFFECT SECTION 17,
RULE VIII OFD.O. 40-03.37
Then on November 11, 2005,the Secretary of Laborfiled another Petition for Review on Certiorari docketed as G.R.
No. 169745 challenging the March 18, 2005 Decision in CA-G.R. SP No. 80603. She anchors her Petition on the
following issues:
I.
WHETHER X X X THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECLARING SECTION 17, RULE
VIII OF DEPARTMENT ORDER NO. 40-03 NULL AND VOID FOR BEING IN CONFLICT WITH ARTICLE 259 OF
THE LABOR CODE, AS AMENDED.
II.
WHETHER PROJECT EMPLOYEES MAY BE INCLUDED IN THE PETITION FOR CERTIFICATION ELECTION
INVOLVING REGULAR EMPLOYEES.38
Since both Petitions seek to uphold the validity of Section 17, Rule VIII of Department Order No. 40-03, this Court
ordered their consolidation.39
Secretary of Labor’s Arguments
The Secretary of Labor insists that Section 17, Rule VIII of Department Order No. 40-03 is in harmony with Article
259 of the Labor Code for it does not deny the aggrieved party in an unorganized establishment the right to appeal.
It merely defers the exercise of such rightuntil after the certification election shall have been conducted. In the
meantime, the aggrieved party may raise any issue arising therefrom as a protest. Such rule, according to the
Secretary of Labor, is in consonance with the policy of the State toencourage the workers to organize and with the
mandate ofthe Med-Arbiter to automatically conduct a certification election.
The Secretary of Labor likewise argues that Article 259 applies only when there is a violation of the rules and
regulations in the conduct of the certification election. It does not cover the order ofthe Med-Arbiter granting the
conduct of certification election. Moreover, the appeal contemplated under Article 259 must be filed by a party to the
certification election proceedings, to which the employer, Namboku, is a mere stranger.
The Secretary of Labor further contends that the combination of regular rank-and-file employees and project
employees in a certified bargaining unit does not pose any legal obstacle.
Namboku’s Arguments
In opposing the Petition, Namboku questions the locus standi of the Secretary of Labor, insisting that she is merely
a nominal party in the Petitions for Certiorari filed with the CA. Namboku strongly stresses that as a quasi-judicial
officer, the Secretary of Labor should detach herself from cases where her decision is appealed to a higher court for
review. Besides,her office never participated or defended the validity of Section 17 beforethe CA. It was only after
the CA rendered its Decision nullifying the subject provision of Department Order No. 40-03 that the Secretary of
Labor took an active stance to defend the validity thereof.
With respect to the substantive aspect, Namboku remains steadfast in its position that Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional for it unduly restricts the statutory right of the management to
appeal the decision of the Med-Arbiter to the Secretary of Labor in an unorganized establishment. It created a
distinction that does not appear in Article 259 of the Labor Code that it seeks to implement.
Namboku likewise echoes the ruling of the CA that there exists a statutory difference between regular and project
employees. Theyhave divergent duties, responsibilities, and status and duration of employment. They do not
1âwphi 1
receive the same benefits. Hence, they cannot unite into a homogenous or appropriate bargaining unit.
Phil-Japan’s Arguments
In defending the Decision of the CA, Phil-Japan argues that Section 17, Rule VIII of Department Order No. 40-03
restricting the statutory right of the employer to appeal will not stand judicial scrutiny. It stresses that the authority of
the Med-Arbiter to determine the existence of an employer-employee relationship and the right of a party to appeal
the former’s decision thereon to the Secretary of Labor are already settled. Phil-Japan insists that under Article 259
of the Labor Code the remedy of appeal isavailable to any party for the purpose of assailing the disposition of the
Med-Arbiter allowing the conduct of certification election without any distinction whether the establishment
concerned is organized or unorganized.
Our Ruling
The Petitions are denied. The Secretary of Labor isnot the real party-ininterest vested with personality to file the
present petitions. A real party-in-interest is the party who stands to bebenefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit.40 As thus defined, the real parties-in-interest in these cases would
have been PALCEA-SUPER and PJWU-SUPER. It would have been their duty to appear and defend the ruling of
the Secretary of Labor for they are the ones who were interested that the same be sustained. Of course, they had
the option not to pursue the case beforea higher court, as what they did in these cases. As to the Secretary of
Labor, she was impleaded in the Petitions for Certiorari filed before the CA as a nominal party because one of the
issues involved therein was whether she committed an error of jurisdiction. But that does not make her a real party-
in-interest or vests her withauthority to appeal the Decisions of the CA in case it reverses her ruling. Under Section
1,41 Rule 45 of the Rules of Court, only real parties-in-interest who participated in the litigation of the case before the
CA canavail of an appeal by certiorari. In Judge Santiago v. Court of Appeals,42 Judge Pedro T. Santiago rejected
the amicablesettlement submitted by the parties in an expropriation proceeding pending before his sala for being
manifestly iniquitous to the government. When the CA reversed his decision, Judge Santiago, apparently motivated
by his sincere desire to protect the government, filed a petition before this Court seeking the reinstatement of his
ruling. In denying his petition, this Court ruled that:
x x x Section 1 of Rule 45 allows a party to appeal by certiorari from a judgment of the Court of Appeals by filing
withthis Court a petition for review on certiorari. But petitioner judge was not a party either in the expropriation
proceedings or in the certiorari proceeding in the Court of Appeals. His being named as respondent in the Court of
Appeals was merely to comply with the rule that in original petitions for certiorari, the court or the judge, in his
capacity as such, should be named as party respondent because the question in such a proceeding is the
jurisdiction of the court itself. (See Mayol v. Blanco, 61 Phil. 547 [1935], cited in Commentson the Rules of Court,
Moran, Vol. II, 1979 ed., p. 471). "In special proceedings, the judge whose order is under attack is merely a nominal
party; wherefore, a judge in his official capacity, should not be made to appear as a party seeking reversal of a
decision that is unfavorable to the action taken by him. A decent regard for the judicial hierarchy bars a judge from
suing against the adverse opinion of a higher court, x x x." (Alcasid v. Samson, 102 Phil. 735, 740 [1957]).43
A similar ruling was arrived at in Government Service Insurance System v. The Hon. Court of Appeals (8th Div.).44 In
that case, upon petition of GSIS, the Securities and Exchange Commission (SEC) issued a cease and desist order
restraining the use of proxies during the scheduled annual stockholders’ meeting of Manila Electric Company.When
the private respondents therein filed a petition for certiorari and prohibition, the CA invalidated the SEC’s cease and
desist order. Uncomfortable with the CA’s ruling, SEC appealed to this Court. In denying SEC’s appeal, this Court
ratiocinated as follows:
x x x Under Section 1 of Rule45, which governs appeals by certiorari, the right to file the appeal is restricted to "a
party," meaning that only the real parties-ininterest who litigated the petition for certiorari before the Court of
Appeals are entitled to appeal the same under Rule 45. The SEC and its two officers may have been designated as
respondents in the petition for certiorari filed with the Court of Appeals, but under Section 5 ofRule 65 they are not
entitled to be classified as real parties-in-interest. Under the provision, the judge, court, quasijudicial agency,
tribunal, corporation, board, officer or person to whom grave abuse of discretion is imputed (the SEC and its two
officers in this case) are denominated only as public respondents.The provision further states that "public
respondents shall not appear in or file an answer or comment to the petition or any pleading therein." Justice
Regalado explains:
[R]ule 65 involves an original special civil action specifically directed against the person, court, agency or party a
quo which had committed not only a mistake of judgment but an error of jurisdiction, hence should be made public
respondents in that action brought to nullify their invalidacts. It shall, however be the duty of the party litigant,
whether in an appeal under Rule 45 or in a special civil action in Rule65, to defend in his behalf and the party whose
adjudication is assailed, as he is the one interested in sustaining the correctness of the disposition or the validity of
the proceedings.45
It does not escape the attention of this Court that G.R. No. 170091 was cleverly captioned as "Phil-Japan Workers
Union Solidarity of Unions in the Philippines for Empowerment and Reforms (PJWU-SUPER), Med-Arbiter Clarissa
G. Beltran-Lerios and Secretary Patricia Sto.Tomas of the Department of Labor and Employment, petitioners,
versus Court of Appeals46 and Phil-Japan Industrial Manufacturing Corporation." But the same was actually filed by
the Secretary of Labor all by herself. The body of the Petition does not include PJWU-SUPER as one of the parties.
Neither did its agent or representative sign the verification and certification against forum-shopping. In other words,
PJWUSUPER had no participation in the preparation and filing of the Petition in G.R. No. 170091.
Another reason that heavily militates against entertaining these Petitions is that the Secretary of Laborshould have
remained impartial and detached from the cases she has decided even if the same are appealed to a higher court
for review.
In Pleyto v. PNP-Criminal Investigation & Detection Group,47 the Ombudsman ordered the dismissal of Salvador A.
Pleyto from the service. When Pleyto filed a Petition for Review questioning his dismissal before the CA, the
Ombudsman intervened. The Ombudsman argued that as a competent disciplining body, it has the right "to defend
its own findings of factand law relative to the imposition of its decisions and ensure that its judgments
inadministrative disciplinary cases [are] upheld by the appellate court."48 Further, as "the agency which rendered the
assailed Decision, it is bestequipped with the knowledgeof the facts, laws and circumstances that led to the finding
of guilt against petitioner."49 The CA allowed the Ombudsman to intervene and admitted the latter’s Comment and
Memorandum.
In ruling that the CA erred in allowing the Ombudsman to actively participate in the case, this Court declared that:
It is a well-known doctrine that a judge should detach himself from cases where his decision is appealed toa higher
court for review. The raison d'etrefor such doctrine is the fact that a judgeis not an active combatant in such
proceeding and must leave the opposing parties to contend their individual positions and the appellate court to
decide the issues without his active participation. When a judge actively participates in the appeal of his judgment,
he, in a way, ceases to be judicial and has become adversarial instead.
The court or the quasi-judicial agency must be detached and impartial, not only when hearing and resolving the
case before it, but even when its judgment is brought on appeal before a higher court. The judge of a court or the
officer of a quasi-judicial agency must keep in mind thathe is an adjudicator who must settle the controversies
between parties in accordance with the evidence and the applicable laws, regulations, and/or jurisprudence. His
judgment should already clearly and completely state his findings of fact and law. There must be no more need for
him to justify further his judgment when it is appealed before appellate courts. When the court judge orthe quasi-
judicial officer intervenes as a party in the appealed case, he inevitably forsakes his detachment and impartiality,
and his interest in the case becomes personal since his objective now is no longer only to settle the controversy
between the original parties (which he had already accomplished by rendering his judgment), but more significantly,
to refute the appellant’s assignment of errors, defend his judgment, and prevent it from being overturned on
appeal.50
But the Secretary of Labor next contends that with the nullification of Department Order No. 40-03, she has now
become a party adversely affected by the CA ruling. In support of her contention, the Secretary of Labor poses the
question: who may now appeal the Decisionsof the CA to the Supreme Court? Certainly, neither Namboku nor Phil-
Japan would appeala favorable decision.
The National Appellate Board v. P/Insp. Mamauag51 provides the complete answer. Thus:
However, the government party that can appeal is not the disciplining authority or tribunal which previously heard
the case and imposed the penalty of demotion or dismissal from the service. The government party appealing must
be one that is prosecuting the administrative case against the respondent. Otherwise, an anomalous situation will
result where the disciplining authority or tribunal hearing the case, instead of being impartial and detached, becomes
an active participant in prosecuting the respondent. Thus, in Mathay, Jr. v. Court of Appeals, decided after
Dacoycoy, the Court declared:
To be sure, when the resolutions of the Civil Service Commission were brought before the Court of Appeals, the
Civil Service Commission was included only as a nominal party. As a quasi-judicial body, the Civil Service
Commission can be likened to a judge who should "detach himself from cases where his decision is appealed to a
higher court for review."
In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its role as adjudicator and
became an advocate. Its mandated function is to "hear and decide administrative cases instituted by or brought
before it directly or on appeal, including contested appointments and to review decisions and actions of its offices
and agencies," not to litigate.52
Here, both cases emanated from the petitions for certification election filed with the Med-Arbiter and subsequently
appealed to the Secretary of Labor. She had occasion to hear the parties’ respective contentions and rule thereon.
As the officer who rendered the decision now subject of these cases, the Secretary of Labor should have remained
impartial and detached from the time the cases reached her until the same were being scrutinized on appeal.53
True, the issue of whether Section 17, Rule VIII ofDepartment Order No. 40-03 is unconstitutional is a matter of
great concern and deserves everyone’s attention. But this Court cannot pass upon and resolve the same in these
Petitions. Otherwise, it will countenance the objectionable actions of the Secretary of Labor and run afoul of the
abovecited settled decisions. WHEREFORE, for the foregoing reasons, the Petitions in G.R. Nos. 169745 and
170091 are DENIED.
SO ORDERED.
SECOND DIVISION
G.R. No.173861 July 14, 2014
JAY CANDELARIA and ERIC BASIT, Petitioners,

vs.
REGIONAL TRIAL COURT, BRANCH 42, CITY OF SAN FERNANDO; (Pampanga) represented by its
Presiding Judge HON. MARIA AMIFAITH S. FIDER-REYES, OFFICE OF THE PROVINCIAL PROSECUTOR,
CITY OF SAN FERNANDO, PAMPANGA and ALLIED DOMECQ PHILIPPINES, INC., Respondents.
DECISION
DEL CASTILLO, J.:
In this Petition for Certiorari with Application for Preliminary Injunction1 filed under Rule 65 of the Rules of Court,
petitioners Jay Candelaria and Eric Basit (petitioners) seek to nullify and set aside two Orders of the Regional Trial
Court (RTC), Branch 42, City of San Fernando, Pampanga, to wit: Order dated October 12, 20052 denying their
Motion to Suppress/Exclude Evidence3 and Order dated July 14, 20064 denying their Motion for
Reconsideration5thereto.
Factual Antecedents
During an alleged buy-bust operation conducted in the evening of June 22, 2001, petitioners werearrested at the
corner of Gueco St. and MacArthur Highway, Balibago, Angeles City for delivering, with the intention to sell, five
cases of counterfeit FundadorBrandy. On the strength of the Joint Affidavit6 of the police operatives, petitioners were
formally charged in an Information7 dated July 6, 2004 with violation of Section 155 in relation to Section 170 of
Republic Act No. 8293, otherwise known as the IntellectualProperty Code of the Philippines. After they were
arraigned and had pleaded not guilty to the charge on May 31, 2005,8 petitioners filed on June 17, 2005 a Motion to
Suppress/Exclude Evidence9 based on inadmissibility of evidence. They contended that the evidence the
prosecution intended to present were obtained in violation of their constitutional right against unreasonable searches
and seizures. This is considering that at the time the alleged counterfeit productswere seized, they were neither
committing nor attempting to commit a crime in the presence of the arresting officers as to justify the conduct of
search and seizure following their unlawful arrest.
On October 12, 2005, the RTC issued the first assailed Order10 denying the Motion to Suppress/Exclude Evidence.
Observing that the motion was anchored on petitioners’ alleged illegal arrest, it cited jurisprudence11 wherein it was
held that any objection to an arrest must be made before an accused enters his plea on arraignment. Having failed
to move for the quashal of the information before the arraignment, an accused is estopped from questioning the
legality of his arrest. Notwithstanding this reference, the RTC based its denial of the subject motion on its
examination of the Joint Affidavit of the arresting officers. According to the said court, since it appears from the said
affidavit that the search and seizure was incidental to a valid warrantless arrest of the accused who were caught in
flagrante delicto, any evidence obtained during such search and seizure is admissible in evidence.
Not satisfied, petitioners filed a Motion for Reconsideration,12 which the RTC denied in its assailed Order13 of July 14,
2006.
Issue
Hence, the present recourse under Rule65 of the Rules ofCourt, anchored on the sole ground of:
WHETHER X X X THE REGIONAL TRIAL COURT, BRANCH 42 OF THE CITY OF SAN FERNANDO, PAMPANGA
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
DENYING THE MOTION OF THE PETITIONERS TO SET THE CASE FOR SUPPRESSION HEARING.14
The Petition is bereft of merit.
Petitioners failed to allege that there is

no appeal nor any plain, speedy and
adequate remedy in the ordinary course
of law.
It is to be stressed that in every special civil action underRule 65, a party seeking the writ whether for certiorari,
prohibition or mandamus, must be able to show that his or her resort to such extraordinary remedy is justified by the
absence of an appeal or any plain, speedy and adequate remedy in the ordinary course of law. "[H]e must allege in
his petition and establish facts to show that any other existing remedy is not speedy or adequate x x x."15 As held in
Visca v. Secretary of Agriculture and Natural Resources:16
x x x [I]t is incumbent upon an applicant for a writ of certiorarito allege with certainty in his verified petition facts
showing that "there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law,"
because this is an indispensable ingredient of a valid petition for certiorari. "Being a special civil action, petitioner-
appellant must allege and prove that he has no other speedy and adequate remedy." "Where the existence of a
remedy by appeal or some other plain, speedy and adequate remedy precludes the granting of the writ, the
petitioner must allegefacts showing that any existing remedy is impossible or unavailing, or that excuse petitioner for
not having availed himself of such remedy. A petition for certiorari which does not comply with the requirements of
the rules may be dismissed.17
Pursuant to the foregoing, the instant Petition for Certiorariis dismissible for failure to allege that there is no appeal,
nor any plain, speedy and adequate remedy in the ordinary course oflaw as to justify resort to certiorari.
Assuming the assailed October 12, 2005

Order to be erroneous, the mistake is an
error in judgment which is beyond the
ambit of certiorari.
In Triplex Enterprises, Inc. v. PNB-Republic Bank,18 the Court held that:
The writ of certiorari is restricted to truly extraordinary cases wherein the act of the lower court or quasi-judicial body
is wholly void. Moreover, it is designed to correct errors of jurisdiction and not errors in judgment. The rationale of
this rule is that, when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of
the jurisdiction being exercised when the error is committed. Otherwise, every mistake made by a court will deprive
it of its jurisdiction and every erroneousjudgment will be a void judgment.
When the court has jurisdiction over the case and person of the defendant, any mistake in the application of the law
and the appreciation of evidence committed by a court may becorrected only by appeal. The determination made by
the trial court regarding the admissibility of evidence is but an exercise of its jurisdiction and whatever fault it may
have perpetrated in making such a determination is an error in judgment, not of jurisdiction. Hence, settled is the
rule that rulings of the trial court on procedural questions and on admissibility of evidence during the course of a trial
are interlocutory in nature and may not be the subject of a separate appeal or review on certiorari. They must be
assigned as errors and reviewed in the appeal properly taken from the decision rendered by the trial court on the
merits of the case.19
Here, it is undisputed that the RTC had jurisdiction over the case and the person of the petitioners. As such, any
perceived error in its interpretation of the law and its assessment of evidence is correctibleby appeal, not certiorari,
as the same would only be considered an error ofjudgment and not of jurisdiction. In particular, the RTC’s denial of
the Motion to Suppress/Exclude Evidence based on its assessment that the evidence sought to be
suppressed/excluded isadmissible, was done in the proper exercise of its jurisdiction. Assuming that the RTC’s
determination is erroneous, the mistake is clearly not anerror of jurisdiction but of judgment which is not correctible
by certiorari.
No grave abuse of discretion.
Even assuming that petitioners’ resort of certiorariis proper, the Petition must still be dismissed for their failure
toshow that the RTC acted in grave abuse of discretion as to amount to lack of jurisdiction. "Grave abuse of
discretion is the capricious and whimsical exercise of judgment on the part of the public officer concerned which is
equivalentto an excess or lack of jurisdiction. The abuse of discretion must be sopatent and gross as to amountto an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of
law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility."20
In this case, petitionersmiserably failed to show how the RTC supposedly abused its discretion. In fact, we note that
1a\^ /phi1
the main issue raised by petitioners in their Petition is when is the proper timeto file a motion to suppress/exclude
evidence.21 They even conceded that this is a pure question of law.22
In any case, our perusal of the records shows that the RTC did not abuse, much more, gravely abuse its discretion.
The RTC thoroughly considered the pleadings submitted by the parties, to wit: Motion to Suppress/Exclude
Evidence; Opposition (to the Motion to Suppress Evidence); Reply; Rejoinder; and SurRejoinder; as well as the
Joint affidavit submitted by the arresting officers. Only after a careful analysis of the submissions of the parties did
the RTC render its judgment.
Petitioners violated the principle

of hierarchy of courts.
It also did not escape our attention that from the RTC, petitioners made a direct recourse to this Court. This is
against the well-settled principle dictating that a petition for certiorariassailing the interlocutory orders of the RTC
should be filed with the Court of Appeals and not directly with the Supreme Court. It was held in Rayos v. City of
Manila23 that:
Indeed, this Court, the Court of Appeals and the Regional Trial Courts exercise concurrent jurisdiction to issue writs
of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction. However, such concurrence in
jurisdiction does not give petitioners unbridled freedom of choice of court forum. In Heirs of Bertuldo Hinog v.
Melicor, citing People v. Cuaresma, the Court held:
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional
Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according
to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application
therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of
appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs.
A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary
writs against fiq;t level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter,
with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should
be allowed only when there are special and important reasons therefor, clearly and specifically set out in the
petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Court's time
and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court's docket.24
Clearly, a direct invocation of this Court's original jurisdiction may only be allowed if there are special and important
reasons clearly and specifically set out in the petition which, however, are not obtaining in this case.
WHEREFORE, premises considered, the Petition for Certiorari is DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 185100 July 9, 2014

GIRLY G. ICO, Petitioner,
vs.
SYSTEMS TECHNOLOGY INSTITUTE, INC., MONICO V. JACOB and PETER K. FERNANDEZ, Respondents.
DECISION
DEL CASTILLO, J.:
When another employee is soon after appointed to a position which the employer claims has been abolished, while
the employee who had to vacate the same is transferred against her will to a position which does not e:x.ist in the
corporate structure, there is evidently a case of illegal constructive dismissal.
Before us is a Petition for Review on Certiorari1 questioning the October 27, 2008 Decision2 of the Court of Appeals
(CA) which dismissed the petition in CA-G.R. SP No. 104437, entitled "Girly G. Jco, Petitioner, versus National
Labor Relations Commission (First Division), Systems Technology Institute, Inc., Monico V. Jacob and Peter K
Femandez, Respondents."
Factual Antecedents
Respondent Systems Technology Institute, Inc. (STI) is an educational institution duly incorporated, organized, and
existing under Philippine laws. Respondents Monico V. Jacob (Jacob) and Peter K. Fernandez (Fernandez) are STI
officers, the former being the President and Chief Executive Officer (CEO) and the latter Senior Vice-President.
STI offers pre-school, elementary, secondary and tertiary education, as well as post-graduate courses either
through franchisees or STI wholly-owned schools.3
Petitioner Girly G. Ico,a masteral degree holder with doctorate units earned,4 was hired as Faculty Member bySTI
College Makati (Inc.), which operates STI College-Makati (STI-Makati). STI College Makati (Inc.) is a wholly-owned
subsidiary of STI.5
At STI, petitioner servedunder contract from June1997 to March 1998. In April 1998, she was recalled to STI’s
Makati Central Office orHeadquarters (STIHQ) and promoted to the position of Dean of STI College-Parañaque
(STIParañaque). In November1999, she was again recalled to STI-HQ and STI appointed her as Full-Time Assistant
Professor I reporting directly to STI’s Academic Services Division (ASD).
In June 2000, petitioner was promoted to the position of Dean under ASD, and assigned to STI College-Guadalupe
(STI-Guadalupe), where she served as Dean from June 5, 2000 up to October 28, 2002.6
Meanwhile, petitioner’s position as Deanwas reclassified from "Job Grade 4" to "Job Grade Manager B"with a
monthly salary of ₱37,483.58 effective April 1, 2002,7 up from the ₱27,000.00salary petitioner was then receiving.
After petitioner’s stint as Dean of STI-Guadalupe, she was promoted to the position of Chief Operating Officer
(COO) of STI-Makati, under the same position classification and salary level of "Job Grade Manager B". She
concurrently served as STI-Makati School Administrator.8
Sometime in July 2003,or during petitioner’s stint as COO and School Administrator of STI-Makati, a Plan of
Merger9 was executed between STI and STI College Makati (Inc.), whereby the latter would be absorbed by STI.
The merger was approved by the Securities and Exchange Commission on November 12, 2003. STI College Makati
(Inc.) thus ceased to exist, and STI-Makati was placed under STI’s Education Management Division (EMD).10
In a March 12, 2004 Memorandum,11 STI – "[i]n line with the recently approved organizational structure effective
August 1, 2003"12 – updated petitioner’s appointment as COO, "Job Grade Manager B" witha gross monthly salary of
₱37,483.58. She was re-appointed as COO of STI-Makati, under the supervision of the AcademicServices Group of
the EMD and reporting directly to the Head thereof, herein respondent Fernandez. However,petitioner was not given
the salary commensurate to her position as COO, which by this time appeared to be pegged at ₱120,000.00.13 It
likewise appears that she was not given benefits and privileges which holdersof equivalent positions were entitled
to, such as a car plan.14
Two months after confirming petitioner’s appointment as STI-Makati COO, another Memorandum15 dated May 18,
2004 was issued by STI Human Resources Division Head, Yolanda Briones (Briones), signed and approved by STI
Senior Vice-President for Corporate Services Division Jeanette B. Fabul (Fabul), and noted by respondent Jacob –
a) Cancelling, effective May 20, 2004, petitioner’s COO assignment at STI-Makati, citing management’s decision to
undertake an "organizational restructuring" in line with the merger of STI and STI-Makati;
b) Ordering petitioner to report to STI-HQ on May 20, 2004 and to turn over her work to one Victoria Luz (Luz), who
shall function as STI-Makati’s School Administrator; and
c) Appointing petitioner, effective May 20, 2004, as STI’s Compliance Manager with the same "Job Grade Manager
B" rank and salarylevel, reporting directly to SchoolCompliance Group Head Armand Paraiso (Paraiso).
According to STI, the "organizational re-structuring" was undertaken "in order to streamline operations. In the
process, the positions of Chief Executive Officer and Chief Operating Officer of STI Makati were abolished."16
On May 18, 2004, Fernandez summoned petitioner to his office, where the following conversation – which appears
to have been recorded by petitioner with the knowledge and consent of Fernandez – took place:
F: (Fernandez) I’m sure you know already why you are here.
P: (Petitioner) No, sir. Nanalo ba tayo sa Winners’ Circle…
F: Girly, let’s stop this. You will be pulled out [from] STI CollegeMakati[.] x x x [T]urn over toVicky Luz everything
tomorrow.
P: Sir? What have I done? May I know what is the reason of (sic) an immediate transfer and a short period of turn-
over?
F: I don’t trust you anymore. I’ve beenhearing too many things from [sic] you and as your CEO, you don’t submit to
me FSP monthly. Me high school student ka na inenroll para lang makasali sa basketball.
P: Sir, that’s not true.
F: Would you like me to call Liezel? ([H]e stood up and called Ms. Liezel Diego)
P: Yes, sir.
F: Liezel, how many times did STI College-Makati submitted [sic] to you the FSP?
L: (Liezel Diego) Sir, sa akin po 2 beses peromeron pa po ke Ervie.
Tanong ko lang po ke Ervie kung ilan sa kanya.
P: Sir, can I have one minute to call STI College-Makati to fax the data of the receiving copies of the FSP?
F: Irrelevant! I don’t have time.
P: Sir, you will please put that in writing[. It] is a very strong accusation you are making and I think I should defend
myself.
F: No way! You cannot get anything from me. Why? Sothat when I will provide such then you will go toLabor? (in a
shouting manner)
P: Sir, what is this all about? Please tell me the real score. I am honest to you and I believe I am performing well. Is
this what I deserve?
F: Don’t talk to me about honesty (again said in a shouting manner and fuming mad). Girly, don’t push me to the
limit! Don’t let me do things that you will regret later. Don’t be like Chito (Salazar, the former STI President) who
have [sic] left STI without proving to everybody whether [sic] he have [sic] done wrong or not. I don’t want that to
happen to you!
P: Sir, can I have one minute to go outside. I can no longer bear this?
(begging with both hands [together] as a sign of surrender)
F: No! (still shouting) I don’t have time. Here’s the letter from HR[.] I want you to sign this.
P: Sir, I’m sorry but I will not sign. I think it should be HR who will give this to me.
F: You want me to call HR? You wantme to call Atty. Pascua? You want me to call people outside [to] witness that
you refused to sign? (still shouting) I don’t care if you have a tape recorder there with you. After all, that will not be a
[sic] valid evidence in court.
xxxx
F: Ok. Don’t make me loose [sic] my temper again (with a soft voice already). You just sign this (giving to me the
[May 18, 2004 Memorandum]). Don’t go to Bohol anymore. If ever you will win in the Winners’ Circle, you can get
the tripjust like what happened to Redger (Agudo, the former COO of STI College-Makati).
P: Sir, what will be the consequence if I will not sign this?
F: I will file a case against you. What do you call this? (pausing for a little while then uttered the word) Disobedience!
P: Ok, sir, but please I want to know what exactly my violation is (while signing the paper). Now that we will be
parting ways, I am still hoping that you can tell [sic] the violationsthat I made, if there is any.
F: You can have it after 2-3 weeks time. Besides, we are not parting ways (with a sarcastic smile). I am still your
boss in Audit. Audit and Compliance is still under my supervision.
P: Thank you, sir. (I went out in [sic] his room still trembling)17
Incidentally, by this time, petitioner had garnered the following awards and distinctions:
1) Silver Awardee, 2004 STI Winners’ Circle Awards, 17thSTI Leaders’ Convention;
2) STI Academic Winners’ Circle Award as Dean of STI-Guadalupe given at the 2002 STI Leaders’ Convention;
3) Academic Head of the Year for 2002, as Dean of STI-Guadalupe; and
4) 2001 STI Winners’ Circle, as Academic Head, STI-Guadalupe.18
On May 20, 2004, petitioner reported toher new office at STI’s School Compliance Group, only to find out that all
members ofthe department had gone to Baguio City for a planning session. Petitioner, who was not apprised of the
official trip, was thus left behind. That same day, an official communication19 was disseminated throughout STI,
announcing Jacob’s appointment as the new STI President and CEO, Fernandez as the new COO of STI-
Makati,and Luz as the new STI-Makati School Administrator; however, petitioner’s appointment as Compliance
Manager was left out.
In a May 24, 2004 letter20 to Jacob, petitioner took exception to the incidents of May 18 and 20, 2004, claiming that
she became the victim of a series of discriminatory acts and objecting to the manner by which she was transferred,
asserting that she was illegally demoted and that her name was tarnished as a result of the demotion and transfer.
Jacob replied through a June 7, 2004 letter21 advising petitioner that her letter was forwarded to Fernandez for
comment.
Prior to that, on May 25, 2004, during the 17th STI Leaders Convention held in Panglao, Bohol, petitioner’s
achievement as a Silver Awardee for the 2004 STI Winners’ Circle Awards was announced, but she did notattend,
claiming that she was too embarrassed to attend owing to the events leading to her transfer, which to her was a
demotion.22 STI withheld petitioner’s prize – a South Korea trip termed "Travel Incentive Award" for the Winners’
Circle for STI fiscal year 2003-2004 – "pending the final result of the investigations being conducted" by STI relative
to irregularities and violations of company policies allegedly committed by petitioner.23
It appears that from May 28, 2004 up to June 10, 2004, STI’s Corporate Auditor/Audit Advisory Group conducted
anaudit of STI-Makati covering the whole period of petitioner’s stint as COO/School Administrator therein. In a report
(Audit Report) later submitted to Fernandez, the auditors claim to have discovered irregularities, specifically –
1. Appointment papers of STI-Makati employees did not have the written approval of Fernandez inhis capacity as
CEO;
2. There were instances where employees became regular after only an abbreviated probationary period, and in
some cases,the employees did not undergo probation;
3. Petitioner failed to fully liquidate cash advances amounting to ₱60,000.00, relative tothe purchase of books;
4. There was a lack of internal controlsin regard to cost of planning sessions, liquidation reports, journal entries, use
of petty cash fund, and inventory; and
5. Petitioner and other employees falsified school records in order to enable high school players to play for STI-
Makati’s volleyball team.24
In a June 17, 2004 Memorandum25 to Jacob, Fernandez cited the above Audit Report and recommended that an
investigation committee be formed to investigate petitioner for grave abuse of authority, falsification, gross
dishonesty, maligning and causing intrigues, commission of acts tending tocast negativity upon his person
(Fernandez), and other charges. Fernandez recommended that petitioner be placed under preventive suspension
pending investigation. Meanwhile, with respect to petitioner’s May 24, 2004 letter, it appears that Fernandez did not
submit a comment or answer thereto.
Jacob approved Fernandez’s recommendations, and on June 21, 2004, a Memorandum26 was issued placing
petitioner under preventive suspension and banning her entry to any of STI’s premiseseffective June 22, 2004 up to
July 16, 2004, citing "(an) Audit investigation being conducted relative to the offenses" for which petitioner was
charged, namely:
I. FACULTY MANUAL
a) Making malicious, obscene or libelous statements about the person of any member of the academic community.
b) Threatening, intimidating, coercingor harassing another person within the school premises.
c) Commission of acts inimicalto student’s [sic] interest.
II. STI-HO POLICY MANUAL
A. Class 3 –
1. Making false or malicious statements against another employee.
2. Causing intrigues tending to cast insult, dishonor and discredit to another employee.
3. Reading or gaining access to files,records, memos, correspondence and other classified documents of the
company.
[B] Class 4 –
1. Concealing errors of omission or commission, thus negatively prejudice [sic] the interest of the company.
[C] Class 5 –
1. Falsifying timekeeping reports and records, drawing salary/allowance, in any form, or money by virtue of falsified
timekeeping report of records, vouchers, receipts and the like.
2. Giving false and untruthful statements of [sic] concealing material facts in an investigation conducted byan
authorized representative of the company.
3. Misappropriating or withholding company funds.
4. All acts of dishonesty, which cause [sic] tend to cause prejudice to the company.27
On June 24, 2004, petitioner received another Memorandum28 from Briones dated June 23, 2004, this time stating
that charges havealready been filed against her allegedly "based on the Audit Findings", yet makingreference to the
June 21, 2004 Memorandum and without informing petitioner of the particulars of the charges or the results of the
audit. Nor was a copy of the said audit findings attached to the memorandum.
In a June 28, 2004 demand letter29 addressed to Jacob,petitioner protested anew her alleged maltreatment, claiming
illegal constructive dismissal and demanding immediate reinstatement to her COO position and the payment of
actual and other damages, under pain of suit.
In a June 30, 2004 letter, petitioner was notified of a hearing scheduled for July 2, 2004 and required to submit her
written explanation to the charges. It appears, however, that petitioner did not receive the said letter.30 On even date,
petitioner filed with the National Labor Relations Commission (NLRC) a labor case against herein respondents,
Fabul and Briones. Docketed as NLRC NCR Case No. 00-06-07767-04, the Complaint31 alleged illegal constructive
dismissal and illegal suspension, withclaims for regularization as well as for underpayment of salaries, holiday pay,
service incentive leave, 13th -month pay, moral and exemplary damages, and attorney’s fees.
In a July 12, 2004 Memorandum32 to petitioner, STI lifted petitioner’s suspension and ordered her to return towork on
July 13, 2004, with full salary from the time of her suspension.
In a July 13, 2004 electronic mail message33 sent by STI’s Reuel Virtucio (Virtucio) to petitioner, the latter was invited
to a July 19, 2004 "meeting with the committee formed to act on the complaint filed against (petitioner) by
(Fernandez)."34 The committee was composed ofSTI’s officers, namely Amiel Sangalang (Sangalang); Flerdeliza
Catalina Domingo (Domingo); and Virtucio.
On July 19, 2004, during the supposed scheduled meeting with the committee, petitioner was furnished with several
documents; however, no copy of the formal complaint or written chargewas given to her.The meeting was adjourned
without the committee setting another meeting for the submission of petitioner’s answer; nor was a hearing set for
the presentation of the parties’ evidence.35
Thereafter, petitioner wenton sanctioned leave of absence. After the lapse of her approved leave, she reported for
workseveral times. After August 9, 2004, however, she no longer reported for work.
On August 17, 2004, STI issued another Memorandum36 to petitioner, informing her that her South Korea
travelincentive award was being withheld, as the investigation covering her alleged involvement in irregularities and
violations of company policies was still pending.
In a January 13, 2005 letter cumnotice of termination signed by Jacob, petitioner was dismissed from STI effective
January 11, 2005.37
The Labor Arbiter Decision
In her Position Paper,38 petitioner claimed that during her stint as COO of STI-Makati and up to her transfer and
appointment as Compliance Manager, she was discriminated against and unfairly treated by respondents; that she
was denied a) the salary corresponding to the COO position in the amount of ₱100,000.00 – ₱120,000.00, b) her
prizes as Winners’ Circle awardee, aswell as c) her benefits such as a car plan and honorarium of ₱8,500.00
monthly.She likewise contended that her removal as STI-Makati COO and transfer to the School Compliance Group
as Compliance Manager was illegal and constituted a demotion amounting to constructive dismissal, as she was not
given prior notice of the transfer; forced to give her written conformity thereto; placed in an embarrassing situation
thereafter; and never given any task or work while she held such position. She added that the alleged reorganization
which caused her removal as STI-Makati COO was a sham, calculated to ease her out inthe guise of a restructuring;
that she was illegally placed under suspension for alleged offenses which respondents could not substantiate and
which she was not informedabout; that she was not accorded due process during the conduct of the purported
investigation; and that as a consequence of the discrimination and unfair treatment she received from respondents,
she suffered untold injury. Petitioner thus pleaded:
WHEREFORE, complainant respectfully prays that, after due proceedings, judgment be rendered ordering
respondents, jointly and severally, as follows:
1. To reinstate complainant to her former position as COO without loss to [sic] her seniority rights with backwages
and other benefits, such the [sic] monthly ₱8,500.00 honorarium, among others, to be paid until fully reinstated with
the necessary adjustments to equal the salary and benefits now being received by her replacement, respondent
Peter K. Fernandez.
2. To pay complainant the unpaid salaryand benefits differential due her as COO computed from November 5, 2002
to equal the salary and benefits of respondent Peter K. Fernandez, plus the legal rate of interest thereon from the
same date until fully paid.
3. To pay the money equivalent, plus the legal rate [sic] interest thereon until fully paid, of complainant’s awards as
a Silver Awardee in its STI 17th Winners’ Circle, consisting of the tripto Panglao, Bohol from May 25 to 27, 2004 and
Korea from September 21 to 24, 2004.
4. To pay complainant the unpaid Holiday Pay duly adjusted as above [sic] and with legal interest thereon until fully
paid.
5. To pay complainant the proportionate 13th [-]month pay for the current year with legal interestthereon until fully
paid.
6. To pay complainant moral damages in [sic] sum of ₱3 Million and exemplary damages in the amount of ₱2
Million, including attorney’s fees, and expenses of litigation.
Complainant prays for such other reliefs just and equitable in the premises.39
In their Position Paper,40 the respondents in NLRC NCR Case No. 00-06-07767-04 claimed that petitioner was
removed as STI-Makati COO pursuant to a reorganization aimed atstreamlining STI’s operations after the merger;
as a result, the positions of STI-Makati CEO and COO were abolished. They argued that petitioner was merely
"laterally transferred" to the School Compliance Group as Compliance Manager, and was not demoted in rank; nor
did she suffer a diminution in her salary and benefits, as the positions of STI-Makati COO and Compliance Manager
are equivalent in rank under the STI structure, that is, they both fall under "Job Grade Manager B". They added that
petitioner committed anomalies and irregularities, as stated above, which became the subject of an Audit
Report.41They asserted that the abolition of a position in STI is a recognized prerogative of management which may
not be interfered with absent malice or bad faith, and more so when done pursuant to a valid corporate restructuring;
the abolition of the CEO, COO, Treasurer, Corporate Secretary, and Director positions in STI-Makati was pursued
as a matterof course because with the merger, STI-Makati ceased to exist as it was absorbed by STI, and
consequently these positions became unnecessary. Petitioner’s transfer was justified as an exercise of STI’s
prerogative and right to transfer its employees when called for, and was done reasonably, without malice or bad
faith, and without unnecessarily inconveniencing petitioner.
Respondents added that petitioner’s suspension was vital for the protection of sensitive data and to ensure the
smooth conduct of the investigation, and in order that she may not gain access to sensitive information which, if
divulged to government agenciessuch as the Commission on Higher Education (CHED), would result in the
denial/withholding of permits to STI.42 On petitioner’s claim for regularization, respondents claimed that this was
unnecessary since petitioner was already a regular employee of STI. Regarding petitioner’s money claims,
respondents argued that petitioner could not be entitled to them, as she received all her salaries, benefits and
entitlementsduring her stint with STI. Finally, respondents contended that petitioner was not entitled to damages and
attorney’s fees, since she was not illegally dismissed and, in carrying out her transfer, they did not act with malice,
bad faith, orin a wanton and oppressive manner.
In her Reply43 to respondents’ Position Paper, petitioner noted that while STI and STI College Makati (Inc.) merged,
there was in fact no restructuring that took place which required her transfer and demotion; onthe contrary, the
merger created 29 additional vacant positions in STI. Petitioner added that no prior announcement of the
restructuring of STI-Makati was made, which thus renders such reorganization of questionable integrity; instead, the
merger was utilized as a tool to ease her out, through the bogus reorganization. She contended that Fernandez had
prejudged her case even before an investigation into the alleged anomalies could be conducted. Petitioner likewise
notedthat even her appointment as Compliance Manager was a sham, because no such vacant position existed
within the School Compliance Group, as the only two Compliance Manager positions were then occupied by Eddie
Musico (Musico) and Reynaldo Gozum (Gozum);44 the only other vacant positions in that department were those for
lower level Compliance Officers. In effect, petitioner was in fact made a mere ComplianceOfficer, which meant that
she was effectively demoted. Petitioner claimed as well that her demotion was highlighted by the fact that while she
had a masteral degreeand doctorate units, all the others within the School Compliance Group – including her
superior, Paraiso – were mere bachelor’s degree holders.
Finally, petitioner maintained that the multiple charges lodged against her were without basis, and respondents
failed to prove them byadequate evidence.
On the other hand, respondents maintained in their Reply (to Complainant’s Position Paper)45 that as to salary and
benefits, petitioner was not discriminated against, and was merely given a compensation package commensurate to
her rank as "Job Grade Manager B", taking into consideration her length of service at STI.Her salary was thus at par
with those of other STI employees of equivalent rank and similar durations ofemployment. They added that
honoraria are not given to its employees,as well as to those who are deployed to company-owned schools such as
STI-Makati. Respondents asserted further that the reorganization was not a ruse to ease petitioner out; it was
necessary as a means toward streamlining STI’s operations. Fernandez characterized petitioner’s account of their
conversation as inaccurate.46 Respondents likewise debunked petitioner’s claims that she was discriminated against
while she held the position of Compliance Manager, saying that this claim was specious and exaggerated. They
added that even though Fernandez was later appointed COO of STI-Makati after petitioner was appointed
Compliance Manager, his work assuch STI-Makati COO was limited to performance of oversight functions, which
functions he already performs as SeniorVice-President of the Education Management Division of STI. With regard to
the July 19, 2004 meeting, respondents argued that nothing was achieved during said meeting owing to petitioner’s
and her counsel’s "quarrelsome attitude" and insistence thatshe be furnished the written charges against her as well
as the supporting evidenceor documents, which would have been unnecessary if she only cooperated during said
meeting and answered the charges against her. They underscored the fact that during said meeting, petitioner was
furnished with a copy of the charges against her, including all other documents, particularlythe Audit Findings.
On March 31, 2006, LaborArbiter Renaldo O. Hernandez issued a Decision47 in NLRC Case No. 00-06-07767-04,
decreeing as follows:
WHEREFORE, premises considered, judgment is hereby finding [sic] complainant to have been illegally
constructively and in bad faith dismissed by respondents in her legally acquired status as regular employee thus,
ORDERING respondents SYSTEMS TECHNOLOGY INSTITUTE, INC. and/or MONICO V. JACOB, PETER K.
FERNANDEZ in solido:
1) To reinstate her to her former position, without loss of seniority rights and benefits, allowances, which
reinstatement aspect, actual or in the payroll, is immediately executory, even pending appeal.
2) To pay complainant’s full back wages, which should legally start from date of her illegal constructive
dismissal/illegal demotion on 05/18/2004, but reckoned from date of the illegal suspension when she was physically
prevented/ barred from working on 06/22/2004, based on her gross monthly salary ₱37,483.58, 15 days Vacation
Leave/yearand 15 days Sick Leave/year, 13th [-] month pay, and other benefits accruingto her in her regular
position as COO until actually reinstated, which as of date amounts to:
Basic ₱37,483.58 x 21 months = ₱787,155.18
13th[-]month pay 1/12 thereof = 65,596.26

VL 15 days/yr ₱1,249.45 x 15 x 1.75 years = 32,798.13
SL 15 days/yr ₱1,249.45 x 15 x 1.75 years = 32,798.13
Total F/B as of date = ₱918,347.70
3) To pay her moral and exemplary damages in the combined amount of ₱1,000,000.00.
4) To pay her the monetary equivalentof the awards due her as her being proclaimed as a Silver Awardee of
US$630.00 for the Korean travel from 09/21-24/2004, and the round trip ticket US$350.00, hotel accommodation
and expenses to be paid, viz. 1. PhilippineTravel Tax ₱1,620.00, NAIA Terminal Fee ₱550.00, Visa Processing Fee
₱500.00, War Risk Tax US$12.00, Seoul Tax US$15.00, Ticket Insurance US$3.00, Travel Insurance ₱420.00,
Tour Guide and Driver’s Tip US$4.00/day.
5) To pay her 10% of the entire computable award herein as attorney’s fees.
SO ORDERED.48
The Labor Arbiter found that petitioner was illegally dismissed, and respondents were guilty of malice and bad faith
in the handling of her case. He held that petitioner’s transfer – which STI claimed was the result of STI’s
restructuring – was irregular, because at the time of such transfer, the reorganization and restructuring of STI-Makati
had already been effected; STI’s March 12, 2004 Memorandum topetitioner – which confirmed and renewed her
appointment as STI-Makati COO – was precisely issued as a consequence of the merger and reorganization,which
took place as early as November 2003. STI’s claim that petitioner’s lateral transferwas necessary is thus contrived.
In addition, the Labor Arbiter declared that even as petitioner was appointed to the position of Compliance Manager,
such position did not actually exist in STI’s new corporate structure; under the Compliance Group, which was
headed by Paraiso, there were only two Compliance Manager positions which were at the time occupied by Musico
and Gozum, and the only other vacant positions in the Compliance Group were for Compliance Officers. In effect,
petitioner was appointed to the position of a mere Compliance Officer, which was lower in rank.
The Labor Arbiter held further that during the process of her illegal transfer, petitioner was harassed, humiliated, and
oppressed, thus:
1. On May 18, 2004, she was subjected to threats and intimidation by Fernandez, the latter bullying and forcing her
toreceive the May 18, 2004 Memorandum while petitioner was inside his office;
2. On the day she reported to her new position as Compliance Manager, the whole ComplianceGroup team left for a
three-day out-of-town planning session, without respondents informing her or including her in the official event as
she should be;
3. On May 20, 2004, an official written announcement was made regarding Jacob’s appointment as new STI
President and CEO, Fernandez as new STI-Makati COO, and Luz as new STI-Makati School Administrator. Adding
insult to injury, petitioner’s appointment as Compliance Manager was intentionally left out;
4. Petitioner, given her illustrious career in STI – having risen from the ranks as a faculty member, to full-time
professor, to Dean, and finally to the position of STI-Makati COO, and having achieved multiple awards and
distinctions – was thereafter treated "as a non-entity" by respondents.
The Labor Arbiter added that the purported audit and investigation of petitioner’s alleged irregularities was a sham,
as the same was conducted without official sanction from STI and without petitioner’s knowledge; it was founded on
hearsay evidence and based on charges known only to Fernandez; it was conducted merely to conceal
respondents’ shabby treatment of petitioner, and without apprising petitioner of the writtenformal charges against
her.
Finally, respondents wereadjudged guilty of malice, bad faith, acts oppressive to labor and contrary to morals, good
customs and public policy, which caused upon petitioner suffering and humiliation which entitles her to an award of
moral and exemplary damages, as well as attorney’s fees.
Respondents interposed an appeal with the NLRC, docketed as NLRC NCR Case No. 050756-06.In an October 31,
2007 Decision,49 the NLRC decreed, thus:
WHEREFORE, the [D]ecision appealed from is VACATED and SET ASIDE and a new one entered dismissingthe
complaint for lack of merit.
SO ORDERED.50
In reversing the Labor Arbiter’s Decision and finding that there was no illegal constructive dismissal,the NLRC held
that any action taken by STI after the merger can be reasonably concluded as one of the valid consequences
thereof; the regulation of manpower is a management prerogative enjoyed by STI, and it was free to regulate
according to its own discretion and judgment all aspects of petitioner’s employment. Inthis light, and since no
concrete evidence was presented by petitioner to show that respondents acted with maliceor bad faith, the NLRC
held that it may not be said that the abolition of the position of STI-Makati COO was done to unduly ease her out of
STI.
The NLRC added that while it may be conceded that a heated argument between petitioner and Fernandez took
place during their May 18, 2004 meeting, the charged emotional outbreaks were nonetheless occasioned by
extraneous matters injected during such meeting, and consequently, Fernandez may not be faulted for insisting that
petitioner receive the May 18, 2004 Memorandum ordering petitioner’s transfer.
Moreover, the NLRC declared that petitioner’s preventive suspension was not done irregularly, as it was based on
charges leveled against her and made pursuant to an administrativeinvestigation then being conducted; likewise, it
held that the pending investigation justified the withholding ofpetitioner’s Korea travel incentive award.
Finally, the NLRC noted that petitioner’s failure to report for work after August 9, 2004 should betaken against her,
and on this note it would be unfair to hold respondents liable for illegal constructive dismissal.
Petitioner moved for reconsideration,but in a March 28, 2008 Resolution,51 the NLRC denied the same.
Petitioner went up to the CA via certiorari. On October 27, 2008, the CA issued the assailedDecision, decreeing as
follows:
WHEREFORE, premises considered, the Petition is DENIED for lack of merit. Costs against petitioner.
SO ORDERED.52
According to the CA, the NLRC was correct in finding that as a result of the November 2003 merger of STI and STI-
Makati, petitioner’s transfer to her new position as Compliance Manager became necessary, as the position of
STIMakati COO – which petitioner then held– was abolished as a result of a reorganization that was implemented
pursuant to the merger. It noted further that the March 12, 2004 confirmation53 of petitioner’s appointment as STI-
Makati COO was done pursuant to an August 2003 reorganization – or one that was implemented priorto the
November 2003merger; thus, petitioner’s transfer and appointment as Compliance Manager days later,per the May
18, 2004 Memorandum, may not be said to be irregular, as it was made in accordance with a newreorganization or
restructuring program implemented in accordance with the November 2003 merger.
The CA held further that petitioner’stransfer was made pursuant to the valid exercise of STI’s prerogative toabolish
certain positions and transfer/ reassign its employees, for valid reasons and in accordance with the requirements of
its business. Since petitioner’s transferwas not attended by malice or bad faith, as it was shown to be necessary
following the merger and abolition of the position that she held, and was done without diminution in rank, salary and
benefits, there could be no cause of action against respondents for illegal dismissal.
The appellate court did not give credence to petitioner’s allegations of discrimination and harassmenteither, as it
found them to be self-serving and unsubstantiated. Regarding her suspension, the CA affirmed the NLRC’s view
that the same was not irregularly imposed; the withholding of her travel award was justified as well.
Issues
Petitioner now submits the following issues for the Court’s resolution:
THE COURT OF APPEALS ERRED IN DEVIATING FROM THE 18 MAY 2004 EMPLOYMENT UPDATE CLEARLY
ADMITTING AN INVALID ABOLITION OF PETITIONER’S POSITION WITH STI’SAPPOINTMENT OF HER
REPLACEMENT AND RENAMING HER OFFICE AS "SCHOOL ADMINISTRATOR".
II
AS THERE WAS NO VALID ABOLITION OF PETITIONER’S POSITION AS COO, THE COURT OF APPEALS
ERRED IN FRAMING A CASE OF VALID LATERAL TRANSFER INSTEAD OF CONSTRUCTIVE DISMISSAL
DONE IN BAD FAITH.54
In a nutshell, petitioner argues in her Petition and Reply55 that her appointment as Compliance Manager is illegal,
because the abolition of the STIMakati COO position and the creation of the position of Compliance Manager were
contrived and fabricated. She adds that her appointment to the position of Compliance Manager was in fact a
demotion: she was relegated to a position where she did not have any staff to supervise; her work became merely
mechanical in nature; she became a mere Compliance Officer reporting to the Compliance Group Head; and her
work was severely limited.
Petitioner adds that contrary to the CA’s pronouncement, she was subjected to harassment and discrimination,
humiliated and became the victim of STI’s fraudulent scheme to illegally oust her from her position as STI-Makati
COO. She cites: 1) the May 18, 2004 incident, noting the treatment accorded her by Fernandez and the manner by
which she was allegedly forced to receive the Memorandum of even date; 2)the investigation into alleged
irregularities, which she characterized as sham; 3) her preventive suspension, which she claims was illegal for being
based on non-existent charges; and 4) the withholding of her travel award.
Petitioner insists that her suspension was illegal, as her new employment as Compliance Manager did not put her in
a position where she would have access to sensitive STI records;thus, she was never a serious threat to such
extent that respondents believed she was. Besides, the investigation into allegations of irregularities committed by
her, which was the cause for her suspension as well, was a sham for violating her rightsto a hearing and due
process. Respondents’ Arguments
In their Comment,56 respondents maintain that the merger of STI and STIMakati required the abolition of the
Chairman, President/CEO, COO, Treasurer and Corporate Secretary positions in STI-Makati; likewise, it became
necessary to effect a reorganization of STI’s corporate structure inorder to streamline its operations. Petitioner’s
transfer was in line with such merger and reorganization; no bad faith may thus be inferred from their actions, which
were carried out legally and pursuant to STI’s rights, prerogatives, and needs at the time.
Respondents argue further that petitioner’s transfer did not amount to a demotion in rank, as the positions of COO
and Compliance Manager are of equal importance; in fact, the functions of Compliance Manager are much broader
in scope as they involve the conduct of operations and academic audits of allof STI’s schools, and not just STI-
Makati. As to salaryand benefits, petitioner as Compliance Manager is given the same salary and benefits which she
received at the time she was STI-Makati COO.
Respondents add that, ascorrectly held by the NLRC and CA, petitioner was never subjected to harassment and
humiliation, thus:
1. Petitioner was not excluded from the Compliance Group’s planning session held in Baguio City. At the timeof
petitioner’s transfer, Briones was not aware of the scheduled Baguio trip, and thus petitioner was not duly informed
thereof. Thus, her inability to attend the official event may not be blamed on respondents;
2. Petitioner was assigned ample work at the Compliance Group, contrary to her claims that she virtually did nothing
in her new position;
3. It is not true that petitioner was not given her own room as Compliance Manager in order to humiliate her. She
could not begiven a room simply on account of office space constraints.
On petitioner’s suspension, respondents reiterate that petitioner’s threats to divulge sensitive information and
jeopardize STI’s then pending permit applications justified the taking of drastic measures to insure that company
records are kept intact and free from access; the preventive suspension of petitioner thus became necessary.
Moreover, an audit investigation was then being conducted on alleged irregularities committed by petitioner;
preventive suspension as a preliminary step in the investigation is thus authorized.
Our Ruling
The Petition is granted.
As a rule, this Court is not a trier of facts, and thus the findings of fact of the NLRC and CA are final and conclusive
and will not be reviewed on appeal. However, there are well-recognized exceptions to the rule, such as when its
judgment is based on a misapprehension of facts or relevant facts not disputed by the parties were overlooked
which, if properly considered, would justify a different conclusion. Petitioner’s case falls under these exceptions.
Both the NLRC and CA found thatpetitioner was not constructively dismissed, for the following reasons:
1. Petitioner’s position as STI-Makati COO was abolished as a necessary result of the merger of STI and STI-
Makati,and the restructuring of STI aimed at streamlining its operations;
2. Petitioner was merely "laterally transferred" to the Compliance Group as Compliance Manager, with no diminution
in rank, salary and benefits; and
3. The reorganization of STI was done in good faith and in the exercise of the management prerogative. In the same
manner, petitioner’s transfer was a) made in the exercise of the management prerogative to transfer employees
when necessary; b) done in good faith; and c)not unreasonable, inconvenient or prejudicial to her interests.
It appears, however, that the position of STI-Makati COO was actually never abolished. As a matter of fact, soon
after petitioner was removed from the position, Fernandez was appointed to take her place as STI-Makati COO; his
appointment was even publicly announced via an official communication disseminated company-wide. This thus
belies respondents’ claim thatthe position of STI-Makati COO became unnecessary and was thus abolished.
Respondents may argue, as they did in their Reply57 to petitioner’s Position Paper, that Fernandez’s appointment as
STI-Makati COO replacing petitioner was merely for oversight purposes. Whatever the reason could be for
Fernandez’s appointment as STI-Makati COO, the fact still remains that such position continued to exist.
Next, petitioner’s appointment as Compliance Manager appears to be contrived as well. At the time of petitioner’s
appointment, the only two Compliance Manager positions within STI’s compliance department – the School
Compliance Group – were already filled up as they were then occupiedby Musico and Gozum.58 None of them has
been dismissed or resigned. Nor could petitioner have been appointed head ofthe department, as Paraiso was very
much in charge thereof, as its ComplianceGroup Head. The only positionswithin the department that were at the
time vacant were those of Compliance Officers, which are of lower rank. In other words,petitioner could not have
been validly appointed as Compliance Manager, a position within STI that was then very much occupied; if ever,
petitioner took the position of a mereCompliance Officer, the only vacant position within the department.
Thirdly, even though it isclaimed that from May 28, 2004 up to June 10, 2004, STI’s Corporate Auditor/Audit
Advisory Group conducted an audit of STIMakati covering the whole period of petitioner’s stint as COO/School
Administrator, it appears that even prior to such audit, petitioner’s superior – Fernandez – had already prejudged her
case. The May 18, 2004 conversation between petitioner and Fernandez inside the latter’s office is quite revealing.
The May 18 conversation between petitioner and Fernandez, taken in conjunction with the Court’s findings that the
position of STI-Makati COO was never abolished and that petitioner’s appointment as Compliance Manager was
contrived, confirms the view that petitioner was not transferred to the School Compliance Group as a matter of
necessity, but as punishment for her perceived irregularities. In effect, petitioner was demoted and relegated to a
position of insignificance within STI, there to suffer for what her employer alleged were transgressions committed by
her. To all intents and purposes, petitioner was punished even before she could be tried.
Fernandez’s declarations during the May 18 conversation undoubtedly provide the true motive behind petitioner’s
removal as STI-Makati COO:
a. After "hearing too many things" about petitioner, Fernandez simply lost confidence in her – meaning that
Fernandez had made up his mind about petitioner after hearing rumors about her; b. Fernandez accused petitioner
of specific violations, without the benefit of accurate information and without giving her the opportunity to refute the
accusations;
c. Fernandez has no time to listen to petitioner’s explanations, despite her pleas to be heard;
d. Fernandez refused to provide petitioner with the evidence or other basis for his accusations, in spite of petitioner’s
request for him to put the same in writing;
e. Fernandez has prejudged petitioner, and intimated to her that she was dishonest, even before she could be
heard; and
f. Fernandez threatened petitioner, that if she pushed him further, she would suffer the fate of a former employee
who was separated fromSTI without the benefit of clearing his name. In other words, she could find herself without a
job at STI even before her innocence or guilt could be established.
From the May 18 conversation alone, it can be seen that petitioner’s fate in STI was a foregone conclusion. She was
threatened to accept her fate or else she would find herself without work, either through dismissal or forced
resignation. Evidently, she became the subject of an illegal constructive dismissal in the guise of a transfer.
The supposed audit conducted from May 28, 2004 up to June 10, 2004 by STI’s Corporate Auditor/Audit Advisory
Group was a mere afterthought, as it was apparent that as early as May 18, 2004, petitioner has been found guilty
of whatever transgressions she was being charged with, founded or unfounded. The same is true with respect to her
preventive suspension; it was imposed with malice and bad faith, and calculated to harass her further, if not trick her
into believing that respondents were properly addressing her case. Needless to say, all proceedings and actions
taken in regard to petitioner’s employment and case, beginning on May 18, 2004, were all but a farce, done or
carried out in bad faith, with the objective of harassing and humiliating her, all in the fervent hope that she would fold
up and quit.
Constructive dismissal exists where there is cessation of work because ‘continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay’ and other
benefits. Aptly called a dismissal in disguise or anact amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his
continued employment. In cases of a transfer of an employee, the rule is settled that the employer is charged with
the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business
necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer
cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive
dismissal.59
There is no doubt that petitioner was subjected to indignities and humiliated by the respondents. As correctly
observed by the Labor Arbiter, she was bullied, threatened, shouted at, and treated insolently by Fernandez on May
18, 2004 inside the latter’s own office. She was shamedwhen, on her very first day at the School Compliance Group,
all of the employees of the department have gone on an official out-of-town event without her and, as a result,she
was left alone at the office for several days. Respondents did not even have the courtesy to offer her the opportunity
to catch up with the group sothat she could makeit to the event, even if belatedly. Then again, on May 20, 2004, STI
made an official companywide announcement of Jacob’s appointment as new STI President and CEO, Fernandez
as new STI-Makati COO, and Luz asnew STI-Makati School Administrator, but petitioner’s appointment as new
Compliance Manager was inconsiderately excluded. Respondents made her go through the rigors of a contrived
investigation, causing her to incur unnecessary legal expenses as a result of her hiring the services of counsel. Her
well-deserved awards and distinctions were unduly withheld in the guise of continuing investigation – which
obviously was taking too long to conclude; investigation began formally on May 28, 2004 (start of audit), yet by
August 17 (date of memorandum informing petitioner of the withholding of Korea travel award), the investigation was
still allegedly ongoing. She was deprived of the privilege to attend company events where she would have received
her well-deserved awards with pride and honor, and her colleagues would have been inspired by her in return.
Certainly, respondents made sure that petitioner suffered a humiliating fate and consigned to oblivion.
Indeed, petitioner could not be faulted for taking an indefinite leave of absence, and for altogether failing to report for
work after August 9, 2004. Human nature dictates that petitioner should refuse to subject herself to further
embarrassment and indignitiesfrom the respondents and her colleagues. All told, petitioner was deemed
constructively dismissed as of May 18, 2004. Finally, since the position of STI-Makati COO was never abolished, it
follows that petitioner should bereinstated to the very same position, and there to receive exactly what Fernandez
gets by way of salaries, benefits, privileges and emoluments, without diminution in amount and extent. Petitioner,
multi-awarded, deserving and loyal, is entitled to what Fernandez receives, and is deemed merely to take over the
office from him; moreover, the position of Chief Operations Officer is not merely an ordinary managerial position, asit
is a senior managerial office. In turn, Fernandez – or anyone who currently occupies the position of STIMakati COO
– must vacatethe office and hand over the same to petitioner.
It is correct for petitioner to have included among the reliefs prayed for in her Complaint that she be paid the salary,
benefits and privileges being enjoyed by Fernandez currently. The Court, in granting said relief, deems it only fair
that she should be entitled to what Fernandez is receiving. Not only that the position requires greater expertise in
many areas,or that it involves great responsibility, or that petitioner deserves it from the point of view of her
qualifications and experience; but it would be to prevent another form of oppressive practice, where an employee is
appointed toa senior management position, there to enjoy only the prestige or title, but not the
benefitscommensurate with the work and responsibility assumed. It would likewise prevent a situation where, as in
this case, an employer – obliged by law or the courts to reinstate an "unwanted" employee holding a senior
management position – is given an opportunity to retaliate by limiting the employee’s salary, privileges and benefits
to a certain level – low or high, so long as it is within the managerial range– that is however 1) not commensurate
with the work and responsibility assumed by the employee, or 2) discriminatory, or 3) indicative of a tendency to
favor only one or some employees.
Nonetheless, the Court failsto discern any bad faithor negligence on the part of respondent Jacob. The principal
character that figures prominently in this case is Fernandez; he alone relentlessly caused petitioner’s hardships and
suffering. He alone is guilty of persecuting petitioner. Indeed, some of his actions were without sanction of STI itself,
and were committedoutside of the authority given to him by the school; they bordered on the personal, rather than
official. His superior, Jacob, may have been, for the most part, clueless of what Fernandez was doing to petitioner.
After all, Fernandez was the Head of the Academic Services Group of the EMD, and petitioner directly reported to
him at the time; his position enabled him to pursue a course of action with petitioner that Jacob was largely unaware
of.
A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations incurred
as a result of the directors’ and officers’ acts as corporate agents, are nottheir personal liability but the direct
responsibility of the corporation they represent. As a rule, they are only solidarily liable with the corporation for the
illegal termination of servicesof employees if they acted with malice or bad faith.
To hold a director or officer personally liable for corporate obligations, two requisites must concur: (1) it must be
alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation or that the
officer was guilty of gross negligence or bad faith; and (2) there must be proof that the officer acted in bad faith.60
WHEREFORE, the Petition is GRANTED. The October 27, 2008 Decision of the Court of Appeals in CA-G.R. SP
No. 104437 is ANNULLED andSET ASIDE. The March 31, 2006 Decision ofLabor Arbiter Renaldo O. Hernandez in
NLRCCase No. 00-06-07767-04 is hereby REINSTATED, WITH MODIFICATIONS, in that:
1. Respondent Systems Technology Institute, Inc., is ordered to REINSTATEpetitioner Girly G. Ico to the position of
STI-Makati College Chief Operating Officer and pay her the exact salary, benefits, privileges, and emoluments
which respondent Peter K. Fernandez is receiving, but not less than what petitioner was receiving at the time of her
illegal constructive dismissal on May 18, 2004;
2. Respondent Monico V. Jacob is ABSOLVED of any liability;
3. Respondent Peter K. Fernandez is ordered to VACATEthe said office of STI-Makati Chief Operating Officer and
turn over the same to petitioner;
4. The award of backwages shall earn LEGAL INTERESTat the rate of six per cent(6%) per annumfrom the date of
the petitioner’s illegal dismissal until fully paid;61
5. Finally, the appropriate Computation Division of the NLRC is hereby ordered to COMPUTE AND UPDATEthe
award as herein established WITH DISPATCH.
SO ORDERED.
SECOND DIVISION
G.R. No. 163999 July 9, 2014
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner,

vs.
MILLARD R. OCAMPO, CIPRIANO REY R. HIPOLITO, ERIC F. MERJILLA AND JOSE R.
CARANDANG,Respondents,
DECISION
DEL CASTILLO, J.:
A special civil action for certiorari is an extraordinary remedy; thus, a party who seeks to avail of it must strictly
observe the rules laid down by law. 1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the Decision3 dated February 18,
2004 and the Resolution4 dated June 11, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 74990.
Factual Antecedents
In February 1996, petitioner Philippine Long Distance Telephone Company (PLDT), through its Quality Control
Investigation Division (QCID), conducted an investigation on 1he alleged illegal International Simple Resale (ISR)
activities in Makati City.5 ISR is a method of routing and completing an international long distance call using lines,
cables, antennas, and/or airwave or frequency that directly connect to the local or domestic exchange facilities of
the country of destination of the call.6 Likened to a jumper,7 the unauthorized routing of international long distance
calls by-passes petitioner’s International Gateway Facilities (IGF) with the use of ISR access numbers, making
international long distance calls appear as local calls, and thereby, depriving petitioner of substantial revenues.8
After confirming that some PLDT subscribers wereindeed operating ISR businesses in Makati City, under the
business names INFILNET and Emergency Monitoring System9 (EMS), petitioner requested the assistance of the
National Bureau of Investigation (NBI) to apprehend the said subscribers.10 Acting on said request, Atty. Oscar L.
Embido (Embido), the supervising agent assigned to the Anti-Organized Crime Divisionof the NBI, conducted
surveillance on the offices of INFILNET and EMS.11 To verify his findings, he went to San Francisco, USA, and made
international calls to the Philippines using a borrowed subscriber’s card.12 Petitioner monitored the calls and
discovered that these calls by-passed its IGF.13 Atty. Embido then returned to the Philippines and applied for search
warrants with Branch 2314 of the Regional Trial Court (RTC) of Manila.15
On September 17, 1996, the Manila RTC issued two search warrants: (a) Search Warrant No. 96-651 directed at
the office of INFILNET; and (b) Search Warrant No. 96-652 directed at the officeof EMS, both located in Makati
City.16
On the same day, NBI agents conducted simultaneous raids during which electronic gadgets, documents,assorted
office supplies, several pieces of computer equipment, and some personal belongings of the employees of
INFILNET and EMS were seized.17
On September 19, 1996, an Information for the crime of simple theft was filed before the RTC of Makati City, Branch
60, docketed as Criminal Case No. 96-1590, against respondents Millard R. Ocampo, CiprianoRey R. Hipolito, Eric
F. Merjilla, and Jose R. Carandang.18 Respondents posted bail the following day.19
On October 4, 1996, respondents filed before the Makati RTC a Motion to Suppress or Exclude or Return
Inadmissible Evidence Unlawfully Obtained,20 assailing the validity of the Search Warrantson the ground thatthe
searches conducted were not in accordance with the established constitutional rules and statutory guidelines.21
On February 21, 1997, the Makati RTC denied the Motion ruling that it is the issuing court, in this case, the Manila
RTC, which has the jurisdiction to rule on the validity of the Search Warrants.22 Respondents moved for
reconsideration but the same was unavailing,23 prompting them to file with the CA a Petition for Certiorari,24docketed
asCA-G.R. SP No. 47265.25
On July 13, 1998, the CA rendered a Decision26 dismissing the Petition as it found no fault on the part ofthe Makati
RTC in refusing to rule on the Motion to Suppress Evidence under the Principle of Non-Interference ofa co-equal
court.27 However, in order toavoid any conflict, the CA ordered the search warrant cases consolidated with the
criminal case for theft.28 Thus:
WHEREFORE, premises considered:
(1) The instant special civil action for certiorari is hereby DENIED for lack of merit; and
(2) The [RTC] of Manila, Branch 23, is hereby ORDERED to forward the records of the case to the [RTC] of Makati
Branch 60, for proper consolidation thereof.
SO ORDERED.29
Ruling of the Regional Trial Court of Makati City
On May 24, 2002, respondents applied for the issuance of a subpoena duces tecumagainst certain personsallegedly
in possession of documents relating to PAMTEL, a foreign telecommunicationscompany with tie-ups to INFILNET
and EMS.30
Finding the documents irrelevant and immaterial to the resolution of the case, the RTC issued an Order31 dated July
11, 2002, denying the application for subpoena duces tecum.32 Respondents soughtreconsideration33 but the RTC
denied the same in its Order34 dated October 10, 2002. Respondents were notified of the denial of their Motion for
Reconsideration on October 18, 2002.35
On November 29, 2002, the RTC proceeded to hear the Motion to Suppress, which was revived pursuant tothe CA’s
Decision dated July 13, 1998 in CA-G.R. SP No. 47265.36 But since respondents failed toappear and present
evidence to substantiate their Motion, the RTC denied the Motion in open court and issued the corresponding
Order37 to that effect.
Aggrieved, respondents elevated the case to the CA via a Petition for Certiorari,38 docketed as CA-G.R. SP No.
74990, assailing the Orders dated July 11, 2002, October 10, 2002, and November 29, 2002.
On February 18, 2004, the CA rendered a Decision39 finding grave abuse of discretion on the part of the RTC in
issuing the assailed Orders.40 In reversing the denial of the Motion toSuppress, the CA explained thatcontrary to the
findings of the RTC, there was no intention on the part of respondents to delay the resolution of the Motion.41 In fact,
the delays were notsolely attributable to them considering that both parties were trying to arrive at a compromise
agreement.42 As to the application for subpoena duces tecum, the CA said that the RTC should have granted it
because respondents needed the documents to support their Motion to Suppress.43 Thus:
WHEREFORE, premises considered, the instant petition is given due course. The assailed Orders dated November
29, 2002 and July 11, 2002 are hereby REVERSED and SET ASIDE. Public respondent Presiding Judge is hereby
ordered to grant [respondents’] application for subpoena duces tecum and to continue with the hearing on
[respondents’] Motion to Suppress and Exclude Inadmissible Evidence Seized by the reception of evidence from
both parties in support of or in opposition to said motion.
SO ORDERED.44
Petitioner moved for reconsideration45 but the CA denied the same in its Resolution46 dated June11, 2004.
Issues
Hence, petitioner filed the instant Petition for Review on Certiorariraising the following errors:
A. THE [CA] GRAVELY ERRED INREVERSING THE FIRST AND SECOND RTC ORDERS, WHICH DENIED
RESPONDENTS’ APPLICATION FOR SUBPOENA CONSIDERING THAT:
1. SAID ORDERS HAVE LONG BEEN FINAL AND EXECUTORY AND THE PERIOD FOR FILING A PETITION
FOR CERTIORARI ASSAILING THESE ORDERS HAS ALREADY LAPSED. THUS, THE [CA] SHOULD NOT
HAVE DISTURBED THE FIRST AND SECOND RTC ORDERS.
2. THE RTC-MAKATI PROPERLY DENIED THE APPLICATION FOR SUBPOENA AS THERE WAS NO PROPER
GROUND FOR GRANTING THE SAME.
B. THE [CA] GRAVELY ERRED INREVERSING THE THIRD RTC ORDER, WHICH DENIED THE MOTION TO
SUPPRESS, CONSIDERING THAT:
1. RESPONDENTS FAILED TO FILE A MOTION FOR RECONSIDERATION OF THE THIRD RTC ORDER
WITHOUT CITING ANY JUSTIFIABLE REASON BEFORE FILING A PETITION FOR CERTIORARI
QUESTIONING SAID ORDER.
2. DESPITE SEVERAL OPPORTUNITIES GRANTED TO THEM BY, AND REPEATED WARNINGS FROM, THE
RTC-MAKATI, RESPONDENTS FAILED TO SUBSTANTIATE THE MOTION TO SUPPRESS.
3. THE ISSUES RAISED IN THE MOTION TO SUPPRESS ARE THE SAME ISSUES IN A MOTION TO QUASH
WHICH HAVE ALREADY BEEN RULED UPON BY THE RTC-MANILA, A COURT OF COORDINATE
JURISDICTION.
4. IN ANY CASE, THE MOTION TO SUPPRESS HAS NO MERIT AND WAS PROPERLY DENIED BY THE RTC-
MAKATI.47
Stripped of the non-essentials, the core issue is whether the CA erred in giving due course to the Petition for
Certiorari, and in subsequently granting the same despite evident procedural lapses.
Petitioner assails the propriety of the CA’s reversal of the Orders of the RTC, positing that in filing the Petition for
Certiorari, respondents failed to observe procedural rules. First, no motion for reconsideration of the Order dated
November 29, 2002, denying respondents’ Motion to Suppress, was filed prior to the filing of the Petition for
Certiorari.48 Second, more than60-days had lapsed from the time respondents were notified of the denialof their
Motion for Reconsideration of the Order dated July 11, 2002, which denied their application for subpoenaduces
tecum.49 Third, respondents failed to indicate the date they received the Orders dated July11, 2002 and October 10,
2002.50 Given the foregoing procedural infirmities, petitioner contends the CA should not have entertained the
Petition for Certiorarimuch more granted affirmative relief.
Respondents, on the other hand, insist that their failure to file a motion for reconsideration of the Order dated
November 29, 2002 is not fatal as the rule is subject to exceptions.51 In this case, respondents no longer filed a
motion for reconsideration as they already moved inopen court for a reconsideration of the denial of their Motion to
Suppress butthe RTC flatly denied the same.52 As to the alleged non-compliance with the 60-day period,
respondents brush aside the issue arguing that technical rules cannot prevent the CA fromgiving due course to a
Petition for Certiorari, which it considers to be meritorious.53
Our Ruling
The Petition has merit.
Assailed in the Petition for Certiorarifiled before the CAare three Orders, to wit:
1) The Order dated July 11, 2002, denying respondents’ application for subpoena duces tecum;
2) The Order dated October 10, 2002, denying respondents’ Motion for Reconsideration of the Order dated July 11,
2002; and
3) The Order dated November 29, 2002, denying respondents’ Motion to Suppress.
We shall first discuss the Orders dated July 11, 2002 and October 10, 2002.
The Petition for Certiorari should have been filed within 60 days from notice of the denial of the Motion for
Reconsideration of the assailed Order.
Section 4,54 Rule 65 of the Rules of Court provides that a special civil action for certiorari should be instituted within
60 days from notice of the judgment, order, or resolution, or from the notice of the denial of the motion for
reconsideration of the judgment, order, or resolution being assailed. The 60-day period, however, is inextendible to
avoid any unreasonable delay, which would violate the constitutional rights of parties to a speedy disposition of their
cases.55 Thus, strict compliance of this rule is mandatory and imperative.56 But like all rules, the 60-day limitation may
be relaxed "for the most persuasive of reasons," which must be sufficiently shown by the party invoking liberality.57
In this case, respondents were notified of the denial of their Motion for Reconsideration of the Order dated July 11,
2002, denying their application for subpoena duces tecum, on October 18, 2002.58 Accordingly, they had until
December 17, 2002 within which to file a Petition for Certiorariwith the CA. Records, however, show that it was only
on January 20, 2003 that respondents filed their Petition for Certiorarito assail the Orders dated July 11, 2002 and
October 10, 2002.59 Instead of admitting that more than 60 days had lapsed, respondents kept silent about it in their
Petition for Certiorari. When petitioner brought up the issue,respondents’ reply60 was unresponsive. Infact, they did
not even confirm or deny the alleged lapse of the 60-day period. Siding with respondent, the CA opted not to
discuss the issue and resolved to reverse the Order dated July 11, 2002 on the ground that the granting of the
subpoena duces tecum was necessary in order for respondents to substantiate their Motion to Suppress.
The CA’s reasoning, however, even if true, doesnot excuse respondents from complying with the 60-day period rule,
especially since they have not offered any plausible justification for their non-compliance. In fact, their adamant
refusal to admit the obvious truth as well as their deliberate attempt to hide this procedural lapse cannot be ignored.
Leniency is given only to those deserving of it. In this case, respondents are not entitled to any because they
intentionally omitted to indicate in their Petition for Certiorarithe date they were notified of the Order dated October
10, 2002 in order to mislead the CA. Besides, relaxing the rule would not only be unfair and unjust but would also be
prejudicial to petitioner, who had every right to believe that the Orders dated July 11, 2002 and October 10, 2002
had attained finality and may no longer be altered, modified, or reversed. As we have said, the 60-day limitation may
be relaxed only for the most persuasive reasons and only in meritorious cases, which must be sufficiently shown by
the party invoking liberality.Such is not the situation in this case.
1âwphi1
In view of the foregoing, we find that the CA erred in giving due course to the Petition and in reversing the Orders
dated July 11, 2002 and October 10, 2002, as they may no longer be disturbed, after having attained finality.
In the absence of a motion for reconsideration, the Petition for Certiorari should have been dismissed.
Jurisprudence consistently holds that the filing of a motion for reconsideration is a prerequisite to the institution of a
petition for certiorari.61 Although this rule is subject to certain exceptions,62 none of which is present in this case.
Respondents admit that they failed to file a motion for reconsideration of the Order dated November 29, 2002 prior
to filing the Petition for Certiorari. As an excuse, they alleged that their counselverbally moved for a reconsideration
of the denial of their Motion to Suppress, which the RTC flatly denied in open court. Such allegation, however, as
aptly pointed out by petitioner,63 is not supported by the evidence as the Order dated November 29, 2002 made no
mention of such fact.64 It is also unlikely for respondents’ counsel to have moved for a reconsideration of the said
Order considering that, as stated in the Order, he appeared only after the hearings were over.65 Besides, the lower
court should first be informed of its supposed error and be allowed to correct or rectify the same through a re-
examination of the legal and factual aspects of the case, which could only be done by filing a motion for
reconsideration of the assailed order.66 This respondents failed todo. Thus, in the absence of a motion for
reconsideration, the CA erred in giving due course to the Petition and in reversing the Order dated November 29,
2002.
In closing, we must emphasize thatwhile litigation isnot a game of technicalities, this does not mean that procedural
rules may be ignored at will or that their non-observance may be dismissed simply because it may prejudice a
party’s substantial rights.67 Mere invocations of substantial justice and liberality are not enough for the court
tosuspend procedural rules.68 Again, except only for the most compelling or persuasive reasons, procedural rules
must be followed to facilitate the orderly administration of justice.69
WHEREFORE, the Petition is hereby GRANTED. The Decision dated February 18, 2004 and the Resolution dated
June 11, 2004 of the Court of Appeals in CA-G.R. SP No. 74990 are hereby SET ASIDE. The Orders dated July 11,
2002, October 10, 2002 and November 29, 2002 of the Regional Trial Court of Makati, Branch 60, in Criminal Case
No. 96-1590, are hereby REINSTATED.
SO ORDERED.
SECOND DIVISION
G.R. No. 176341 July 7, 2014
PRO-GUARD SECURITY SERVICES CORPORATION, Petitioner,

vs.
TORMIL REALTY AND DEVELOPMENT CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:

Contending that it is obliged to pay back rentals only from the time the demand to vacate was served upon it and not
from the time it began occupying the disputed premises, petitioner Pro-Guard Security Services Corporation
(ProGuard) seeks recourse to this Court.
This is a Petition for Review on Certiorari1 of the September 6, 2006 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 58867 which denied the Petition for Review filed therewith by Pro-Guard as one of the petitioners.
Likewise assailed is the CA's Janu'!l)' 23, 2007 Resolution3 denying the motion for reconsideration thereto.
Factual Antecedents
On July 24, 1984, Manuel A.Torres, Jr., (Manuel)assigned to respondent Tormil Realty and Development
Corporation (Tormil) three parcels of land located in Pasay Cityand all the improvements thereon in exchange for
shares of stock in the said corporation.4 Despite the assignment, however, title to the real properties remained in
Manuel’s name as he neither registered the transaction in the Registry of Deeds nor provided Tormil the necessary
documents to have the titles over the properties transferred inits name. Later,Manuel unilaterally revoked the
transaction.
Subsequently, Manuel, together with two other persons, one of whom is Edgardo Pabalan (Edgardo), established
Torres Pabalan Realty, Incorporated (Torres-Pabalan). As part of his capital contribution, Manuelassigned the same
aforesaid parcels of land to Torres-Pabalan.In the meantime, construction of the Torres Building on the subject real
properties was completed in1985 and its units rented out. Edgardo, who was also then the General Manager and
Administrator of Tormil, acted as the building administrator and occupied the 2 nd floor. He later resigned from his
position inTormil in September 1986.
In March 1987, Tormil filed a case before the Securities and Exchange Commission (SEC) docketed as SEC Case
No. 31535 (SEC case) to compel Manuel to fulfill his obligation by turning over the documents necessary to effect
the registration and transfer of titles in its name of the properties assigned to it by Manuel.
Meanwhile, Edgardo continued to actas the administrator of Torres Building allegedly on behalf of Torres-Pabalan.
He then set up in October 1989 a law office (law office) with Atty. Augustus Cesar Azura (Augustus) in the 2 nd floor
of the building. Torres Building was thereafter declared by Torres-Pabalan for tax purposes.6
On March 6, 1991, the SEC rendered judgment in favor of Tormil,7 and this was later affirmed by the SEC en
banc.8Manuel appealed to the CA. During the pendency thereof, Pro-Guard entered into an agreement with Edgardo
in March 1994 for the rentof a unit in the 3rd floor of Torres Building. As payment, Pro-Guard was to provide security
servicesto Torres-Pabalan. Subsequently, the CA,9 and later this Court,10 upheld the ruling in the SEC case such that
it became final and executory on December 12, 1997.11 By October 1998, not only were the titles to the subject
parcels of land registered in Tormil’s name,12 but also the tax declaration over the Torres Building.13
On November 5, 1998, Tormil sent letters14 to Edgardo and Augustus (for the law office) and Pro-Guard asking them
to validate their possession/enter into a lease contract with Tormil and at the same time settle their past and current
rentals. Since these letters were ignored, Tormil, on November 16, 1998 sent them separate demands to vacate the
premises and pay the monthly rentalof ₱20,000.00 from the time of their occupation thereof untilthe same are
actually turned over to Tormil.15 As these were unheeded, Tormil asserting right of possession based on its
ownership of the Pasay properties, filed before the Pasay City Metropolitan Trial Court (MeTC) separate ejectment
suits against Edgardo and Augustus, and Pro-Guard16 which were raffled to Branch44. The cases were later on
consolidated. In its complaints, Tormil stated that it deemed prudent to have the ownership issue over the premises
resolved first in the SEC case before it filed the ejectment cases in order to prevent complication. It thus averred that
the occupancy by defendants of units in Torres Building pending resolution of the SEC Case was out of tolerance.
Edgardo and Augustus disputed Tormil’s ownership of the parcels of land where the building stands and asserted
that Torres-Pabalan was the owner of the same. It was also the onewho funded the building’s construction.
Unfortunately, its tax declarations over the building were surreptitiouslyand unlawfully cancelled on the sole basis of
the SEC Case. Pro-Guard, for its part, claimed that it was paying rentals to the owner,Torres-Pabalan, in the form of
security services provided to the latter. It likewise called attention to the fact that it was no longer in the premises as
Tormil forcibly ousted ittherefrom.

The MeTC adjudged that Tormil has proven its right to possess the property. Said court brushed aside the claim that
Torres-Pabalan owns the building since its SEC Certificate of Registration was already cancelled, and that the
construction of the building was completed in July 1985 or prior to the time said corporation was incorporated in
September 1986. Finding the defendants’ occupancy of the units as only upon Tormil’s tolerance, the MeTC
concluded that their possession became unlawful when Tormil decided to assert its right of ownership over the
building after the ruling in the SEC case was upheld with finality by this Court.
Thus, in its June 28, 1999 Decision,17 the MeTC ordered Edgardo and Augustus to vacate the unit they possessed,
as well as topay attorney’s fees and costs. With respect to Pro-Guard, it adjudged:
2. ordering defendant Pro-Guard Security Services Corporation and all persons claiming rights under [it] to vacate
and surrender possession of Unit M, 3rd Floor, Torres Building, 157 Buendia Ext., Sen. Gil Puyat Avenue, Pasay
City;
xxxx
4. ordering defendant Pro-Guard Security Services Corp. to pay [Tormil] the fair and reasonable rental of the
premises [in] the amount of ₱20,000.00 per month with legal interest from June, 1995 until the premises is fully
vacated;18
Contending that Tormil has no right to possess the building, the defendants appealed to the Regional Trial Court
(RTC) of Pasay City and the same was raffled to Branch 109 thereof. In the meantime, Pro-Guard informed the
MeTC that it had already vacated the premises as early asMarch 20, 1999.19
In its Decision20 dated December 15,1999, the RTC did not find merit in the appeal, viz:
In view of the foregoing and pursuant to several decision[s] of the Supreme Court and the provision of Rule 70 of the
Revised Rules of Court to the effect [that] the occupancy and possession of the subject premises by the defendants-
appellants became illegal when they failed and refused to heed the demand letters of herein plaintiff-appellee to
vacate the same and surrender possession peacefully, the Court finds no cogent reason to reverse the decision of
the trial court and hereby affirms the same IN TOTO.
SO ORDERED.21
On appeal to the CA, Edgardo, Augustus and Pro-Guard reiterated their arguments on Torres-Pabalan’s ownership
of the building and on its right to possess it.
The CA adjudged Tormil tohave sufficiently proven its case for unlawful detainer. It held that based on its Torrens
titles over the subject parcels of land and the tax declarations over the building thereon, Tormil has the right to
possess the disputed properties. It debunked the claim of Edgardo, Augustus and Pro-Guard that the tax
declarations in Tormil’s nameare invalid, ratiocinating that their issuance by the CityAssessor are presumed to have
been regularly performed.
Ultimately, the CA denied the petition and affirmed the RTC Decision,22 viz:
WHEREFORE, PREMISESCONSIDERED, THE Petition is DENIED DUE COURSE and ordered DISMISSED for
lack of merit. The Decision dated 15 December 1999 and Order dated 02 May 2000 of the Regional Trial Court of
Pasay City, Branch 109 in Civil Case Nos. 99-0618 & 99-[0619] are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.23
In asking for a reconsideration, one aspect which Edgardo, Augustus and Pro-Guard objected to was the order for
them to pay ₱20,000.00 monthly rental and the reckoning point of payment. Pro-Guard, in its Supplemental Motion
for Reconsideration,24 argued that the CA should havemodified the RTC judgment by reckoning the payment from
the date of Tormil’s notice to vacate.
The CA found no reason to reverse its judgment,25 impelling Pro-Guard to elevate the case to this Court.
Issue
WHETHER THE [CA] ERRED WHEN IT AFFIRMED THE DECISION OF THE [METC] AND THE [RTC] ON THE
AWARD OF THE [METC] IN RECKONING THE DATEOF PAYMENT OF RENTALS IN THE AMOUNT OF
₱20,000.00 PER MONTH WITH LEGAL INTEREST FROM JUNE 1995 UNTIL THE PREMISES IS FULLY
VACATED CONTRARY TO PREVAILING LAW AND JURISPRUDENCE.26
Parties’ Arguments
Pro-Guard stresses that the CA erred in affirming the lower courts’ award of ₱20,000.00 monthly rental reckoned
from the time it occupied the unit. It contends that it cannot be blamed if it relied on the representations of
TorresPabalan when it entered into a lease contract with it, the latter being then in possession of the building. Pro-
Guard maintains that in any case, it owes no unpaid rentals to Tormil for the entire period of its stay in the building
out of Tormil’s tolerance. On the other hand, Tormil argues that Pro-Guard’s stay ‘out of tolerance’ does not bar it
from claiming arrears from the time the latter occupied a unit in the building. It contends that the demand to vacate
was not for the purpose of counting the reckoning period for payment of rental arrears, but only for the purpose of
counting the prescriptive period to file a case for unlawful detainer. Besides, Pro-Guard’s rentalpayments to Torres-
Pabalan were not valid as the latter was not its authorizedrepresentative. To it, Pro-Guard, fully aware of the
pending legal dispute between Tormil and Torres-Pabalan, should have consigned the rental payments.
It would appear that Pro-Guard no longer impugns the uniform rulings of the MeTC, RTC, and CA, on the right of
Tormil to possessthe subject premises. The only question it brought before this Court is when to reckon its rental
payments.
Our Ruling
While indeed Tormil, as the victor inthe unlawful detainer suit, is entitled to the fair rental value for the use and
occupation of the unit in the building, such compensation should not be reckoned from the time Pro-Guard began to
occupy the same, but from the time of the demand to vacate. "In unlawful detainer cases, the defendant is
necessarily in prior lawful possession of the property but his possession eventually becomes unlawful upon
termination or expiration of his right to possess."27 In other words, the entry is legal but the possession thereafter
became illegal. Additionally, the Rules of Court requires the filing of such action within a year after the withholding of
possession,28 meaning that "if the dispossession has not lasted for more than one year, [then] an ejectment
proceeding (in this case unlawful detainer) is proper x x x."29 Here, from the moment Pro-Guard started to occupy the
unit in March 1994 up to November 15, 1998, the right ofPro-Guard to possess the premises was not challenged. It
was only after Tormil prevailed over Manuel in its ownership of the same that it terminated Pro-Guard’s right to
possess the unit it was occupying through a letter to vacate dated November 16, 1998. Hence, it is only from that
point that Tormil is considered to have withdrawn its tolerance of Pro-Guard’s occupation. Conversely, Pro-Guard’s
possession became unlawful at that same moment. This is supported by the allegation in the complaint for
ejectment that Tormil initiated the same not because of non-payment of rentals, but because of withdrawal
oftolerance. Tolerance or "[t]oleration isdefined as ‘the act or practice ofpermitting or enduring something not wholly
approved of,"30 while tolerated acts are "those which by reason of neighborliness or familiarity, the owner of the
property allowshis neighbor or another person to do on the property; they are generally those particular services or
benefits which one’s property can give to another without material injury or prejudice to the owner, who permitsthem
out of friendship or courtesy."31
With regard to the effects of withdrawal of tolerance, it is settled that:
x x x A person who occupies the land ofanother at the latter’s tolerance or permission, without any contract between
them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action
for ejectment is the proper remedy against him. His status is analogous to that of a lessee or tenant whose term of
lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the date of unlawful
deprivation or withholding of possessionis to be counted from the date of the demand to vacate.32
Thus, in Sps. Jimenez v. Patricia, Inc.,33 the lessor ended its tolerance of the sublessees’ occupation of the property
and demanded that they vacate the premises on March 29, 1995. We upheld the ejectment of the sublessees and
ordered them to pay monthly rentals beginning April 1995 until they vacate the premises. Indeed, it is inconsistent to
demand payment of rentals during the period of tolerance.
Incidentally, Tormil mentioned that Pro-Guard is obliged to consign the payment of rentals. One legal cause for
consignation is when two ot more persons claim the same right to collect.34 Various claimants to a debtor's payment
must have the appearance of a right to collect such that the debtor would have a reasonable doubt, not based on
negligence, as to who is entitled to the payment.35
Whether Pro-Guard was indeed aware of the legal dispute then pending before the SEC and subsequently before
the courts is of no moment. When the dispute regarding the validity ofManuel's assignment to Tonnil of the realties
was pending before the SEC, Tormil did not claim to Pro-Guard that it is the true owner of the premises. It neither
sought payment of rentals which it now claims Pro-Guard should have consigned during the pendency of its suit
against Manuel. As such, from the viewpoint of Pro-Guard, the lease contract remained to be then between it and
Torres-Pabalan. The latter was occupying and running the building, as evidenced by several tax declarations in its
name which, while not conclusive proofs of ownership, nevertheless, are good indicia of possession in the concept
of owner.36 Moreover, Edgardo, who claimed to act on behalf of TorresPabalan, administered the premises. Pro-
Guard is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord
and tenant between them.37
WHEREFORE, the instant Petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in
CA-G.R. No. SP 58867 are MODIFIED in that Pro-Guard is to pay for the fair and reasonable rental of the premises
in the amount of ₱20,000.00 per month with legal interest beginning November 16, 1998 up to the time that the
premises are fully vacated.
SO ORDERED.
SECOND DIVISION
G.R. No.166680 July 7, 2014
ALOYSIUS DAIT LUMAUIG, Petitioner,

vs.
DECISION
DEL CASTILLO, J.:
A prior notice or demand for liquidation of cash advances is not a condition sine qua non before an accountable
public officer may be held liable under Article 2181 of the Revised Penal Code.
Before us is a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court of the September 10, 2004
Decision2 of the Sandiganbayan in Criminal Case No. 26528 and its January 11, 2005 Resolution3 denying
reconsideration thereof.
The Information4 dated January 25, 2001 under which petitioner Aloysius Dait Lumauig (petitioner) was tried and
convicted has this accusatory portion:
That in or about August 1994 or immediately prior or subsequent thereto, in Alfonso Lista, Ifugao and within the
jurisdiction of this Honorable Court, the above-named accused then Municipal Mayorof Alfonso Lista, Ifugao, and as
such accountable public officer, and responsible for the amount of ₱101,736.00 which the accused received by way
of cashadvance for payment of the insurance coverage of the twelve (12) motorcycle[s] purchased by the
Municipality, and, hence with the corresponding duty under the law to account for the same, did then and there,
willfully and feloniously fail to liquidate and account for the same to the damage and prejudice of the Government.5
The facts are matters of recordor otherwise undisputed.
Sometime in January 1998, Commission on Audit (COA) Auditor Florence L. Paguirigan examined the year-end
reports involving the municipal officials of Alfonso Lista, Ifugao. During the courseof her examination of the records
and related documents of the municipality, she came across a disbursement voucher6 for ₱101,736.00 prepared for
petitioner, a former mayor of the municipality, as cash advance for the payment of freight and other cargo charges
for 12 units of motorcycles supposed to be donated to the municipality. The amount was covered by Land Bank
Check No. 118942007 dated August 29, 1994 wherein the payee is petitioner. Her further investigation of the
accounting records revealed that no payment intended for the charge was made to Royal Cargo Agencies for the
month of August 1994. Thus, she issued a certification8 to this effect on November 29, 2001. She likewise claimed
that she prepared two letters to inform the petitioner of his unliquidated cash advance but the same were not sent to
him because she could not get his exact address despite efforts exerted. She averred that on June 4, 2001,
petitioner paid the subject cash advance before the treasurer of the municipality, for which reason, incumbent Mayor
Glenn D. Prudenciano executed an Affidavit of Desistance.9
Petitioner admitted having obtained the cash advance of ₱101,736.00 during his incumbency as municipal mayor of
Alfonso Lista, Ifugao.10 This amount was intended for the payment of freight and insurance coverage of 12 units of
motorcycles to bedonated to the municipality by the City of Manila. However, instead of motorcycles, he was able to
secure two buses and five patrol cars. He claimed that it never came to his mind to settle or liquidate the amount
advanced since the vehicles were already turned over to the municipality. He alleged that he was neither informed
nor did he receive any demand from COA to liquidate his cash advances. It was only in 2001 while he was claiming
for separation pay when he came to know that he still has an unliquidated cash advance. And so as not toprolong
the issue, he paidthe amount of ₱101,736.00 to the municipal treasurer on June 4, 2001.
From the same facts stemmed an Information for violation of Section 3 of Republic Act (RA) No. 301911 docketed as
CriminalCase No. 26527 against petitioner for having allegedly utilized the cash advance for a purpose other than
for which it was obtained.
On September 10, 2004, after a joint trial, the Sandiganbayanrendered a consolidated Decision12 disposing thusly:
WHEREFORE, premises consideredthe Court rules as follows:
1. In Criminal Case No. 26527, accused ALOYSIUS DAIT LUMAUIG is hereby ACQUITTED. No civil liability shall
be imposed there being no basis for its award. The cash bondposted for his provisional liberty is ordered returned to
him, subject to the usual accounting and auditing procedure; and
2. In Criminal Case No. 26528, accused ALOYSIUS DAIT LUMAUIG is hereby CONVICTED of the felony of Failure
of Accountable Officer to Render Accounts under Article 218 of the Revised Penal Code. He is hereby sentenced to
a straight penalty of six months and one (1) day and a fine of Php1,000.00.
SO ORDERED.13
On January 11, 2005, the Sandiganbayanpromulgated its Resolution14 denying petitioner’s UrgentMotion for
Reconsideration.15
After a thorough review of the records of the case and a judicious consideration of the arguments of the petitioner,
the Court does not find sufficient basis to reverse the judgment of conviction. From the prevailing facts, we entertain
no doubt on the guilt of petitioner.
The acquittal of petitioner in the anti-

graft case is not a bar to his conviction
for failure to render an account in the
present case.
Petitioner stakes the present Petition on the assertion that since the cases for which he was indicted involve the
same subject cash advance in the amount of ₱101,736.00, his exoneration in the anti-graft case should likewise
exculpate him from further liability in the present case.
It is undisputed that the two charges stemmed from the same incident. "However, [we have] consistently held
thatthe same act may give rise to two or more separate and distinct charges."16 Further, because there is a variance
between the elements of the two offenses charged, petitioner cannot safely assume that his innocence in one case
will extend to the other case even if both cases hinge on the same set of evidence.
To hold a person criminally liable under Section 3(e)of RA 3019, the following elements must be present:
(1) That the accused is a public officer or a private person charged in conspiracy with the former;
(2) That said public officer commitsthe prohibited acts during the performance of his or her official duties or in
relation to his or her public positions;
(3) That he or she causes undue injury toany party, whether the government or a private party;
(4) That such injury is caused by giving unwarranted benefits, advantage or preference to such parties; and
(5) That the public officer has acted withmanifest partiality, evident bad faith or gross inexcusable negligence.17
On the other hand, the elements of the felony punishable under Article 218 of the Revised Penal Code are:
(1) That the offender is a public officer whether in the service or separated therefrom;
(2) That he must be an accountable officer for public funds or property;
(3) That he is required by law or regulation to render accounts to the COA or to a provincial auditor; and,
(4) That he fails to do so for a period oftwo months after such account should be rendered.18
The glaring differences between the elements of these two offenses necessarily imply that the requisite evidence to
establish the guilt or innocence of the accused would certainly differ in each case. Hence, petitioner’s acquittal in the
anti-graft case provides no refuge for him inthe present case given the differences between the elements ofthe two
offenses.
Prior demand to liquidate is not a

requisite for conviction under Article
218 of the Revised Penal Code.
The central aspect of petitioner’s next argument is that he was not reminded of his unliquidated cash advances. The
Office of the Special Prosecutor countered that Article 218 does not require the COA orthe provincial auditor to first
make a demand before the public officer should render an account. It is sufficient that there is a law or regulation
requiring him to render an account. The question has been settled in Manlangit v. Sandiganbayan19 where we ruled
that prior demand to liquidate is not necessary to hold an accountable officer liable for violation of Article 218 of the
Revised Penal Code:
x x x [W]e are asked to resolve whether demand is necessary for a conviction of a violation of Article 218 of the
Revised Penal Code.
Citing United States v. Saberon, petitioner contends that Article 218 punishes the refusal of a public employee to
render an account of funds in his charge when duly required by a competent officer. He argues that he cannot be
convicted of the crime unless the prosecution has proven that there was a demand for him to render an account.
Petitioner asserts that COA Circular No. 90-331 provides that the public officer shall be criminally liable for failure to
settle his accounts after demand had been made. Moreover, petitioner asserts that the case had become moot and
academic since he already submitted his liquidation report.
For the People, the Office of the Special Prosecutor (OSP) counters that demand is not an element of the offense
and that it is sufficient that there is a law or regulation requiring the public officer to render an account. The OSP
insists that Executive Order No. 292, Presidential Decree No. 1445, the COA Laws and Regulations, and even the
Constitution mandate that public officers render an account of funds in their charge. It maintains that the instant
case differs from Saberonwhich involved a violation of Act No. 1740 where prior demand was required. In this case
involving a violation of Article 218, prior demand is not required. Moreover, the OSP points out that petitioner even
admitted his failure to liquidate the funds within the prescribed period, hence, he should be convicted of the crime.
We shall now resolve the issue at hand.
Article 218 consists ofthe following elements:
1. that the offender is a public officer, whether in the service or separated therefrom;
2. that he must be an accountable officer for public funds or property;
3. that he is required by law or regulation to render accounts to the Commission on Audit, or to a provincial auditor;
and
4. that he fails to do so for a period of two months after such accounts should be rendered. Nowhere in the provision
does it require that there first be a demand before an accountable officer is held liable for a violation of the crime.
The law is very clear. Where none is provided, the court may not introduce exceptions or conditions, neither may it
engraft into the law qualifications not contemplated. Where the law is clear and unambiguous, it must be taken to
mean exactly what it says and the court has no choice but to see to it that its mandate is obeyed. There is no room
for interpretation, but only application.
Petitioner’s reliance on Saberonis misplaced. As correctly pointed out by the OSP, Saberoninvolved a violation of
Act No. 1740 whereas the present case involves a violation of Article 218 of the Revised Penal Code. Article 218
merely provides that the public officer berequired by law and regulation to render account. Statutory construction
tells us that in the revision or codification of laws, all parts and provisions of the old laws that are omitted in the
revised statute or code are deemed repealed, unless the statute or code provides otherwise.20
Petitioner is liable for violation of Article 218 of the Revised Penal Code.
Section 5 of COA Circular No. 90-331, the circular in force at the time petitioner availed of the subject cash advance,
pertinently provides:
5. LIQUIDATION OFCASH ADVANCES
5.1 The AO (Accountable Officer) shall liquidate his cash advance as follows:
xxxx
5.1.2 Petty Operating Expenses and Field Operating Expenses - within 20 days after the end of the year; subject to
replenishment during the year.
Since petitioner received the subject cash advance sometime in 1994, he was, thus, required to liquidate the same
on or before January 20, 1995. Further, to avoid liability under Article 218, he should have liquidated the cash
advance within two months from the time it was due, or on or before March 20, 1995. In the case at bar, petitioner
liquidated the subject cash advance only on June 4, 2001. Hence, as correctly found by the
Sandiganbayan,petitioner was liable for violation of Article 218 because it took him over six years before settling his
accounts.
The penalty imposed on petitioner should be modified.
Petitioner argues that assuming that he is liable for violation of Article 218, he should be meted a lesser penalty
considering that (1) he subsequently liquidated the subject cash advance when he later discovered and was
confronted with his delinquency, and (2) the COA did not immediately inform him of his unliquidated cash advance.
On this point, we partially agree with petitioner.
In sentencing petitioner to a straight penalty of six months and one day of prisión correccionaland a fine of
₱1,000.00, the Sandiganbayan correctly considered the mitigating circumstance of voluntary surrender, as borne by
the records,21 in favor of petitioner.However, it failed toconsider the mitigating circumstance of return or full restitution
of the funds that were previously unliquidated.
In malversation of public funds, the payment, indemnification, or reimbursement of the funds misappropriated may
be considered a mitigating circumstance being analogousto voluntary surrender.22 Although this case does not
involve malversation ofpublic funds under Article 217 of the Revised Penal Code but rather failure to render an
account under Article 218 (i.e., the succeeding Article found in the same Chapter), the same reasoning may be
applied to the return or full restitution ofthe funds that were previously unliquidated in considering the same as a
mitigating circumstance in favor of petitioner.
The prescribed penalty for violation of Article 218 is prisión correccionalin its minimum period or six months and one
day to two years and four months, or by a fine ranging from 200to 6,000 pesos, orboth. Considering that there are
two mitigating circumstances and there are no aggravating circumstances, under Article 64 (5)23 of the Revised
Penal Code, the imposable penalty is the penalty next lower to the prescribed penalty which, in this case, is arresto
mayorin its maximum period or four months and one day to six months. 1âwphi1
The Indeterminate Sentence Law, under Section 2,24 is not applicable to, among others, cases where the maximum
term of imprisonment does not exceed one year. In determining "whether an indeterminate sentence and not a
straight penalty is proper, what is considered is the penalty actually imposed by the trial court, after considering the
attendant circumstances, and not the imposable penalty."25 In the case at bar, since the maximum of the imposable
penalty is six months, then the possible maximum term that can be actually imposed is surely less than one year.
Hence, the Indeterminate Sentence Law is notapplicable to the present case. As a result, and in view of the
attendant circumstances in this case, we deem it proper to impose a straight penalty of four months and one day of
arresto mayorand delete the imposition of fine.
WHEREFORE, the Petition is GRANTED IN PART. The Decision of the Sandiganbayanin Criminal Case No. 26528
dated September 10, 2004 convicting petitioner of the felony of Failure of Accountable Officer to Render Accounts
under Article 218 of the Revised Penal Code is AFFIRMEDwith the following MODIFICATIONS:
1. Petitioner is sentenced to a straight penalty of four months and one day of arresto mayor, and 2. The imposition
of finein the amount of ₱1,000.00 is deleted.
SO ORDERED.
SECOND DIVISION
G.R. No. 181045 July 2, 2014
SPOUSES EDUARDO and LYDIA SILOS, Petitioners,

vs.
PHILIPPINE NATIONAL BANK, Respondent.
DECISION
DEL CASTILLO, J.:

In loan agreements, it cannot be denied that the rate of interest is a principal condition, if not the most important
component. Thus, any modification thereof must be mutually agreed upon; otherwise, it has no binding effect.
Moreover, the Court cannot consider a stipulation granting a party the option to prepay the loan if said party is not
agreeable to the arbitrary interest rates imposed. Premium may not be placed upon a stipulation in a contract which
grants one party the right to choose whether to continue with or withdraw from the agreement if it discovers that
what the other party has been doing all along is improper or illegal.
This Petition for Review on Certiorari1 questions the May 8, 2007 Decision2 of the Court of Appeals (CA) in CA-G.R.
CV No. 79650, which affirmed with modifications the February 28, 2003 Decision3 and the June 4, 2003 Order4 of
the Regional Trial Court (RTC), Branch 6 of Kalibo, Aklan in Civil Case No. 5975.
Factual Antecedents
Spouses Eduardo and Lydia Silos (petitioners) have been in business for about two decades of operating a
department store and buying and selling of ready-to-wear apparel. Respondent Philippine National Bank (PNB) is a
banking corporation organized and existing under Philippine laws.
To secure a one-year revolving credit line of ₱150,000.00 obtained from PNB, petitioners constituted in August 1987
a Real Estate Mortgage5 over a 370-square meter lot in Kalibo, Aklan covered by Transfer Certificate of Title No.
(TCT) T-14250. In July 1988,the credit line was increased to ₱1.8 million and the mortgage was correspondingly
increased to ₱1.8 million.6
And in July 1989, a Supplement to the Existing Real Estate Mortgage7 was executed to cover the same credit line,
which was increased to ₱2.5 million, and additional security was given in the form of a 134-square meter lot covered
by TCT T-16208. In addition, petitioners issued eight Promissory Notes8 and signed a Credit Agreement.9 This July
1989 Credit Agreement contained a stipulation on interest which provides as follows:
1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% per annum. Interest shall be payable in
advance every one hundred twenty days at the rate prevailing at the time of the renewal.
(b) The Borrower agrees that the Bank may modify the interest rate in the Loan depending on whatever policy the
Bank may adopt in the future, including without limitation, the shifting from the floating interest rate system to the
fixed interest rate system, or vice versa. Where the Bank has imposed on the Loan interest at a rate per annum,
which is equal to the Bank’s spread over the current floating interest rate, the Borrower hereby agrees that the Bank
may, without need of notice to the Borrower, increase or decrease its spread over the floating interest rate at any
time depending on whatever policy it may adopt in the future.10 (Emphases supplied)
The eight Promissory Notes, on the other hand, contained a stipulation granting PNB the right to increase or reduce
interest rates "within the limits allowed by law or by the Monetary Board."11
The Real Estate Mortgage agreement provided the same right to increase or reduce interest rates "at any time
depending on whatever policy PNB may adopt in the future."12
Petitioners religiously paid interest on the notes at the following rates:
1. 1st Promissory Note dated July 24, 1989 – 19.5%;
2. 2nd Promissory Note dated November 22, 1989 – 23%;
3. 3rd Promissory Note dated March 21, 1990 – 22%;
4. 4th Promissory Note dated July 19, 1990 – 24%;
5. 5th Promissory Note dated December 17, 1990 – 28%;
6. 6th Promissory Note dated February 14, 1991 – 32%;

7. 7th Promissory Note dated March 1, 1991 – 30%; and
8. 8th Promissory Note dated July 11, 1991 – 24%.13
In August 1991, an Amendment to Credit Agreement14 was executed by the parties, with the following stipulation
regarding interest:
1.03. Interest on Line Availments. (a) The Borrowers agree to pay interest on each Availment from date of each
Availment up to but not including the date of full payment thereof at the rate per annum which is determined by the
Bank to be prime rate plus applicable spread in effect as of the date of each Availment.15 (Emphases supplied)
Under this Amendment to Credit Agreement, petitioners issued in favor of PNB the following 18 Promissory Notes,
which petitioners settled – except the last (the note covering the principal) – at the following interest rates:
1. 9th Promissory Note dated November 8, 1991 – 26%;
2. 10th Promissory Note dated March 19, 1992 – 25%;
6. 14th Promissory Note dated July 12, 1993 – 17.5%;
11. 19th Promissory Note dated April 10, 1995 – 21%;
12. 20th Promissory Note dated July 19, 1995 – 18.5%;
13. 21st Promissory Note dated December 18, 1995 – 18.75%;
14. 22nd Promissory Note dated April 22, 1996 – 18.5%;
15. 23rd Promissory Note dated July 22, 1996 – 18.5%;
17. 25th Promissory Note dated May 30, 1997 – 17.5%; and
18. 26th Promissory Note (PN 9707237) dated July 30, 1997 – 25%.16
The 9th up to the 17th promissory notes provide for the payment of interest at the "rate the Bank may at any time
without notice, raise within the limits allowed by law x x x."17
On the other hand, the 18th up to the 26th promissory notes – including PN 9707237, which is the 26th promissory
note – carried the following provision:
x x x For this purpose, I/We agree that the rate of interest herein stipulated may be increased or decreased for the
subsequent Interest Periods, with prior notice to the Borrower in the event of changes in interest rate prescribed by
law or the Monetary Board of the Central Bank of the Philippines, or in the Bank’s overall cost of funds. I/We hereby
agree that in the event I/we are not agreeable to the interest rate fixed for any Interest Period, I/we shall have the
option top repay the loan or credit facility without penalty within ten (10) calendar days from the Interest Setting
Date.18 (Emphasis supplied)
Respondent regularly renewed the line from 1990 up to 1997, and petitioners made good on the promissory notes,
religiously paying the interests without objection or fail. But in 1997, petitioners faltered when the interest rates
soared due to the Asian financial crisis. Petitioners’ sole outstanding promissory note for ₱2.5 million – PN 9707237
executed in July 1997 and due 120 days later or on October 28, 1997 – became past due, and despite repeated
demands, petitioners failed to make good on the note.
Incidentally, PN 9707237 provided for the penalty equivalent to 24% per annum in case of default, as follows:
Without need for notice or demand, failure to pay this note or any installment thereon, when due, shall constitute
default and in such cases or in case of garnishment, receivership or bankruptcy or suit of any kind filed against
me/us by the Bank, the outstanding principal of this note, at the option of the Bank and without prior notice of
demand, shall immediately become due and payable and shall be subject to a penalty charge of twenty four percent
(24%) per annum based on the defaulted principal amount. x x x19 (Emphasis supplied)
PNB prepared a Statement of Account20 as of October 12, 1998, detailing the amount due and demandable from
petitioners in the total amount of ₱3,620,541.60, broken down as follows:
Principal P 2,500,000.00
Interest 538,874.94
Penalties 581,666.66
Total P 3,620,541.60
Despite demand, petitioners failed to pay the foregoing amount. Thus, PNB foreclosed on the mortgage, and on
January 14, 1999, TCTs T-14250 and T-16208 were sold to it at auction for the amount of ₱4,324,172.96.21 The
sheriff’s certificate of sale was registered on March 11, 1999.
More than a year later, or on March 24, 2000, petitioners filed Civil Case No. 5975, seeking annulment of the
foreclosure sale and an accounting of the PNB credit. Petitioners theorized that after the first promissory note where
they agreed to pay 19.5% interest, the succeeding stipulations for the payment of interest in their loan agreements
with PNB – which allegedly left to the latter the sole will to determine the interest rate – became null and void.
Petitioners added that because the interest rates were fixed by respondent without their prior consent or agreement,
these rates are void, and as a result, petitioners should only be made liable for interest at the legal rate of 12%.
They claimed further that they overpaid interests on the credit, and concluded that due to this overpayment of steep
interest charges, their debt should now be deemed paid, and the foreclosure and sale of TCTs T-14250 and T-
16208 became unnecessary and wrongful. As for the imposed penalty of ₱581,666.66, petitioners alleged that since
the Real Estate Mortgage and the Supplement thereto did not include penalties as part of the secured amount, the
same should be excluded from the foreclosure amount or bid price, even if such penalties are provided for in the
final Promissory Note, or PN 9707237.22
In addition, petitioners sought to be reimbursed an alleged overpayment of ₱848,285.00 made during the period
August 21, 1991 to March 5, 1998,resulting from respondent’s imposition of the alleged illegal and steep interest
rates. They also prayed to be awarded ₱200,000.00 by way of attorney’s fees.23
In its Answer,24 PNB denied that it unilaterally imposed or fixed interest rates; that petitioners agreed that without
prior notice, PNB may modify interest rates depending on future policy adopted by it; and that the imposition of
penalties was agreed upon in the Credit Agreement. It added that the imposition of penalties is supported by the all-
inclusive clause in the Real Estate Mortgage agreement which provides that the mortgage shall stand as security for
any and all other obligations of whatever kind and nature owing to respondent, which thus includes penalties
imposed upon default or non-payment of the principal and interest on due date.
On pre-trial, the parties mutually agreed to the following material facts, among others:
a) That since 1991 up to 1998, petitioners had paid PNB the total amount of ₱3,484,287.00;25 and
b) That PNB sent, and petitioners received, a March 10, 2000 demand letter.26
During trial, petitioner Lydia Silos (Lydia) testified that the Credit Agreement, the Amendment to Credit Agreement,
Real Estate Mortgage and the Supplement thereto were all prepared by respondent PNB and were presented to her
and her husband Eduardo only for signature; that she was told by PNB that the latter alone would determine the
interest rate; that as to the Amendment to Credit Agreement, she was told that PNB would fill up the interest rate
portion thereof; that at the time the parties executed the said Credit Agreement, she was not informed about the
applicable spread that PNB would impose on her account; that the interest rate portion of all Promissory Notes she
and Eduardo issued were always left in blank when they executed them, with respondent’s mere assurance that it
would be the one to enter or indicate thereon the prevailing interest rate at the time of availment; and that they
agreed to such arrangement. She further testified that the two Real Estate Mortgage agreements she signed did not
stipulate the payment of penalties; that she and Eduardo consulted with a lawyer, and were told that PNB’s actions
were improper, and so on March 20, 2000, they wrote to the latter seeking a recomputation of their outstanding
obligation; and when PNB did not oblige, they instituted Civil Case No. 5975.27
On cross-examination, Lydia testified that she has been in business for 20 years; that she also borrowed from other
individuals and another bank; that it was only with banks that she was asked to sign loan documents with no
indicated interest rate; that she did not bother to read the terms of the loan documents which she signed; and that
she received several PNB statements of account detailing their outstanding obligations, but she did not complain;
that she assumed instead that what was written therein is correct.28
For his part, PNB Kalibo Branch Manager Diosdado Aspa, Jr. (Aspa), the sole witness for respondent, stated on
cross-examination that as a practice, the determination of the prime rates of interest was the responsibility solely of
PNB’s Treasury Department which is based in Manila; that these prime rates were simply communicated to all PNB
branches for implementation; that there are a multitude of considerations which determine the interest rate, such as
the cost of money, foreign currency values, PNB’s spread, bank administrative costs, profitability, and the practice in
the banking industry; that in every repricing of each loan availment, the borrower has the right to question the rates,
but that this was not done by the petitioners; and that anything that is not found in the Promissory Note may be
supplemented by the Credit Agreement.29
On February 28, 2003, the trial court rendered judgment dismissing Civil Case No. 5975.30
It ruled that:
1. While the Credit Agreement allows PNB to unilaterally increase its spread over the floating interest rate at any
time depending on whatever policy it may adopt in the future, it likewise allows for the decrease at any time of the
same. Thus, such stipulation authorizing both the increase and decrease of interest rates as may be applicable is
valid,31 as was held in Consolidated Bank and Trust Corporation (SOLIDBANK) v. Court of Appeals;32
2. Banks are allowed to stipulate that interest rates on loans need not be fixed and instead be made dependent on
prevailing rates upon which to peg such variable interest rates;33
3. The Promissory Note, as the principal contract evidencing petitioners’ loan, prevails over the Credit Agreement
and the Real Estate Mortgage.
As such, the rate of interest, penalties and attorney’s fees stipulated in the Promissory Note prevail over those
mentioned in the Credit Agreement and the Real Estate Mortgage agreements;34
4. Roughly, PNB’s computation of the total amount of petitioners’ obligation is correct;35
5. Because the loan was admittedly due and demandable, the foreclosure was regularly made;36
6. By the admission of petitioners during pre-trial, all payments made to PNB were properly applied to the principal,
interest and penalties.37
The dispositive portion of the trial court’s Decision reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the respondent and against the petitioners
by DISMISSING the latter’s petition.
Costs against the petitioners.
SO ORDERED.38
Petitioners moved for reconsideration. In an Order39 dated June 4, 2003, the trial court granted only a modification in
the award of attorney’s fees, reducing the same from 10% to 1%. Thus, PNB was ordered to refund to petitioner the
excess in attorney’s fees in the amount of ₱356,589.90, viz:
WHEREFORE, judgment is hereby rendered upholding the validity of the interest rate charged by the respondent as
well as the extra-judicial foreclosure proceedings and the Certificate of Sale. However, respondent is directed to
refund to the petitioner the amount of ₱356,589.90 representing the excess interest charged against the latter.
SO ORDERED.40
Petitioners appealed to the CA, which issued the questioned Decision with the following decretal portion:
WHEREFORE, in view of the foregoing, the instant appeal is PARTLY GRANTED. The modified Decision of the
Regional Trial Court per Order dated June 4, 2003 is hereby AFFIRMED with MODIFICATIONS, to wit:
1. [T]hat the interest rate to be applied after the expiration of the first 30-day interest period for PN. No. 9707237
should be 12% per annum;
2. [T]hat the attorney’s fees of10% is valid and binding; and
3. [T]hat [PNB] is hereby ordered to reimburse [petitioners] the excess in the bid price of ₱377,505.99 which is the
difference between the total amount due [PNB] and the amount of its bid price.
SO ORDERED.41
On the other hand, respondent did not appeal the June 4,2003 Order of the trial court which reduced its award of
attorney’s fees. It simply raised the issue in its appellee’s brief in the CA, and included a prayer for the reversal of
said Order.
In effect, the CA limited petitioners’ appeal to the following issues:
1) Whether x x x the interest rates on petitioners’ outstanding obligation were unilaterally and arbitrarily imposed by
PNB;
2) Whether x x x the penalty charges were secured by the real estate mortgage; and
3) Whether x x x the extrajudicial foreclosure and sale are valid.42
The CA noted that, based on receipts presented by petitioners during trial, the latter dutifully paid a total of
₱3,027,324.60 in interest for the period August 7, 1991 to August 6, 1997, over and above the ₱2.5 million principal
obligation. And this is exclusive of payments for insurance premiums, documentary stamp taxes, and penalty. All the
while, petitioners did not complain nor object to the imposition of interest; they in fact paid the same religiously and
without fail for seven years. The appellate court ruled that petitioners are thus estopped from questioning the same.
The CA nevertheless noted that for the period July 30, 1997 to August 14, 1997, PNB wrongly applied an interest
rate of 25.72% instead of the agreed 25%; thus it overcharged petitioners, and the latter paid, an excess of ₱736.56
in interest.
On the issue of penalties, the CA ruled that the express tenor of the Real Estate Mortgage agreements
contemplated the inclusion of the PN 9707237-stipulated 24% penalty in the amount to be secured by the
mortgaged property, thus –
For and in consideration of certain loans, overdrafts and other credit accommodations obtained from the
MORTGAGEE and to secure the payment of the same and those others that the MORTGAGEE may extend to the
MORTGAGOR, including interest and expenses, and other obligations owing by the MORTGAGOR to the
MORTGAGEE, whether direct or indirect, principal or secondary, as appearing in the accounts, books and records
of the MORTGAGEE, the MORTGAGOR does hereby transfer and convey by way of mortgage unto the
MORTGAGEE x x x43 (Emphasis supplied)
The CA believes that the 24% penalty is covered by the phrase "and other obligations owing by the mortgagor to the
mortgagee" and should thus be added to the amount secured by the mortgages.44
The CA then proceeded to declare valid the foreclosure and sale of properties covered by TCTs T-14250 and T-
16208, which came as a necessary result of petitioners’ failure to pay the outstanding obligation upon demand.45The
CA saw fit to increase the trial court’s award of 1% to 10%, finding the latter rate to be reasonable and citing the
Real Estate Mortgage agreement which authorized the collection of the higher rate.46
Finally, the CA ruled that petitioners are entitled to ₱377,505.09 surplus, which is the difference between PNB’s bid
price of ₱4,324,172.96 and petitioners’ total computed obligation as of January 14, 1999, or the date of the auction
sale, in the amount of ₱3,946,667.87.47
Issues
The following issues are raised in this Petition:
A. THE COURT OF APPEALS AS WELL AS THE LOWER COURT ERRED IN NOT NULLIFYING THE INTEREST
RATE PROVISION IN THE CREDIT AGREEMENT DATED JULY 24, 1989 X X X AND IN THE AMENDMENT TO
CREDIT AGREEMENT DATEDAUGUST 21, 1991 X X X WHICH LEFT TO THE SOLE UNILATERAL
DETERMINATION OF THE RESPONDENT PNB THE ORIGINAL FIXING OF INTEREST RATE AND ITS
INCREASE, WHICH AGREEMENT IS CONTRARY TO LAW, ART. 1308 OF THE [NEW CIVIL CODE], AS
ENUNCIATED IN PONCIANO ALMEIDA V. COURT OF APPEALS,G.R. [NO.] 113412, APRIL 17, 1996, AND
CONTRARY TO PUBLIC POLICY AND PUBLIC INTEREST, AND IN APPLYING THE PRINCIPLE OF ESTOPPEL
ARISING FROM THE ALLEGED DELAYED COMPLAINT OF PETITIONER[S], AND [THEIR] PAYMENT OF THE
INTEREST CHARGED.
B. CONSEQUENTLY, THE COURT OF APPEALS AND THE LOWER COURT ERRED IN NOT DECLARING THAT
PNB IS NOT AT ALL ENTITLED TO ANY INTEREST EXCEPT THE LEGAL RATE FROM DATE OF DEMAND,
AND IN NOT APPLYING THE EXCESS OVER THE LEGAL RATE OF THE ADMITTED PAYMENTS MADE BY
PETITIONER[S] FROM 1991-1998 IN THE ADMITTED TOTAL AMOUNT OF ₱3,484,287.00, TO PAYMENT OF
THE PRINCIPAL OF ₱2,500,000.[00] LEAVING AN OVERPAYMENT OF₱984,287.00 REFUNDABLE BY
RESPONDENT TO PETITIONER[S] WITH INTEREST OF 12% PER ANNUM.
II
THE COURT OF APPEALS AND THE LOWER COURT ERRED IN HOLDING THAT PENALTIES ARE
INCLUDEDIN THE SECURED AMOUNT, SUBJECT TO FORECLOSURE, WHEN NO PENALTIES ARE
MENTIONED [NOR] PROVIDED FOR IN THE REAL ESTATE MORTGAGE AS A SECURED AMOUNT AND
THEREFORE THE AMOUNT OF PENALTIES SHOULDHAVE BEEN EXCLUDED FROM [THE] FORECLOSURE
AMOUNT.
III
THE COURT OF APPEALS ERRED IN REVERSING THE RULING OF THE LOWER COURT, WHICH REDUCED
THE ATTORNEY’S FEES OF 10% OF THE TOTAL INDEBTEDNESS CHARGED IN THE X X X EXTRAJUDICIAL
FORECLOSURE TOONLY 1%, AND [AWARDING] 10% ATTORNEY’S FEES.48
Petitioners insist that the interest rate provision in the Credit Agreement and the Amendment to Credit Agreement
should be declared null and void, for they relegated to PNB the sole power to fix interest rates based on arbitrary
criteria or factors such as bank policy, profitability, cost of money, foreign currency values, and bank administrative
costs; spaces for interest rates in the two Credit Agreements and the promissory notes were left blank for PNB to
unilaterally fill, and their consent or agreement to the interest rates imposed thereafter was not obtained; the interest
rate, which consists of the prime rate plus the bank spread, is determined not by agreement of the parties but by
PNB’s Treasury Department in Manila. Petitioners conclude that by this method of fixing the interest rates, the
principle of mutuality of contracts is violated, and public policy as well as Circular 90549 of the then Central Bank had
been breached.
Petitioners question the CA’s application of the principle of estoppel, saying that no estoppel can proceed from an
illegal act. Though they failed to timely question the imposition of the alleged illegal interest rates and continued to
pay the loan on the basis of these rates, they cannot be deemed to have acquiesced, and hence could recover what
they erroneously paid.50
Petitioners argue that if the interest rates were nullified, then their obligation to PNB is deemed extinguished as of
July 1997; moreover, it would appear that they even made an over payment to the bank in the amount of
₱984,287.00.
Next, petitioners suggest that since the Real Estate Mortgage agreements did not include nor specify, as part of the
secured amount, the penalty of 24% authorized in PN 9707237, such amount of ₱581,666.66 could not be made
answerable by or collected from the mortgages covering TCTs T-14250 and T-16208. Claiming support from
Philippine Bank of Communications [PBCom] v. Court of Appeals,51 petitioners insist that the phrase "and other
obligations owing by the mortgagor to the mortgagee"52 in the mortgage agreements cannot embrace the
₱581,666.66 penalty, because, as held in the PBCom case, "[a] penalty charge does not belong to the species of
obligations enumerated in the mortgage, hence, the said contract cannot be understood to secure the
penalty";53while the mortgages are the accessory contracts, what items are secured may only be determined from
the provisions of the mortgage contracts, and not from the Credit Agreement or the promissory notes.
Finally, petitioners submit that the trial court’s award of 1% attorney’s fees should be maintained, given that in
foreclosures, a lawyer’s work consists merely in the preparation and filing of the petition, and involves minimal
study.54 To allow the imposition of a staggering ₱396,211.00 for such work would be contrary to equity. Petitioners
state that the purpose of attorney’s fees in cases of this nature "is not to give respondent a larger compensation for
the loan than the law already allows, but to protect it against any future loss or damage by being compelled to retain
counsel x x x to institute judicial proceedings for the collection of its credit."55 And because the instant case involves
a simple extrajudicial foreclosure, attorney’s fees may be equitably tempered.
For its part, respondent disputes petitioners’ claim that interest rates were unilaterally fixed by it, taking relief in the
CA pronouncement that petitioners are deemed estopped by their failure to question the imposed rates and their
continued payment thereof without opposition. It adds that because the Credit Agreement and promissory notes
contained both an escalation clause and a de-escalation clause, it may not be said that the bank violated the
principle of mutuality. Besides, the increase or decrease in interest rates have been mutually agreed upon by the
parties, as shown by petitioners’ continuous payment without protest. Respondent adds that the alleged unilateral
imposition of interest rates is not a proper subject for review by the Court because the issue was never raised in the
lower court.
As for petitioners’ claim that interest rates imposed by it are null and void for the reasons that 1) the Credit
Agreements and the promissory notes were signed in blank; 2) interest rates were at short periods; 3) no interest
rates could be charged where no agreement on interest rates was made in writing; 4) PNB fixed interest rates on the
basis of arbitrary policies and standards left to its choosing; and 5) interest rates based on prime rate plus applicable
spread are indeterminate and arbitrary – PNB counters:
a. That Credit Agreements and promissory notes were signed by petitioner[s] in blank – Respondent claims that this
issue was never raised in the lower court. Besides, documentary evidence prevails over testimonial evidence; Lydia
Silos’ testimony in this regard is self-serving, unsupported and uncorroborated, and for being the lone evidence on
this issue. The fact remains that these documents are in proper form, presumed regular, and endure, against
arbitrary claims by Silos – who is an experienced business person – that she signed questionable loan documents
whose provisions for interest rates were left blank, and yet she continued to pay the interests without protest for a
number of years.56
b. That interest rates were at short periods – Respondent argues that the law which governs and prohibits changes
in interest rates made more than once every twelve months has been removed57 with the issuance of Presidential
Decree No. 858.58
c. That no interest rates could be charged where no agreement on interest rates was made in writing in violation of
Article 1956 of the Civil Code, which provides that no interest shall be due unless it has been expressly stipulated in
writing – Respondent insists that the stipulated 25% per annum as embodied in PN 9707237 should be imposed
during the interim, or the period after the loan became due and while it remains unpaid, and not the legal interest of
12% as claimed by petitioners.59
d. That PNB fixed interest rates on the basis of arbitrary policies and standards left to its choosing – According to
respondent, interest rates were fixed taking into consideration increases or decreases as provided by law or by the
Monetary Board, the bank’s overall costs of funds, and upon agreement of the parties.60
e. That interest rates based on prime rate plus applicable spread are indeterminate and arbitrary – On this score,
respondent submits there are various factors that influence interest rates, from political events to economic
developments, etc.; the cost of money, profitability and foreign currency transactions may not be discounted.61
On the issue of penalties, respondent reiterates the trial court’s finding that during pre-trial, petitioners admitted that
the Statement of Account as of October 12, 1998 – which detailed and included penalty charges as part of the total
outstanding obligation owing to the bank – was correct. Respondent justifies the imposition and collection of a
penalty as a normal banking practice, and the standard rate per annum for all commercial banks, at the time, was
24%.
Respondent adds that the purpose of the penalty or a penal clause for that matter is to ensure the performance of
the obligation and substitute for damages and the payment of interest in the event of non-compliance.62 And the
promissory note – being the principal agreement as opposed to the mortgage, which is a mere accessory – should
prevail. This being the case, its inclusion as part of the secured amount in the mortgage agreements is valid and
necessary.
Regarding the foreclosure of the mortgages, respondent accuses petitioners of pre-empting consolidation of its
ownership over TCTs T-14250 and T-16208; that petitioners filed Civil Case No. 5975 ostensibly to question the
foreclosure and sale of properties covered by TCTs T-14250 and T-16208 in a desperate move to retain ownership
over these properties, because they failed to timely redeem them.
Respondent directs the attention of the Court to its petition in G.R. No. 181046,63 where the propriety of the CA’s
ruling on the following issues is squarely raised:
1. That the interest rate to be applied after the expiration of the first 30-day interest period for PN 9707237 should be
12% per annum; and
2. That PNB should reimburse petitioners the excess in the bid price of ₱377,505.99 which is the difference between
the total amount due to PNB and the amount of its bid price.
Our Ruling
Before anything else, it must be said that it is not the function of the Court to re-examine or re-evaluate evidence
adduced by the parties in the proceedings below. The rule admits of certain well-recognized exceptions, though, as
when the lower courts’ findings are not supported by the evidence on record or are based on a misapprehension of
facts, or when certain relevant and undisputed facts were manifestly overlooked that, if properly considered, would
justify a different conclusion. This case falls within such exceptions.
The Court notes that on March 5, 2008, a Resolution was issued by the Court’s First Division denying respondent’s
petition in G.R. No. 181046, due to late filing, failure to attach the required affidavit of service of the petition on the
trial court and the petitioners, and submission of a defective verification and certification of non-forum shopping. On
June 25, 2008, the Court issued another Resolution denying with finality respondent’s motion for reconsideration of
the March 5, 2008 Resolution. And on August 15, 2008, entry of judgment was made. This thus settles the issues,
as above-stated, covering a) the interest rate – or 12% per annum– that applies upon expiration of the first 30 days
interest period provided under PN 9707237, and b)the CA’s decree that PNB should reimburse petitioner the excess
in the bid price of ₱377,505.09.
It appears that respondent’s practice, more than once proscribed by the Court, has been carried over once more to
the petitioners. In a number of decided cases, the Court struck down provisions in credit documents issued by PNB
to, or required of, its borrowers which allow the bank to increase or decrease interest rates "within the limits allowed
by law at any time depending on whatever policy it may adopt in the future." Thus, in Philippine National Bank v.
Court of Appeals,64 such stipulation and similar ones were declared in violation of Article 130865 of the Civil Code. In
a second case, Philippine National Bank v. Court of Appeals,66 the very same stipulations found in the credit
agreement and the promissory notes prepared and issued by the respondent were again invalidated. The Court
therein said:
The Credit Agreement provided inter alia, that —
(a) The BANK reserves the right to increase the interest rate within the limits allowed by law at any time depending
on whatever policy it may adopt in the future; Provided, that the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest is reduced by law or by the Monetary
Board. In either case, the adjustment in the interest rate agreed upon shall take effect on the effectivity date of the
increase or decrease in the maximum interest rate.
The Promissory Note, in turn, authorized the PNB to raise the rate of interest, at any time without notice, beyond the
stipulated rate of 12% but only "within the limits allowed by law."
The Real Estate Mortgage contract likewise provided that —
(k) INCREASE OF INTEREST RATE: The rate of interest charged on the obligation secured by this mortgage as
well as the interest on the amount which may have been advanced by the MORTGAGEE, in accordance with the
provision hereof, shall be subject during the life of this contract to such an increase within the rate allowed by law,
as the Board of Directors of the MORTGAGEE may prescribe for its debtors.
xxxx
In making the unilateral increases in interest rates, petitioner bank relied on the escalation clause contained in their
credit agreement which provides, as follows:
The Bank reserves the right to increase the interest rate within the limits allowed by law at any time depending on
whatever policy it may adopt in the future and provided, that, the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest rate is reduced by law or by the
Monetary Board. In either case, the adjustment in the interest rate agreed upon shall take effect on the effectivity
date of the increase or decrease in maximum interest rate.
This clause is authorized by Section 2 of Presidential Decree (P.D.) No. 1684 which further amended Act No. 2655
("The Usury Law"), as amended, thus:
Section 2. The same Act is hereby amended by adding a new section after Section 7, to read as follows:
Sec. 7-a. Parties to an agreement pertaining to a loan or forbearance of money, goods or credits may stipulate that
the rate of interest agreed upon may be increased in the event that the applicable maximum rate of interest is
increased bylaw or by the Monetary Board; Provided, That such stipulation shall be valid only if there is also a
stipulation in the agreement that the rate of interest agreed upon shall be reduced in the event that the applicable
maximum rate of interest is reduced by law or by the Monetary Board; Provided further, That the adjustment in the
rate of interest agreed upon shall take effect on or after the effectivity of the increase or decrease in the maximum
rate of interest.
Section 1 of P.D. No. 1684 also empowered the Central Bank’s Monetary Board to prescribe the maximum rates of
interest for loans and certain forbearances. Pursuant to such authority, the Monetary Board issued Central Bank
(C.B.) Circular No. 905, series of 1982, Section 5 of which provides:
Sec. 5. Section 1303 of the Manual of Regulations (for Banks and Other Financial Intermediaries) is hereby
amended to read as follows:
Sec. 1303. Interest and Other Charges.
— The rate of interest, including commissions, premiums, fees and other charges, on any loan, or forbearance of
any money, goods or credits, regardless of maturity and whether secured or unsecured, shall not be subject to any
ceiling prescribed under or pursuant to the Usury Law, as amended.
P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to stipulate freely regarding any
subsequent adjustment in the interest rate that shall accrue on a loan or forbearance of money, goods or credits. In
fine, they can agree to adjust, upward or downward, the interest previously stipulated. However, contrary to the
stubborn insistence of petitioner bank, the said law and circular did not authorize either party to unilaterally raise the
interest rate without the other’s consent.
It is basic that there can be no contract in the true sense in the absence of the element of agreement, or of mutual
assent of the parties. If this assent is wanting on the part of the one who contracts, his act has no more efficacy than
if it had been done under duress or by a person of unsound mind.
Similarly, contract changes must be made with the consent of the contracting parties. The minds of all the parties
must meet as to the proposed modification, especially when it affects an important aspect of the agreement. In the
case of loan contracts, it cannot be gainsaid that the rate of interest is always a vital component, for it can make or
break a capital venture. Thus, any change must be mutually agreed upon, otherwise, it is bereft of any binding
effect.
We cannot countenance petitioner bank’s posturing that the escalation clause at bench gives it unbridled right to
unilaterally upwardly adjust the interest on private respondents’ loan. That would completely take away from private
respondents the right to assent to an important modification in their agreement, and would negate the element of
mutuality in contracts. In Philippine National Bank v. Court of Appeals, et al., 196 SCRA 536, 544-545 (1991) we
held —
x x x The unilateral action of the PNB in increasing the interest rate on the private respondent’s loan violated the
mutuality of contracts ordained in Article 1308 of the Civil Code:
Art. 1308. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one
of them.
In order that obligations arising from contracts may have the force of law between the parties, there must be
mutuality between the parties based on their essential equality. A contract containing a condition which makes its
fulfillment dependent exclusively upon the uncontrolled will of one of the contracting parties, is void . . . . Hence,
even assuming that the . . . loan agreement between the PNB and the private respondent gave the PNB a license
(although in fact there was none) to increase the interest rate at will during the term of the loan, that license would
have been null and void for being violative of the principle of mutuality essential in contracts. It would have invested
the loan agreement with the character of a contract of adhesion, where the parties do not bargain on equal footing,
the weaker party’s (the debtor) participation being reduced to the alternative "to take it or leave it" . . . . Such a
contract is a veritable trap for the weaker party whom the courts of justice must protect against abuse and
imposition.67 (Emphases supplied)
Then again, in a third case, Spouses Almeda v. Court of Appeals,68 the Court invalidated the very same provisions in
the respondent’s prepared Credit Agreement, declaring thus:
The binding effect of any agreement between parties to a contract is premised on two settled principles: (1) that any
obligation arising from contract has the force of law between the parties; and (2) that there must be mutuality
between the parties based on their essential equality. Any contract which appears to be heavily weighed in favor of
one of the parties so as to lead to an unconscionable result is void. Any stipulation regarding the validity or
compliance of the contract which is left solely to the will of one of the parties, is likewise, invalid.
It is plainly obvious, therefore, from the undisputed facts of the case that respondent bank unilaterally altered the
terms of its contract with petitioners by increasing the interest rates on the loan without the prior assent of the latter.
In fact, the manner of agreement is itself explicitly stipulated by the Civil Code when it provides, in Article 1956 that
"No interest shall be due unless it has been expressly stipulated in writing." What has been "stipulated in writing"
from a perusal of interest rate provision of the credit agreement signed between the parties is that petitioners were
bound merely to pay 21% interest, subject to a possible escalation or de-escalation, when 1) the circumstances
warrant such escalation or de-escalation; 2) within the limits allowed by law; and 3) upon agreement.
Indeed, the interest rate which appears to have been agreed upon by the parties to the contract in this case was the
21% rate stipulated in the interest provision. Any doubt about this is in fact readily resolved by a careful reading of
the credit agreement because the same plainly uses the phrase "interest rate agreed upon," in reference to the
original 21% interest rate. x x x
xxxx
Petitioners never agreed in writing to pay the increased interest rates demanded by respondent bank in
contravention to the tenor of their credit agreement. That an increase in interest rates from 18% to as much as 68%
is excessive and unconscionable is indisputable. Between 1981 and 1984, petitioners had paid an amount
equivalent to virtually half of the entire principal (₱7,735,004.66) which was applied to interest alone. By the time the
spouses tendered the amount of ₱40,142,518.00 in settlement of their obligations; respondent bank was demanding
₱58,377,487.00 over and above those amounts already previously paid by the spouses.
Escalation clauses are not basically wrong or legally objectionable so long as they are not solely potestative but
based on reasonable and valid grounds. Here, as clearly demonstrated above, not only [are] the increases of the
interest rates on the basis of the escalation clause patently unreasonable and unconscionable, but also there are no
valid and reasonable standards upon which the increases are anchored.
xxxx
In the face of the unequivocal interest rate provisions in the credit agreement and in the law requiring the parties to
agree to changes in the interest rate in writing, we hold that the unilateral and progressive increases imposed by
respondent PNB were null and void. Their effect was to increase the total obligation on an eighteen million peso
loan to an amount way over three times that which was originally granted to the borrowers. That these increases,
occasioned by crafty manipulations in the interest rates is unconscionable and neutralizes the salutary policies of
extending loans to spur business cannot be disputed.69 (Emphases supplied)
Still, in a fourth case, Philippine National Bank v. Court of Appeals,70 the above doctrine was reiterated:
The promissory note contained the following stipulation:
For value received, I/we, [private respondents] jointly and severally promise to pay to the ORDER of the
PHILIPPINE NATIONAL BANK, at its office in San Jose City, Philippines, the sum of FIFTEEN THOUSAND ONLY
(₱15,000.00), Philippine Currency, together with interest thereon at the rate of 12% per annum until paid, which
interest rate the Bank may at any time without notice, raise within the limits allowed by law, and I/we also agree to
pay jointly and severally ____% per annum penalty charge, by way of liquidated damages should this note be
unpaid or is not renewed on due dated.
Payment of this note shall be as follows:
*THREE HUNDRED SIXTY FIVE DAYS* AFTER DATE
On the reverse side of the note the following condition was stamped:
All short-term loans to be granted starting January 1, 1978 shall be made subject to the condition that any and/or all
extensions hereof that will leave any portion of the amount still unpaid after 730 days shall automatically convert the
outstanding balance into a medium or long-term obligation as the case may be and give the Bank the right to charge
the interest rates prescribed under its policies from the date the account was originally granted.
To secure payment of the loan the parties executed a real estate mortgage contract which provided:
(k) INCREASE OF INTEREST RATE:
The rate of interest charged on the obligation secured by this mortgage as well as the interest on the amount which
may have been advanced by the MORTGAGEE, in accordance with the provision hereof, shall be subject during the
life of this contract to such an increase within the rate allowed by law, as the Board of Directors of the
MORTGAGEE may prescribe for its debtors.
xxxx
To begin with, PNB’s argument rests on a misapprehension of the import of the appellate court’s ruling. The Court of
Appeals nullified the interest rate increases not because the promissory note did not comply with P.D. No. 1684 by
providing for a de-escalation, but because the absence of such provision made the clause so one-sided as to make
it unreasonable.
That ruling is correct. It is in line with our decision in Banco Filipino Savings & Mortgage Bank v. Navarro that
although P.D. No. 1684 is not to be retroactively applied to loans granted before its effectivity, there must
nevertheless be a de-escalation clause to mitigate the one-sidedness of the escalation clause. Indeed because of
concern for the unequal status of borrowers vis-à-vis the banks, our cases after Banco Filipino have fashioned the
rule that any increase in the rate of interest made pursuant to an escalation clause must be the result of agreement
between the parties.
Thus in Philippine National Bank v. Court of Appeals, two promissory notes authorized PNB to increase the
stipulated interest per annum" within the limits allowed by law at any time depending on whatever policy [PNB] may
adopt in the future; Provided, that the interest rate on this note shall be correspondingly decreased in the event that
the applicable maximum interest rate is reduced by law or by the Monetary Board." The real estate mortgage
likewise provided:
The rate of interest charged on the obligation secured by this mortgage as well as the interest on the amount which
may have been advanced by the MORTGAGEE, in accordance with the provisions hereof, shall be subject during
the life of this contract to such an increase within the rate allowed by law, as the Board of Directors of the
MORTGAGEE may prescribe for its debtors.
Pursuant to these clauses, PNB successively increased the interest from 18% to 32%, then to 41% and then to
48%. This Court declared the increases unilaterally imposed by [PNB] to be in violation of the principle of mutuality
as embodied in Art.1308 of the Civil Code, which provides that "[t]he contract must bind both contracting parties; its
validity or compliance cannot be left to the will of one of them." As the Court explained:
In order that obligations arising from contracts may have the force of law between the parties, there must be
mutuality between the parties based on their essential equality. A contract containing a condition which makes its
fulfillment dependent exclusively upon the uncontrolled will of one of the contracting parties, is void (Garcia vs. Rita
Legarda, Inc., 21 SCRA 555). Hence, even assuming that the ₱1.8 million loan agreement between the PNB and
the private respondent gave the PNB a license (although in fact there was none) to increase the interest rate at will
during the term of the loan, that license would have been null and void for being violative of the principle of mutuality
essential in contracts. It would have invested the loan agreement with the character of a contract of adhesion, where
the parties do not bargain on equal footing, the weaker party’s (the debtor) participation being reduced to the
alternative "to take it or leave it" (Qua vs. Law Union & Rock Insurance Co., 95 Phil. 85). Such a contract is a
veritable trap for the weaker party whom the courts of justice must protect against abuse and imposition.
A similar ruling was made in Philippine National Bank v. Court of Appeals. The credit agreement in that case
provided:
The BANK reserves the right to increase the interest rate within the limits allowed by law at any time depending on
whatever policy it may adopt in the future: Provided, that the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest is reduced by law or by the Monetary
Board. . . .
As in the first case, PNB successively increased the stipulated interest so that what was originally 12% per annum
became, after only two years, 42%. In declaring the increases invalid, we held:
We cannot countenance petitioner bank’s posturing that the escalation clause at bench gives it unbridled right to
unilaterally upwardly adjust the interest on private respondents’ loan. That would completely take away from private
respondents the right to assent to an important modification in their agreement, and would negate the element of
mutuality in contracts.
Only recently we invalidated another round of interest increases decreed by PNB pursuant to a similar agreement it
had with other borrowers:
[W]hile the Usury Law ceiling on interest rates was lifted by C.B. Circular 905, nothing in the said circular could
possibly be read as granting respondent bank carte blanche authority to raise interest rates to levels which would
either enslave its borrowers or lead to a hemorrhaging of their assets.
In this case no attempt was made by PNB to secure the conformity of private respondents to the successive
increases in the interest rate. Private respondents’ assent to the increases can not be implied from their lack of
response to the letters sent by PNB, informing them of the increases. For as stated in one case, no one receiving a
proposal to change a contract is obliged to answer the proposal.71 (Emphasis supplied)
We made the same pronouncement in a fifth case, New Sampaguita Builders Construction, Inc. v. Philippine
National Bank,72 thus –
Courts have the authority to strike down or to modify provisions in promissory notes that grant the lenders
unrestrained power to increase interest rates, penalties and other charges at the latter’s sole discretion and without
giving prior notice to and securing the consent of the borrowers. This unilateral authority is anathema to the
mutuality of contracts and enable lenders to take undue advantage of borrowers. Although the Usury Law has been
effectively repealed, courts may still reduce iniquitous or unconscionable rates charged for the use of money.
Furthermore, excessive interests, penalties and other charges not revealed in disclosure statements issued by
banks, even if stipulated in the promissory notes, cannot be given effect under the Truth in Lending Act.73 (Emphasis
supplied)
Yet again, in a sixth disposition, Philippine National Bank v. Spouses Rocamora,74 the above pronouncements were
reiterated to debunk PNB’s repeated reliance on its invalidated contract stipulations:
We repeated this rule in the 1994 case of PNB v. CA and Jayme Fernandez and the 1996 case of PNB v. CA and
Spouses Basco. Taking no heed of these rulings, the escalation clause PNB used in the present case to justify the
increased interest rates is no different from the escalation clause assailed in the 1996 PNB case; in both, the
interest rates were increased from the agreed 12% per annum rate to 42%. x x x
xxxx
On the strength of this ruling, PNB’s argument – that the spouses Rocamora’s failure to contest the increased
interest rates that were purportedly reflected in the statements of account and the demand letters sent by the bank
amounted to their implied acceptance of the increase – should likewise fail.
Evidently, PNB’s failure to secure the spouses Rocamora’s consent to the increased interest rates prompted the
lower courts to declare excessive and illegal the interest rates imposed. Togo around this lower court finding, PNB
alleges that the ₱206,297.47 deficiency claim was computed using only the original 12% per annum interest rate.
We find this unlikely. Our examination of PNB’s own ledgers, included in the records of the case, clearly indicates
that PNB imposed interest rates higher than the agreed 12% per annum rate. This confirmatory finding, albeit based
solely on ledgers found in the records, reinforces the application in this case of the rule that findings of the RTC,
when affirmed by the CA, are binding upon this Court.75 (Emphases supplied)
Verily, all these cases, including the present one, involve identical or similar provisions found in respondent’s credit
agreements and promissory notes. Thus, the July 1989 Credit Agreement executed by petitioners and respondent
contained the following stipulation on interest:
1.03. Interest. (a) The Loan shall be subject to interest at the rate of 19.5% [per annum]. Interest shall be payable in
advance every one hundred twenty days at the rate prevailing at the time of the renewal.
(b) The Borrower agrees that the Bank may modify the interest rate in the Loan depending on whatever policy the
fixed interest rate system, or vice versa. Where the Bank has imposed on the Loan interest at a rate per annum
while the eight promissory notes issued pursuant thereto granted PNB the right to increase or reduce interest rates
"within the limits allowed by law or the Monetary Board"77 and the Real Estate Mortgage agreement included the
same right to increase or reduce interest rates "at any time depending on whatever policy PNB may adopt in the
future."78
On the basis of the Credit Agreement, petitioners issued promissory notes which they signed in blank, and
respondent later on entered their corresponding interest rates, as follows:
1st Promissory Note dated July 24, 1989 – 19.5%;
2nd Promissory Note dated November 22, 1989 – 23%;
3rd Promissory Note dated March 21, 1990 – 22%;
4th Promissory Note dated July 19, 1990 – 24%;
5th Promissory Note dated December 17, 1990 – 28%;

6th Promissory Note dated February 14, 1991 – 32%;
7th Promissory Note dated March 1, 1991 – 30%; and
8th Promissory Note dated July 11, 1991 – 24%.79
On the other hand, the August 1991 Amendment to Credit Agreement contains the following stipulation regarding
interest:
Bank to be prime rate plus applicable spread in effect as of the date of each Availment.80 (Emphases supplied)
and under this Amendment to Credit Agreement, petitioners again executed and signed the following promissory
notes in blank, for the respondent to later on enter the corresponding interest rates, which it did, as follows:
9th Promissory Note dated November 8, 1991 – 26%;
10th Promissory Note dated March 19, 1992 – 25%;
14th Promissory Note dated July 12, 1993 – 17.5%;
19th Promissory Note dated April 10, 1995 – 21%;
20th Promissory Note dated July 19, 1995 – 18.5%;
21st Promissory Note dated December 18, 1995 – 18.75%;
22nd Promissory Note dated April 22, 1996 – 18.5%;
23rd Promissory Note dated July 22, 1996 – 18.5%;
25th Promissory Note dated May 30, 1997 – 17.5%; and
26th Promissory Note (PN 9707237) dated July 30, 1997 – 25%.81
The 9th up to the 17th promissory notes provide for the payment of interest at the "rate the Bank may at any time
without notice, raise within the limits allowed by law x x x."82 On the other hand, the 18th up to the 26th promissory
notes – which includes PN 9707237 – carried the following provision:
x x x For this purpose, I/We agree that the rate of interest herein stipulated may be increased or decreased for the
subsequent Interest Periods, with prior notice to the Borrower in the event of changes in interest rate prescribed by
law or the Monetary Board of the Central Bank of the Philippines, or in the Bank’s overall cost of funds. I/We hereby
agree that in the event I/we are not agreeable to the interest rate fixed for any Interest Period, I/we shall have the
option to prepay the loan or credit facility without penalty within ten (10) calendar days from the Interest Setting
Date.83 (Emphasis supplied)
These stipulations must be once more invalidated, as was done in previous cases. The common denominator in
these cases is the lack of agreement of the parties to the imposed interest rates. For this case, this lack of consent
by the petitioners has been made obvious by the fact that they signed the promissory notes in blank for the
respondent to fill. We find credible the testimony of Lydia in this respect. Respondent failed to discredit her; in fact,
its witness PNB Kalibo Branch Manager Aspa admitted that interest rates were fixed solely by its Treasury
Department in Manila, which were then simply communicated to all PNB branches for implementation. If this were
the case, then this would explain why petitioners had to sign the promissory notes in blank, since the imposable
interest rates have yet to be determined and fixed by respondent’s Treasury Department in Manila.
Moreover, in Aspa’s enumeration of the factors that determine the interest rates PNB fixes – such as cost of money,
foreign currency values, bank administrative costs, profitability, and considerations which affect the banking industry
– it can be seen that considerations which affect PNB’s borrowers are ignored. A borrower’s current financial state,
his feedback or opinions, the nature and purpose of his borrowings, the effect of foreign currency values or
fluctuations on his business or borrowing, etc. – these are not factors which influence the fixing of interest rates to
be imposed on him. Clearly, respondent’s method of fixing interest rates based on one-sided, indeterminate, and
subjective criteria such as profitability, cost of money, bank costs, etc. is arbitrary for there is no fixed standard or
margin above or below these considerations.
The stipulation in the promissory notes subjecting the interest rate to review does not render the imposition by
UCPB of interest rates on the obligations of the spouses Beluso valid. According to said stipulation:
The interest rate shall be subject to review and may be increased or decreased by the LENDER considering among
others the prevailing financial and monetary conditions; or the rate of interest and charges which other banks or
financial institutions charge or offer to charge for similar accommodations; and/or the resulting profitability to the
LENDER after due consideration of all dealings with the BORROWER.
It should be pointed out that the authority to review the interest rate was given [to] UCPB alone as the lender.
Moreover, UCPB may apply the considerations enumerated in this provision as it wishes. As worded in the above
provision, UCPB may give as much weight as it desires to each of the following considerations: (1) the prevailing
financial and monetary condition;(2) the rate of interest and charges which other banks or financial institutions
charge or offer to charge for similar accommodations; and/or(3) the resulting profitability to the LENDER (UCPB)
after due consideration of all dealings with the BORROWER (the spouses Beluso). Again, as in the case of the
interest rate provision, there is no fixed margin above or below these considerations.
In view of the foregoing, the Separability Clause cannot save either of the two options of UCPB as to the interest to
be imposed, as both options violate the principle of mutuality of contracts.84 (Emphases supplied)
To repeat what has been said in the above-cited cases, any modification in the contract, such as the interest rates,
must be made with the consent of the contracting parties. The minds of all the parties must meet as to the
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proposed modification, especially when it affects an important aspect of the agreement. In the case of loan
agreements, the rate of interest is a principal condition, if not the most important component. Thus, any modification
thereof must be mutually agreed upon; otherwise, it has no binding effect.
What is even more glaring in the present case is that, the stipulations in question no longer provide that the parties
shall agree upon the interest rate to be fixed; -instead, they are worded in such a way that the borrower shall agree
to whatever interest rate respondent fixes. In credit agreements covered by the above-cited cases, it is provided
that:
The Bank reserves the right to increase the interest rate within the limits allowed by law at any time depending on
whatever policy it may adopt in the future: Provided, that, the interest rate on this accommodation shall be
correspondingly decreased in the event that the applicable maximum interest rate is reduced by law or by the
Monetary Board. In either case, the adjustment in the interest rate agreed upon shall take effect on the effectivity
date of the increase or decrease in maximum interest rate.85 (Emphasis supplied)
Whereas, in the present credit agreements under scrutiny, it is stated that:
IN THE JULY 1989 CREDIT AGREEMENT
(b) The Borrower agrees that the Bank may modify the interest rate on the Loan depending on whatever policy the
fixed interest rate system, or vice versa. Where the Bank has imposed on the Loan interest at a rate per annum,
IN THE AUGUST 1991 AMENDMENT TO CREDIT AGREEMENT
Bank to be prime rate plus applicable spread in effect as of the date of each Availment.87 (Emphasis supplied)
Plainly, with the present credit agreement, the element of consent or agreement by the borrower is now completely
lacking, which makes respondent’s unlawful act all the more reprehensible.
Accordingly, petitioners are correct in arguing that estoppel should not apply to them, for "[e]stoppel cannot be
predicated on an illegal act. As between the parties to a contract, validity cannot be given to it by estoppel if it is
prohibited by law or is against public policy."88
It appears that by its acts, respondent violated the Truth in Lending Act, or Republic Act No. 3765, which was
enacted "to protect x x x citizens from a lack of awareness of the true cost of credit to the user by using a full
disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national
economy."89 The law "gives a detailed enumeration of the specific information required to be disclosed, among which
are the interest and other charges incident to the extension of credit."90 Section 4 thereof provides that a disclosure
statement must be furnished prior to the consummation of the transaction, thus:
SEC. 4. Any creditor shall furnish to each person to whom credit is extended, prior to the consummation of the
transaction, a clear statement in writing setting forth, to the extent applicable and in accordance with rules and
regulations prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such person in connection with the transaction
but which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed expressed as a simple annual rate on
the outstanding unpaid balance of the obligation.
Under Section 4(6), "finance charge" represents the amount to be paid by the debtor incident to the extension of
credit such as interest or discounts, collection fees, credit investigation fees, attorney’s fees, and other service
charges. The total finance charge represents the difference between (1) the aggregate consideration (down
payment plus installments) on the part of the debtor, and (2) the sum of the cash price and non-finance charges.91
By requiring the petitioners to sign the credit documents and the promissory notes in blank, and then unilaterally
filling them up later on, respondent violated the Truth in Lending Act, and was remiss in its disclosure obligations. In
one case, which the Court finds applicable here, it was held:
UCPB further argues that since the spouses Beluso were duly given copies of the subject promissory notes after
their execution, then they were duly notified of the terms thereof, in substantial compliance with the Truth in Lending
Act.
Once more, we disagree. Section 4 of the Truth in Lending Act clearly provides that the disclosure statement must
be furnished prior to the consummation of the transaction:
SEC. 4. Any creditor shall furnish to each person to whom credit is extended, prior to the consummation of the
transaction, a clear statement in writing setting forth, to the extent applicable and in accordance with rules and
regulations prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such person in connection with the transaction
but which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed expressed as a simple annual rate on
the outstanding unpaid balance of the obligation.
The rationale of this provision is to protect users of credit from a lack of awareness of the true cost thereof,
proceeding from the experience that banks are able to conceal such true cost by hidden charges, uncertainty of
interest rates, deduction of interests from the loaned amount, and the like. The law thereby seeks to protect debtors
by permitting them to fully appreciate the true cost of their loan, to enable them to give full consent to the contract,
and to properly evaluate their options in arriving at business decisions. Upholding UCPB’s claim of substantial
compliance would defeat these purposes of the Truth in Lending Act. The belated discovery of the true cost of credit
will too often not be able to reverse the ill effects of an already consummated business decision.
In addition, the promissory notes, the copies of which were presented to the spouses Beluso after execution, are not
sufficient notification from UCPB. As earlier discussed, the interest rate provision therein does not sufficiently
indicate with particularity the interest rate to be applied to the loan covered by said promissory notes.92 (Emphases
supplied)
However, the one-year period within which an action for violation of the Truth in Lending Act may be filed evidently
prescribed long ago, or sometime in 2001, one year after petitioners received the March 2000 demand letter which
contained the illegal charges.
The fact that petitioners later received several statements of account detailing its outstanding obligations does not
cure respondent’s breach. To repeat, the belated discovery of the true cost of credit does not reverse the ill effects
of an already consummated business decision.93
Neither may the statements be considered proposals sent to secure the petitioners’ conformity; they were sent after
the imposition and application of the interest rate, and not before. And even if it were to be presumed that these are
proposals or offers, there was no acceptance by petitioners. "No one receiving a proposal to modify a loan contract,
especially regarding interest, is obliged to answer the proposal."94
Loan and credit arrangements may be made enticing by, or "sweetened" with, offers of low initial interest rates, but
actually accompanied by provisions written in fine print that allow lenders to later on increase or decrease interest
rates unilaterally, without the consent of the borrower, and depending on complex and subjective factors. Because
they have been lured into these contracts by initially low interest rates, borrowers get caught and stuck in the web of
subsequent steep rates and penalties, surcharges and the like. Being ordinary individuals or entities, they naturally
dread legal complications and cannot afford court litigation; they succumb to whatever charges the lenders impose.
At the very least, borrowers should be charged rightly; but then again this is not possible in a one-sided credit
system where the temptation to abuse is strong and the willingness to rectify is made weak by the eternal desire for
profit.
Given the above supposition, the Court cannot subscribe to respondent’s argument that in every repricing of
petitioners’ loan availment, they are given the right to question the interest rates imposed. The import of
respondent’s line of reasoning cannot be other than that if one out of every hundred borrowers questions
respondent’s practice of unilaterally fixing interest rates, then only the loan arrangement with that lone complaining
borrower will enjoy the benefit of review or re-negotiation; as to the 99 others, the questionable practice will continue
unchecked, and respondent will continue to reap the profits from such unscrupulous practice. The Court can no
more condone a view so perverse. This is exactly what the Court meant in the immediately preceding cited case
when it said that "the belated discovery of the true cost of credit does not reverse the ill effects of an already
consummated business decision;"95 as to the 99 borrowers who did not or could not complain, the illegal act shall
have become a fait accompli– to their detriment, they have already suffered the oppressive rates.
Besides, that petitioners are given the right to question the interest rates imposed is, under the circumstances,
irrelevant; we have a situation where the petitioners do not stand on equal footing with the respondent. It is doubtful
that any borrower who finds himself in petitioners’ position would dare question respondent’s power to arbitrarily
modify interest rates at any time. In the second place, on what basis could any borrower question such power, when
the criteria or standards – which are really one-sided, arbitrary and subjective – for the exercise of such power are
precisely lost on him?
For the same reasons, the Court cannot validly consider that, as stipulated in the 18th up to the 26th promissory
notes, petitioners are granted the option to prepay the loan or credit facility without penalty within 10 calendar days
from the Interest Setting Date if they are not agreeable to the interest rate fixed. It has been shown that the
promissory notes are executed and signed in blank, meaning that by the time petitioners learn of the interest rate,
they are already bound to pay it because they have already pre-signed the note where the rate is subsequently
entered.
Besides, premium may not be placed upon a stipulation in a contract which grants one party the right to choose
whether to continue with or withdraw from the agreement if it discovers that what the other party has been doing all
along is improper or illegal.
Thus said, respondent’s arguments relative to the credit documents – that documentary evidence prevails over
testimonial evidence; that the credit documents are in proper form, presumed regular, and endure, against arbitrary
claims by petitioners, experienced business persons that they are, they signed questionable loan documents whose
provisions for interest rates were left blank, and yet they continued to pay the interests without protest for a number
of years – deserve no consideration.
With regard to interest, the Court finds that since the escalation clause is annulled, the principal amount of the loan
is subject to the original or stipulated rate of interest, and upon maturity, the amount due shall be subject to legal
interest at the rate of 12% per annum. This is the uniform ruling adopted in previous cases, including those cited
here.96 The interests paid by petitioners should be applied first to the payment of the stipulated or legal and unpaid
interest, as the case may be, and later, to the capital or principal.97 Respondent should then refund the excess
amount of interest that it has illegally imposed upon petitioners; "[t]he amount to be refunded refers to that paid by
petitioners when they had no obligation to do so."98 Thus, the parties’ original agreement stipulated the payment of
19.5% interest; however, this rate was intended to apply only to the first promissory note which expired on
November 21, 1989 and was paid by petitioners; it was not intended to apply to the whole duration of the loan.
Subsequent higher interest rates have been declared illegal; but because only the rates are found to be improper,
the obligation to pay interest subsists, the same to be fixed at the legal rate of 12% per annum. However, the 12%
interest shall apply only until June 30, 2013. Starting July1, 2013, the prevailing rate of interest shall be 6% per
annum pursuant to our ruling in Nacar v. Gallery Frames99 and Bangko Sentral ng Pilipinas-Monetary Board Circular
No. 799.
Now to the issue of penalty. PN 9707237 provides that failure to pay it or any installment thereon, when due, shall
constitute default, and a penalty charge of 24% per annum based on the defaulted principal amount shall be
imposed. Petitioners claim that this penalty should be excluded from the foreclosure amount or bid price because
the Real Estate Mortgage and the Supplement thereto did not specifically include it as part of the secured amount.
Respondent justifies its inclusion in the secured amount, saying that the purpose of the penalty or a penal clause is
to ensure the performance of the obligation and substitute for damages and the payment of interest in the event of
non-compliance.100 Respondent adds that the imposition and collection of a penalty is a normal banking practice, and
the standard rate per annum for all commercial banks, at the time, was 24%. Its inclusion as part of the secured
amount in the mortgage agreements is thus valid and necessary.
The Court sustains petitioners’ view that the penalty may not be included as part of the secured amount. Having
found the credit agreements and promissory notes to be tainted, we must accord the same treatment to the
mortgages. After all, "[a] mortgage and a note secured by it are deemed parts of one transaction and are construed
together."101 Being so tainted and having the attributes of a contract of adhesion as the principal credit documents,
we must construe the mortgage contracts strictly, and against the party who drafted it. An examination of the
mortgage agreements reveals that nowhere is it stated that penalties are to be included in the secured amount.
Construing this silence strictly against the respondent, the Court can only conclude that the parties did not intend to
include the penalty allowed under PN 9707237 as part of the secured amount. Given its resources, respondent
could have – if it truly wanted to – conveniently prepared and executed an amended mortgage agreement with the
petitioners, thereby including penalties in the amount to be secured by the encumbered properties. Yet it did not.
With regard to attorney’s fees, it was plain error for the CA to have passed upon the issue since it was not raised by
the petitioners in their appeal; it was the respondent that improperly brought it up in its appellee’s brief, when it
should have interposed an appeal, since the trial court’s Decision on this issue is adverse to it. It is an elementary
principle in the subject of appeals that an appellee who does not himself appeal cannot obtain from the appellate
court any affirmative relief other than those granted in the decision of the court below.
x x x [A]n appellee, who is at the same time not an appellant, may on appeal be permitted to make counter
assignments of error in ordinary actions, when the purpose is merely to defend himself against an appeal in which
errors are alleged to have been committed by the trial court both in the appreciation of facts and in the interpretation
of the law, in order to sustain the judgment in his favor but not when his purpose is to seek modification or reversal
of the judgment, in which case it is necessary for him to have excepted to and appealed from the judgment.102
Since petitioners did not raise the issue of reduction of attorney’s fees, the CA possessed no authority to pass upon
it at the instance of respondent. The ruling of the trial court in this respect should remain undisturbed.
For the fixing of the proper amounts due and owing to the parties – to the respondent as creditor and to the
petitioners who are entitled to a refund as a consequence of overpayment considering that they paid more by way of
interest charges than the 12% per annum103 herein allowed – the case should be remanded to the lower court for
proper accounting and computation, applying the following procedure:
1. The 1st Promissory Note with the 19.5% interest rate is deemed proper and paid;
2. All subsequent promissory notes (from the 2nd to the 26th promissory notes) shall carry an interest rate of only
12% per annum.104 Thus, interest payment made in excess of 12% on the 2nd promissory note shall immediately be
applied to the principal, and the principal shall be accordingly reduced. The reduced principal shall then be
subjected to the 12%105 interest on the 3rd promissory note, and the excess over 12% interest payment on the 3rd
promissory note shall again be applied to the principal, which shall again be reduced accordingly. The reduced
principal shall then be subjected to the 12% interest on the 4th promissory note, and the excess over12% interest
payment on the 4th promissory note shall again be applied to the principal, which shall again be reduced
accordingly. And so on and so forth;
3. After the above procedure is carried out, the trial court shall be able to conclude if petitioners a) still have an
OUTSTANDING BALANCE/OBLIGATION or b) MADE PAYMENTS OVER AND ABOVE THEIR TOTAL
OBLIGATION (principal and interest);
4. Such outstanding balance/obligation, if there be any, shall then be subjected to a 12% per annum interest from
October 28, 1997 until January 14, 1999, which is the date of the auction sale;
5. Such outstanding balance/obligation shall also be charged a 24% per annum penalty from August 14, 1997 until
January 14, 1999. But from this total penalty, the petitioners’ previous payment of penalties in the amount of
₱202,000.00made on January 27, 1998106 shall be DEDUCTED;
6. To this outstanding balance (3.), the interest (4.), penalties (5.), and the final and executory award of 1%
attorney’s fees shall be ADDED;
7. The sum total of the outstanding balance (3.), interest (4.) and 1% attorney’s fees (6.) shall be DEDUCTED from
the bid price of ₱4,324,172.96. The penalties (5.) are not included because they are not included in the secured
amount;
8. The difference in (7.) [₱4,324,172.96 LESS sum total of the outstanding balance (3.), interest (4.), and 1%
attorney’s fees (6.)] shall be DELIVERED TO THE PETITIONERS;
9. Respondent may then proceed to consolidate its title to TCTs T-14250 and T-16208;
10. ON THE OTHER HAND, if after performing the procedure in (2.), it turns out that petitioners made an
OVERPAYMENT, the interest (4.), penalties (5.), and the award of 1% attorney’s fees (6.) shall be DEDUCTED from
the overpayment. There is no outstanding balance/obligation precisely because petitioners have paid beyond the
amount of the principal and interest;
11. If the overpayment exceeds the sum total of the interest (4.), penalties (5.), and award of 1% attorney’s fees (6.),
the excess shall be RETURNED to the petitioners, with legal interest, under the principle of solutio indebiti;107
12. Likewise, if the overpayment exceeds the total amount of interest (4.) and award of 1% attorney’s fees (6.), the
trial court shall INVALIDATE THE EXTRAJUDICIAL FORECLOSURE AND SALE;
13. HOWEVER, if the total amount of interest (4.) and award of 1% attorney’s fees (6.) exceed petitioners’
overpayment, then the excess shall be DEDUCTED from the bid price of ₱4,324,172.96;
14. The difference in (13.) [₱4,324,172.96 LESS sum total of the interest (4.) and 1% attorney’s fees (6.)] shall be
DELIVERED TO THE PETITIONERS;
15. Respondent may then proceed to consolidate its title to TCTs T-14250 and T-16208. The outstanding penalties,
if any, shall be collected by other means.
From the above, it will be seen that if, after proper accounting, it turns out that the petitioners made payments
exceeding what they actually owe by way of principal, interest, and attorney’s fees, then the mortgaged properties
need not answer for any outstanding secured amount, because there is not any; quite the contrary, respondent must
refund the excess to petitioners. In such case, the extrajudicial foreclosure and sale of the properties shall be
1âwphi1
declared null and void for obvious lack of basis, the case being one of solutio indebiti instead. If, on the other hand,
it turns out that petitioners’ overpayments in interests do not exceed their total obligation, then the respondent may
consolidate its ownership over the properties, since the period for redemption has expired. Its only obligation will be
to return the difference between its bid price (₱4,324,172.96) and petitioners’ total obligation outstanding – except
penalties – after applying the latter’s overpayments.
WHEREFORE, premises considered, the Petition is GRANTED. The May 8, 2007 Decision of the Court of Appeals
in CA-G.R. CV No. 79650 is ANNULLED and SET ASIDE. Judgment is hereby rendered as follows:
1. The interest rates imposed and indicated in the 2nd up to the 26th Promissory Notes are DECLARED NULL AND
VOID, and such notes shall instead be subject to interest at the rate of twelve percent (12%) per annum up to June
30, 2013, and starting July 1, 2013, six percent (6%) per annum until full satisfaction;
2. The penalty charge imposed in Promissory Note No. 9707237 shall be EXCLUDED from the amounts secured by
the real estate mortgages;
3. The trial court’s award of one per cent (1%) attorney’s fees is REINSTATED;
4. The case is ordered REMANDED to the Regional Trial Court, Branch 6 of Kalibo, Aklan for the computation of
overpayments made by petitioners spouses Eduardo and Lydia Silos to respondent Philippine National Bank, taking
into consideration the foregoing dispositions, and applying the procedure hereinabove set forth;
5. Thereafter, the trial court is ORDERED to make a determination as to the validity of the extrajudicial foreclosure
and sale, declaring the same null and void in case of overpayment and ordering the release and return of Transfer
Certificates of Title Nos. T-14250 and TCT T-16208 to petitioners, or ordering the delivery to the petitioners of the
difference between the bid price and the total remaining obligation of petitioners, if any;
6. In the meantime, the respondent Philippine National Bank is ENJOINED from consolidating title to Transfer
Certificates of Title Nos. T-14250 and T-16208 until all the steps in the procedure above set forth have been taken
and applied;
7. The reimbursement of the excess in the bid price of ₱377,505.99, which respondent Philippine National Bank is
ordered to reimburse petitioners, should be HELD IN ABEYANCE until the true amount owing to or owed by the
parties as against each other is determined;
8. Considering that this case has been pending for such a long time and that further proceedings, albeit
uncomplicated, are required, the trial court is ORDERED to proceed with dispatch.
SO ORDERED.
SECOND DIVISION
G.R. No.178055 July 2, 2014
AMECOS INNOVATIONS, INC. and ANTONIO F. MATEO, Petitioners,

vs.
ELIZA R. LOPEZ, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are the March 22, 2007 Resolution2 of the Court of Appeals (CA) in
CA-G.R. SP No. 96959 which affirmed the June 30, 2006 Decision3 of the Regional Trial Court (RTC) of Caloocan
City, Branch 121, dismissing the Complaint4 for lack of jurisdiction, and its May 23, 2007 Resolution5 denying
petitioners' Motion for Reconsideration.6
Factual Antecedents
Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly incorporated under Philippine laws engaged in
the business of selling assorted products created by its President and herein co-petitioner, Antonio F. Mateo
(Mateo). On May 30, 2003, Amecos received a Subpoena7 from the Office of the City Prosecutor of Quezon City in
connection with a complaint filed by the Social Security System (SSS) for alleged delinquency in the remittance of
SSS contributions and penalty liabilities in violation of Section 22(a) and 22(d) in relation to Section 28(e) of the SSS
law, as amended.
By way of explanation, Amecos attributed its failure to remit the SSS contributions to herein respondent Eliza R.
Lopez (respondent). Amecos claimed that it hired respondent on January 15, 2001 as Marketing Assistant to
promote its products; that upon hiring, respondent refused to provide Amecos with her SSS Number and to be
deducted her contributions; that on the basis of the foregoing, Amecos no longer enrolled respondent with the SSS
and did not deduct her corresponding contributions up to the time of her termination in February 2002.
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to Withdraw
Complaint8which was approved by the Office of the City Prosecutor.9
Thereafter, petitioners sent a demand letter10 to respondent for ₱27,791.65 representing her share in the SSS
contributions and expenses for processing, but to no avail. Thus, petitioners filed the instant Complaint for sum of
money and damages against respondent docketed as Civil Case No. 04-27802 and raffled to Branch 51 of the
Metropolitan Trial Court (MeTC) of Caloocan City. Petitioners claimed that because of respondent’s
misrepresentation, they suffered actual damages in the amount of ₱27,791.65 allegedly incurred by Amecos by way
of settlement and payment of its obligations with the SSS.11 Mateo also allegedly suffered extreme embarrassment
and besmirched reputation as a result of the filing of the complaint by the SSS. Hence they prayed for ₱50,000.00
as moral damages, ₱50,000.00 as exemplary damages, ₱50,000.00 as attorney’s fees, and costs of the suit.
Respondent filed her Answer with Motion to Dismiss12 claiming that she was formerly an employee of Amecos until
her illegal dismissal in February 2002; that Amecos deliberately failed to deduct and remit her SSS contributions;
and that petitioners filed the instant Complaint in retaliation to her filing of an illegal dismissal case. Respondent also
averred that the regular courts do not have jurisdiction over the instant case as it arose out of their employer-
employee relationship.
The parties then submitted their respective Position Papers.13
On March 24, 2006, the MeTC issued its Decision,14 which decreed as follows:
All viewed from the foregoing, the court hereby dismisses the complaint for lack of jurisdiction.
SO ORDERED.15
Petitioners appealed to the RTC. On June 30, 2006, the RTC rendered its Decision16 disposing as follows:
WHEREFORE, premises considered, the instant appeal is accordingly DISMISSED for lack of merit.
SO ORDERED.17
The RTC affirmed the view taken by the MeTC that under Article 217(a)(4) of the Labor Code,18 claims for actual,
moral, exemplary and other forms of damages arising from employer-employee relationship are under the
jurisdiction of the Labor Arbiters or the National Labor Relations Commission (NLRC); that since petitioners and
respondent were in an employer-employee relationship at the time, the matter of SSS contributions was thus an
integral part of that relationship; and as a result, petitioners’ cause of action for recovery of damages from
respondent falls under the jurisdiction of the Labor Arbiters, pursuant to Article 217(a)(4) of the Labor Code.
Petitioners filed a Motion for Reconsideration19 which the RTC denied.20
Petitioners thus instituted a Petition for Review21 with the CA claiming that the RTC seriously erred in sustaining the
dismissal of the Complaint by the MeTC on the ground of lack of jurisdiction. On March 22, 2007, the CA rendered
the assailed Resolution, viz:
ACCORDINGLY, the petition for review is DENIED DUE COURSE and this case is DISMISSED.
SO ORDERED.22
Finding no error in the Decision of the RTC, the CA held that:
x x x The matter of whether the SSS employer’s contributive shares required of the petitioners to be paid due to the
complaint of the respondent necessarily flowed from the employer-employee relationship between the parties. As
such, the lower courts were correct in ruling that jurisdiction over the claim pertained to the Labor Arbiter and the
National Labor Relations Commission, not to the regular courts, even if the claim was initiated by the employer
against the employee.23
Petitioners moved to reconsider, but in the second assailed Resolution24 dated May 23, 2007, the CA denied
petitioners’ Motion for Reconsideration.25 Hence, the instant Petition.
Issues
The issues raised in this Petition are:
WHETHER THE REGULAR CIVIL COURT AND NOT THE LABOR ARBITER OR X X X THE NATIONAL LABOR
RELATIONS COMMISSION HAS JURISDICTION OVER CLAIM[S] FOR REIMBURSEMENT ARISING FROM
EMPLOYER-EMPLOYEE RELATIONS.
WHETHER THE REGULAR CIVIL COURT AND NOT THE LABOR ARBITER OR X X X THE NATIONAL LABOR
RELATIONS COMMISSION HAS JURISDICTION OVER CLAIM[S] FOR DAMAGES FOR MISREPRESENTATION
ARISING FROM EMPLOYER-EMPLOYEE RELATIONS.26
In praying that the assailed CA Resolutions be set aside, petitioners argue that their Complaint is one for recovery of
a sum of money and damages based on Articles 19,27 22,28 and 215429 of the Civil Code; that their cause of action is
based on solutio indebitior unjust enrichment, which arose from respondent’s misrepresentation that there was no
need to enroll her with the SSS as she was concurrently employed by another outfit, Triple A Glass and Aluminum
Company, and that she was self-employed as well. They argue that the employer-employee relationship between
Amecos and respondent is merely incidental, and does not necessarily place their dispute within the exclusive
jurisdiction of the labor tribunals; the true source of respondent’s obligation is derived from Articles 19, 22, and 2154
of the Civil Code. They add that by reason of their payment of respondent’s counterpart or share in the SSS
premiums even as it was not their legal obligation to do so, respondent was unjustly enriched, for which reason she
must return what petitioners paid to the SSS.
Petitioners cite the pronouncements of the Court to the effect that where the employer-employee relationship is
merely incidental and the cause of action proceeds from a different source of obligation, such as tort, malicious
prosecution or breach of contract, the regular courts have jurisdiction;30 that when the cause of action is based on
Articles 19 and 21 of the Civil Code, the case is not cognizable by the labor tribunals;31 that money claims of workers
which fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some
reasonable causal connection with the employer-employee relationship;32 and that when a person unjustly retains a
benefit to the loss of another, or when a person retains money or property of another against the fundamental
principles of justice, equity and good conscience, a case of solutio indebiti arises.33
Respondent, on the other hand, maintains that jurisdiction over petitioners’ case lies with the Labor Arbiter, as their
cause of action remains necessarily connected to and arose from their employer-employee relationship. At any rate,
respondent insists that petitioners, as employers, have the legal duty to enroll her with the SSS as their employee
and to pay or remit the necessary contributions.
Our Ruling
This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said provision
bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-
employee relations. The observation that the matter of SSS contributions necessarily flowed from the employer-
employee relationship between the parties – shared by the lower courts and the CA – is correct; thus, petitioners’
claims should have been referred to the labor tribunals. In this connection, it is noteworthy to state that "the Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil
Code."34
At the same time, it cannot be assumed that since the dispute concerns the payment of SSS premiums, petitioners’
claim should be referred to the Social Security Commission (SSC) pursuant to Republic Act No. 1161, as amended
by Republic Act No. 8282.35 As far as SSS is concerned, there is no longer a dispute with respect to petitioners’
accountability to the System; petitioners already settled their pecuniary obligations to it. Since there is no longer any
dispute regarding coverage, benefits, contributions and penalties to speak of, the SSC need not be unnecessarily
dragged into the picture.36 Besides, it cannot be made to act as a collecting agency for petitioners’ claims against the
respondent; the Social Security Law should not be so interpreted, lest the SSC be swamped with cases of this sort.
At any rate, it appears that petitioners do not have a cause of action against respondent. The Complaint in Civil
Case No. 04-27802 reads in part:
STATEMENT OF FACTS AND CAUSES OF ACTION
4. On or about 15 January 2001, [petitioners] hired [respondent] as a Marketing Assistant to promote the products of
[petitioners].
5. Immediately, [respondent] represented that she had other gainful work and that she was also self-employed for
which reason, she refused to divulge her [SSS] Number and refused to be deducted her share in the [SSS]
contributions. In her bio-data submitted to [petitioners], she did not even indicate her SSS [N]umber. x x x [These]
representations were later found out to be untrue and [respondent]knew that.
6. Misled by such misrepresentation, [petitioners’] employees no longer deducted her corresponding SSS
contributions up to the time of her termination from employment on or about 18 February 2002.
7. On or about 30 May 2003, to the unpleasant surprise and consternation of [petitioner] Mateo, he received a
Subpoena x x x pursuant to a criminal complaint against [petitioner] Dr. Antonio Mateo for alleged un-remitted SSS
Contributions including that corresponding to the [respondent]. Upon subsequent clarification with the Social
Security System, only that portion corresponding to the [respondent’s] supposed unremitted contribution remained
as the demandable amount. The total amount demanded was ₱18,149.95. x x x
8. On or about 24 July 2003, [petitioner] Mateo had to explain to the Social Security System the circumstances as to
why no contributions reflected for [respondent]. x x x
9. On or about 31 July 2003, [petitioners] had to pay the Social Security System the amount of ₱18,149.95 including
the share which should have been deducted from [respondent] in the amount of ₱12,291.62. x x x
10. With this development, some of [petitioners’] employees felt troubled and started to doubt x x x whether or not
their SSS contributions were being remitted or paid by the [petitioners]. [Petitioner] Mateo had to explain to them
why there was an alleged deficiency in SSS contributions and had to assure them that their contributions were
properly remitted.
11. As a result of these events, [petitioner] Mateo, for days, felt deep worry and fear leading to sleepless nights that
the Social Security System might prosecute him for a possible criminal offense.
12. [Petitioner] Mateo also felt extreme embarrassment and besmirched reputation as he, being a recognized
inventor, a dean of a reputable university and a dedicated teacher, was made the butt of ridicule and viewed as a
shrewd businessman capitalizing on even the SSS contributions of his employees. x x x
13. On or about 15 January 2004, in order to [recover] what is due [petitioners], they sent a demand letter to
[respondent] for her to pay the amount of ₱27,791.65 as her share in the SSS contributions and other expenses for
processing. x x x
14. This demand, however, fell on deaf ears as [respondent] did not pay and has not paid to date the amount of her
share in the SSS contributions and other amounts demanded.
15. For such malicious acts and the suffering befalling [petitioner] Mateo, [respondent] is liable for moral damages in
the amount of FIFTY THOUSAND PESOS (₱50,000.00).
16. For having made gross misrepresentation, she is liable for exemplary damages in the amount of FIFTY
THOUSAND PESOS (₱50,000.00) to serve as a warning for the public not to follow her evil example.
17. As [petitioners] were compelled to file the instant suit to protect and vindicate [their] right and reputation,
[respondent] should also be held liable for attorney’s fees in the amount of FIFTY THOUSAND PESOS
(₱50,000.00) in addition to the costs of this suit.
PRAYER
[Petitioners] respectfully [pray] that a judgment, in [their] favor and against [respondent], be rendered by this
Honorable Court, ordering [respondent]:
1. To pay the amount due of TWENTY SEVEN THOUSAND SEVEN HUNDRED NINETY ONE AND 65/100
(₱27,791.65) representing her share in the SSS contributions and processing costs, with interest, at legal rate, from
the time of the filing of this Complaint;
2. To pay FIFTY THOUSAND PESOS (₱50,000.00) for moral damages;
3. To pay FIFTY THOUSAND PESOS (₱50,000.00) for exemplary damages;
4. To pay FIFTY THOUSAND PESOS (₱50,000.00) as attorney’s fees;
5. To pay the costs of this suit.
[Petitioners] further [pray] for such other relief as are just and equitable under the circumstances.37
In fine, petitioners alleged that respondent misrepresented that she was simultaneously employed by another
company; consequently, they did not enroll her with the SSS or pay her SSS contributions. Likewise, when
petitioners eventually paid respondent’s SSS contributions as a result of the filing of a complaint by the SSS,
respondent was unjustly enriched because the amount was not deducted from her wages in Amecos.
The evidence, however, indicates that while respondent was employed, Amecos did not remit premium contributions
– both employer and employees’ shares – to the SSS; the SSS demand letter38 sent to it covers non-payment of
SSS premium contributions from January 2001 up to April 2002, amounting to ₱85,687.84.39 The Amecos
payroll40covering the period from January 30 to November 29, 2001 likewise shows that no deductions for SSS
contributions were being made from respondent’s salaries. This can only mean that during the period, Amecos was
not remitting SSS contributions – whether the employer or employees’ shares – pertaining to respondent. As such,
during her employment with Amecos, respondent was never covered under the System as SSS did not know in the
first instance that petitioners employed her, since the petitioners were not remitting her contributions. Petitioners
were forced to remit monthly SSS contributions only when SSS filed I.S. No. 03-6068 with the Quezon City
Prosecutor’s Office. By that time, however, respondent was no longer with Amecos, as her employment was
terminated sometime in mid-February of 2002.
Given the above facts, it is thus clear that petitioners have no cause of action against the respondent in Civil Case
No. 04-27802. Since Amecos did not remit respondent’s full SSS contributions, the latter was never covered by and
1âw phi 1
protected under the System. If she was never covered by the System, certainly there is no sense in making her
answerable for the required contributions during the period of her employment. And it follows as a matter of
consequence that claims for other damages founded on the foregoing non-existent cause of action should likewise
fail.
WHEREFORE, premises considered, the Petition is DENIED. The assailed March 22, 2007 and the May 23, 2007
Resolutions of the Court of Appeals in CA-G.R. SP No. 96959 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No.177374 July 2, 2014
MARIANO JOSE, FELICISIMO JOSE, deceased, substituted by his children MARIANO JOSE, CAMILO JOSE,
TIBURCIA JOSE, FERMINA JOSE, and VICTORIA JOSE, Petitioners,
vs.
ERNESTO M. NOVIDA, RODOLFO PALA YLA Y, JR., ALEX M. BELARMINO, RODRIGO LIBED, LEONARDO L.
LIBED, BERNARDO B. BELARMINO, BENJAMIN G. ACOSTA, MODESTO A. ORLANDA, W ARLITO B. MEJIA,
MAMERTO B. BELARMINO, MARCELO 0. DELFIN and HEIRS OF LUCINO A. ESTEBAN, represented by
CRESENCIA M. VDA. DE ESTEBAN, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the September 25, 2006 Decision2 and March 16, 2007 Resolution3 of
the Court of Appeals (CA) in CAG.R. SP No. 48681, which affirmed the June 20, 1997 Decision4 and June 24, 1998
Resolution5 of the Department of Agrarian Reform Adjudication Board (DARAB), Quezon City in DARAB Case No.
1429.
Factual Antecedents
In 1990, herein respondents Ernesto M. Novida, Rodolfo Palaylay, Jr., Alex M. Belarmino, Rodrigo Libed, Leonardo
L. Libed, Bernardo B. Belarmino, Benjamin G. Acosta, Modesto A. Orlanda, Warlito B. Mejia, Mamerto B. Belarmino
and Marcelo O. Delfin, together with Cristina M. Esteban, were each granted – as farmer-beneficiaries –
Emancipation Patents (EPs) and Certificates of Title6 (covering one hectare each) over a parcel of land which
formed part of a 16.4142-hectare agricultural land (subject property) in San Vicente, Alcala, Pangasinan which was
placed within the coverage of Operation Land Transfer.7
On January 4, 1991, petitioners Mariano, Camilo, Victoria, Tiburcia and Fermina, as well as Josefina and Anecita –
all surnamed Jose – filed with the Region I Office of the Department of Agrarian Reform (DAR) at San Fernando, La
Union (DAR Region I) a Petition for Reinvestigation and Cancellation of Anomalously Prepared and Generated
Emancipation Patents8 against the respondents, claiming that they are the bona fide and actual tenant-tillers of the
subject property; that they were issued Certificates of Land Transfer (CLTs) to the same; that they are actually in
possession of the same; and that the EPs issued to respondents were anomalous. They prayed that the
respondents’ EPs be cancelled; that new EPs be issued to them; and that an investigation be conducted on the
circumstances surrounding the issuance of respondents’ EPs, and the guilty parties prosecuted.
On January 30, 1991, the DAR Region I Director issued an Order9 relative to the petitioners’ petition for
reinvestigation and cancellation of EPs – which was not docketed or assigned a case number – which held thus:
WHEREFORE, premises considered and by virtue of the powers vested in me under DAR Memorandum Circular 5-
87 ORDER is hereby rendered as follows:
1. That herein petitioners have better right as beneficiaries of the 16 hectares in question to the exclusion of the
respondents due to the defective installation as beneficiaries;
2. That Emancipation Patents be generated in favor of the herein petitioners;

3. That [inasmuch] as payments on the land in question were already made by the respondents who are not
qualified to become beneficiaries of the estate, the complainants are hereby ordered to pay the said amount to the
Administrator who shall likewise reimburse the same to the respondents, as suggested by MARO Constancio
Castillo to settle the problem at bar; and
4. That the PARO of Pangasinan or his duly authorized representative is directed to implement this ORDER and if
necessary with the help of the PNP of the Municipality of Alcala, Pangasinan.
SO ORDERED.10
On December 17, 1991, respondents filed a Complaint11 for recovery of possession, accounting, liquidation and
damages with injunctive relief against petitioners Mariano and Felicisimo Jose (Felicisimo), and Virgilio Jose
(Virgilio). The case was docketed in the Region I Office of the DARAB in Urdaneta, Pangasinan (DARAB Urdaneta)
as Case No. 01-465-EP’91.12 Respondents alleged that Felicisimo was the original tenant of the subject property;
that Felicisimo obtained loans from one Benigno Siobal (Siobal) and one Rogelio Cerezo (Cerezo), which were
secured by a mortgage over the subject property; that Felicisimo did not redeem the subject property from Siobal
and Cerezo, but instead abandoned the same when he migrated to the United States of America (U.S.A.) and
became a naturalized citizen thereof; that with the sanction of the DAR, the owners of the subject property
subdivided the land and sold portions thereof to respondents; and that on or about May 10, 1990, after Felicisimo
returned from the U.S.A., he and the other petitioners ousted respondents from the subject property, using force,
stealth, threats and intimidation. Respondents prayed that they be placed in peaceful possession, cultivation and
enjoyment of the land; that petitioners be declared as usurpers and without right to the land; that an accounting be
made of all lost harvests; that injunctive relief be granted in order that petitioners shall desist from further disturbing
respondents’ peaceful possession, cultivation and enjoyment of the land; that petitioners be made to pay actual,
moral and exemplary damages in the amount of at least ₱180,000.00, ₱25,000.00 litigation expenses, ₱50,000.00
attorney’s fees, and costs of suit.
In their Answer with Counterclaim,13 petitioners alleged that in addition to Felicisimo, Mariano, and Virgilio, the
subject property was being cultivated by their siblings Tiburcia, Fermina, Victoria, and Josefina, and their mother
Aniceta Jose; that Felicisimo indeed mortgaged the subject property in 1981 to secure a loan of ₱10,000.00, which
was settled by letting the lender Siobal take exclusive possession of the land, cultivating the same and keeping the
harvests; that Siobal cultivated the subject property up to 1987, after which petitioners Camilo, Virgilio, Mariano, and
the other siblings took over; that when Felicisimo returned from the U.S.A. in 1990, Siobal attempted to negotiate
another agreement with him, but this time he refused; that petitioners – and not the respondents – are the owner
beneficiaries of the subject property; that respondents have never been in possession of the land; and that the case
should be dismissed. By way of counterclaim, petitioners sought to be awarded ₱100,000.00 actual damages,
₱20,000.00 exemplary damages, ₱15,000.00 attorney’s fees, and ₱20,000.00 litigation expenses.
On July 13, 1992, the DARAB Urdaneta issued a Decision14 in Case No. 01-465-EP’91, which held thus:
The evidence on record revealed that respondent Felicisimo E. Jose was the former tenant-lessee of the 16.4142
hectares in question; that on August 13, 1981, respondent Felicisimo E. Jose and his wife Anecita Bautista
mortgaged to Benigno Siobal x x x one-half (1/2) of their real estate with an area of 82,579 square meters in the
amount of Ten Thousand (₱10,000.00) Pesos; that immediately after the execution of the mortgage contract,
respondent Felicisimo Jose, who was then the tenant over the same parcel of land of approximately eight (8)
hectares more or less delivered actual physical possession to Benigno Siobal and the other half portion or eight (8)
hectares plus to one Rogelio Cerezo; that the landholding in question was formerly owned by the Galvan-Cabrera
Estate which was covered by Operation Land Transfer (OLT) pursuant to the provisions of P.D. No. 27; that
Emancipation Patents were already issued to the complainants.
The evidence on record clearly disclosed that the former tenant-lessee, the respondent Felicisimo Jose delivered
actual physical possession of the landholding in question on August 13, 1981. From that date he lost his security of
tenure as tenant and that his tenancy relationship was terminated.
The act of Felicisimo E. Jose in giving up his possession and cultivation of the landholding in question and his going
abroad in 1981 is a clear case of abandonment, as enunciated in the case of "Mateo Balanay, et al., vs. Sergio
Rafael, CA G.R. No. SP-01746 CAR, August 2, 1976". Acceptance of new employment is an abandonment, how
much more [in] this instant case when the tenant-lessee went abroad.
WHEREFORE, premises considered, judgment is hereby rendered as follows to wit:
1. DECLARING the complainants the tenant-beneficiaries of the land in question;
2. DECLARING the respondents [to have] no right whatsoever [to] the landholding in question;
3. ORDERING the respondents to desist from disturbing the possession and cultivation of the complainants.
4. All other claims of the parties are hereby denied for lack of evidence.
SO ORDERED.15
Meanwhile, on August 22,1995, the DAR Secretary issued an Order16 affirming the January 30, 1991 Order of the
DAR Region I Director in the petition for reinvestigation and cancellation of EPs filed by petitioners against the
respondents. The Order reads in part:
The issue to be resolved is who are the qualified beneficiaries over the subject landholdings.
Mariano Jose, et al. (petitioners) are the qualified beneficiaries of the subject landholdings considering that CLT’s
were already issued to them which is a recognition to the grantees as the [parties] qualified to avail of the statutory
mechanism for the acquisition of ownership of the land tilled by them as provided under Presidential Decree No. 27.
Moreover, the Agreement entered into by Felicisimo Jose and Benigno Siobal wherein the subject landholdings
were used to answer the amount loaned by their father is considered as illegal transaction therefore null and void
(Memo Circular No. 7, Series of 1979).
As to the allegation of denial of due process, we find the same unmeritorious. Respondents’ subsequent Motion for
Reconsideration has the effect of curing whatever irregularity might have been committed in the proceeding below x
x x.
WHEREFORE, premises considered, this Order is hereby issued denying the instant appeal for lack of merit and the
Order issued by the Regional Director is hereby affirmed.
SO ORDERED.17
However, on respondents’ motion for reconsideration, the DAR Secretary issued another Order18 on June 5, 1996
which declared thus:
It appears that DARAB Case No. 01-465-EP’92 entitled Ernesto M. Novida, et al., vs. Mariano Jose, et al., for
Peaceful Possession and Damages involving the same parties and same cause of action as in the case herein is
pending appeal before the DARAB Central Office.
Likewise, records show that Emancipation Patents Nos. 550853, 550854, 550855, 550849, 550851, 550848,
550852 and 550856 were already awarded to Respondents herein. The jurisdiction to cancel the same is not with
this Office but with the DARAB x x x.
WHEREFORE, premises considered, Order is hereby issued remanding the case to the DAR Adjudication Board for
its proper disposition in the light of DARAB Case No. 01-465-EP’92 pending before it.
SO ORDERED.19
The DARAB Quezon City Decision
Meanwhile, failing to obtain a reconsideration of the DARAB Urdaneta’s July 13, 1992 decision in Case No. 01-465-
EP’91, petitioners interposed an appeal with the DARAB Quezon City. Docketed as DARAB Case No. 1429, the
appeal was premised on the arguments that the DARAB Urdaneta erred in taking cognizance of the case, which is
under the exclusive jurisdiction of the Secretary of Agrarian Reform as the subject property was covered by the
Comprehensive Agrarian Reform Program (CARP); and that there is another case between the parties – for
cancellation of anomalously prepared/generated Emancipation Patents – pending in the Office of the DAR
Secretary.
On June 20, 1997, the DARAB Quezon City issued its Decision affirming in toto the July 13, 1992 decision of the
DARAB Urdaneta. It held –
Based on the facts of the case and evidences adduced, Felicisimo Jose was the former legitimate agricultural
lessee of the Galvan-Cabrera estate. However, on August 13, 1981, he and his spouse mortgaged one-half of the
said property with an area of 82,579 square metersto secure a loan of ₱10,000 from a certain Benigno Siobal and
Rogelio Orezo20 by delivering the physical possession thereof to the mortgagees. Subsequently, respondent-
appellant (Felicisimo Jose) left for abroad to acquire his citizenship by naturalization in the United States of America.
Sometime in 1985, the subject landholding was subdivided into sixteen (16) farm lots and the complainants-
appellees21 were installed by the mortgagee Benigno Siobal. Their possession and cultivation were duly sanctioned
by the landowner and DAR Team Leader of Alcala, Pangasinan. They paid the rentals and later on the amortization
payments to the subject landholding.
On January 6, 1991, their peaceful enjoyment and cultivation of their respective landholdings was interrupted upon
the unlawful dispossession, through force and intimidation by the defendants-appellants,22 who forcibly took over by
destroying the corn plants by hiring two (2) tractor operators despite the issuance of the tenant-farmers’
Emancipation Patents. Complainants-appellees were compelled to file a criminal case of malicious mischief x x x in
addition to this instant agrarian case.
xxxx
We are not convinced by the arguments of the respondents-appellants.
There is an overwhelming evidence indicating that Felicisimo Jose caused the execution of a Deed of Mortgage, for
and in consideration of Ten Thousand (₱10,000) Pesos, using the subject landholding as security to the loan and
transferring the physical possession thereof to the mortgagees as per Document No. 254, Page 52, Book No. XVII
series of 1981 as duly notarized by Porferio A. Tadeo x x x. In the interim, Felicisimo Jose left for the United States
of America. Sometime in 1985, the mortgagees, as legal possessors, allowed the installation of the complainants-
appellees with the consent of the Administrator of the Galvan-Cabrera estate to be tenant-tillers who peacefully,
openly and continuously occupied and cultivated the land as lessees to their respective landholdings. Finally, on
December 7, 1990, all the sixteen (16) complainants appellees received their Emancipation Patents thru Secretary
Benjamin C. Leong, Department of Agrarian Reform x x x.
When Felicisimo Jose left to pursue his desire to acquire his naturalization of citizenship in the United States which
amounted to a circumstance advantageous to him and his family, in effect, there was literally an implied
extinguishment and/or voluntary termination of the agricultural tenancy relation on the part of the respondent-
appellant as contemplated in Section 8 (2) in relation to Section 28 (5) of RA 3844.23 Both the elements of physical
relinquishment of possession and intention to vacate were consummated and remained undisputed findings of facts
of the case.
If ever DAR Regional Director, Region I issued an Order dated January 30, 1991, to the effect that the respondents-
appellants have a better right as beneficiaries over the subject landholding, this said official issuance of a lesser
officer in the bureaucratic totempole could not overrule nor nullify the acts performed earlier by the head of agency
or the Secretary of the Department of Agrarian Reform unless the cancellation/revocation is initiated by the
Secretary himself. For the Emancipation Patents dated December 7, 1990 were issued earlier to the farmer-
beneficiaries. And with the same token, that the enactment of our agrarian reform laws is principally intended to
make the small farmers more independent, self-reliant and responsible citizens and a source of a genuine strength
in our democratic society x x x. Clearly, those who renounce their citizenship should yield to those rights and
privileges intended for those with undivided loyalty and unquestioned nationalism to the Filipino nation.
WHEREFORE, premises considered, the challenged decision is hereby AFFIRMED in toto.

Let the entire records of this case be remanded to the Adjudicator a quo for the issuance of a Writ of Execution
immediately.
SO ORDERED.24
Petitioners filed a Motion for Reconsideration,25 but the DARAB Quezon City denied the same via its June 24, 1998
Resolution.
The Assailed Court of Appeals Decision
Petitioners went up to the CA via Petition for Review26 insisting that the DAR Secretary has exclusive jurisdiction
over the case, pursuant to the Revised (1989) DARAB Rules of Procedure which state that matters involving the
administrative implementation of the CARP and other agrarian laws and regulations shall be the exclusive
prerogative of and cognizable by the DAR
Secretary;27 that in the January 30, 1991 Order of the DAR Region I Director which was affirmed via the DAR
Secretary’s August 22, 1995 Order, they were declared to have better rights as beneficiaries and that respondents’
EPs should be cancelled; and that respondents previously instituted two cases with the DARAB Urdaneta – one of
them docketed as Case No. 01-318-EP’90 – which were dismissed.
On September 25, 2006, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the challenged DARAB decision and resolution dated June 20, 1997 and June 24, 1998
respectively, in DARAB CASE NO. 1429 are hereby AFFIRMED.
SO ORDERED.28
The CA held that under Section 1,Rule II of the 1994 DARAB Rules of Procedure,29 the DARAB has primary and
exclusive original jurisdiction over cases involving the issuance and cancellation of EPs;30 the DAR Secretary had no
power to cancel EPs, and petitioners’ argument that such power is part of his administrative functions is misplaced.
It noted further that the DAR Secretary himself recognized the DARAB’s jurisdiction over cases involving the
cancellation of EPs when he issued his June 5, 1996 Order in the undocketed case for reinvestigation and
cancellation of EPs filed by petitioners against the respondents.31
The CA further upheld the DARAB’s conclusion that petitioners in effect abandoned their rights as beneficiaries, and
that respondents’ installation as beneficiaries by the mortgagees (Siobal and Cerezo) was regular and in
accordance with law, and they paid the required amortizations as well. It held that as landless farmers, respondents
deserved the land more than petitioners, noting that one of them was a naturalized American citizen; it would thus
go against the rationale of the agrarian laws to award land to such an individual.
Petitioners filed a Motion for Reconsideration,32 but in its assailed March 16, 2007 Resolution, the CA stood its
ground. Thus, the instant Petition.
Meanwhile, a substitution of parties was accordingly made in view of the death of some of the parties.33
Issues
Petitioners submit the following assignment of errors:
I.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN NOT SUSTAINING THE ORDER DATED
JANUARY 30, 1991 ISSUED BY THE REGIONAL DIRECTOR, REGION I, BUREAU OF AGRARIAN LEGAL
ASSISTANCE (BALA), DEPARTMENTOF AGRARIAN REFORM (DAR), SAN FERNANDO, LA UNION X X
X,ORDER DATED 22 AUGUST 1995, ISSUED BY DAR SECRETARY, AFFIRMING SAID ORDER DATED
JANUARY 30, 1991 X X X AND IN NOT REVERSING AND SETTING ASIDE THE ORDER DATED 05 JUNE 1996
X X X ISSUED BY THE DAR SECRETARY IN THE SAME CASE THERE BEING NO PENDING CASE INVOLVING
THE SAME ISSUES WITH THE X X X (DARAB) AND HENCE THE DAR SECRETARY HAS JURISDICTION OVER
THE LAND IN QUESTION TO THE EXCLUSION OF THE DARAB, QUEZON CITY.
II.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN NOT REVERSING AND SETTING ASIDE THE
DARAB DECISION DATED 20 JUNE 1997 X X X AND DARAB UNDATED RESOLUTION, DENYING
PETITIONERS’ MOTION FOR RECONSIDERATION OF THE CA DECISION X X X, ONTHE GROUNDS THAT
THE INSTANT CASE WAS BARRED BY PRIOR JUDGMENT AND THAT THE RESPONDENTS FAILED TO
PROVE THAT THEYARE AGRICULTURAL TENANTS OVER THE LAND IN QUESTION.
III.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN ITS RESOLUTION DATEDSEPTEMBER 5, 2005,
EXPUNGING THE MEMORANDUM FOR PETITIONERS DATED17 APRIL 2001 FILED VIA REGISTERED MAIL
ON 18 APRIL 2001 FOR LATE FILING.34
In their Petition and Reply,35 petitioners reiterate the January 30, 1991 Order of the DAR Region I Director which the
DAR Secretary affirmed through his August 22, 1995 Order, particularly citing the pronouncement in said Orders
that they are the actual tillers of the subject property, and not respondents. They add that respondents failed to
prove in Case No. 01-465-EP’91 that they are tenants of the land; that respondents have never cultivated the
subject property, and have never been in possession of the same; that respondents are mere landgrabbers; that
Felicisimo has settled his financial obligations to Siobal; that respondents’ EPs have been cancelled by the DAR
Region I Director and the DAR Secretary; and that it was erroneous and unjust for the CA to have expunged their
Memorandum.
Petitioners essentially prayfor the reversal of the assailed dispositions, as well as the reinstatement of both the
January 30, 1991 Order of the DAR Region I Director and the August 22,1995 Order of the DAR Secretary in their
petition for reinvestigation and cancellation of EPs filed with the DAR Region I.Finally, petitioners pray that the DAR
Region I Director and the DAR Secretary be ordered to issue EPs in their favor.
In their Comment,36 respondents point out that a review under Rule 45 of the 1997 Rules of Civil Procedure is
discretionary and will be granted only when there are special and important reasons therefor; that such special and
important circumstances that should warrant review do not obtain in petitioners’ case; that the CA is correct in
stating that the DARAB has primary and exclusive jurisdiction over cases involving the issuance and cancellation of
EPs; and finally, that based on the merits and consonant with the substance and intent of the agrarian laws,
respondents – and not petitioners – are entitled to the subject property.
Our Ruling
The Court affirms.
When petitioners filed, on January 4, 1991, their Petition for Reinvestigation and Cancellation of Anomalously
Prepared and Generated Emancipation Patents with the DAR Region I Office at San Fernando, La Union,
certificates of title have been issued to the respondents. Thus, the DARAB – and not the DAR Region I or the DAR
Secretary – had exclusive jurisdiction over the case, pursuant to law and the 1994 DARAB Rules of Procedure.
x x x. The DARAB derives its jurisdiction from RA 6657 or popularly known as the Comprehensive Agrarian Reform
Law (CARL) of 1988.
Section 50 of RA 6657 confers jurisdiction on the DARAB over agrarian reform cases or controversies as follows:
Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the primary jurisdiction to determine
and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of
Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all 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 and the merits of the case. Towards this end, it shall adopt a
uniform rule of procedure to achieve a just, expeditious and inexpensive determination for every action or
proceeding before it.
To implement this particular provision of RA 6657 regarding the adjudication of agrarian reform matters, the DAR
adopted the DARAB New Rules of Procedure, issued on May 30, 1994. Under Section 1, Rule II of the said Rules of
Procedure, the DARAB has exclusive original jurisdiction over the following cases:
(a) The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and
use of all agricultural lands covered by the CARP and other agrarian laws;
(b) The valuation of land, and the preliminary determination and payment of just compensation, fixing and collection
of lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of
the Land Bank of the Philippines (LBP);
xxxx
(f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and
Emancipation Patents (EPs) which are registered with the Land Registration Authority;
(g) Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian
Relations under Section 12 of Presidential Decree No. 946, except subparagraph (Q) thereof and Presidential
Decree No. 815.
xxxx
Matters involving strictly the administrative implementation of Republic Act. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules
shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.
(h) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.
Subparagraph (f) stated above provides that the DARAB has exclusive jurisdiction over cases involving the
issuance, [correction and cancellation of CLOAs and EPs which are] registered with the Land Registration Authority
(the Registry of Deeds).
The grounds for cancellation of registered EPs were summarized by DAR Memorandum Order No. 02, Series of
1994, to wit:
1. Misuse or diversion of financial and support services extended to the ARB; (Section 37 of R.A. No. 6657)
2. Misuse of land; (Section 22 of R.A. No. 6657)
3. Material misrepresentation of the ARB’s basic qualifications as provided under Section 22 of R.A. No. 6657, P.D.
No. 27, and other agrarian laws;
4. Illegal conversion by the ARB; (Cf. Section 73, Paragraph C and E of R.A. No. 6657)
5. Sale, transfer, lease or other forms of conveyance by a beneficiary of the right to use or any other usufructuary
right over the land acquired by virtue of being a beneficiary in order to circumvent the provisions of Section 73 of
R.A. No. 6657, P.D. No. 27, and other agrarian laws. However, if the land has been acquired under P.D. No.
27/E.O. No. 228, ownership may be transferred after full payment of amortization by the beneficiary; (Sec. 6 of E.O.
No. 228)
6. Default in the obligation to pay an aggregate of three (3) consecutive amortizations in case of voluntary land
transfer/direct payment scheme, except in cases of fortuitous events and force majeure;
7. Failure of the ARBs to pay for at least three (3) annual amortizations to the LBP, except in cases of fortuitous
events and force majeure; (Section 26 of RA 6657)
8. Neglect or abandonment of the awarded land continuously for a period of two (2) calendar years as determined
by the Secretary or his authorized representative; (Section 22 of RA 6657)
9. The land is found to be exempt/excluded from P.D. No. 27/E.O. No. 228 or CARP coverage or to be part of the
landowner’s retained area as determined by the Secretary or his authorized representative; and
10. Other grounds that will circumvent laws related to the implementation of agrarian reform.
A study of the above-enumerated grounds for the cancellation of registered EPs shows that it requires the exercise
by the DAR of its quasi-judicial power through its adjudicating arm, DARAB. Thus, rightly so, the DARAB New Rules
of Procedure provide that DARAB has exclusive jurisdiction over cases involving the cancellation of registered EPs.
But what about EPs that are unregistered like the one issued to Angelina Rodriguez?
The answer can be found in Administrative Order No. 06-00, issued on August 30, 2000, which provides for the
Rules of Procedure for Agrarian Law Implementation (ALI) Cases. These rules were issued pursuant to Sections 49
and 50 of RA 6657. In contrast to the DARAB Rules of Procedure which govern the exercise of DAR’s quasi-judicial
function, Administrative Order No. 06-00 govern the administrative function of the DAR.
Under the said Rules of Procedure for Agrarian Law Implementation (ALI) Cases, the Agrarian Reform Secretary
has exclusive jurisdiction over the issuance, recall or cancellation of EPs/CLOAs that are not yet registered with the
Register of Deeds. Thus, Section 2 of the said Rules provides:
SECTION 2. Cases Covered. - These Rules shall govern cases falling within the exclusive jurisdiction of the DAR
Secretary which shall include the following:
(a) Classification and identification of landholdings for coverage under the Comprehensive Agrarian Reform
Program (CARP), including protests or oppositions thereto and petitions for lifting of coverage;
(b) Identification, qualification or disqualification of potential farmer-beneficiaries;
(c) Subdivision surveys of lands under CARP;
(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary Certificates
(CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall or
cancellation of Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs) not yet
registeredwith the Register of Deeds;
(e) Exercise of the right of retention by landowner;
xxxx
(q) Such other matters not mentioned above but strictly involving the administrative implementation of RA 6657 and
other agrarian laws, rules and regulations as determined by the Secretary."
Clearly, the cancellation of EPs that are not yet registered with the Register of Deeds falls within the authority of the
Agrarian Reform Secretary or DAR officials duly designated by him, in the exercise of his/their administrative
functions. x x x
xxxx
Second, even if the Court of Appeals ruling were based on the old DARAB rules (the 1989 DARAB Revised Rules of
Procedure) which provided that the DARAB had primary jurisdiction over "cases involving the issuance of Certificate
of Land Transfer (CLT), Certificate of Land Ownership Award (CLOA) and Emancipation Patent (EP) and the
administrative correction thereof", we do not agree that the cancellation by the DARAB of the subject EPs fell within
the ambit of mere administrative correction. "Administrative correction" refers only to the rectification of wrong or
insufficient information in the patent and not to something as substantial as the actual cancellation thereof. The
meaning of "administrative correction" is provided in DAR Administrative Order No. 02, Series of 1994:
C. The administrative corrections may include non-identification of spouse, corrections of civil status, corrections of
technical descriptions and other matters related to agrarian reform.37
The above pronouncement was reiterated in this ponente’s ruling in Heirs of Lazaro Gallardo v. Soliman:38 "the
DARAB has exclusive jurisdiction over cases involving the cancellation of registered EPs[;] the DAR Secretary, on
the other hand, has exclusive jurisdiction over the issuance, recall or cancellation of [EPs] or Certificates of Land
Ownership Awards that are not yet registered with the Register of Deeds."
Thus, since certificates of title have been issued in the respective names of the respondents as early as in
1990,39the DAR Region I Director had no jurisdiction to cancel their titles; the same is true with respect to the DAR
Secretary. Thus, their respective January 30, 1991 and August 22, 1995 Orders are null and void; consequently,
respondents’ EPs and titles subsist, contrary to petitioners’ claim that they have been cancelled. Void judgments or
orders have no legal and binding effect, force, or efficacy for any purpose; in contemplation of law, they are non-
existent.40
For the above reasons, it necessarily follows that what petitioners pray for in the instant Petition – i.e. the 1)
reinstatement of the January 30, 1991 Order of the DAR Region I Director and the August 22, 1995 Order of the
DAR Secretary – which have been voided herein, and 2) issuance of EPs in their favor – are reliefs that this Court
may not grant.
Next, as correctly pointed out by the respondents, a review of the instant petition under Rule 45 is not a matter of
right but of sound judicial discretion, and will be granted only when there are special and important reasons
therefor.41 Moreover, a petition for review under Rule 45 covers questions of law only.42 "[T]he jurisdiction of the
Supreme Court in cases brought before it from the CA via Rule 45 of the 1997 Rules of Civil Procedure is generally
limited to reviewing errors of law. This Court is not a trier off acts. In the exercise of its power of review, the findings
of fact of the CA are conclusive and binding and consequently, it is not our :function to analyze or weigh evidence all
over again."43
This Court finds that no special and important reasons exist to warrant a thorough review of the assailed CA
Decision. Quite the contrary, the Court is satisfied with and can simply rely on the findings of the DARAB Urdaneta,
1âwphi 1
DARAB Quezon City, and the CA - as well as the very admissions of the petitioners themselves - to the effect that
respondents fulfilled all the requirements under the agrarian laws in order to become entitled to their EPs; that F
elicisimo voluntarily surrendered and abandoned the subject property in favor of his creditors, who took over the
land and tilled the same until 1987; that Felicisimo migrated to the U.S.A. and became a naturalized American
citizen; that in 1991, respondents were illegally dispossessed of their landholdings through force and intimidation by
the petitioners after Felicisimo returned from abroad; and that as between petitioners and respondents, the latter are
legally entitled to the subject property. These identical findings are not only entitled to great respect, but even
finality. For petitioners to question these identical findings is to raise a question of fact.44
It must be said as well that "[ f]actual findings of administrative bodies charged with their specific field of expertise,
are afforded great weight by the courts, and in the absence of substantial showing that such findings were made
from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of stability of the
governmental structure, should not be disturbed. "45
Finally, the Court finds it unnecessary to resolve the other issues raised by the parties, including petitioners' claim
that it was erroneous and unjust for the CA to have expunged their Memorandum.
WHEREFORE, the Petition is DENIED. The September 25, 2006 Decision and March 16, 2007 Resolution of the
SO ORDERED.
SECOND DIVISION
G.R. No. 192011 June 30, 2014
LIBCAP MARKETING CORP., JOHANNA J. CELIZ, and MA. LUCIA G. MONDRAGON, Petitioners,
vs.
LANNY JEAN B. BAQUIAL, Respondent.
DECISION
DEL CASTILLO, J.:
The law and jurisprudence allow the award of nominal damages in favor of an employee in a case where a valid
cause for dismissal exists but the employer fails to observe due process in dismissing the employee. On the other
hand, financial assistance is granted to a dismissed employee as a measure of equity or social justice, and is in the
nature or takes the place of severance compensation.
Assailed in this Petition for Review on Certiorari1 are the April 22, 2009 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 01794, entitled "Libcap Marketing Corporation, and/or Johanna J. Celiz, and Ma. Lucia G. Mondragon,
Petitioners, versus National Labor Relations Commission and Lanny Jean B. Baquial, Respondents," and its March
24, 2010 Resolution3 denying reconsideration thereof
Factual Antecedents
Petitioner Libcap Marketing Corporation (Libcap) is engaged in the freight forwarding business with offices in Iloilo
City. Petitioner Johanna J. Celiz (Celiz) is Libcap’s Human Resources Division Head, and petitioner Ma. Lucia G.
Mondragon is Libcap’s Vice-President for Administration.
Respondent Lanny Jean B. Baquial was employed by Libcap on October 12, 1999 as accounting clerk for Libcap’s
Super Express branch in Cagayan de Oro City. Her functions included depositing Libcap’s daily sales and
collections in Libcap’s bank account with Global Bank (now PSBank). She was paid a monthly salary of
₱4,600.00,and was required to work from 8:00 a.m. to 6:30 p.m. six days each week without additional
compensation and/or overtime pay. From her salary each payday, an amount of ₱200.00 was deducted by way of
cash bond.4
Sometime in March 2003, an audit of Libcap’s Super Express branch in Cagayan de Oro City was conducted, and
the resulting audit report5 showed that respondent made a double reporting of a single deposit made on April
2,2001. In other words, a single April 2, 2001 bank deposit of ₱1,437.00 was used to cover or account for two days’
sales of apparently identical amounts, covering the undeposited collection for March 19, 2001 and current sales for
March 31, 2001.
In a March 28, 2003 letter, Celiz required respondent to explain in writing within 24 hours why the cash sales
of₱1,437.00 each for March 31, 2001 and April 1, 2001 – as reported in the daily collection reports – were covered
by a single April 2, 2001 validated bank deposit slip for only ₱1,437.00.6
In an April 1, 2003 written reply,7 respondent claimed that on April 2, 2001, she deposited with the bank two
separate amounts of ₱1,437.00 each, but that it appears that both separate deposits were covered by a single bank
validation, which defect should not be blamed on her but on the bank.8 Respondent then forwarded to Libcap’s head
office two bank deposit slips to show that she deposited two amounts of ₱1,437.00 each on April 2,2001 with Global
Bank.9
Libcap discovered that only one ₱1,437.00 deposit was made on April 2, 2001. On verification with PS Bank, its
branch head confirmed in an August 7, 2003 letter that only a single deposit of ₱1,437.00 was posted on April 2,
2001, and that there was no misposting or deposits to other accounts of the same amount made on such date.10The
two bank deposit slips forwarded by respondent revealed that only one of them was validated by the bank.11Libcap’s
bank account passbook showed that only one deposit for ₱1,437.00 was made on April 2, 2001.12 Finally, Libcap’s
Global Bank bank statement covering April 1–30, 2001 showed that only one cash deposit of ₱1,437.00 was made
on April 2, 2001.13
Meanwhile, the amount of ₱1,437.00 was deducted from respondent’s salary each payday on a staggered basis –
or on April 30, June 15, and June 30, 2003, respectively.14
On July 26, 2003, respondent received a Notice of Administrative Investigation15 requiring her to attend a July 28,
2003 investigation at Libcap’s Iloilo office. Respondent was unable to attend due to lack of financial resources.16
On July 28, 2003, respondent received a 2nd Notice of Administrative Investigation17 requiring her to attend an
August4, 2003 investigation in Iloilo City. Again, respondent failed to attend.
Respondent was placed on preventive suspension from July 29, 2003 to August 12, 2003.18
Respondent sent petitioners an August 6, 2003 written explanation.19
On August 16, 2003, respondent received a Notice of Termination20 dated August 9, 2003, stating that she was
terminated from employment effective August 12, 2003 for dishonesty, embezzlement, inefficiency, and for
commission of acts inconsistent with Libcap’s work standards.
Respondent filed a labor complaint for illegal dismissal against petitioners, which was docketed in the National
Labor Relations Commission, Regional Arbitration Branch No. X, Cagayan de Oro City as NLRC Case No. RAB-10-
08-00586-2003.
On January 20, 2006, Labor Arbiter Joselito B. de Leon issued his Decision21 in NLRC Case No. RAB-10-08-00586-
2003, which decreed as follows:
WHEREFORE, in view of the foregoing premises, this Office holds that the dismissal, under the cited jurisprudence
is ineffectual. Respondents LIBCAP Marketing Corp. and Johanna J. Celiz, HRD Head and Ma. Lucia G.
Mondragon, EVP for Administration are jointly and severally ordered to pay the complainant, Lanny Jean Baquial,
her backwages from August 12, 2003 to November 30, 2005 in the sum of₱127,911.04 computed as follows:
1) From August 12-15, 2003:
₱4,600/mo./26.08/mo. = ₱176.38/day
₱176.38/day x 4 days = ₱705.52
2) From August 16, 2003 to November 30, 2005 – (27.5) mos.
₱4,600.00/mo. x 27.5 mos. = ₱127,205.52
Total………… ₱127,911.04
The other money claims are denied for lack of legal and factual basis.
SO ORDERED.22
In effect, the Labor Arbiter held that respondent was dismissed for just cause, but the dismissal was ineffectual as
she was deprived of procedural due process; it was error for Libcap to schedule the July 28, 2003 investigation at its
Iloilo office when it could very well have held it in Cagayan de Oro City. In other words, conducting the hearing in
Iloilo City was tantamount to depriving respondent’s day in court, because she did not have the financial resources
to go to Iloilo City.
In awarding backwages, the Labor Arbiter relied on the ruling in Serrano v. National Labor Relations
Commission,23which held that an employee dismissed for just cause but without notice need not be reinstated, but
must be paid backwages from the time of termination until it is determined that his termination was for a just cause.
Both petitioners and respondent appealed to the NLRC, where the case was docketed as NLRC CA No. M-008999-
2006.
On January 29, 2007, the NLRC rendered a Resolution24 dismissing the parties’ respective appeals, thus:
WHEREFORE, in the light of the foregoing, both appeals are hereby DISMISSED. The assailed decision of the
1âwphi 1
Labor Arbiter is hereby AFFIRMED in toto.
SO ORDERED.25
In a second Resolution26 dated May 31, 2007, petitioners’ Motion for Reconsideration27 was denied.
The NLRC affirmed the Labor Arbiter’s finding that respondent was deprived of due process when she was required
to attend hearings in Iloilo City when she had limited financial resources, and given the fact that at the time, she had
just given birth to her first-born child; petitioners, for humanitarian considerations, could have scheduled the
hearings in Cagayan de Oro City instead. Furthermore, it held that the case cited and relied upon by petitioners –
Agabon v. National Labor Relations Commission,28 which provided for the payment of nominal damages in lieu of
backwages incase of dismissal where the employer fails to comply with the requirements of due process – could not
be applied as it was promulgated only on November 17, 2004, while respondent’s Amended Complaint in NLRC
Case No. RAB-10-08-00586-2003 was filed on September 1, 2003 or while the Serrano doctrine was not yet in
effect.
In a Petition for Certiorari filed with the CA and therein docketed as CAG.R. SP No. 01794, petitioners sought to
nullify the Resolutions of the NLRC, arguing that the latter committed grave abuse of discretion and gross error in
declaring that respondent’s right to due process was violated and in applying the Serranocase, instead of the
doctrine in Agabon.
On April 22, 2009, the CA issued the assailed Decision which contained the following decretal portion:
WHEREFORE, the assailed Resolution of the National Labor Relations Commission dated January29, 2007 is
AFFIRMED, with the MODIFICATION that the award of backwages is deleted. Petitioners are ordered to pay private
respondent nominal damages in the amount of ₱100,000.00.
SO ORDERED.29
The CA upheld the labor tribunals’ findings that while there was just cause to dismiss respondent for dishonesty and
embezzlement, petitioners failed to comply with procedural due process in effecting her dismissal. It held that in
requiring respondent to attend the scheduled hearing and investigation in Iloilo City, "petitioners were callous of
private respondent’s difficulties, considering that not only would she have had to go to Iloilo City for the purpose, but
that her having to do so would also have meant straining her financial resources. Thus, as a result of failing to
appear in the investigation, private respondent was unable to confront her accusers face to face, and to rebut the
evidence relied upon by petitioners in dismissing her."30
The CA held further that while the Agabon case, instead of the Serrano doctrine, should apply, respondent was
nevertheless entitled to nominal damages in the amount of ₱100,000.00 considering that she was required to work
beyond her scheduled or assigned hours of work without overtime pay, from date of hiring until she was terminated
on August 12, 2003– or for a period of four years.
Petitioners filed a Motion for Reconsideration,31 but the CA denied the same in its March 24, 2010 Resolution.
Issues
Petitioners submit the following issues for the Court’s resolution:
THE COURT OF APPEALS ERRED WHEN IT RULED THAT THERE WAS NON-COMPLIANCE WITH THE
PROCEDURAL DUE PROCESS REQUIREMENT WHEN THE RECORDS SHOW THAT THE RESPONDENT WAS
GIVEN FULL OPPORTUNITY TO EXPLAIN THE CHARGES AGAINST HER.
II
THE COURT OF APPEALS ERRED WHEN IT AWARDED RESPONDENT THE AMOUNT OF₱100,000.00
ABSENT ANY JUSTIFIABLE, COMPELLING CIRCUMSTANCE TO DEPART FROM THE STANDARD ₱30,000.00
ESTABLISHED BY JURISPRUDENCE[.]32
In claiming that respondent’s dismissal was valid, petitioners contend that a face-to-face confrontation between the
employer and employee is not required in dismissal cases. They cite the pronouncement in Perez v. Philippine
Telegraph and Telephone Company,33 which states that "the employer may provide an employee with ample
opportunity to be heard and defend himself with the assistance of a representative or counsel in ways other than a
formal hearing. The employee can be fully afforded a chance to respond to the charges against him, adduce his
evidence or rebut the evidence against him through a wide array of methods, verbal or written,"34 and that –
In sum, the following are the guiding principles in connection with the hearing requirement in dismissal cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to
answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or
some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or
substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify
it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference"
requirement in the implementing rules and regulations.35
Petitioners contend that so long as respondent was given the opportunity to be heard, which in fact she was
afforded, then the twin-notice requirement is satisfied.
With regard to the award of nominal damages in the amount of ₱100,000.00, petitioners argue that the award is
erroneous and respondent is not entitled to the same, given the nature and gravity of her offense. They cite the
ruling in Philippine Airlines, Inc. v. National Labor Relations Commission,36 stating that if the reason for the valid
dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft, fraud, falsification or
illicit sexual relations with a fellow worker, separation pay or financial assistance, or by whatever other name it is
called, may not be allowed. They add that the CA’s conclusions that respondent worked long hours without overtime
pay is not supported by evidence; thus, it could not grant nominal damages greater than ₱30,000.00, which is the
amount fixed by the Court in a host of cases. Petitioners thus pray that the Court declare that due process was
properly observed in the dismissal of respondent, and that the award of nominal damages be deleted. In the
alternative, they pray that the amount of nominal damages be reduced from ₱100,000.00 to ₱30,000.00.
In addition, petitioners contend in their Reply37 that respondent may no longer question the existence of just cause
for her dismissal, as she did not raise the issue in an appropriate appeal or petition before the NLRC or the CA.
In her Comment,38 apart from arguing the claim that she was denied due process, respondent insists that her
dismissal was without just cause. In addition, she revives the Labor Arbiter’s award of backwages, and makes a new
claim for reinstatement with corresponding claims for refund of her cash bond, maternity leave benefits, moral
damages, overtime pay and attorney’s fees. All these claims are of course premised on the argument, resurrected at
this stage of the proceedings, that respondent was illegally dismissed and thus forced to litigate to protect her rights
and interests.
Our Ruling
At this juncture, it must be stated that respondent’s failure to file an appropriate appeal or petition from the
respective dispositions of the NLRC and the CA precludes her from questioning these dispositions at this stage.
"The rule is clear that no modification of judgment could be granted to a party who did not appeal."39 Thus,
respondent’s pleas for reinstatement and the payment of backwages, cash bond, maternity leave benefits, moral
damages, overtime pay, and attorney’s fees may no longer be taken up.
The CA, the NLRC and the Labor Arbiter are correct in concluding that respondent was denied due process, but
their reasons for arriving at such conclusion are erroneous. What they seem to have overlooked is that respondent’s
case has been pre-judged even prior to the start of the investigation on July 28, 2003. This is evident from the fact
that the amount of ₱1,437.00 – or the amount which petitioners claim was embezzled – was peremptorily deducted
each payday from respondent’s salary on a staggered basis, culminating on June 30, 2003, or nearly one month
prior to the scheduled investigation on July 28, 2003. In doing so, petitioners have made it clear that they considered
respondent as the individual responsible for the embezzlement; thus, in petitioners’ eyes, respondent was adjudged
guilty even before she could be tried – the payroll deductions being her penalty and recompense.
By pre-judging respondent’s case, petitioners clearly violated her right to due process from the very beginning, and
from then on it could not be expected that she would obtain a fair resolution of her case. In a democratic system, the
infliction of punishment before trial is fundamentally abhorred. What petitioners did was clearly illegal and improper.
While it is correct to conclude that there was valid cause for dismissal considering that respondent did not contest
the NLRC or CA findings to such effect through an appropriate appeal or petition, the only issue that remains to be
tackled is the correctness of the award of nominal damages.
Petitioners claim that respondent is not entitled to financial assistance given that she is guilty of theft or
embezzlement. The law and jurisprudence, on the other hand, allow the award of nominal damages in favor of an
employee in a case where a valid cause for dismissal exists but the employer fails to observe due process in
dismissing the employee.40 Financial assistance is granted as a measure of equity or social justice, and is in the
nature or takes the place of severance compensation.41
On the other hand, nominal damages "may be awarded to a plaintiff whose right has been violated or invaded by the
defendant, for the purpose of vindicating or recognizing that right, and not for indemnifying the plaintiff for any loss
suffered by him. Its award is thus not for the purpose of indemnification for a loss but for the recognition and
vindication of a right."42 The amount of nominal damages to be awarded the employee is addressed to the sound
discretion of the court, taking into consideration the relevant circumstances.43 Nevertheless, while the amount of
damages is left to the discretion of the court, it has been held that –
Again, we stress that though the Court is given the latitude to determine the amount of nominal damages to be
awarded to an employee who was validly dismissed but whose due process rights were violated, a distinction should
be made between a valid dismissal due to just causes under Article 282 of the Labor Code and those based on
authorized causes, under Article 283. The two causes for a valid dismissal were differentiated in the case of Jaka
Food Processing Corporation v. Pacot where the Court held that:
A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of,
some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some
fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee
himself initiated the dismissal process.
On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or
culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his
management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease
business operations or when, as in this case, he undertakes to implement a retrenchment program.
xxxx
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer
failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on
an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction
should be stiffer because the dismissal process was initiated by the employer’s exercise of his management
prerogative.
Since in the case of JAKA, the employee was terminated for authorized causes as the employer was suffering from
serious business losses, the Court fixed the indemnity at a higher amount of ₱50,000.00. In the case at bar, the
cause for termination was abandonment, thus it is due to the employee’s fault. It is equitable under these
circumstances to order the petitioner company to pay nominal damages in the amount of ₱30,000.00, similar to the
case of Agabon.
We affirm the award of salary differentials, 13th month pay and holiday pay, awarded by the NLRC and the Court of
Appeals. We note that although petitioner company had cause to terminate Madriaga, this has no bearing on the
issue of award of salary differentials, holiday pay and 13th month pay because prior to his valid dismissal, he
performed work as a regular employee of petitioner company, and he is entitled to the benefits provided under the
law. Thus, in the case of Agabon, even while the Court found that the dismissal was for a just cause, the employee
was still awarded his monetary claims.
An employee should be compensated for the work he has rendered in accordance with the minimum wage, and
must be appropriately remunerated when he was suffered to work on a regular holiday during the time he was
employed by the petitioner company. As regards the 13th month pay, an employee who was terminated at any time
before the time for payment of the 13th month pay 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 termination from the service.
As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege
nonpayment, the general rule is that the burden rests on the employer to prove payment, rather than on the
employee to prove nonpayment. The reason for the rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents — which will show that overtime, differentials, service incentive leave and
other claims of workers have been paid — are not in the possession of the employee but in the custody and
absolute control of the employer. Since in the case at bar petitioner company has not shown any proof of payment
of the correct amount of salary, holiday pay and 13th month pay, we affirm the award of Madriaga’s monetary
claims.44(Emphases supplied)
Prescinding from the foregoing, we find it necessary to reduce the amount of nominal damages the CA awarded
from ₱100,000.00 to ₱30,000.00. We cannot subscribe to the CA’s ratiocination that since respondent rendered
overtime work for four years without receiving any overtime pay, she is entitled to ₱100,000.00 nominal damages.
Nominal damages are awarded for the purpose of vindicating or recognizing a right and not for indemnifying a loss.
Hence, the CA should have limited the justification of the award of nominal damages to petitioners’ violation of
respondent’s right to due process in effecting her termination. It should not have considered the claimed unpaid
overtime pay.
After all, the Labor Arbiter had already denied the same. Thus, it cannot be invoked again as a justification to
increase the award of nominal damages.
WHEREFORE, the Petition is GRANTED IN PART. The assailed April 22, 2009 Decision and March 24, 2010
Resolution of the Court of Appeals in CA-G.R. SP No. 01794 are AFFIRMED with MODIFICATION that the award of
nominal damages is reduced to ₱30,000.00.
SO ORDERED.
SECOND DIVISION
G.R. No.177425 June 18, 2014
ALONZO GIPA, IMELDA MARO LLANO, JUANITO LUDOVICE, VIRGILIO GOJIT, DEMAR BIT ANGCOR,
FELIPE MONTALBAN AND DAISY M. PLACER,1 Petitioners,
vs.
SOUTHERN LUZON INSTITUTE as represented by its Vice-President For Operations and Corporate
Secretary, RUBEN G. ASUNCION, Respondent.
DECISION
DEL CASTILLO, J.:
Suffice it to say that "[ c ]oncomitant to the liberal interpretation of the rules of procedure should be an effort on the
part of the party invoking liberality to adequately explain his failure to abide by the rules."2 Those who seek
exemption from the application of the rule have the burden of proving the existence of exceptionally meritorious
reasons warranting such departure.3 Assailed in this Petition for Review on Certiorari is the December 20, 2006
Resolution4 of the Court of Appeals (CA) in CA-G.R. CV No. 85215 which dismissed for non-perfection herein
petitioners' appeal from the January 5, 2005 Decision' of the Regional Trial Court (RTC), Branch 65, Sorsogon City
in Civil Case No. 547-37. Likewise questioned is the CA Resolution6 dated March 30, 2007 which denied the Motion
for Reconsideration thereto.
Factual Antecedents
On February 26, 1996, respondent Southern Luzon Institute (SLI), an educational institution in Bulan, Sorsogon,
filed a Complaint7 for Recovery of Ownership and Possession with Damages against petitioners Alonzo Gipa,
Imelda Marollano, Juanito Ludovice, Demar Bitangcor, Virgilio Gojit, Felipe Montalban and four others namely,
Arturo Rogacion, Virgilio Gracela, Rosemarie Alvarez and Rosita Montalban (Rosita). During trial, defendant Rosita
executed a Special Power of Attorney8 in favor of her sister Daisy M. Placer (Placer) authorizing the latter to
represent her in the case and to sign any and all papers in relation thereto.
SLI alleged that it is the absolute owner of a 7,516-squaremeter parcel of land situated in Brgy. Poblacion, Bulan,
Sorsogon covered by Original Certificate of Title (OCT) No. P-28928. However, petitioners and their co-defendants
who had been informally occupying a portion of the said property refused to vacate the same despite demand.
Hence, SLI sought that they be ordered to immediately vacate the premises, turn over the same to SLI, and pay
compensatory damages, attorney’s fees and cost of suit.
In their Answer with Counterclaim,9 petitioners and their co-defendants asserted that they did not heed SLI’s
demand to vacate as they believed that they have the right to stay on the said property. They relied on their
occupation thereof and that of their predecessors-in-interest which, according to them, dates back to as early as
1950. Impugning SLI’s claims, petitioners and their co-defendants averred that SLI had not even for a single
moment taken possession of the subject property and was merely able to procure a title over the same thru fraud,
bad faith and misrepresentation. By way of counterclaim, they prayed that they be declared the lawful possessors of
the property; that OCT No. P-28928 be declared null and void; and, that SLI be ordered to pay them moral damages
and litigation expenses.
Finding SLI to have proven its ownership of the property by preponderance of evidence, the RTC rendered a
Decision10 in its favor on January 5, 2005. The said court gave weight to SLI’s documentary evidence showing the
grant of its Miscellaneous Sales Application (MSA) over the subject property which became the basis for the
issuance of title under its name, and the testimony of the Supervising Draftsman of the National Housing Authority
(NHA) who categorically stated that the houses occupied by petitioners and their co-defendants were within the
property of SLI per NHA’s survey. It rejected, on the other hand, petitioners and their co-defendants’ claim of title to
the property. For one, the fact that SLI had an existing MSA over the property as far back as 1969 could not have
been unknown to them. This is because several of the petitioners and their codefendants filed Revocable Permit
Applications over the same property which were denied on March 4, 1964, precisely because the areas applied for
were already included in SLI’s MSA. For another, the documentary evidence submitted by them consisted mostly of
tax declarations and other documents which were self-serving and could not be considered as conclusive evidence
of ownership. Hence, the RTC ruled:
WHEREFORE, premises considered, judgment is hereby rendered –
a) Declaring plaintiff-SLI as absolute owner of that portion of Lot 4705 containing an area of SEVEN THOUSAND
FIVE HUNDRED SIXTEEN (7,516) SQUARE METERS covered by "Katibayan ng Orihinal na Titulo Blg. P-28928".
b) Ordering herein defendants to vacate and relinquish the portions of lot 4705 belonging to the SLI that they are
presently occupying illegally and to demolish the residential houses existing thereon at their own expense.
c) To pay attorney’s fee in the amount of Php10,000.00 jointly.
d) And to pay the costs.
SO ORDERED.11
Petitioners and their co-defendants filed a Notice of Appeal12 which was granted by the RTC in its Order13 of January
27, 2005.
The CA, however, dismissed the appeal in its Resolution14 of August 26, 2005 since it was not shown that the
appellate court docket fees and other lawful fees were paid.15 Petitioners and their co-defendants promptly filed a
Motion for Reconsideration16 to which they attached a Certification17 from the RTC that they paid the appeal fee in the
amount of₱3,000.00 under Official Receipt No. 18091130 dated January 25, 2005. In view of this, the CA granted
the said motion and consequently reinstated the appeal through a Resolution18 dated November 2, 2005.
Subsequently, however, the CA further required petitioners and their codefendants, through a Minute
Resolution19dated March 1, 2006,to remit within ten days from notice the amount of ₱30.00 for legal research fund,
which apparently was not included in the ₱3,000.00 appeal fee previously paid by them. Copy of the said resolution
was received on March 13,2006 by petitioners’ counsel, Atty. Jose G. Gojar of the Public Attorney’s Office.20
Despite the lapse of nine months from their counsel’s receipt of the said resolution, petitioners and their co-
defendants, however, failed to comply with the CA’s directive. Hence, the said court dismissed the appeal through
its Resolution21 of December 20, 2006in this wise:
Jurisprudence is replete that the nonpayment of the docket and other lawful fees within the reglementary period as
provided under Section 4 of Rule 41 of the Revised Rules of [C]ourt is a ground for the dismissal of an appeal, as
provided for under Section 1(c)[,] Rule 50 of the same Rule. We quote:
SECTION 1. Grounds for dismissal of appeal. – An appeal may be dismissed by the Court of Appeals, on its own
motion or on that of the appellee, on the following grounds:
xxx xxx xxx
c. Failure of the appellant to pay the docket and other lawful fees as provided in Section 4 of Rule 41; x x x
xxxx
In the instant case, appellants were given sufficient time to complete the payment of the appeal fees. Unfortunately,
appellants still failed to comply with the said directive [despite the fact] that the amount of ₱30.00 involved is very
little. Hence, appellants failed to perfect their appeal for failure to fully pay the appeal fees. They are deemed to
have lost interest over the instant appeal. x x x x
WHEREFORE, premises considered, the instant Appeal is hereby DISMISSED.
SO ORDERED.22
Petitioners and their co-defendants filed a Motion for Reconsideration23 invoking the principle of liberality in the
application of technical rules considering that they have paid the substantial amount of ₱3,000.00 for docket and
other legal fees and fell short only by the meager amount of ₱30.00. Ascompliance, they attached to the said motion
a postal money order in the sum of ₱30.00 payable to the Clerk of Court of the CA.24
The CA, however, was not swayed, hence, the denial of the Motion for Reconsideration in its Resolution25 of March
30, 2007.
Issue
Petitioners and Placer now file this Petition for Review on Certiorari raising the lone issue of:
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE APPEAL FILED BY THE
PETITIONERS FOR FAILURE TO REMIT THE MEAGERAMOUNT OF THIRTY PESOS (₱30.00) AFTER HAVING
ADVANCED A SUBSTANTIAL PORTION OF THE DOCKET FEES.26
It must, however, be noted at the outset that the caption of the present Petition includes Placer as one of the
petitioners. In fact, the other petitioners even authorized her to sign the verification and certification of non-forum
shopping in their behalf.27 A review of the records, however, shows that she was not one of the defendants before
the RTC. Her only participation therein was that she represented her sister Rosita as one of the defendants by virtue
of a Special Power of Attorney which the latter executed in her favor.28 Notably in the present Petition, Placer
appears to have been impleaded in her personal capacity and not as Rosita’s representative. This cannot be done.
It bears emphasizing that an appeal on certiorari, as in this case, is a continuation of the original suit.29 Hence, the
parties in the original suit must also be the parties in such an appeal.30 Placer, therefore, not being a party in the
complaint before the RTC has no personality to continue the same on appeal and cannot be considered as a
petitioner. At the most, her only role in this Petition was to sign the verification and certification of non-forum
shopping for and in behalf of petitioners.
Initially, petitioners invoke the liberal application of technical rules31 and contend that the fact that only the amount of
₱30.00 was not paid justifies relaxation of the same. Later in their Reply,32 however, petitioners concede that the
payment of docket fees is not a mere technicality. Nevertheless, they point out that while full payment of docket fees
is indispensable in the perfection of an appeal, the same admits of exceptions.33 Their case falls under one of the
exceptions, that is, in the name of substantial justice and fair play. According to petitioners, the dismissal of their
appeal for failure to pay ₱30.00 runs counter to substantial justice and fair play as the same would deprive them of
their right to justice and render ineffective the amount of ₱3,000.00, which despite being indigents, they undertook to
pay. To support their case, petitioners cited Andrea Camposagrado v. Pablo Camposagrado34 and Spouses
Gutierrez v. Spouses Valiente35 wherein the Court excused the insufficient payment of docket fees. Moreover,
1âw phi 1
petitioners raise in the said Reply, albeit for the first time, the argument that while Republic Act (RA) No. 9406 36 was
still in existent at the time their appeal was filed before the CA, Section 637 thereof which exempts PAO clients like
themselves from the payment of docket and other fees should be given retroactive application.
For its part, SLI argues that since petitioners’ appeal was not perfected due to insufficient payment of docket and
other legal fees, the January 5, 2005 Decision of the RTC had already become final and executory. Further, the CA
correctly dismissed petitioners’ appeal because aside from the fact that petitioners failed to comply with the CA’s
directive to pay the lacking amount of ₱30.00 for a period of more than nine months from their counsel’s receipt of
notice, no plausible explanation was tendered by them for such failure.
Our Ruling
The Petition fails.
Payment of the full amount of appellate

court docket and lawful fees is
mandatory and jurisdictional;
Relaxation of the rule on payment of
appeal fee is unwarranted in this case.
Sec. 4. Appellate court docket and other lawful fees. – Within the period for taking an appeal, the appellant shall pay
to the clerk of court which rendered the judgment or final order appealed from, the full amount of the appellate court
docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with
the original record or the record on appeal. (Emphases supplied)
In Gonzales v. Pe,38 the Court’s explanation anent the requirement of full payment of docket and other lawful fees
under the above-quoted provision was iterated, viz:
In Far Corporation v. Magdaluyo, as with other subsequent cases of the same ruling, the Court explained that the
procedural requirement under Section 4 of Rule 41 is not merely directory, as the payment of the docket and other
legal fees within the prescribed period is both mandatory and jurisdictional. It bears stressing that an appeal is not a
right, but a mere statutory privilege. An ordinary appeal from a decision or final order of the RTC to the CA must be
made within 15 days from notice. And within this period, the full amount of the appellate court docket and other
lawful fees must be paid to the clerk of the court which rendered the judgment or final order appealed from. The
requirement of paying the full amount of the appellate docket fees within the prescribed period is not a mere
technicality of law or procedure. The payment of docket fees within the prescribed period is mandatory for the
perfection of an appeal. Without such payment, the appeal is not perfected. The appellate court does not acquire
jurisdiction over the subject matter of the action and the Decision sought to be appealed from becomes final and
executory. Further, under Section 1 (c), Rule 50, an appeal may be dismissed by the CA, on its own motion or on
that of the appellee, on the ground of the non-payment of the docket and other lawful fees within the reglementary
period as provided under Section 4 of Rule 41. The payment of the full amount of the docket fee is an indispensable
step for the perfection of an appeal. In both original and appellate cases, the court acquires jurisdiction over the
case only upon the payment of the prescribed docket fees.39
Here, petitioners concede that payment of the full amount of docket fees within the prescribed period is not a mere
technicality of law or procedure but a jurisdictional requirement. Nevertheless, they want this Court to relax the
application of the rule on the payment of the appeal fee in the name of substantial justice and equity.
The Court is not persuaded.
The liberality which petitioners pray for has already been granted to them by the CA at the outset. It may be recalled
that while petitioners paid a substantial part of the docket fees, they still failed to pay the full amount thereof since
their payment was short of ₱30.00.Based on the premise that the questioned Decision of the RTC has already
become final and executory due to non-perfection, the CA could have dismissed the appeal outright. But owing to
the fact that only the meager amount of ₱30.00 was lacking and considering that the CA may opt not to proceed
with the case until the docket fees are paid,40 it still required petitioners, even if it was already beyond the
reglementary period, to complete their payment of the appeal fee within 10 days from notice. Clearly, the CA acted
conformably with the pronouncement made in Camposagrado, a case cited by petitioners, that "[a] party’s failure to
pay the appellate docket fee within the reglementary period confers only a discretionary and not a mandatory power
to dismiss the proposed appeal. Such discretionary power should be used in the exercise of the court’s sound
judgment in accordance with the tenets of justice and fair play with great deal of circumspection, considering all
attendant circumstances and must be exercised wisely and prudently, never capriciously, with a view to substantial
justice."41
The CA’s leniency over petitioners’ cause did not end there. Although they were given only 10 days to remit the
₱30.00 deficiency, the said court allowed an even longer period of nine months to lapse, apparently in the hope that
petitioners’ compliance would be on its way. But as no payment was remitted, it was constrained to finally dismiss
the appeal for non-perfection. Surprisingly, petitioners were again heard of when they filed a Motion for
Reconsideration to which they attached a postal money order of ₱30.00. Nevertheless, they did not offer any
plausible explanation either as to why they, at the start, failed to pay the correct docket fees or why they failed to
comply with the CA’s directive for them to remit the ₱30.00-deficiency. Instead, they focused on begging the CA for
leniency, arguing that the meager amount of the deficiency involved justifies relaxation of the rules. What is worse is
that even if the CA already took note of the lack of such explanation in its Resolution denying petitioners’ motion for
reconsideration, petitioners, up to now, have not attempted to tender one in this Petition and instead continue to
capitalize on substantial justice, fair play and equity to secure a reversal of the dismissal of their appeal. The Court
cannot, therefore, help but conclude that there is really no plausible reason behind the said omission.
Suffice it to say that "[c]oncomitant to the liberal interpretation of the rules of procedure should be an effort on the
part of the party invoking liberality to adequately explain his failure to abide by the rules."42 Those who seek
exemption from the application of the rule have the burden of proving the existence of exceptionally meritorious
reason warranting such departure.43 Petitioners’ failure to advance any explanation as to why they failed to pay the
correct docket fees or to complete payment of the same within the period allowed by the CA is thus fatal to their
cause. Hence, a departure from the rule on the payment of the appeal fee is unwarranted. Neither do the cases
cited by petitioners help because they are not in point. Unlike in this case, the CA in Camposagrado no longer
required the petitioners therein to complete the payment of the appeal fee by remitting the ₱5.00 deficiency but just
dismissed the appeal outright. Moreover, a justifiable reason for the insufficient payment was tendered by petitioners
in the said case, i.e., that they relied on the assessment made by the collection officer of the court and honestly
believed that the amount collected from them was that which is mandated by the Rules. 1âwphi1
The same thing goes true with Gutierrez. In fact, the pronouncement made in Sun Insurance Office, Ltd. v.
Asuncion,44 as cited in Gutierrez, even militates against petitioners. It was reiterated therein that the rule that "a court
acquires jurisdiction over any case only upon payment of the prescribed docket fees does not apply where the party
does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by
the rules by paying additional docket fees when required by the court."45 As may be recalled, petitioners in this case
did not immediately remit the deficient amount of ₱30.00 when required by the CA and only did so after the lapse of
more than nine months when their appeal was already dismissed.
The Court need not belabor the issue

of the retroactive application of Section 6
of RA 9406.
"The purpose of a reply is to deny or allege facts in denial of new matters alleged by way of defense in the
answer,"46 or in this case, in the comment to the petition. "It is not the office or function of a reply to set up or
introduce a new [issue] or to amend or amplify the [Petition]."47 The issue of whether Section 6 of RA 9406 should be
given retroactive application in order to exempt petitioners from payment of docket fees was therefore improperly
introduced in petitioners’ Reply. Moreover, "[t]he rule in pleadings and practice is that no new issue in a case can be
raised in a pleading which by due diligence could have been raised in previous pleadings."48 Here, petitioners at the
outset could have very well raised the said issue in the Petition since at the time of its filing on June 7, 2007, RA
9406 was already in effect.49 However, they failed to do so. Besides, for this Court to take cognizance of the same is
to offend the basic rules of fair play, justice and due process since SLI had no chance to propound its argument in
connection thereto. This is because even if it wanted to, SLI could not anymore do so in its Memorandum as no new
issues or arguments may be raised in the said pleading, it being only the summation of the parties’ previous
pleadings.50 For these reasons, the Court sees no need to belabor the issue of the retroactive application of Section
6 of RA 9406.
All told, the Court finds the CA’s dismissal of the appeal interposed by petitioners in order.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed Resolutions dated December 20,
2006 and March 30, 2007 of the Court of Appeals in CA-G.R. CV No. 85215 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 179914 June 16, 2014
SPOUSES REYNALDO AND HILLY G. SOMBILON, Petitioners,

vs.
ATTY. REY FERDINAND GARAY AND PHILIPPINE NATIONAL BANK, Respondents.
x-----------------------x
A.M. No. RTJ-06-2000
ATTY. REY FERDINAND T. GARAY, Petitioner,

vs.
JUDGE ROLANDO S. VENADAS, SR., Respondent.
DECISION
DEL CASTILLO, J.:
A judge owes the public and the court the duty to know the law by heart and to have the basic rules of procedure at
the palm of his hands.1
Before us are two consolidated cases: (1) a Petition for Review on Certiorari2 under Rule 45 of the Rules of Court
assailing the June 13, 2007 Decision3 and the August 8, 2007 Resolution4 of the Court of Appeals (CA) in CA-G.R.
SP No. 00477-MIN; and (2) an Administrative Complaint5 against Judge Rolando S. Venadas, Sr. (Judge Venadas,
Sr.) of the Regional Trial Court (RTC) of Malaybalay, Bukidnon, Branch 8, for Grave Abuse of Authority and Grave
Misconduct.
Factual Antecedents
Spouses Reynaldo and Hilly G. Sombilon (spouses Sombilon) were the previous owners of a 601-square meter
property, with two buildings constructed on it, in South Poblacion, Maramag, Bukidnon.6 The said property, which
they mortgaged to the Philippine National Bank (PNB) as security for their loan, was foreclosed and sold at public
auction on July 15, 1998, where PNB emerged as the winning bidder in the amount of
₱2,355,000.00.7Consequently, on August 20, 1998, a Certificate of Sale was issued in PNB’s name, which was duly
registered with the Registry of Deeds for Bukidnon on August 25, 1999.8 The one-year redemption period lapsed but
spouses Sombilon failed to redeem the property.9
In 2005, spouses Sombilon sought the help of Atty. Rey Ferdinand T. Garay (Atty. Garay), a Public Attorney’s Office
(PAO) lawyer, who was once appointed by the court as counsel de officio for Hilly Sombilon in a criminal case and
who happens to be the owner of a lot adjacent to the property.10 Spouses Sombilon told Atty. Garay that they wanted
to reacquire11 the property from PNB, but had no money to repurchase it.12 Thus, they were hoping that he would
agree to advance the money and, in exchange, they promised to sell him the 331-square meter portion of the
property, where one of the buildings is located, for ₱5 million.13
On February 9, 2005, Atty. Garay together with spouses Sombilon went to PNB to inquire about the status of the
property.14 They were informed by the bank that the property could be purchased at the fair market value of
₱2,938,000.00.15 The following day, Atty. Garay went to the bank alone and offered to buy the property by making a
down payment of ₱587,600.0016 or 20% of the purchase price.17
On February 14, 2005, upon learning that Atty. Garay intended to purchase the entire property for himself, spouses
Sombilon offered to buy back the property from PNB.18 The bank advised them to make a 10% down payment of the
bank’s total claim19 to formalize their offer.20
On February 15, 2005, a Final Deed of Conveyance was issued in favor of PNB.21
On April 14, 2005, Transfer Certificate of Title (TCT) No. 94384 was issued in the name of PNB.22
On the same date, PNB decided to approve the purchase offer of Atty. Garay23 since spouses Sombilon failed to
make the required down payment.24
G.R. No. 179914
On May 9, 2005, PNB filed an Ex-Parte Petition for Issuance of a Writ of Possession25 before the RTC of Malaybalay
City, Bukidnon. The case was docketed as Special Civil Case No. 375-05 and raffled to Branch 8, presided over by
Judge Venadas, Sr.
On June 10, 2005, Judge Venadas, Sr. issued an Order26 granting the Petition and, on June27, 2005, he issued a
Writ of Possession27 in favor of PNB.28
On June 22, 2005, PNB informed spouses Sombilon that Atty. Garay’s offer to purchase the property had been
approved due to their failure to pay the full down payment.29
On July 10, 2005, spouses Sombilon moved for a reconsideration30 of the issuance of the Writ of Possession arguing
that Atty. Garay,31 who was the former counsel of Hilly, was barred from purchasing the property pursuant to
paragraph 5,32 Article 1491 of the Civil Code.
On July 14, 2005, Judge Venadas, Sr. issued an Order33 holding in abeyance the implementation of the Writ of
Possession, a portion of which reads:
Although, ordinarily a writ of possession is issued by the court because it is a mandatory and ministerial duty under
Act 3135, x x x there is x x x an exception to this rule that if the implementation and enforcement of the writ of
possession would work [great] injustice to the registered owner because the petitioner PNB or in this case Atty.
Garay counsel for the Sombilon[s] is not entitled thereto. There is much to be said about the conduct of Atty. Garay
in manipulating that the property in question was finally bought by him from the PNB not to mention the possible
violation of the [canon] of legal and judicial ethics. However, the court cannot ignore the version of Mrs. Sombilon.
The court will give Atty. Garay [the opportunity] to rebut the evidence presented by spouses Sombilon and he is
directed to appear on August 2, 2005, at 8:30 in the morning. And if this case cannot be accommodated in the
morning[,] it will proceed in the afternoon.
Send proper notice to Atty. Rey Ferdinand Garay for him to appear on said date.
In the meantime, the full implementation x x x of the Writ of Possession is hereby held in abeyance. Sheriff Claudio
C. Bugahod is hereby directed to return all items to the house of Spouses Sombilon and to restore them in full
possession of the property, if already implemented and enforced.
SO ORDERED.34
Aggrieved, Atty. Garay and PNB elevated the case to the CA via a Petition for Certiorari with prayer for issuance of
a Temporary Restraining Order (TRO) and/or Injunction35 under Rule 65 of the Rules of Court.
Initially, on August 2, 2005, the CA dismissed36 the Petition for Certiorari for several procedural defects.37 However,
on reconsideration,38 the CA reinstated the Petition.39
On July 25, 2006, the CA issued a Resolution40 granting the PNB and Atty. Garay’s application for a TRO. Thus:
Accordingly, let a Temporary Restraining Order (TRO) be issued upon the posting of a Five Thousand Peso
(₱5,000.00) bond within five (5) days from receipt hereof ordering, [petitioners] to:
1. Cease and desist from doing any act which is destructive of, or involves danger to, or alters the nature and
condition of the property;
2. Cease and desist from collecting rent or income [for the use of] the said property;
3. To deposit any rent or income arising from the said property which they may have already received to the Clerk of
Court of the Regional Trial Court of the Tenth Judicial Region, Malaybalay City; and
Furthermore, all tenants are hereby ordered to deposit any rentals arising from the disputed property to the said
Clerk of Court.
SO ORDERED.41
On June 13, 2007, the CA rendered a Decision42 granting the Petition for Certiorari. The CA found grave abuse of
discretion on the part of Judge Venadas, Sr. in holding in abeyance the implementation of the Writ of
Possession.43The dispositive portion of the Decision reads:
ACCORDINGLY, the petition for certiorari is hereby GRANTED and the assailed July 14, 2005 Order of the court a
quo is hereby SET ASIDE.
SO ORDERED.44
Spouses Sombilon moved for reconsideration45 but the CA denied the same in its August 8, 2007 Resolution.46
Hence, spouses Sombilon filed the instant Petition for Review on Certiorari contending that:
THE [CA] COMMITTED A REVERSIBLE ERROR AND GRAVELY ERRED IN GRANTING THE PETITIONFOR
CERTIORARI OF [ATTY. GARAY AND PNB] AND IN DECLARING THAT THERE WAS GRAVE ABUSE OF
DISCRETION AMOUNT[ING] TO LACK OR EXCESS OF JURISDICTION COMMITTED BYTHE [RTC], BRANCH
[8], MALAYBALAY CITY, WHICH IS CONTRARY [TO] LAW AND APPLICABLE DECISIONS OF THE
HONORABLE SUPREME COURT.47
Spouses Sombilon’s Arguments
Spouses Sombilon insist that the CA should have dismissed the Petition for Certioraridue to the failure of PNB and
Atty. Garay to file a Motion for Reconsideration of the assailed Order.48
They also allege that PNB and Atty. Garay engaged in forum-shopping when they filed a Motion to Recall Order with
the RTC, in addition to the Petition for Certiorari they earlier filed with the CA.49
As to the assailed Order, they contend that Judge Venadas, Sr. did not commit grave abuse of discretion in holding
in abeyance the implementation of the Writ of Possession because PNB no longer has the legal personality to apply
for a Writ of Possession considering that the subject property had already been sold to Atty. Garay,50 who they claim
is also not entitled to the Writ of Possession as he is disqualified from purchasing the subject property pursuant to
paragraph 5,
Article 1491 of the Civil Code.51
Atty. Garay’s and PNB’s Arguments
Atty. Garay, on the other hand, argues that the CA did not err in granting the Petition for Certiorari as Judge
Venadas, Sr. acted with grave abuse of discretion when he recalled the Writ of Possession without notice to him and
PNB.52 He also emphasizes that it is a ministerial duty of the court to issue a writ of possession after the redemption
period has lapsed.53
PNB, for its part, asserts that as the registered owner of the subject property, it is entitled to the Writ of
Possession.54 Thus, it was grave abuse of discretion on the part of Judge Venadas, Sr. in holding in abeyance the
implementation of the Writ of Possession, which he had earlier issued.55
PNB further avers that it is not privy to the arrangement or relationship between Atty. Garay and spouses
Sombilon.56 In any case, the prohibition in paragraph 5, Article 1491 of the Civil Code does not apply to the instant
case as Atty. Garay purchased the subject property from PNB and not from spouses Sombilon.57
Anent its failure to file a Motion for Reconsideration prior to filing a Petition for Certiorari, PNB explains that in this
case the filing of a Motion for Reconsideration may be dispensed with as the issue involved is purely one of law,
which is an exception under prevailing jurisprudence.58
Besides, there was no plain, speedy, and adequate remedy available at the time considering that Judge Venadas,
Sr. issued the assailed Order, holding in abeyance the implementation of the Writ of Possession, without affording
PNB the opportunity to be heard.59
Lastly, PNB denies that it committed forum-shopping claiming that it did not institute another action simultaneously
with the Petition for Certiorari it filed with the CA.60
A.M. No. RTJ-06-2000
Meanwhile, on November15, 2005, Atty. Garay filed a Verified Complaint61 against Judge Venadas, Sr., charging
him with Grave Abuse of Authority and Grave Misconduct when he proceeded with the hearing of spouses
Sombilon’s motion for reconsideration of the Order granting the issuance of the Writ of Possession despite lack of
notice to PNB and for holding in abeyance the Writ of Possession he issued in Special Civil Case No. 375-05.
Atty. Garay’s Arguments
Atty. Garay claims that Judge Venadas, Sr. should be administratively sanctioned for holding in abeyance the Writ
of Possession he earlier issued62 and for ignoring Sections 4,63 5,64 and 665 of Rule 15 of the Rules of Court as he
proceeded to hear the motion despite lack of notice to PNB.66
Judge Venadas, Sr.’s Arguments
In his defense, Judge Venadas, Sr. denies the charges against him arguing that he did not annul the Writ of
Possession but merely stayed its execution and implementation to prevent any injustice.67 He insists there was no
violation of due process because he immediately scheduled a hearing for PNB to present its evidence.68
Report and Recommendation of the
Office of the Court Administrator (OCA)
The OCA, in its Report,69 found Judge Venadas, Sr. administratively liable for grave abuse of authority bordering on
gross ignorance of procedure.70 Although the OCA did not touch on the issue of whether Judge Venadas, Sr. should
be administratively sanctioned for holding in abeyance the implementation of the Writ of Possession as it was still
pending with the CA at that time, it nevertheless found Judge Venadas, Sr. guilty of blatantly disregarding Sections
4, 5, and 6 of Rule 15 of the Rules of Court when he acted on the defective motion filed by spouses Sombilon.71 It
also pointed out that PNB and Atty. Garay were deprived of their rights to due process as no proper notice was sent
to them.72 Thus, the OCA recommended that:
a) the instant administrative complaint be DOCKETED as a regular administrative complaint;
b) respondent Judge Rolando S. Venadas,Sr. be found guilty of gross ignorance of procedure; and
c) respondent Judge Rolando S. Venadas, Sr. be ordered to pay a FINE of TWENTY THOUSAND PESOS
(₱20,000.00) with a WARNING that a similar transgression x x x will be dealt with more severely.73
On November 26, 2007, the Court resolved to consolidate A.M. No. RTJ-06-2000 with G.R. No. 179914.74
Issues
Stripped of the non-essentials, the issues boil down to: (1) whether Judge Venadas, Sr. committed grave abuse of
discretion in holding in abeyance the implementation of the Writ of Possession; and (2) whether he should be
administratively sanctioned for holding in abeyance the implementation of the Writ of Possession and for
disregarding Sections 4, 5, and 6, Rule 15 of the Rules of Court.
Our Ruling
G.R. No. 179914
The issuance of a writ of possession is
ministerial upon the court.
A debtor has one year from the date the Certificate of Sale is registered with the Register of Deeds within which to
redeem his property.75 During the one-year redemption period, the purchaser may possess the property by filing a
petition for the issuance of a writ of possession before the court, upon the posting of a bond.76 But after the one-year
period, the purchaser has a right to consolidate the title and to possess the property, without need of a bond.77 And
once title is consolidated under the name of the purchaser, the issuance of the writ of possession becomes
ministerial on the part of the court; thus, no discretion is left to the court.78 Questions regarding the regularity and
validity of the mortgage or the foreclosure sale may not be raised as a ground to oppose or hold in abeyance the
issuance of the writ of possession as these must be raised in a separate action for the annulment of the mortgage or
the foreclosure sale.79 The pendency of such action is also not a ground to stay the issuance of a writ of
possession.80
In this case, the redemption period had long lapsed when PNB applied for the issuance of the Writ of Possession. In 1âw phi 1
fact, the title over the subject property had already been consolidated in PNB’s name. Thus, it was ministerial upon
Judge Venadas, Sr. to issue the Writ of Possession in favor of PNB, the registered owner of the subject property.
Though there are instances when the issuance of the Writ of Possession may be deferred,81 we find none of these
recognized exceptions present in the instant case. Spouses Sombilon claim that the sale between PNB and Atty.
Garay was invalid as it was done in violation of paragraph 5, Article 1491 of the Civil Code. However, the alleged
invalidity of the sale is not a ground to oppose or defer the issuance of the Writ of Possession as this does not affect
PNB’s right to possess the subject property. Thus, there was no reason for Judge Venadas, Sr. to hold in abeyance
the implementation of the Writ of Possession. Clearly, he committed grave abuse of discretion in issuing the
assailed Order holding in abeyance the implementation of the Writ of Possession because PNB, as the registered
owner, is entitled to the possession of the subject property as a matter of right.
Regarding the failure of PNB and Atty. Garay to move for a reconsideration of the assailed Order prior to the
availment of a special civil action for certiorari, we agree with PNB that the filing of a motion for reconsideration may
be dispensed with where the decision is a patent nullity or where there is violation of due process,82 such as in the
instant case.
All told, we find no error on the part of the CA in granting the Petition for Certiorari.
A.M. No. RTJ-06-2000
As to the Administrative Complaint filed against Judge Venadas, Sr., we agree with the findings and
recommendations of the OCA.
Records show that spouses Sombilon failed to comply with the three-day notice rule and the required proof of
service embodied in Sections 4, 5, and 6 of Rule 15 of the Rules of Court, thereby rendering the motion fatally
defective. Despite this, Judge Venadas, Sr. still took cognizance of the motion filed by spouses Sombilon, depriving
PNB and Atty. Garay of their right to due process.
To exculpate himself from the charges against him, Judge Venadas, Sr. claims that the motion was personally
served on PNB and its counsel on July 12, 2005 but they refused to receive the same. However, as aptly pointed
out by the OCA, no affidavit was submitted to substantiate such allegation. Thus, we agree with the Court
Administrator that Judge Venadas, Sr. is guilty of grave abuse of authority bordering on gross ignorance of
procedure for blatantly disregarding Sections 4, 5, and 6, Rule 15 of the Rules of Court.
Blatant disregard of basic, elementary, and well-known rules of procedure and law is gross ignorance of the
law,83which is classified as a serious charge under Rule 140, Section 8 of the Rules of Court, as amended by A.M.
No. 01-8-10-SC, punishable by either dismissal from service, suspension for more than three months but not
exceeding six months, or a fine of more than ₱20,000.00 but not exceeding ₱40,000.00.84
Thus, in view of his blatant disregard of the rules and his grave abuse of discretion in issuing the assailed Order,
and considering that this is his first offense, we find Judge Venadas, Sr. guilty of grave abuse of authority bordering
on gross ignorance of the law and is hereby fined the amount of ₱20,000.00. Incidentally, in the April 18, 2007
Resolution in A.M. No. 12600-Ret.,85 the Court approved the application of Judge Venadas, Sr. for disability
retirement but withheld the amount of ₱100,000.00 pending the final resolution of this case. In view thereof, the fine
of ₱20,000.00 herein imposed on Judge Venadas, Sr. is to be deducted from the withheld amount of ₱100,000.00.
WHEREFORE, in G.R. No. 179914, the Petition is hereby DENIED. The June 13, 2007 Decision and the August 8,
2007 Resolution of the Court of Appeals in CA-G.R. SP No. 00477-MIN are hereby AFFIRMED.
In Administrative Matter No. RTJ-06-2000, Judge Rolando S. Venadas, Sr. of the Regional Trial Court of Malaybalay
City, Bukidnon, Branch 8, is hereby found guilty of grave abuse of authority bordering on gross ignorance of the law
and is ordered to pay a FINE of TWENTY THOUSAND PESOS (₱20,000.00) to be deducted from the withheld
amount of ₱100,000.00 from his retirement benefits pursuant to the April 18, 2007 Resolution in A.M. No. 12600-
Ret.
SO ORDERED.
ECOND DIVISION
G.R. No. 194818 June 9, 2014
CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO and ZOSIMA PADRE, and
FELIPE DOMINCIL, Petitioners,
vs.
REGALADO ARRIBAY, Respondent.
DECISION
DEL CASTILLO, J.:
A case involving agricultural land does not immediately qualify it as an agrarian dispute. The mere fact that the land
is agricultural does not ipso facto make the possessor an agricultural lessee or tenant; there are conditions or
requisites before he can qualify as an agricultural lessee or tenant, and the subject matter being agricultural land
constitutes simply one condition. In order to qualify as an agrarian dispute, there must likewise exist a tenancy
relation between the parties.
(CA) in CA-G.R. SP No. 101423, entitled "Regalado Arribay, Petitioner, versus Charles Bumagat, Julian Bacudio,
Rosario Padre, Spouses Rogelio and Zosima Padre, and Felipe Domincil," as well as its November 9, 2010
Resolution3 denying reconsideration of the assailed judgment.
Factual Antecedents
Petitioners are the registered owners, successors-in-interest, or possessors of agricultural land, consisting of about
eight hectares, located in Bubog, Sto. Tomas, Isabela Province, to wit:
1. Charles Bumagat (Bumagat) – 14,585 square meters covered by Transfer Certificate of Title No. (TCT) 014557;4
2. Julian Bacudio (Bacudio) – 14,797 square meters covered by TCT 014556;5
3. Rosario Padre – 14,974 square meters covered by TCT 0145546 in the name of Dionicio Padre;7
4. Spouses Rogelio and Zosima Padre – 6,578 square meters covered by TCT 0145618 in the name of Ireneo
Padre;9
5. Spouses Rogelio and Zosima Padre – 6,832 square meters covered by TCT 014560 in the name of their
predecessor-in-interest Felix Pacis;10
6. Felipe Domincil – 14,667 square meters covered by TCT 014558;11 and
7. Felipe Domincil – 7,319 square meters.12
The certificates of title to the above titled properties were issued in 1986 pursuant to emancipation patents.13
On July 19, 2005, petitioners filed a Complaint14 for forcible entry against respondent before the 2nd Municipal
Circuit Trial Court (MCTC) of Cabagan-Delfin Albano, Isabela. The case was docketed as Special Civil Action No.
475 (SCA 475). In an Amended Complaint,15 petitioners alleged that on May 9, 2005, respondent – with the aid of
armed goons, and through the use of intimidation and threats of physical harm – entered the above-described
parcels of land and ousted them from their lawful possession; that respondent then took over the physical
possession and cultivation of these parcels of land; and that petitioners incurred losses and injuries by way of lost
harvests and other damages. Petitioners thus prayed for injunctive relief, actual damages in the amount of not less
than ₱40,000.00 for each cropping season lost, ₱30,000.00attorney’s fees, and costs.
Respondent filed a Motion to Dismiss,16 claiming that the subject properties are agricultural lands – which thus
renders the dispute an agrarian matter and subject to the exclusive jurisdiction of the Department of Agrarian
Reform Adjudication Board (DARAB). However, in a January 30, 2006 Order,17 the MCTC denied the motion, finding
that the pleadings failed to show the existence of a tenancy or agrarian relationship between the parties that would
bring their dispute within the jurisdiction of the DARAB. Respondent’s motion for reconsideration was similarly
rebuffed.18
Respondent filed his Amended Answer with Counterclaim,19 alleging among others that petitioners’ titles have been
ordered cancelled in a December 1, 2001 Resolution20 issued by the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94; that he is the absolute owner of approximately 3.5 hectares of the subject
parcels of land, and is the administrator and overseer of the remaining portion thereof, which belongs to his
principals Leonardo and Evangeline Taggueg (the Tagguegs); that petitioners abandoned the subject properties in
1993, and he planted the same with corn; that in 2004, he planted the land to rice; that he sued petitioners before
the Municipal Agrarian Reform Office (MARO) for non-payment of rentals since 1995; and that the court has no
jurisdiction over the ejectment case, which is an agrarian controversy.
The parties submitted their respective Position Papers and other evidence.21
During the proceedings before the MCTC, respondent presented certificates of title, supposedly issued in his name
and in the name of the Tagguegs in 2001, which came as a result of the supposed directive in Administrative Case
No. A0200 0028 94 to cancel petitioners’ titles. As claimed by respondent, the subject parcels of land formed part of
a 23.663-hectare property owned by one Romulo Taggueg, Sr. (Romulo Sr.) and covered by Original Certificate of
Title No. (OCT) P-4835, which was placed under the Operation Land Transfer Program pursuant to Presidential
Decree No. 2722 (PD 27). Petitioners supposedly became farmer-beneficiaries under the program, and the parcels of
land were awarded to them.
Meanwhile, Romulo Sr. died and his heirs instituted Administrative Case No. A0200 0028 94 to cancel petitioners’
titles. The heirs won the case, and later on new titles over the property were issued in their favor. In turn, one of the
heirs transferred his title in favor of respondent.
Ruling of the Municipal Circuit Trial Court
On April 12, 2007, a Decision23 was rendered by the MCTC in SCA 475, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant as follows:
1. Ordering the defendant or any person or persons acting in his behalf to vacate the entire SEVENTY NINE
THOUSAND SEVEN HUNDRED FIFTY TWO (79,752)[-]SQUARE METERS, property described under paragraph 2
of the amended complaint and to peacefully surrender the physical possession thereof in favor of each of the
plaintiffs;
2. Ordering the defendant to pay each of the plaintiffs representing actual damages as follows:
o Charles Bumagat …………………... ₱109,390.00
o Julian Bacudio …………………….... ₱110,980.00
o Rosario Padre ……………………… ₱112,305.00
o Sps. Rogelio and ZosimaPadre ..... ₱100,575.00
o Felipe Domincil …………………..… ₱165,429.00
3. Ordering the defendant to pay plaintiffs representing the Attorney’s fees in the amount of ₱10,000.00.
4. Ordering the defendant to pay costs of the suit.
SO ORDERED.24
Essentially, the MCTC held that based on the evidence, petitioners were in actual possession of the subject parcels
of land, since respondent himself admitted that he brought an action against petitioners before the MARO to collect
rentals which have remained unpaid since 1995 – thus implying that petitioners, and not respondent, were in actual
possession of the land, and belying respondent’s claim that he took possession of the property in 1993 when
petitioners supposedly abandoned the same. The court added that petitioners’ claims were corroborated by the
statements of other witnesses – farmers of the adjoining lands – declaring that petitioners have been in unmolested
and peaceful possession of the subject property until May 9, 2005,when they were dispossessed by respondent.
The MCTC added that it had jurisdiction over the case since there is no tenancy relationship between the parties,
and the pleadings do not allege such fact; that respondent’s own witnesses declared that the subject property was
never tenanted nor under lease to tenants.
Finally, the MCTC held that while respondent and his principals, the Tagguegs, have been issued titles covering the
subject property, this cannot give respondent "license to take the law into his own hands and unilaterally eject the
plaintiffs from the land they have been tilling."25

Respondent appealed26 the MCTC Decision before the Regional Trial Court (RTC), insisting that the DARAB has
jurisdiction over the case; that he has been in actual possession of the subject land since 2003; that while
petitioners hold certificates of title to the property, they never acquired ownership over the same for failure to pay
just compensation therefor; that petitioners’ titles have been ordered cancelled, and they reverted to the status of
mere tenants; and that the MCTC erred in granting pecuniary awards to petitioners.
On October 15, 2007, the RTC issued its Order27 denying the appeal for lack of merit and affirming in toto the
appealed MCTC judgment. In sum, the RTC pronouncement echoed the MCTC findings that no tenancy or any
other agrarian relationship existed between the parties, nor do the pleadings bear out such fact; that the evidence
preponderantly shows that petitioners were in actual possession of the subject land; and that petitioners were
entitled to compensation as awarded by the court a quo.
Respondent went up to the CA by Petition for Review,28 assailing the Decision of the RTC and claiming that since
petitioners acquired title by virtue of PD 27, this should by itself qualify the controversy as an agrarian dispute
covered by the DARAB; that there is no need to allege in the pleadings that he and the heirs of Romulo Sr. acquired
title to the property, in order for the dispute to qualify as an agrarian dispute; that petitioners’ titles were ordered
cancelled in Administrative Case No. A0200 0028 94; that he has been in possession of the property since 2003;
and that the trial court erred in granting pecuniary awards to petitioners.
On February 19, 2010, the CA issued the assailed Decision, which held thus:
IN VIEW WHEREOF, the petition is GRANTED. The assailed Order of the Regional Trial Court of Cabagan, Isabela,
Branch 22, dated October 15, 2007, affirming in toto the previous Decision of the MCTC of Cabagan-Sto. Tomas,
Isabela is hereby REVERSED and SET ASIDE. Civil Case No. 475, entitled "Charles Bumagat, Julian Bacudio,
Rosario Padre, Sps. Rogelio and Zosima Padre and Felipe Domincil versus Regalado Arribay" is DISMISSED.
SO ORDERED.29
In reversing the trial court, the CA agreed that the parties’ dispute fell under the jurisdiction of the DARAB since
petitioners’ titles were obtained pursuant to PD 27, and under the 1994 DARAB rules of procedure, cases involving
the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation
Patents (EPs) which are registered with the Land Registration Authority fall under DARAB jurisdiction.30 The
appellate court added that the Complaint for ejectment attacked the certificates of title issued in favor of respondent
and the Tagguegs because the complaint prayed for –
x x x the annulment of the coverage of the disputed property within the Land Reform Law which is but an incident
involving the implementation of the CARP. These are matters relating to terms and conditions of transfer of
ownership from landlord to agrarian reform beneficiaries over which DARAB has primary and exclusive original
jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure.31
Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the CA stood its ground. Hence, the
present recourse.
Issue
Petitioners raise the following issue in this Petition:
WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MCTC HAD NO
JURISDICTION OVER THE COMPLAINT OF THE (PETITIONERS), INSTEAD IT IS THE DARAB THAT HAS
JURISDICTION, SINCE THE COMPLAINT ESSENTIALLY PRAYS FOR THE ANNULMENT OFTHE COVERAGE
OF THE DISPUTED PROPERTY WITH THE LAND REFORM LAW WHICH IS BUT AN INCIDENT INVOLVING
THE IMPLEMENTATION OF THE CARP.32
In their Petition and Reply,33 petitioners seek a reversal of the assailed CA dispositions and the reinstatement of the
MCTC’s April 12, 2007 Decision, arguing that their Complaint for ejectment simply prays for the recovery of de facto
possession from respondent, who through force, threat and intimidation evicted them from the property; that there is
no agrarian reform issue presented therein; that the fact that the controversy involved agricultural land does not ipso
facto make it an agrarian dispute; that the parties’ dispute does not relate to any tenurial arrangement over
agricultural land; and that quite the contrary, the parties are strangers to each other and are not bound by any
tenurial relationship, whether by tenancy, leasehold, stewardship, or otherwise.34
Petitioners add that when certificates of title were issued in their favor, they ceased to be tenant-tillers of the land
but became owners thereof; that full ownership over the property was acquired when emancipation patents were
issued in their favor;35 that when their certificates of title were issued, the application of the agrarian laws was
consummated; and that as owners of the subject property, they were thus in peaceful and adverse physical
possession thereof when respondent ousted them by force, threat and intimidation. Petitioners argue further that
respondent is not the former landowner, nor the representative thereof; he is merely an absolute stranger who came
into the picture only later.
Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to evict respondent, they were in
effect mounting an attack on the latter’s title and thus their Complaint in effect sought the "the annulment of the
coverage of the disputed property within the Land Reform Law which is but an incident involving the implementation
of the CARP,"36 which thus relates to "terms and conditions of transfer of ownership from landlord to agrarian reform
beneficiaries over which DARAB has primary and exclusive original jurisdiction x x x."37
Seeking the denial of the Petition, respondent in his Comment38 insists that the ejectment case is intertwined with the
CARP Law,39 since petitioners’ titles were obtained by virtue of the agrarian laws, which thus places the controversy
within the jurisdiction of the DARAB; that under the 2003 DARAB Rules of Procedure, specifically Rule II, Section 1,
paragraph 1.440 thereof, cases involving the ejectment and dispossession of tenants and/or leaseholders fall within
the jurisdiction of the DARAB; that under such rule, the one who ejects or dispossesses the tenant need not be the
landowner or lessor, and could thus be anybody, including one who has no tenurial arrangement with the
evicted/dispossessed tenant.
Respondent adds that with the cancellation of petitioners’ titles, they were directed to enter into a leasehold
relationship with the owners of the subject parcels of land, or the heirs of Romulo Sr. – whose petition for exemption
and application for retention were granted and approved by the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94 – and later, with him as transferor and purchaser of a 3.5-hectare portion
thereof.
Our Ruling
In declaring that the parties’ dispute fell under the jurisdiction of the DARAB, the CA held that respondents’ titles
were obtained pursuant to PD 27, and pursuant to the 1994 DARAB rules of procedure then applicable, cases
involving the issuance, correction and cancellation of CLOAs and EPs which are registered with the Land
Registration Authority fall under DARAB jurisdiction. It added that since the Complaint prayed for the annulment of
the coverage of the disputed property under the land reform law, which thus relates to terms and conditions of
transfer of ownership from landlord to agrarian reform beneficiaries, the DARAB exercises jurisdiction.
What the appellate court failed to realize, however, is the fact that as between petitioners and the respondent, there
is no tenurial arrangement, not even an implied one. As correctly argued by petitioners, a case involving agricultural
land does not immediately qualify it as an agrarian dispute. The mere fact that the land is agricultural does not ipso
facto make the possessor an agricultural lessee or tenant. There are conditions or requisites before he can qualify
as an agricultural lessee or tenant, and the subject being agricultural land constitutes just one condition.41 For the
DARAB to acquire jurisdiction over the case, there must exist a tenancy relation between the parties. "[I]n order for a
tenancy agreement to take hold over a dispute, it is essential to establish all its indispensable elements, to wit: 1)
that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject matter of the relationship
is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the
relationship is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or
agricultural lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural
lessee."42In the present case, it is quite evident that not all of these conditions are present. For one, there is no
tenant, as both parties claim ownership over the property.
Besides, when petitioners obtained their emancipation patents and subsequently their certificates of title, they
acquired vested rights of absolute ownership over their respective landholdings. "It presupposes that the grantee or
beneficiary has, following the issuance of a certificate of land transfer, already complied with all the preconditions
required under P.D. No. 27, and that the landowner has been fully compensated for his property. And upon the
issuance of title, the grantee becomes the owner of the landholding and he thereby ceases to be a mere tenant or
lessee. His right of ownership, once vested, becomes fixed and established and is no longer open to doubt or
controversy."43 Petitioners "became the owner[s] of the subject property upon the issuance of the emancipation
patents and, as such, [enjoy] the right to possess the same—a right that is an attribute of absolute ownership."44
On the other hand, it appears that respondent obtained title through Romulo Sr.’s heirs, whose claim to the property
is by virtue of an unregistered deed of donation in their favor supposedly executed prior to September 21, 1972. On
this basis, the heirs filed in 1993 a petition with the Department of Agrarian Reform, Region 2 to exempt the property
from coverage under PD 27, which was granted in a December 29, 1994 Order.45 By then, or way back in 1986
petitioners had been issued certificates of title thus, respondent’s acquisition of the property appears questionable,
considering the Court’s pronouncement in Gonzales v. Court of Appeals,46 thus:
The sole issue to be resolved is whether the property subject of the deed of donation which was not registered when
P.D. No. 27 took effect, should be excluded from x x x Operation Land Transfer.
Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the ownership and
possession of Lot 551-C which comprises an area of 46.97 hectares to his 14 grandchildren. They further assert that
inasmuch as Lot 551-C had already been donated, the same can no longer fall within the purview of P.D.No. 27,
since each donee shall have a share of about three hectares only which is within the exemption limit of seven
hectares for each landowner provided under P.D. No. 27.
Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable may be valid, it must
be made in a public document, specifying therein the property donated and the value of the charges which the
donee must satisfy." Corollarily, Article 709 of the same Code explicitly states that "the titles of ownership, or other
rights over immovable property, which are not duly inscribed or annotated in the Registry of property shall not
prejudice third persons." From the foregoing provisions, it may be inferred that as between the parties to a donation
of an immovable property, all that is required is for said donation to be contained in a public document. Registration
is not necessary for it to be considered valid and effective. However, in order to bind third persons, the donation
must be registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the non-
registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the
rights of third persons are affected, as in the case at bar.
It is actually the act of registration that operates to convey registered land or affect title thereto. Thus, Section 50 of
Act No. 496 (Land Registration Act), as amended by Section 51 of P.D. No. 1529 (Property Registration Decree),
provides:
SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds
to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned,
...
Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates constructive notice
to the whole world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as
amended by Section 52 of P.D. No. 1529, provides:
SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the Office of the
Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons
from the time of such registering, filing or entering.
It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his grandchildren, although in
writing and duly notarized, has not been registered in accordance with law. For this reason, it shall not be binding
upon private respondents who did not participate in said deed or had no actual knowledge thereof. Hence, while the
deed of donation is valid between the donor and the donees, such deed, however, did not bind the tenants-farmers
who were not parties to the donation. As previously enunciated by this Court, non-registration of a deed of donation
does not bind other parties ignorant of a previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]).
So it is of no moment that the right of the [tenant]-farmers in this case was created by virtue of a decree or law. They
are still considered "third persons" contemplated in our laws on registration, for the fact remains that these [tenant]-
farmers had no actual knowledge of the deed of donation.
xxxx
As a final note, our laws on agrarian reform were enacted primarily because of the realization that there is an urgent
need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws, the majority of
these farmers still live on a hand-to-mouth existence. This can be attributed to the fact that these agrarian laws have
never really been effectively implemented. Certain individuals have continued to prey on the disadvantaged, and as
a result, the farmers who are intended to be protected and uplifted by the said laws find themselves back in their
previous plight or even in a more distressing situation. This Court ought to be an instrument in achieving a dignified
existence for these farmers free from pernicious restraints and practices, and there’s no better time to do it than
now.47
When petitioners’ titles were issued in 1986, these became indefeasible and incontrovertible. Certificates of title
issued pursuant to emancipation patents acquire the same protection accorded to other titles, and become
indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order for the
issuance of the patent. Lands so titled may no longer be the subject matter of a cadastral proceeding; nor can they
be decreed to other individuals.48 "The rule in this jurisdiction, regarding public land patents and the character of the
certificate of title that may be issued by virtue thereof, is that where land is granted by the government to a private
individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the grantee;
thereafter, the land is automatically brought within the operation of the Land Registration Act, the title issued to the
grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon
expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a
certificate issued in a registration proceeding."49
For the above reasons, the Court is not inclined to believe respondent’s contention that with the issuance of the
December 29, 1994 Order of the Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028
94 ordering the cancellation of petitioners’ titles, the latter were relegated to the status of mere tenants. Nor can the
Court agree with the appellate court’s observation that through the forcible entry case, petitioners impliedly seek to
exclude the property from land reform coverage; there is no factual or legal basis for such conclusion, and no such
inference could be logically generated. To begin with, petitioners acknowledge nothing less than ownership over
1âwphi 1
the property.
Likewise, for the foregoing reasons, it may be concluded that petitioners exercised prior peaceful and uninterrupted
possession of the property until the same was interrupted by respondent’s forcible intrusion in 2005; being farmer
beneficiaries under PD 27 and finally having acquired title to the property in 1986, the Court is inclined to believe
that petitioners continued to till their landholdings without fail. Indeed, the evidence on record indicates such
peaceful and undisturbed possession, while respondent’s claim that he entered the property as early as in 1993
remains doubtful, in light of his own admission that he sued petitioners for the collection of supposed rentals which
they owed him since 1995. Petitioners’ witnesses further corroborate their claim of prior peaceful possession. With
regard to the portion of the property which is not titled to petitioners but over which they exercise possessory rights,
respondent has not sufficiently shown that he has any preferential right to the same either; the Court adheres to the
identical findings of fact of the MCTC and RTC.
Finally, respondent’s submissions are unreliable for being contradictory. In some of his pleadings, he claims to have
acquired possession over the property as early as in 1993; in others, he declares that he entered the land in 2003.
Notably, while he claimed in his Answer in the MCTC that he entered the land in 1993, he declared in his appeal
with the RTC and Petition for Review in the CA that he took possession of the property only in 2003.50 Irreconcilable
and unexplained contradictions on vital points in respondent’s account necessarily disclose a weakness in his
case.51
Regarding the award of actual damages, which respondent prominently questioned all throughout the proceedings,
this Court finds that there is sufficient basis for the MCTC to award petitioners the total amount of ₱598,679.00 by
way of actual damages. The trial court’s findings on this score are based on the evidence presented by the
petitioners and the respective statements of their witnesses, who themselves are farmers cultivating lands adjacent
to the subject property.52
WHEREFORE, the Petition is GRANTED. The assailed February 19, 2010 Decision and November 9, 2010
Resolution of the Court of Appeals in CAG.R. SP No. 101423 are REVERSED and SET ASIDE. The April 12, 2007
Decision of the 2nd Municipal Circuit Trial Court of Cabagan-Delfin Albano, Isabela in Special Civil Action No. 475 is
REINSTATED and AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 179535, June 09, 2014
JOSE ESPINELI A.K.A. DANILO ESPINELI, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Jurisprudence teaches us that “for circumstantial evidence to be sufficient to support a conviction, all circumstances must be
consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent with
the hypothesis that he is innocent x x x.”1 Thus, conviction based on circumstantial evidence can be upheld provided that
the circumstances proven constitute an unbroken chain which leads to one fair and reasonable conclusion that points to the
accused, to the exclusion of all others, as the guilty person.2 cralawred
Assailed in the present Petition for Review on Certiorari3 is the July 6, 2007 Decision4 of the Court of Appeals (CA) in CA-G.R.
CR-H.C. No. 02252 which modified the August 31, 1999 Decision5 of the Regional Trial Court (RTC) of Imus, Cavite, Branch
90, by finding petitioner Jose Espineli a.k.a. Danilo “Danny” Espineli (petitioner) guilty of the crime of homicide instead of
murder. Also questioned is the CA’s September 14, 2007 Resolution6 denying petitioner’s Motion for Reconsideration.7 cralawred
Factual Antecedents
On June 24, 1997, an Information8 charging petitioner with the crime of murder was filed before the RTC,9 the accusatory
portion of which reads as follows:ChanRobles Vi rt ualawlib ra ry
That on or about the 15th day of December, 1996 in the Municipality of Imus, Province of Cavite, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, together with one (1) Sotero Paredes and three (3) other
unidentified persons, whose real names, identities and whereabouts are still unknown, said Sotero Paredes having been
earlier charged with the same offense, and is now undergoing trial before Branch 90, of the Regional Trial Court of Cavite,
then armed with firearms, conspiring, confederating and mutually helping one another, with intent to kill, with treachery and
evident premeditation and taking advantage of superior strength, did then and there, willfully, unlawfully and feloniously,
attack, assault and shoot one Alberto Berbon y Downie with the use of said firearms, thereby inflicting upon the latter
multiple gunshot wounds on his head and different parts of his body which caused his instantaneous death, to the damage
and prejudice of the heirs of said Alberto Berbon y Downie.
CONTRARY TO LAW.10
Petitioner was arrested on July 1, 1997 and when arraigned on July 7, 1997 with the assistance of counsel, entered a plea of
not guilty.11
cra lawred
The facts show that in the early evening of December 15, 1996, Alberto Berbon y Downie (Alberto), a 49-year old Senior
Desk Coordinator of the radio station DZMM, was shot in the head and different parts of the body in front of his house in
Imus, Cavite by unidentified malefactors who immediately fled the crime scene on board a waiting car.
Meanwhile, the group of Atty. Orly Dizon (Atty. Dizon) of the National Bureau of Investigation (NBI) arrested and took into
custody one Romeo Reyes (Reyes) for the crime of Illegal Possession of Deadly Weapon. Reyes confided to the group of
Atty. Dizon that he was willing to give vital information regarding the Berbon case. In due course, NBI Agent Dave Segunial
(NBI Agent Segunial) interviewed Reyes on February 10, 1997 and reduced his statement into writing whereby Reyes
claimed that on December 15, 1996, he saw petitioner and Sotero Paredes (Paredes) board a red car while armed with a .45
caliber firearm and armalite, respectively; and that petitioner told Paredes that “ayaw ko nang abutin pa ng bukas yang si
Berbon.”12 Subsequently, Reyes posted bail and was released on February 14, 1997. Thenceforth, he jumped bail and was
never again heard of. NBI Agent Segunial testified on these facts during the trial.
The victim’s widow, Sabina Berbon (Sabina) likewise testified. According to her, sometime in the third week of February
1997 Reyes sought financial help so he could transfer his family to the province and protect them from any untoward
consequence that may result from his giving information to the NBI regarding the death of Sabina’s husband. Sabina gave
him the total amount of P1,500.00 and promised to help him in applying for the witness protection program. This was
affirmed on the witness stand by Sabina’s brother, Bartolome Pakingan. After that, however, Reyes never came back.
Another prosecution witness, Rodolfo Dayao (Rodolfo), testified that he sold his red Ford Escort car to three persons who
came to his residence in the afternoon of September 1, 1996. He later identified the said car from the photographs
presented to him by the police officers.
Dr. Ludivino J. Lagat (Dr. Lagat), the NBI Medico-Legal Officer who conducted a post-mortem examination on Alberto,
declared in his Autopsy Report that the victim suffered multiple gunshot wounds in the head and body. He also stated that
based on the size of the gunshot wounds or entrance, high-powered guns were used in the killing.
Petitioner, on the other hand, did not adduce evidence for his defense. Instead, he filed a Demurrer to Evidence13 without
leave of court. As no action whatsoever was taken thereon by the trial court, petitioner just moved that the case be deemed
submitted for decision.
In its Decision14 dated August 31, 1999, the trial court adjudged petitioner guilty of murder, thus: ChanRobles Virtualawl ibra ry
WHEREFORE, premises considered, accused JOSE ESPINELI a.k.a. DANILO “Danny” Espineli, is found guilty beyond
reasonable doubt of committing the crime of “Murder” as charged. He is, therefore, sentenced to suffer the penalty of
RECLUSION PERPETUA, and is likewise ordered to pay the heirs of Alberto Berbon y Downie, the civil indemnity of
P50,000.00, and actual and compensatory damages in the total amount of P135,000.00 as funeral expenses (Exhibit “H”),
interment fee of P8,360.00 (Exhibit “C”), medical expenses in the total amount of P1,519.45 (Exhibit[s] “D”, “D-1” and “D-
2”) and for the contract fees of Memorial Park Care the amount of P15,700.00 (Exhibit “E”).
Furthermore, considering that he is a high risk prisoner, his transfer to the National Penitentiary at Muntinlupa City, Metro
Manila, is immediately ordered.
SO ORDERED.15
Petitioner seasonably appealed his conviction before this Court. Pursuant, however, to the Court’s pronouncement in People
v. Mateo,16 the case was ordered transferred to the CA for appropriate action and disposition through a Resolution17 dated
March 22, 2006.
In its Decision18 promulgated on July 6, 2007, the CA affirmed with modification the findings of the trial court. It ratiocinated
that since none of the prosecution witnesses saw how the killing of the victim was perpetrated, the qualifying circumstance of
abuse of superior strength cannot be appreciated. Neither can nighttime serve as an aggravating circumstance as the time of
the commission of the crime was not even alleged in the Information. In view thereof, the CA found petitioner guilty only of
homicide instead of murder. The decretal portion of the appellate court’s Decision reads: ChanRoblesVirtualawl ibra ry
WHEREFORE, premises considered, the present appeal is hereby DISMISSED. The appealed Decision dated August 31, 1999
of the Regional Trial Court of Imus, Cavite, Branch 90 is hereby AFFIRMED with MODIFICATION in that accused-appellant is
hereby found GUILTY beyond reasonable doubt of the crime of Homicide and is hereby sentenced to an indeterminate prison
term of ten (10) years of prision mayor, as minimum, to seventeen (17) years and four (4) months of reclusion temporal, as
maximum.
In all other respects, the said decision STANDS.
In the service of his sentence, accused-appellant shall be credited in full with the period of his preventive imprisonment.
With costs against the accused-appellant.

SO ORDERED.19
Dissatisfied, petitioner filed a Motion for Reconsideration20 which the CA denied in its Resolution21 dated September 14, 2007.
Arguments of the Parties
Petitioner posits that the CA should not have affirmed the Decision of RTC as the latter erred: C hanRoble sVi rt ualawlib ra ry
x x x [in admitting, considering and giving] probative value to Exhibit “A”, the “Sinumpaang Salaysay” of [Reyes] because
[he] was not presented in court to confirm, affirm and authenticate the contents of his sworn statement. It resulted in the
denial of petitioner’s constitutional right to confront and cross-examine his accusers.22cralaw red
x x x [in convicting] the [petitioner] based on unproven, inadmissible circumstantial evidence.23 c ralawre d
x x x in not acquitting the petitioner for failure of the prosecution to prove [his guilt] beyond reasonable doubt x x x.24
In sum, petitioner anchors his quest for the reversal of his conviction on the alleged erroneous admission in evidence of
the Sinumpaang Salaysay25 of Reyes for being hearsay and inadmissible. He avers that the said sworn statement should not
have been given probative value because its contents were neither confirmed nor authenticated by the affiant. Thus, all
circumstances emanating from or included in the sworn statement must be totally brushed aside as lacking any evidentiary
and probative value. Petitioner emphasizes that as found by the courts below, there was no direct evidence linking him to
the crime; therefore, he wants this Court to review the sufficiency of the circumstantial evidence upon which his conviction
was based as he believes that the same failed to establish his guilt beyond reasonable doubt.
For its part, the Office of the Solicitor General (OSG), representing respondent People of the Philippines, concurs with the
petitioner and recommends his acquittal.26 It is also of the view that the prosecution failed to discharge its burden of proving
petitioner’s guilt beyond reasonable doubt.
Truly, “direct evidence of the commission of a crime is not the only basis from which a court may draw its finding of
guilt.”27 The rules of evidence allow a trial court to rely on circumstantial evidence to support its conclusion of
guilt. Circumstantial evidence is that evidence “which indirectly proves a fact in issue through an inference which the fact-
finder draws from the evidence established.”28 Under Section 4, Rule 133 of the Rules of Court, circumstantial evidence
would be sufficient to convict the offender “if i) there is more than one circumstance; ii) the facts from which the inference is
derived are proven; and iii) the combination of all circumstances is such as to produce a conviction beyond reasonable
doubt.”29 All the circumstances must be consistent with one another, consistent with the hypothesis that the accused is
guilty and at the same time inconsistent with the hypothesis that he is innocent. Thus, conviction based on circumstantial
evidence can be upheld provided that the circumstances proved constitute an unbroken chain which leads to one fair and
reasonable conclusion that points to the accused, to the exclusion of all others as the guilty person.30 c ralawre d
In this case, the circumstances found by the CA as forming an unbroken chain leading to one fair and reasonable conclusion
that petitioner, to the exclusion of all others, is the guilty person are the following:
1. In the morning of December 15, 1996, petitioner was heard telling his co-accused Sotero Paredes (Sotero) “ayaw ko nang
abutin pa ng bukas yang si Berbon” before boarding a red car. Sotero was holding an armalite rifle while petitioner was
armed with a .45 caliber pistol;
2. The said red car was identified or recognized by prosecution witness Rodolfo to be the same car he had sold to Sotero for
P10,000.00 in September 1996;
3. The victim Alberto was fatally shot later in the day (December 15, 1996) by unidentified gunmen who thereafter
immediately fled riding a red car; and
4. Post-mortem examination of the victim’s body showed that he sustained multiple gunshot wounds, the nature, severity
and characteristics of which indicate that they were inflicted using high-powered guns, possibly an armalite rifle and .22
caliber pistol.31
c ralawred
The records reveal that there was no eyewitness to the actual killing of Alberto. Thus the courts below were forced to render
their verdict of conviction on circumstantial evidence as sanctioned under Section 4, Rule 13332 of the Rules of Court. The
central issue now confronting this Court is whether the prosecution has amply proved by circumstantial evidence petitioner’s
guilt beyond reasonable doubt.
The circumstantial evidence relied upon
by the Court of Appeals sufficiently support
petitioner’s conviction.
The Court has carefully scrutinized the evidence presented in this case in the light of the standards discussed above and finds
the foregoing circumstantial evidence sufficient to support a judgment of conviction. Several reasons deserve our
acceptance of the circumstances upon which petitioner’s conviction was based, to wit:
First, NBI Agent Segunial testified that he had investigated Reyes and reduced the latter’s statement into writing declaring,
among others, that in the morning of December 15, 1996, he (Reyes) overheard petitioner telling Sotero “Ayaw ko nang
abutin pa ng bukas yang si Berbon” and saw them armed with .45 caliber pistol and an armalite, respectively, before
boarding a red car. The CA gave weight to Reyes’ sworn statement in this wise: ChanRobles Vi rtualawl ib rary
The probative value of Romeo Reyes’ sworn statement as to the words spoken by appellant to his co-accused Sotero Paredes
in the morning of December 15, 1996 cannot be disputed. x x x33
Petitioner takes vigorous exception to the said findings, insisting that the said sworn statement belongs to the category of
hearsay evidence and therefore inadmissible. He asserts that its contents were never confirmed or authenticated by Reyes,
thus, it lacks probative value.
The Court is unconvinced.
The hearsay evidence rule as provided under Section 36, Rule 130 of the Rules of Court states: ChanRoblesVi rt ualawlib ra ry
Sec. 36. Testimony generally confined to personal knowledge; hearsay excluded. – A witness can testify only to those facts
which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided
in these rules.
Evidence is hearsay when its probative force depends in whole or in part on the competency and credibility of some persons
other than the witness by whom it is sought to produce. However, while the testimony of a witness regarding a statement
made by another person given for the purpose of establishing the truth of the fact asserted in the statement is clearly
hearsay evidence, it is otherwise if the purpose of placing the statement on the record is merely to establish the fact that the
statement, or the tenor of such statement, was made. Regardless of the truth or falsity of a statement, when what is
relevant is the fact that such statement has been made, the hearsay rule does not apply and the statement may be
shown. As a matter of fact, evidence as to the making of the statement is not secondary but primary, for the statement
itself may constitute a fact in issue or is circumstantially relevant as to the existence of such a fact.34 This is known as the
doctrine of independently relevant statements.35 cralawred
In the present case, the testimony of NBI Agent Segunial that while he was investigating Reyes, the latter confided to him
that he (Reyes) heard petitioner telling Sotero “Ayaw ko nang abutin pa ng bukas yang si Berbon” and that he saw the two
(petitioner and Sotero) armed with a .45 caliber pistol and an armalite, respectively, before boarding a red car, cannot be
regarded as hearsay evidence. This is considering that NBI Agent Segunial’s testimony was not presented to prove the truth
of such statement but only for the purpose of establishing that on February 10, 1997, Reyes executed a sworn statement
containing such narration of facts. This is clear from the offer of the witness’ oral testimony.36 Moreover, NBI Agent
Segunial himself candidly admitted that he is incompetent to testify on the truthfulness of Reyes’ statement.37 Verily then,
what the prosecution sought to be admitted was the fact that Reyes made such narration of facts in his sworn statement and
not necessarily to prove the truth thereof. Thus, the testimony of NBI Agent Segunial is in the nature of an independently
relevant statement where what is relevant is the fact that Reyes made such statement and the truth and falsity thereof is
immaterial. In such a case, the statement of the witness is admissible as evidence and the hearsay rule does not
apply.38 Moreover, the written statement of Reyes is a notarized document having been duly subscribed and sworn to before
Atty. Cesar A. Bacani, a supervising agent of the NBI. As such, it may be presented in evidence without further proof, the
certificate of acknowledgment being a prima facie evidence of the due execution of this instrument or document involved
pursuant to Section 30 of Rule 132 of the Rules of Court. As held in Gutierrez v. Mendoza-Plaza,39 a notarized document
enjoys a prima facie presumption of authenticity and due execution which must be rebutted by clear and convincing
evidence. Here, no clear and convincing evidence was presented by petitioner to overcome such presumption. Clearly,
therefore, the CA did not err in its appreciation of Reyes’ sworn statement as testified to by NBI Agent Segunial.
Second, the identification and recognition through photograph by Rodolfo of the 1971 Ford Escort red colored car as the
same car he had sold to Sotero in September 1996 clearly and convincingly prove that it was the very same red car used in
the killing of Alberto on December 15, 1996.
Third, Alberto was shot and killed on December 15, 1996 and the gunmen immediately fled the scene riding a red car which
was identified as the same car previously sold by Rodolfo to Sotero.
Fourth, though the testimony of Dr. Lagat was limited to the post-mortem examination of the cadaver of Alberto, his findings
that the victim suffered multiple gunshot wounds and that the same were caused by high-powered guns, served as
corroborative evidence and contributed in a significant way in establishing the level of proof that the law requires in
convicting petitioner.
Lastly, petitioner’s escape from detention on August 26, 1998 while the case was pending can also be considered as another
circumstance since it is a strong indication of his guilt.
All told, this Court finds the concordant combination and cumulative effect of the alleged established circumstances, which
essentially were the same circumstances found by the trial court and the appellate court, to have satisfied the requirement of
Section 4, Rule 133 of the Rules of Court. Indeed, the incriminating circumstances, when taken together, constitute an
unbroken chain of events enough to arrive at the conclusion that petitioner was responsible for the killing of the victim.
Besides, it is “[a]n established rule in appellate review x x x that the trial court’s factual findings, including its assessment of
the credibility of the witnesses and the probative weight of their testimonies, as well as the conclusions drawn from the
factual findings, are accorded respect, if not conclusive effect. These factual findings and conclusions assume greater weight
if they are affirmed by the CA,”40 as in this case.
The Crime Committed and the Proper Penalty.
The Court agrees with the CA that petitioner is guilty only of the crime of homicide in view of the prosecution’s failure to
prove any of the alleged attendant circumstances of abuse of superior strength and nighttime. As aptly observed by the
appellate court: ChanRoble sVi rt ualawlib ra ry
The circumstance of abuse of superior strength is present whenever there is inequality of forces between the victim and the
aggressor, assuming a situation of superiority of strength notoriously advantageous for the aggressor, and the latter takes
advantage of it in the commission of the crime. However, as none of the prosecution witnesses saw how the killing was
perpetrated, abuse of superior strength cannot be appreciated in this case. Neither can nighttime serve as an aggravating
circumstance, the time of the commission of the crime was not even alleged in the Information.41 (Citations omitted)
The penalty prescribed by law for the crime of homicide is reclusion temporal.42 In view of the absence of any mitigating or
aggravating circumstance and applying the Indeterminate Sentence Law, the maximum of the sentence should be within the
range of reclusion temporal in its medium term which has a duration of fourteen (14) years, eight (8) months and one (1)
day to seventeen (17) years and four (4) months, while the minimum should be within the range of prision mayor which has
a duration of six (6) years and one (1) day to twelve (12) years. Thus, the imposition by the CA of an indeterminate prison
term of ten (10) years of prision mayor, as minimum, to seventeen (17) years and four (4) months of reclusion temporal, as
maximum, is in order.
Petitioner’s Civil liability
While the CA correctly imposed the amount of P50,000.00 as civil indemnity, it failed, however, to award moral damages.
These awards are mandatory without need of allegation and proof other than the death of the victim, owing to the fact of the
commission of murder or homicide.43 Thus, for moral damages, the award of P50,000.00 to the heirs of the victim is only
proper.
Anent the award of actual damages, this Court sees no reason to disturb the amount awarded by the trial court as upheld by
the CA since the itemized medical and burial expenses were duly supported by receipts and other documentary evidence.
The CA did not grant any award of damages for loss of earning capacity and rightly so. Though Sabina testified as to the
monthly salary of the deceased, the same remains unsubstantiated. “Such indemnity cannot be awarded in the absence of
documentary evidence except where the victim was either self-employed or a daily wage worker earning less than the
minimum wage under current labor laws.”44 The exceptions find no application in this case.
In addition and in conformity with current policy, an interest at the legal rate of 6% per annum is imposed on all the
monetary awards for damages from date of finality of this judgment until fully paid.
WHEREFORE, in light of all the foregoing, the Petition is hereby DENIED. The Decision dated July 6, 2007 and Resolution
dated September 14, 2007 of the Court of Appeals in CA-G.R. CR-H.C. No. 02252 are AFFIRMED with
the MODIFICATIONS that petitioner JOSE ESPINELI a.k.a. DANILO “DANNY” ESPINELI is further ordered to pay the heirs of
the victim ALBERTO BERBON y DOWNIE P50,000.00 as moral damages as well as interest on all the damages assessed at
the legal rate of 6% per annum from date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 177592 June 9, 2014
AVELINO S. ALILIN, TEODORO CALESA, CHARLIE HINDANG, EUTIQUIO GINDANG, ALLAN SUNGAHID,
MAXIMO LEE, JOSE G. MORA TO, REX GABILAN, AND EUGEMA L. LAURENTE, Petitioners,
vs.
PETRON CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
A contractor is presumed to be a labor-only contractor, unless it proves that it has the substantial capital,
investment, tools and the like. However, where the principal is the one claiming that the contractor is a legitimate
contractor, the burden of proving the supposed status of the contractor rests on the principal.1
This Petition for Review on Certiorari2 assails the Decision3 dated May 10, 2006 of the Court of Appeals (CA) in CA-
G.R. SP No. 01291 which granted the Petition for Certiorari filed therewith, reversed and set aside the February 18,
2005 Decision4 and August 24, 2005 Resolution5 of the National Labor Relations Commission (NLRC) in NLRC
Case No. V-000481-2003 and dismissed the Complaint for illegal dismissal filed by petitioners Avelino Alilin (Alilin),
Teodoro Calesa (Calesa), Charlie Hindang (Hindang), Eutiquio Gindang (Gindang), Allan Sungahid (Sungahid),
Maximo Lee (Lee), Jose G. Morato (Morato), Rex Gabilan (Gabilan) and Eugema L. Laurente (Laurente) against
respondent Petron Corporation (Petron). Also assailed in this Petition is the CA Resolution6 dated March 30, 2007
which denied petitioners’ Motion for Reconsideration7 and Supplemental Motion for Reconsideration.8
Factual Antecedents
Petron is a domestic corporation engaged in the oil business. It owns several bulk plants in the country for receiving,
storing and distributing its petroleum products.
In 1968, Romualdo D. Gindang Contractor, which was owned and operated by Romualdo D. Gindang (Romualdo),
started recruiting laborers for fielding to Petron’s Mandaue Bulk Plant. When Romualdo died in1989, his son Romeo
D. Gindang (Romeo), through Romeo D. Gindang Services(RDG), took over the business and continued to provide
manpower services to Petron. Petitioners were among those recruited by Romualdo D. Gindang Contractor and
RDG to work in the premises of the said bulk plant, with the corresponding dates of hiring and work duties, to wit:
Employees Date of Hiring Duties

Eutiquio Gindang 1968 utility/tanker receiver/barge loader/warehouseman/mixer
Eugema L. Laurente June 1979 telephone operator/order taker
Teodoro Calesa August 1, 1981 utility/tanker receiver/barge loader/sounder/gauger
Rex Gabilan July 1, 1987 warehouseman/forklift driver/tanker receiver/barge loader
Charlie T. Hindang September 18, 1990 utility/tanker receiver/barge loader/sounder/gauger
Allan P. Sungahid September 18, 1990 filler/sealer/painter/tanker receiver/utility
Maximo S. Lee September 18, 1990 gasul filler/painter/utility
Avelino S. Alilin July 16, 1992 carpenter/driver
Jose Gerry M. Morato March 16, 1993 cylinder checker/tanker receiver/grass cutter/janitor/utility
On June 1, 2000, Petron and RDG entered into a Contract for Services9 for the period from June 1, 2000 to May 31,
2002, whereby RDG undertook to provide Petron with janitorial, maintenance, tanker receiving, packaging and other
utility services in its Mandaue Bulk Plant. This contract was extended on July 31, 2002 and further extended until
September 30, 2002. Upon expiration thereof, no further renewal of the service contract was done.
Alleging that they were barred fromcontinuing their services on October 16, 2002, petitioners Alilin, Calesa,
Hindang, Gindang, Sungahid, Lee, Morato and Gabilan filed a Complaint10 for illegal dismissal, underpayment of
wages, damages and attorney’s fees against Petron and RDG on November 12, 2002. Petitioner Laurente filed
another Complaint11 for illegal dismissal, underpayment of wages, non-payment of overtime pay, holiday pay,
premium pay for holiday, rest day, 13th month pay, service incentive leave pay, allowances, separation pay,
retirement benefits, damages and attorney’s fees against Petron and RDG. The said complaints were later
consolidated.
Petitioners did not deny that RDG hired them and paid their salaries. They, however, claimed that the latter is a
labor-only contractor, which merely acted as an agent of Petron, their true employer. They asseverated that their
jobs, which are directly related to Petron’s business, entailed them to work inside the premises of Petron using the
required equipment and tools furnished by it and that they were subject to Petron’s supervision. Claiming to be
regular employees, petitioners thus asserted that their dismissal allegedly in view of the expiration of the service
contract between Petron and RDG is illegal.
RDG corroborated petitioners’ claim that they are regular employees of Petron. It alleged that Petron directly
supervised their activities; they performed jobs necessary and desirable to Petron’s business; Petron provided
petitioners with supplies, tools and equipment used in their jobs; and that petitioners’ workplace since the start of
their employment was at Petron’s bulk plant in Mandaue City. RDG denied liability over petitioners’ claim of illegal
dismissal and further argued that Petron cannot capitalize on the service contract to escape liability.
Petron, on the other hand, maintained that RDG is an independent contractor and the real employer of the
petitioners. It was RDG which hired and selected petitioners, paid their salaries and wages, and directly supervised
their work. Attesting to these were two former employees of RDG and Petron’s Mandaue Terminal Superintendent
whose joint affidavit12 and affidavit,13 respectively, were submitted by Petron. Anent its allegation that RDG is an
independent contractor, Petron presented the following documents: (1) RDG’s Certificate of Registration issued by
the Department of Labor and Employment (DOLE) on December 27, 2000;14 (2) RDG’s Certificate of Registration of
Business Name issued by the Department of Trade and Industry (DTI) on August 18, 2000;15 (3) Contractor’s Pre-
Qualification Statement;16 (4) Conflict of Interest Statement signed by Romeo Gindang as manager of RDG;17 (5)
RDG’s Audited Financial Statements for the years 199818 199919 and 2000;20 (6) RDG’s Mayor’s Permit for the years
200021 and 2001;22 (7) RDG’s Certificate of Accreditation issued by DTI in October 1991;23 (8) performance bond24and
insurance policy25 posted to insure against liabilities; (9) Social Security System (SSS) Online Inquiry System
Employee Contributions and Employee Static Information;26 and, (10) Romeo’s affidavit27 stating that he had paid the
salaries of his employees assigned to Petron for the period of November 4, 2001 to December 31, 2001. Petron
argued that with the expiration of the service contract it entered with RDG, petitioners’ term of employment has
concomitantly ended. And not being the employer, Petron cannot be held liable for petitioners’ claim of illegal
dismissal.
In a Decision28 dated June 12, 2003,the Labor Arbiter ruled that petitioners are regular employees of Petron. It found
that their jobs were directly related to Petron’s business operations; they worked under the supervision of Petron’s
foreman and supervisor; and they were using Petron’s tools and equipment in the performance of their works. The
Labor Arbiter also found that Petron merely utilized RDG in its attempt to hide the existence of employee-employer
relationship between it and petitioners and avoid liability under labor laws. And there being no showing that
petitioners’ dismissal was for just or authorized cause, the Labor Arbiter declared them to have been illegally
dismissed. Petron was thus held solidarily liable with Romeo for the payment of petitioners’ separation pay (in lieu of
reinstatement due to strained relations with Petron) fixed at one month pay for every year of service and backwages
computed on the basis of the last salary rate at the time of dismissal. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondents Petron Corporation
and Romeo Gindang to pay the complainants as follows:
1. Teodoro Calesa P 136,890.00

2. Eutiquio Gindang P 202,800.00
3. Charlie T. Gindang P 91,260.00
4. Allan P. Sungahid P 91,260.00
5. Jose Gerry Morato P 76,050.00
6. Avelino A. Alilin P 95,680.00
7. Rex S. Gabilan P 106,470.00
8. Maximo S. Lee P 91,260.00
9. Eugema Minao Laurente P 150,800.00
Total award ₱1,042,470.00
The other claims are dismissed for lack of merit.
SO ORDERED.29
Petron continued to insist that there is no employer-employee relationship between it and petitioners. The NLRC,
however, was not convinced. In its Decision30 of February 18, 2005, the NLRC ruled that petitioners are Petron’s
regular employees because they are performing job assignments which are germane to its main business. Thus:
WHEREFORE, premises considered, the Decision of the Labor Arbiter is hereby affirmed. It is understood that the
grant of backwages shall be until finality of the Decision.
The appeal of respondent Petron Corporation is hereby DISMISSED for lack of merit.
SO ORDERED.31
The NLRC also denied Petron’s Motion for Reconsideration in its Resolution32 of August 24, 2005.
Petron filed a Petition for Certiorari with prayer for the issuance of a temporary restraining order or writ of injunction
before the CA. The said court resolved to grant the injunction.33 Hence, a Writ of Preliminary Injunction34 to restrain
the implementation of the February 18, 2005 Decision and August 24, 2005 Resolution of the NLRC was issued on
March 3, 2006.
In a Decision35 dated May 10, 2006, the CA found no employer-employee relationship between the parties.
According to it, the records of the case do not show that petitioners were directly hired, selected or employed by
Petron; that their wages and other wage related benefits were paid by the said company; and that Petron controlled
the manner by which they carried out their tasks. On the other hand, RDG was shown to be responsible for paying
petitioners’ wages. In fact, SSS records show that RDG is their employer and actually the one remitting their
contributions thereto. Also, two former employees of RDG who were likewise assigned in the Mandaue Bulk Plant
confirmed by way of a joint affidavit that it was Romeo and his brother Alejandre Gindang who supervised their
work, not Petron’s foreman or supervisor. This was even corroborated by the Terminal Superintendent of the
Mandaue Bulk Plant.
The CA also found RDG to be an independent labor contractor with sufficient capitalization and investment as
shown by its financial statement for year-end 2000. In addition, the works for which RDG was contracted to provide
were menial which were neither directly related nor sensitive and critical to Petron’s principal business. The CA
disposed of the case as follows:
WHEREFORE, the Petition is GRANTED. The February 18, 2005 Decision and the August 24, 2005 Resolution of
the Fourth Division of the National Labor Relations Commission in NLRC Case No. V-000481-2003, entitled
"Teodoro Calesa et al. vs. Petron Corporation and R.D. Gindang Services", having been rendered with grave abuse
of discretion amounting to excess of jurisdiction, are hereby REVERSED and SET ASIDE and a NEW ONE is
entered DISMISSING private respondents’ complaint against petitioner. It is so ordered.36
Petitioners filed a Motion for Reconsideration37 insisting that Petron illegally dismissed them; that RDG is a labor-
only contractor; and that they performed jobs which are sensitive to Petron’s business operations. To support these,
they attached to their Supplemental Motion for Reconsideration38 Affidavits39 of former employees of Petron attesting
to the fact that their jobs were critical to Petron’s business operations and that they were carried out under the
control of a Petron employee.
Petitioners’ motions were, however, denied by the CA in a Resolution40 dated March 30, 2007.
Issue
The primary issue to be resolved in this case is whether RDG is a legitimate job contractor. Upon such finding
hinges the determination of whether an employer-employee relationship exists between the parties as to make
Petron liable for petitioners’ dismissal.
Our Ruling
The Petition is impressed with merit. The conflicting findings of the Labor Arbiter and the NLRC on one hand, and of
the CA on the other, constrains the Court to review the factual issues involved in this case.
As a general rule, the Court does not review errors that raise factual questions.41 Nonetheless, while it is true that the
determination of whether an employer-employee relationship existed between the parties basically involves a
question of fact, the conflicting findings of the Labor Arbiter and the NLRC on one hand, and of the CA on the other,
constrains the Court to review and reevaluate such factual findings.42
Labor-only contracting, distinguished
from permissible job contracting.
The prevailing rule on labor-only contracting at the time Petron and RDG entered into the Contract for Services in
June 2000 is DOLE Department Order No. 10, series of 1997,43 the pertinent provision of which reads:
Section 4. x x x
xxxx
(f) "Labor-only contracting" prohibited under this Rule is an arrangement where the contractor or subcontractor
merely recruits, supplies or places workers to perform a job, work or service for a principal and the following
elements are present:
(i) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work
or service under its own account and responsibility; and
(ii) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which
are directly related to the main business of the principal.
xxxx
Section 6. Permissible contracting or subcontracting. - Subject to the conditions set forth in Section 3 (d) and (e) and
Section 5 hereof, the principal may engage the services of a contractor or subcontractor for the performance of any
of the following:
(a) Works or services temporarily or occasionally needed to meet abnormal increase in the demand of products or
services, provided that the normal production capacity or regular workforce of the principal cannot reasonably cope
with such demands;
(b) Works or services temporarily or occasionally needed by the principal for undertakings requiring expert or highly
technical personnel to improve the management or operations of an enterprise;
(c) Services temporarily needed for the introduction or promotion of new products, only for the duration of the
introductory or promotional period;
(d) Works or services not directly related or not integral to the main business or operation of the principal, including
casual work, janitorial, security, landscaping, and messengerial services, and work not related to manufacturing
processes in manufacturing establishments;
(e) Services involving the public display of manufacturers’ products which do not involve the act of selling or
issuance of receipts or invoices;
(f) Specialized works involving the use of some particular, unusual or peculiar skills, expertise, tools or equipment
the performance of which is beyond the competence of the regular workforce or production capacity of the principal;
and
(g) Unless a reliever system is in place among the regular workforce, substitute services for absent regular
employees, provided that the period of service shall be coextensive with the period of absence and the same is
made clear to the substitute employee at the time of engagement. The phrase "absent regular employees" includes
those who are serving suspensions or other disciplinary measures not amounting to termination of employment
meted out by the principal, but excludes those on strike where all the formal requisites for the legality of the strike
have been prima facie complied with based on the records filed with the National Conciliation and Mediation Board.
"Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out with
a contractor or subcontractor the performance of a specific job, work, or service within a definite or predetermined
period, regardless of whether such job, work or, service is to be performed or completed within or outside the
premises of the principal. Under this arrangement, the following conditions must be met: (a) the contractor carries on
a distinct and independent business and undertakes the contract work on his account under his own responsibility
according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of his work except as to the results thereof; (b) the contractor has
substantial capital or investment; and (c) the agreement between the principal and contractor or subcontractor
assures the contractual employees’ entitlement to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure, and social welfare benefits."44 Labor-only contracting, on
the other hand, is a prohibited act, defined as "supplying workers to an employer who does not have substantial
capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly related to the principal business of
such employer."45 "[I]n distinguishing between prohibited labor-only contracting and permissible job contracting, the
totality of the facts and the surrounding circumstances of the case shall be considered."46 Generally, the contractor is
presumed to be a labor-only contractor, unless such contractor overcomes the burden of proving that it has the
substantial capital, investment, tools and the like. However, where the principal is the one claiming that the
contractor is a legitimate contractor, as in the present case, said principal has the burden of proving that supposed
status.47 It is thus incumbent upon Petron, and not upon petitioners as Petron insists,48 to prove that RDG is an
independent contractor.
Petron failed to discharge the burden of

proving that RDG is a legitimate
contractor. Hence, the presumption that
RDG is a labor-only contractor stands.
Here, the audited financial statements and other financial documents of RDG for the years 1999 to 2001 establish
that it does have sufficient working capital to meet the requirements of its service contract. In fact, the financial
evaluation conducted by Petron of RDG’s financial statements for years 1998-2000 showed RDG to have a
maximum financial capability of Php4.807 Million as of December 1998,49 and Php1.611 Million as of December
2000.50 Petron was able to establish RDG’s sufficient capitalization when it entered into the service contract in 2000.
The Court stresses though that this determination of RDG’s status as an independent contractor is only with respect
to its financial capability for the period covered by the financial and other documents presented. In other words, the
evidence adduced merely proves that RDG was financially qualified as a legitimate contractor but only with respect
to its last service contract with Petron in the year 2000.
As may be recalled, petitioners have rendered work for Petron for a long period of time even before the service
contract was executed in 2000. The respective dates on which petitioners claim to have started working for Petron,
as well as the fact that they have rendered continuous service to it until October 16, 2002, when they were
prevented from entering the premises of Petron’s Mandaue Bulk Plant, were not at all disputed by Petron. In fact,
Petron even recognized that some of the petitioners were initially fielded by Romualdo Gindang, the father of
Romeo, through RDG’s precursor, Romualdo D.Gindang Contractor, while the others were provided by Romeo
himself when he took over the business of his father in 1989. Hence, while Petron was able to establish that RDG
1âwphi1
was financially capable as a legitimate contractor at the time of the execution of the service contract in 2000, it
nevertheless failed to establish the financial capability of RDG at the time when petitioners actually started to work
for Petron in 1968, 1979, 1981, 1987, 1990,1992 and 1993.
Sections 8 and 9,Rule VIII, Book III51 of the implementing rules of the Labor Code, in force since 1976 and prior to
DOLE Department Order No. 10, series of 1997,52 provide that for job contracting to be permissible, one of the
conditions that has to be met is that the contractor must have substantial capital or investment. Petron having failed
to show that this condition was met by RDG, it can be concluded, on this score alone, that RDG is a mere labor-only
contractor. Otherwise stated, the presumption that RDG is a labor-only contractor stands due to the failure of Petron
to discharge the burden of proving the contrary.
The Court also finds, as will be discussed below, that the works performed by petitioners were directly related to
Petron’s business, another factor which negates Petron’s claim that RDG is an independent contractor.
Petron’s power of control over

petitioners exists in this case.
"[A] finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there is an employer-employee
relationship between the principal and the employees of the supposed contractor."53 In this case, the employer
employee relationship between Petron and petitioners becomes all the more apparent due to the presence of the
power of control on the part of the former over the latter.
It was held in Orozco v. The Fifth Division of the Hon. Court of Appeals54 that:
This Court has constantly adhered to the "four-fold test" to determine whether there exists an employer-employee
relationship between the parties. The four elements of an employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power to control the
employee’s conduct.
Of these four elements, it is the power to control which is the most crucial and most determinative factor, so
important, in fact, that, the other elements may even be disregarded." (Emphasis supplied)
Hence, the facts that petitioners were hired by Romeo or his father and that their salaries were paid by them do not
detract from the conclusion that there exists an employer-employee relationship between the parties due to Petron’s
power of control over the petitioners. One manifestation of the power of control is the power to transfer employees
from one work assignment to another.55 Here, Petron could order petitioners to do work outside of their regular
"maintenance/utility" job. Also, petitioners were required to report for work everyday at the bulk plant, observe an
8:00 a.m. to 5:00 p.m. daily work schedule, and wear proper uniform and safety helmets as prescribed by the safety
and security measures being implemented within the bulk plant. All these imply control. In an industry where safety
is of paramount concern, control and supervision over sensitive operations, such as those performed by the
petitioners, are inevitable if not at all necessary. Indeed, Petron deals with commodities that are highly volatile and
flammable which, if mishandled or not properly attended to, may cause serious injuries and damage to property and
the environment. Naturally, supervision by Petron is essential in every aspect of its product handling in order not to
compromise the integrity, quality and safety of the products that it distributes to the consuming public.
Petitioners already attained regular

status as employees of Petron.
Petitioners were given various work assignments such as tanker receiving, barge loading, sounding, gauging,
warehousing, mixing, painting, carpentry, driving, gasul filling and other utility works. Petron refers to these work
assignments as menial works which could be performed by any able-bodied individual. The Court finds, however,
that while the jobs performed by petitioners may be menial and mechanical, they are nevertheless necessary and
related to Petron’s business operations. If not for these tasks, Petron’s products will not reach the consumers in their
proper state. Indeed, petitioners’ roles were vital inasmuch as they involve the preparation of the products that
Petron will distribute to its consumers.
Furthermore, while it may be true that any able-bodied individual can perform the tasks assigned to petitioners, the
Court notes the undisputed fact that for many years, it was the same able-bodied individuals (petitioners) who
performed the tasks for Petron. The engagement of petitioners for the same works for a long period of time is a
strong indication that such works were indeed necessary to Petron’s business. In view of these, and considering
further that petitioners’ length of service entitles them to become regular employees under the Labor Code,
petitioners are deemed by law to have already attained the status as Petron’s regular employees. As such, Petron
could not terminate their services on the pretext that the service contract it entered with RDG has already lapsed.
For one, and as previously discussed, such regular status had already attached to them even before the execution
of the service contract in 2000. For another, the same does not constitute a just or authorized cause for a valid
dismissal of regular employees.
In sum, the Court finds that RDG is a labor-only contractor. As such, it is considered merely as an agent of Petron.
Consequently, the employer-employee relationship which the Court finds to exist in this case is between petitioners
as employees and Petron as their employer. Petron therefore, being the principal employer and RDG, being the
labor-only contractor, are solidarily liable for petitioners' illegal dismissal and monetary claims.56
WHEREFORE, the Petition is GRANTED. The May 10, 2006 Decision and March 30, 2007 Resolution of the Court
of Appeals in CA-G.R. SP No. 01291 are REVERSED and SET ASIDE. The February 18, 2005 Decision and
August 24, 2005 Resolution of the National Labor Relations Commission in NLRC Case No. V-000481-2003 are
hereby REINSTATED and AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 179669 June 4, 2014
SR METALS, INC., SAN R MINING AND CONSTRUCTION CORP. and GALEO EQUIPMENT AND MINING
COMP ANY, INC., Petitioners,
vs.
THE HONORABLE ANGELO T. REYES, in his capacity as Secretary of DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES (DENR), Respondent.
DECISION
DEL CASTILLO, J.:
In this Petition for Review on Certiorari, SR Metals, Inc., SAN R Mining and Construction Corp., and Galeo
Equipment and Mining Co., Inc. (hereinafter referred to as 'mining corporations') assail the Decision1 and
Resolution2 dated July 4, 2007 and September 14, 2007, respectively, of the Court of Appeals (CA), in CA-G.R. SP
No. 97127. The mining corporations fault the CA for (a) upholding the validity of the provision of Presidential Decree
(PD) No. 18993 which limits the annual production/extraction of mineral ore in small-scale mining to 50,000 metric
tons (MT) despite its being violative of the equal protection clause, and (b) adopting the Mines and Geosciences
Bureau's (MGB) definition of 'ore,' which led the said court to conclude that the mining corporations had exceeded
the aforesaid 50,000-MT limit.
Factual Antecedents
On March 9, 2006, each of the petitioners was awarded a 2-year SmallScale Mining Permit4 (SSMP) by the
Provincial Mining Regulatory Board of Agusan del Norte; they were allowed to extract Nickel and Cobalt (Ni-Co) in a
20-hectare mining site in Sitio Bugnang, Brgy. La Fraternidad, Tubay, Agusan del Norte. These permits were
granted after the Environmental Management Bureau (EMB), Region XIII of the Department of Environment and
Natural Resources (DENR) issued on March 2, 2006 Environmental Compliance Certificates5 (ECCs) with a validity
period of one year.
The mining corporations’ ECCs contain a restriction that the amount of NiCo ore they are allowed to extract annually
should not exceed 50,000 MTs
pursuant to Section 1 of PD 1899 which provides:
Section 1. Small-scale mining refers to any single unit mining operation having an annual production of not more
than 50,000 metric tons of ore x x x.
Subsequently, however, Agusan del Norte Governor, Erlpe John M. Amante (Governor Amante), questioned the
quantity of ore that had been mined and shipped by the mining corporations. In reply, the mining corporations
denied having exceeded the extraction limit of 50,000 MTs.6
They explained that an extracted mass contains only a limited amount/percentage of Ni-Co as the latter is lumped
with gangue, i.e., the unwanted rocks and minerals. And it is only after the Ni-Co is separated from the gangue by
means of a scientific process should the amount of the Ni-Co be measured and considered as ‘ore.’ Excluding the
gangue, the mining corporations pegged the volume of Ni-Co ore they had extracted from the time they started
shipping the same in August 2006 until they filed their Petition before the CA in December 2006 at1,699.66 MTs of
Ni-Co ore only.7
Having reservations with the mining corporations’ interpretation of the 50,000-MT restriction, Governor Amante
sought the opinion of the Department of Justice (DOJ) on the matter.
Meanwhile, the EMB sent the mining corporations a Notice of Violation8 informing them that they had exceeded the
allowed annual volume of 150,000 MTs combined production as their stockpile inventory of Nickeliferous ore had
already totaled 177,297 dry metric tons (DMT). This was based on the August 10, 2006 Inspection Report9 of the
MGB Monitoring Team which conducted an inspection after the DENR received complaints of violations of small-
scale mining laws and policies by the mining corporations. A technical conference was thereafter held to hear the
side of the mining corporations anent their alleged over extraction.
On November 26, 2004, DENR Secretary Angelo T. Reyes issued a Cease and Desist Order10 (CDO) against the
mining corporations suspending their operations for the following reasons:
1. The excess in 1) annual production of SR Metals, Inc., 2) maximum capitalization, and, 3) labor cost to equipment
utilization of 1:1 is, by itself, a violation of existing laws.
2. The ECCs issued in favor of San R Construction Corporation and Galeo Equipment Corporation have no legal
basis and [are] therefore considered null and void from the beginning. Similarly, the small scale mining permits that
were issued by reason of such ECCs are likewise null and void.11
A few days later or on November30, 2006, DOJ Secretary Raul M. Gonzalez replied to Governor Amante citing DOJ
Opinion No. 74, Series of 2006.12 By comparing PD 1899 to Republic Act (RA) No. 7076,13 a subsequent law that
likewise defines small-scale mining, the DOJ opined that Section 1 of PD 1899 is deemed to have been impliedly
repealed by RA 7076 as nothing from the provisions of the latter law mentions anything pertaining to an annual
production quota for small-scale mining. It explained:
The definition of "small scale mining" under R.A. No. 7076 is clear and categorical. Any mining activity that relies
heavily on manual labor without use of explosives or heavy mining equipment falls under said definition. It does not
mention any annual production quota or limitation. On the contrary, Section 12 thereof is explicit that the contractor,
or, specifically, in this case, the permit holders or permitees, are entitled not only to the right to [mine], but also to
"extract and dispose of mineral ores (found therein) for commercial purposes" without specific limitation as to the
nature of the mineral extracted or the quantity thereof.
Moreover, while Section 13 of the law imposes certain duties and obligations upon the contractor or permitee,
nothing therein refers directly or otherwise to production quota limitation. Additionally, even Section 10 thereof,
which provides for the extent [of] the mining area, does not limit production but only the mining area and depth of the
tunnel or adit which, as stated in the law shall "not (exceed) that recommended by the (EMB) director taking into
account the "quantity of mineral deposits", among others. It is, however, silent on the extent of the mining’s annual
quota production. Thus, anything that is not in the law cannot be interpreted as included in the law x x x14
Even assuming that the 50,000-MT ore limit in PD 1899 is still in force, the DOJ categorically concluded that the
term ‘ore’ should be confined only to Ni-Co, that is, excluding soil and other materials that are of no economic value
to the mining corporations. This is considering that their ECCs explicitly specified ‘50,000 MTs of Ni-Co ore.’
The mining corporations then filed before the CA a Petition for Certiorari with prayer for Temporary Restraining
Order and/or Preliminary Injunction, imputing grave abuse of discretion on the part of DENR in issuing the CDO.
Relying on the rationalizations made by the DOJ in its November 30, 2006 Opinion, they vehemently denied having
over-extracted Ni-Co.
The Office of the Solicitor General (OSG), for its part, claimed that the CDO was issued for ecological and health
reasons and is a preventive measure against disasters arising from multiple acts of over-extraction such as
landslides, mudslides and flooding. Also to be respected is the DENR’s finding of the mining corporations’ over-
extraction because being the agency mandated to implement the laws affecting the country’s natural resources, the
DENR possesses the necessary expertise to come up with such determination. For the same reason, the DENR’s
definition of small-scale mining particularly that under Mines Administrative Order (MAO) No. MRD-41, series of
1984,15 must also be sustained.
Furthermore, the OSG averred that the mining corporations’ concept of how to measure Ni-Co ore is flawed as this
contradicts Section 2 of MAO No. MRD-41 which confines the 50,000-MT limit to run-of-mine ore, viz.:
SECTION 2 - Who May Qualify for the Issuance of a Small Scale Mining Permit – Any qualified person as defined in
Sec. 1 of these Regulations, preferably claim owners and applicants for or holders of quarry permits and/or licenses
may be issued a small scale mining permit provided that their mining operations, whether newly-opened, existing or
rehabilitated, involve:
(a) a single mining unit having an annual production not exceeding 50,0000 metric tons of run-of-mine ore, either an
open cast mine working or a subsurface mine working which is driven to such distance as safety conditions and
practices will allow;
xxxx
The OSG emphasized that in measuring an extraction, the only deduction allowed from an extracted mass of ore is
the weight of water, not the soil. It quoted a letter16 from Director Horacio C. Ramos of the MGB Central Office dated
April 30, 2007 addressed to the OSG, which explained the definition of the phrase "50,000-metric ton extraction
limit," to wit:
 50,000 metric tons of run-of-mine per year;
 the run[-]of[-]mine can either be wet or dry;
 traditionally, the production rate for nickel is based on dry since the water or moisture content has no value; and
 thus, if the ore is wet, the weight of water is deducted from the total weight of ores in the determination of the
production rate, or for shipment purposes.17

The CA denied the mining corporations’ Petition, not only because the ECCs have been mooted by their expiration,
but also due to its recognition of the power of the DENR to issue the CDO as the agency reposed with the duty of
managing and conserving the country’s resources under Executive Order 192.18 Anent the issue of whether the
imposed limit under PD 1899 should be upheld and whether there was over extraction, the CA had this to say:
We agree with the OSG’s argument that the 50,000[-]metric ton limit pertains to the mined ore in its unprocessed
form, including the soil and dirt. The OSG argued that the DOJ Opinion is not binding upon the court and that the
agency which is tasked to implement the mining laws is the DENR. Citing the MGB letter-reply, the OSG contended
that the limit provided in RA 1899 subsists and RA 7076 did not impliedly repeal the latter. The provisions in both
laws are not inconsistent with each other, both recognizing the DENR’s authority to promulgate rules and
regulations for the implementation of mining laws.19
Furthermore, the said court gave credence to the MGB’s April 30, 2007 opinion on the definition of the 50,000-MT
limit. Rejecting the claims of the mining corporations, it said:
x x x Thus, the MAO not only buttresses the OSG’s arguments as to what the extraction limit pertains to, x x x it also
contravenes [the mining corporations’] assertion that the extraction limit no longer exists and that, even if the limit
subsists, they [had] not exceeded the same because they [had] only extracted around 1,600 metric tons. Indeed, for
purposes of determining whether the extraction is still within the allowable limits, only the weight of water is
deducted from the run-of-mine ore.20
The mining corporations moved for partial reconsideration where they again relied heavily on the DOJ
Opinion.21They also attacked the validity of Section 1(1) of PD 1899 that sets the annual production limit of 50,000-
MT on small-scale mining by arguing that it violates the equal protection clause of the Constitution and that it is
already repealed by RA 7076. Even granting that the said limit is still in force, the mining corporations asserted that
the gangue should not be included in measuring the extraction, since their ECCs clearly provide that 50,000 MTs of
Ni-Co ore, not50,000 MTs of ore, can be extracted.
Ignoring their arguments, the CA stressed that the DENR is the primary government agency responsible for the
conservation, management, development, and proper use of the country’s mineral resources. It reiterated:
This Court likewise declared that the MAO adopted the definition of small scale mining in PD 1899, including the
requirement of observing the extraction limit. Together with the MGB’s interpretation of the term "run-of mine ore",
the MAO supports the arguments of the OSG as to the extraction limit and controverts [the mining corporations’]
assertion that no extraction limit exists and, if the same subsists, they [had] not exceeded it.22
Issues
Two questions are posed before us. The first deals with the constitutionality of Section 1, PD 1899 which, according
to the mining corporations violates the equal protection clause. They argue that there is no substantial distinction
between the miners covered under RA 7076, who can extract as much ore as they can, and those covered under
PD1899 who were imposed an extraction limit.
Another issue concerns the correct interpretation of the 50,000-MT limit. The mining corporations insist on their
version of how to compute the extraction.
To them, the computation of Ni-Co ore should be confined strictly to Ni-Co component from which they derive
economic value.
Our Ruling
Petitioners are governed by the annual production limit under PD 1899.

Two different laws governing small-scale mining co-exist: PD 1899 and RA 7076.23 The controversy lies in the
apparent conflicting provisions on the definition of small-scale mining under the two laws. Section 1 of PD 1899
defines small-scale mining in this wise:
Small-scale mining refers to any single unit mining operation having an annual production of not more than 50,000
metric tons of ore and satisfying the following requisites:
1. The working is artisanal, whether open cast or shallow underground mining, without the use of sophisticated
mining equipment;
2. Minimal investment on infrastructures and processing plant;
3. Heavy reliance on manual labor; and
4. Owned, managed or controlled by an individual or entity qualified under existing mining laws, rules and
regulations.
On the other hand, under Section 3(b) of RA 7076, small-scale mining refers to ‘mining activities which rely heavily
on manual labor using simple implements and methods and do not use explosives or heavy mining equipment.’
Significantly, this definition does not provide for an annual extraction limit unlike in PD 1899.
DOJ Opinion No. 74, Series of 2006 concluded that as nothing from RA 7076 speaks of an annual production limit,
Section 1 of PD 1899 should be considered impliedly repealed by RA 7076, the later law. However, while these two
laws tackle the definition of what small-scale mining is, both have different objects upon which the laws shall be
applied to. PD 1899 applies to individuals, partnerships and corporations while RA 7076 applies to
cooperatives.24There are other differences between the two laws, but we cannot hastily conclude that there is an
implied repeal because of the omission. Both laws may stand.
Petitioners then construe the omission of the annual production limit in the later law in the sense that small-scale
miners granted mining contracts under RA 7076 can now conduct mineral extraction as much as they can while the
benefit of unlimited extraction is denied to those granted permits under PD 1899. According to them, such situation
creates an invalid classification of small-scale miners under the two laws, hence the attack on Section 1 of PD 1899
as being violative of the equal protection clause.
We do not, however, subscribe to the mining corporations’ averment that the 50,000-MTs production limit does not
apply to small-scale miners under RA 7076. Recognizing the DENR’s mandate to regulate the country’s natural
resources under EO 192,25 both PD 1899 and RA 7076 delegated to the DENR, thru its Secretary, the power to
promulgate the necessary IRRs to give effect to the said laws.26
Significantly, the DENR in the exercise of such power had just recently resolved the question on the production limit
in small-scale mining. On July 5, 2007, it issued DMC 2007-07 or "Clarificatory Guidelines in the Implementation of
1âwphi1
the Small-Scale Mining Laws". By imposing the annual production limit of 50,000 DMT to both SSMPs issued under
PD 1899 and Small-Scale Mining Contracts (SSMCs) under RA 7076, the DENR harmonized the two laws, viz:
V. Maximum Annual Production
For metallic minerals, the maximum annual production under an SSMP/SSMC shall be 50,000 dry metric tons
(DMT[s]) of ore, while for nonmetallic minerals, the maximum annual production shall be 50,000 DMT[s] of the
material itself, e.g., 50,000 DMT[s] of limestone, 50,000 DMT[s] of silica, or 50,000 DMT[s] of perlite.
The maximum annual production above shall include low-grade and/or marginal ore, and/or minerals or rocks that
are intended for sampling and/or metallurgical testing purpose/s."
With the 50,000-MT limit likewise imposed on small-scale miners under RA 7076, the issue raised on the violation of
the equal protection clause is moot. The fact is, the DENR treats all small-scale miners equally as the production
limit applies to all of them. There is therefore no more reason for the mining corporations to not recognize and
comply with the said limitation. It must be stressed that the DENR is the government agency tasked with the duty of
managing and conserving the country’s resources; it is also the agency vested with the authority to promulgate rules
and regulations for the implementation of mining laws.
The DENR, being the agency mandated to protect the environment and the country’s natural resources, is
authoritative on interpreting the 50,000-MT limit.
MAO No. MRD-41 specifies measuring the ‘run-of-mine ore,’ meaning the ore as it emerges from the mine, i.e.,
before treatment.27 As explained by the DENR-MGB Director, the ore is weighed only in DMT, excluding the water or
moisture content. Simply stated, included in the measurement are other materials lumped with the sought-after
mineral.
This definition is congruent with RA7942 or The Philippine Mining Act of 1995. Said law defines "ore" as "naturally
occurring substance or material from which a mineral or element can be mined and/or processed for profit."28Clearly,
the law refers to ore in its unprocessed form, i.e., before the valuable mineral is separated from the ore itself.
Also in Section V of the earlier mentioned DMC-2007-07, the DENR clarified the 50,000-MT limit by differentiating
the measurement of metallic minerals from nonmetallic ones. Noticeably, the metallic minerals are conservatively
measured compared to nonmetallic or industrial minerals for a reason. Compared to metallic minerals, nonmetals
are easily available when mined in their raw/natural state, like limestone. As non metallics are produced from
1âw phi 1
natural aggregates, the production limit of 50,000 DMTs will be easily met. On the other hand, metallic minerals, like
Ni-Co are not easily available in their pure form since they are sourced from ores which are mined. To extract these
metals of economic value, the gangue lumped with them have to be removed by metallurgy. And in order to produce
a ton of a metallic mineral sought for, big volumes of gangue will have to be removed. As indicated by the mining
corporations’ Summary of Shipments,29 it took 151,612 DMTs of ore to extract only 1,699.66 DMTs of Ni-Co. Thus,
149,912.34 DMTs of ore are considered waste. This means that if we are to subscribe to the mining corporations’
interpretation of how to measure mined ore by measuring only the Ni-Co and excluding the gangue, small-scale
miners are virtually given the license to continuously collect large volumes of ore until the 50,000 DMTs of Ni-Co
limit is met. It must be emphasized that mining, whether small or large-scale, raises environmental concerns. To
allow such a scenario will further cause damage to the environment such as erosion and sedimentation, landslides,
deforestation, acid rock drainage, etc.30 As correctly argued by the Solicitor General, extracting millions of DMTs of
run-of-mine ore will mean irreversible degradation of the natural resources and possible landslides and flashfloods.
It may be significant to state at this point that while the annual production limit by measuring only the material itself
may apply in small-scale nonmetallic mining, the same cannot be true to metal mining for the reasons above stated.
Hence, the DENR saw it proper to conservatively measure the production of metallic minerals apparently bearing in
mind the more intense impact of such kind of mining to the environment.
Anent the mining corporations’ contention that their ECCs specified that they were allowed to extract 50,000 MTs of
Ni-Co, such should not be taken literally in the sense that the measurement should only be based on the Ni-Co in
their purest form. Their ECCs only meant that they are to mine Ni-Co and not any other minerals. This construction
likewise applies to the respective SSMPs given them.
WHEREFORE, premises considered, the Petition is DENIED. The July 4, 2007 Decision and September 14, 2007
Resolution of the Court of Appeals in CA-G.R. SP No. 97127 are hereby AFFIRMED in toto.
SO ORDERED.
SECOND DIVISION
G.R. No. 199871 June 2, 2014

vs.
WILFREDO SOLANO, JR. y GECITA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Wilfredo Solano, Jr. y Gecita was charged with the crime of rape with homicide in an Information1 that
reads as follows:
That on or about the 22nd day of April, 2007 at around 9:00 o'clock in the morning, at Sitio Okdo, Barangay
Palanas, municipality of Pilar, Province of Sorsogon, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, with lewd design, by means of force, threat and intimidation, and by employing personal
violence upon "AAA,"2 a 12-year old girl, did then and there, wilfully, unlawfully and feloniously, have sexual
intercourse with her against her will and without her ,consent, and after the sexual assault said accused strangled x
x x "AAA," resulting [in] the immediate death of said victim, to the damage and prejudice of her legal heirs.
The crime is aggravated by the minority the victim being twelve years old (12) at the time of the incident.
CONTRARY TO LAW.3
When arraigned on June 6, 2007, appellant entered a plea of not guilty.4
Trial on the merits ensued.
The facts of the case as summarized by the Court of Appeals are as follows:
To prove the charges against accused-appellant, Edwin Canon, Jr. [Edwin, Jr.] testified that in the morning of 22
April 2007, he and his brother were on their way home when he saw [appellant] chasing AAA on a grassy area
located at the outskirts of their barangay. Not minding the two, they left and proceeded home. That same morning,
he learned that people were looking for AAA so he told his father of what he saw. His father in turn informed the
barangay officials and, after conducting a search, AAA’s lifeless body was found in a swamp near the place where
Edwin, Jr. saw [appellant] chasing the victim. On cross-examination, Edwin, Jr. maintained that he was able to see
and recognize [appellant] and AAA from a distance of about 50 to 60 meters before they ran towards the knee-high
cogon grass area. According to him, [appellant] stopped and looked at them before running after the victim.
Meanwhile, prosecution witness Nestor Armenta [Nestor] fortified his Sinumpaang Deklaracion and claimed that in a
grassy place in Barangay Palanas, he saw [appellant] holding an unconscious AAA by her armpits and [dragging]
her while ‘she was facing up lying on the ground.’ Upon seeing him, [appellant] gave him a dagger look, so, he
hurriedly left the place and proceeded to the barangay proper where he reported the matter to the barangay tanod.
On cross-examination, Nestor testified that he was about 9 meters away from where he saw [appellant] drag AAA.
When he arrived at the town proper, he learned that there was a search for AAA so he relayed what he saw to Chief
Tanod Zaldy Campo [Chief Tanod Campo] and went home. Thereafter, he was informed that the body of AAA was
found in the place where he saw [appellant] dragging the victim. On further questioning, he asserted that he knew
AAA because he was the caretaker of the fishpond owned by the victim’s mother. He also knew [appellant] because
he was a friend of his father.
xxxx
On the other hand, Chief Tanod Campo claimed that after Edwin Canon, Sr. [Edwin, Sr.] reported the matter to
them[, a] group of about 30 persons, some of whom were relatives of AAA, proceeded to the swampy area where
Edwin, Jr. saw [appellant] and AAA. At around 7 o’clock in the evening, with the aid of a petromax, they saw the
body of AAA buried in mud. When asked to explain the pictures taken from the crime scene, the witness described
that AAA was naked when they found her and her dress was ‘tied on the neck and the panty was in one leg already.’
Being the only suspect, they proceeded to the house of [appellant’s] uncle to apprehend him. According to him,
[appellant] confessed to raping and killing AAA when investigated at the barrio hall. He was remorseful and
repentant when investigated and did not react when they told him that they found the body of AAA in the swamp.
On cross-examination, Chief Tanod Campo testified that x x x after his arrest, [appellant] verbalized to them his
innocence and that he was the one who convinced [appellant] to surrender.
xxxx
According to [Municipal Health Officer Dr. David Daza], his examination of AAA’s genitalia showed that there was
blood oozing out from her vagina which was marked with hymenal lacerations and presence of suspected
spermatozoa thereby indicating that she was subjected to sexual intercourse.
[Appellant] denied that he raped and killed AAA. He maintained that on the day of the incident, he and his two
cousins were at the house of his uncle, Ernesto Solano to watch over the palay. Around 1 o’clock in the afternoon,
he was summoned by Chief Tanod Campo and brought to the barangay hall.
Thereat, [a relative of "AAA"] asked him whether he saw AAA and when he answered in the negative, ["AAA’s"
relative] threw a punch at him. After that, he was instructed by his uncle to go home but at around 10 o’clock in the
evening, some military men arrested him and brought him to the Municipal Hall of Pilar, Sorsogon. x x x
x x x On cross-examination, he admitted that he personally knows the family of the victim since he worked for them
for less than a year. When he learned about the alleged rape of his sister by [a relative of "AAA"] sometime in the
year 2000, he quit his job with them. x x x He also admitted holding a grudge against the [family of "AAA"] but
denied that he knows anything about AAA’s death. He also did not know of any reason why prosecution witnesses
Edwin, Jr., Edwin Sr., Nelson and Chief Tanod Campo would testify against him inasmuch as he was in good terms
with them. Lastly, [appellant] admitted that the place where he was then staying can easily be negotiated by walking
or any means of transportation and that he could leave the place and return to it easily.5
On May 18, 2009, the Regional Trial Court of Sorsogon City, Branch 51 rendered its Decision6
finding appellant guilty as charged based on the following circumstantial evidence:
The accused was seen chasing the victim at the approximate time of the perpetration of the crime and at the hilly
and grassy place where the victim was found;
The uncontroverted fact that the accused was seen dragging the motionless victim lying with her face up by another
prosecution witness near the same place where he was also seen chasing the victim;
There was no other person last seen together with the victim;
The uncontroverted testimony of some prosecution witnesses regarding the extrajudicial confession made by the
accused that he admitted raping and killing the victim and on the basis thereof he was apprehended and detained in
the evening of the day of the incident in question;
The finding of the examining physician who conducted the autopsy that the victim was subjected to sexual
intercourse when she was still alive manifested by several lacerations and blood found on her genitalia;
Death of the victim by strangulation and the fact that the body of the victim was found submerged in the muddy area
very near the place where the accused was seen chasing the victim and likewise very near the place where the
accused was likewise seen dragging the victim.
The accused admitted being angry at the [family of "AAA"] after he learned that his sister who by then was already
in Manila was raped by [a relative of "AAA].7
The trial court did not lend credence to the alibi of appellant. It observed that not one of appellant’s cousins who
were supposed to be with him when the incident happened stepped forward to corroborate appellant’s testimony.
Besides, the trial court noted that the place where appellant was supposedly present was located in the same
barangay where the rape and homicide was committed. As such, it was not physically impossible for appellant to be
present at the place where the crime was committed. The trial court also found that appellant harbored ill-feelings
toward the family of "AAA" after learning that a relative of "AAA" raped his sister. Lastly, the court a quo considered
the minority of "AAA" as the prosecution satisfactorily established that "AAA" was only 12 years of age during the
commission of the crime.
The dispositive portion of the trial court’s Decision reads:
WHEREFORE, premises considered, the Court hereby finds accused WILFREDO SOLANO JR. y GECITA, GUILTY
beyond reasonable doubt of the special complex crime of Rape with Homicide and hereby sentences him to suffer
the penalty of reclusion perpetua without the possibility of parole.
In keeping with current jurisprudence the accused shall pay the heirs of "AAA" the amount of ₱50,000.00 for her
death and ₱50,000.00 for having been raped. He is likewise held liable in the amount of ₱75,000.00 in moral
damages and ₱25,000.00 as temperate damages in lieu of actual damages not supported by competent proof.
There having been alleged and proven the minority of the victim, the same is taken as an aggravating circumstance
which presence further more entitles her heirs [to] the award of ₱50,000.00 in exemplary damages.
SO ORDERED.8
Appellant appealed to the Court of Appeals. In its Decision9 dated July 14, 2011, the appellate court affirmed in full
the trial court’s Decision. It ratiocinated that -
So viewed, We find no reason to overturn the findings of the RTC with respect to [appellant’s] culpability. In this
case, the prosecution duly established that (1) [appellant] was seen by Edwin, Jr. chasing the victim; (2) [appellant]
was also seen by Nestor chasing the victim; (3) the body of the victim was found in a swamp located near the place
where Edwin, Jr. and Nestor last saw [appellant] and AAA and; (4) upon his arrest, [appellant] was remorseful,
repentant and did not react when they told him that they found the body of AAA in the swamp. All these
circumstances have remained unrefuted by [appellant] which indubitably demonstrate an unbroken chain of events
from which a reasonable conclusion pointing to [appellant] as the culprit may be derived. From all indications,
[appellant’s] culpability had been duly established by his presence at the scene of the crime and his conduct
towards AAA prior to her disappearance and eventual death.10
The dispositive portion of the appellate court’s Decision reads, thus:
WHEREFORE, the foregoing considered, the appeal is hereby DISMISSED and the assailed Decision is
AFFIRMED in toto. Costs against accused-appellant.
SO ORDERED.11
Hence, this appeal.
In a Resolution12 dated February13, 2012, we required the parties to file their Supplemental Briefs; however, both
opted to adopt the brief that they have filed before the Court of Appeals.13
Appellant claims that the pieces of circumstantial evidence presented by the prosecution are insufficient to prove his
guilt beyond reasonable doubt. He insists that it was highly improbable for prosecution witness Edwin Jr. to have
seen him chasing "AAA" from a distance of 50 to 60 meters or even identify him as the perpetrator of the
crime.14Appellant also assails the testimony of Nestor that he saw appellant dragging the victim’s body towards the
swamp considering the lack of explanation why he was in the vicinity or how he reached the place.15
"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."16 In this case, it is beyond doubt that all the circumstances taken together
point to the singular conclusion that appellant, to the exclusion of all others, committed the crime. As found by the
trial court and affirmed by the appellate court, the victim was last seen in the presence of the appellant. Edwin Jr.
1âwphi1
saw appellant chasing the victim. Nestor also saw appellant dragging the motionless body of "AAA." The body of the
victim was eventually found buried in the mud near the place where she was last seen with the appellant. Appellant
admitted holding a grudge against the family of "AAA" because he believes that a relative of "AAA" had raped his
[appellant’s] sister. The autopsy report showed that "AAA" was raped and strangled. Likewise, appellant could not
ascribe any ill-motive on the part of prosecution witnesses Edwin Jr., Edwin Sr. and Nestor whom he even
considered as friends.
We agree with the appellate court’s ratiocination that -
x x x while no direct evidence was adduced by the prosecution, We, however, agree with the trial court that there
was sufficient circumstantial evidence to hold [appellant] for the special complex crime of Rape with Homicide. As
proven by the prosecution, AAA was last seen in the company of [appellant] as the person chasing the victim on a
grassy area located at the outskirts of their barangay. Contrary to the [appellant’s] supposition, We find that the
distance of about 50-60 meters is enough for one person to recognize another person’s face. This is especially true
since it had been established by one witness that [appellant] turned his face towards him x x x and that he was able
to see him before AAA ran towards the knee-high cogon grass. 1âwphi1
The same is true with respect to the accounts of Nestor. [Appellant’s] attempt to taint the truthfulness of his
testimony on the mere fact that he failed to testify on ‘how he was able to reach the area’ or the reason why he was
on that place at the time he saw [appellant] and AAA, finds no leg to stand on. Needless to state, the circumstances
alluded [to] by [appellant] are trivial and merely refer to insignificant matters which hardly affect the credibility of the
witness. What is more important is that Nelson’s testimony, which had been considered worthy of credit by the trial
court, had withstood the gruelling cross-examination of the defense.17
As regards the penalty, both the trial court and the appellate court correctly sentenced appellant to reclusion
perpetua without eligibility for parole. Both courts also properly awarded the heirs of "AAA" the amounts of
₱100,000.00 as civil indemnity, ₱75,000.00 as moral damages, ₱25,000.00 as temperate damages, and
₱50,000.00 as exemplary damages.18 However, all damages awarded shall earn interest at the rate of 6% per
annum from the date of finality of this judgment 'until fully paid in line with prevailing jurisprudence.
WHEREFORE, the July 14, 2011 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 04010 affirming the May
18, 2009 Decision of the Regional Trial Court of Sorsogon City, Branch 51 finding appellant Wilfredo Solano, Jr. y
Gecita guilty beyond reasonable doubt of rape with homicide and sentencing him to suffer the penalty of reclusion
perpetua without eligibility for parole, to pay the heirs of "AAA" Pl00,000.00 as civil indemnity, ₱75,000.00 as moral
damages, ₱25,000.00 as temperate damages, and ₱50,000.00 as exemplary damages, is AFFIRMED with
MODIFICATION that interest at the rate of 6% per annum shall be imposed on all damages awarded from date of
finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 191906 June 2, 2014
JOSELITO MA. P. JACINTO (Formerly President of F. Jacinto Group, Inc.), Petitioner,

vs.
EDGARDO* GUMARU, JR., Respondent.
DECISION
DEL CASTILLO, J.:
"When a judgment has been satisfied, it passes beyond review",1 and "there are no more proceedings to speak of
inasmuch as these were terminated by the satisfaction of the judgment."2
This Petition for Review on Certiorari3 seeks to set aside the November 5, 2009 Resolution4 of the Court of Appeals
(CA) in CA-G.R. SP No. 111098, entitled "Joselito Ma. P. Jacinto (Former President of F Jacinto Group, Inc.),
Petitioner, versus Edgardo Gumaru, Jr. and the National Labor Relations Commission, Respondents," as well as its
March 24, 2010 Resolution5 denying the petitioner's Motion for Reconsideration.
Factual Antecedents
On December 6, 2004, a Decision6 was rendered in favor of respondent Eduardo Gumaru, Jr. and against petitioner
Joselito Ma. P. Jacinto and F. Jacinto Group, Inc. in NLRC-NCR Case No. 00-06-07542-037 (the labor case), the
dispositive portion of which reads:
WHEREFORE, premises considered, respondents are hereby jointly and severally liable to pay complainant the
following:
1. Separation pay based on two months per year of service.
₱50,000.00 x 2 x 10 years = ₱1,000,000.00
2. Other monetary claims.
A. 3 mos. unpaid wages & allowance = ₱133,101.00
B. SL/VL for 2000 = 34,969.00
C. 13th month pay for 2000 = 24,944.00
3. Moral Damages in the sum of ₱100,000.00
4. Exemplary Damages in the sum of ₱500,000.00
5. 10% of all sums accruing shall be adjudged as attorney’s fees.
It is understood that the withholding of the separation benefits plus other monetary claims shall earn legal interest of
12% per annum from the time [they were] unlawfully withheld on September 01, 2000.
SO ORDERED.8
Petitioner and F. Jacinto Group, Inc. filed an appeal with the National Labor Relations Commission (NLRC).
However, the appeal was not perfected for failure to post the proper cash or surety bond; this was the finding of the
NLRC in its Resolution dated September 30, 2005.9
Thus, the December 6, 2004 Decision became final and executory. Entry of judgment was issued by the NLRC on
November 23, 2005.10
On February 6, 2006, a Writ of Execution11 was issued in the labor case. A Second Alias Writ of Execution was
issued and returned when the first one expired. By virtue of such alias writ, real property belonging to petitioner –
located in Baguio City and covered by Original Certificate of Title No. P-2010 – was levied upon, and was scheduled
to be sold at auction on June 27, 2008 or July 4, 2008.
On June 20, 2008, petitioner filed an Extremely Urgent Motion to Lift and Annul Levy on Execution12 praying, among
others, that the scheduled June 27, 2008 auction sale be restrained, and that the execution process covered by the
Second Alias Writ of Execution be invalidated.
On June 26, 2008, the Labor Arbiter issued an Order13 denying petitioner’s Extremely Urgent Motion to Lift and
Annul Levy on Execution, thus:
On June 20, 2008, respondents filed a Motion to Lift and Annul levy on execution on the ground that the writ of
execution served had already elapsed. Finding that the writ of execution was issued on September 07, 2007 and
pursuant to the Supreme Court’s declaration in the case of Merlinda Dagooc vs. Roberto Endina, 453 SCRA 423
quoting section 14 of the Revised Rules of Court, that the writ has a life of five years, the instant Motion is hereby
DENIED.
WHEREFORE, premises considered, the NLRC Sheriff is hereby ORDERED to proceed with the auction sale set on
June 27, 2008 at 10:00 AM before the Register of Deeds of Baguio City.
SO ORDERED.14
The Subject Resolutions of the National Labor Relations Commission
Petitioner appealed the Labor Arbiter’s June 26,2008 Order to the NLRC, which, in a November 28, 2008
Resolution,15set aside the same. The decretal portion of the Resolution states:
WHEREFORE, premises considered, the Order appealed from is hereby SET ASIDE and respondents-appellants’
Motion to Lift and Annul Levy is GRANTED. The Labor Arbiter is also hereby ordered to oversee the proper
implementation and execution of the judgment award in this case.
Let the records be remanded to the Labor Arbiter of origin for further execution proceedings.
SO ORDERED.16
Petitioner moved for partial reconsideration, but in a July 27, 2009 Resolution,17 the NLRC stood its ground.
The Assailed Resolutions of the Court of Appeals
Petitioner went up to the CA on certiorari, assailing the November 28, 2008 and July 27, 2009 Resolutions of the
NLRC. The Petition18 in CA-G.R. SP No. 111098 contained a verification and certification of non-forum shopping that
was executed and signed not by petitioner, but by his counsel Atty. Ronald Mark S. Daos.
On November 5, 2009, the CA issued the first assailed Resolution, which held thus:
The Verification and Certification of Non-Forum Shopping, which accompanied the petition at bar, was executed and
signed by petitioner’s counsel Atty. Ronald Mark S. Daos, in violation of Section 5,Rule 7 of the Revised Rules of
Court.
Pursuant to Supreme Court Revised Circular No. 28-91, the duty to certify under oath is strictly addressed to
petitioner which in this case is herein petitioner Joselito P. Jacinto and not his counsel to [sic] Atty. Ronald Mark S.
Daos. Thus, to allow the delegation of said duty to anyone would render Supreme Court Revised Circular No. 28-91
inutile.
Accordingly, the petition is DENIED DUE COURSE and DISMISSED.
SO ORDERED.19
Petitioner filed his Motion for Reconsideration,20 arguing that a verification signed by counsel constitutes adequate
and substantial compliance under Sections 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure;21 verification is
merely a formal, and not jurisdictional, requisite such that an improper verification or certification against forum-
shopping is not a fatal defect.22 Petitioner attached a copy of an Affidavit23 – acknowledged before the Hon. Paul
Raymond Cortes, Consul, Philippine Consulate General, Honolulu, Hawaii, U.S.A. – attesting that he caused the
preparation of the CA Petition, and that he read the contents of the CA Petition and affirm that they are true and
correct and undisputed based on his own personal knowledge and on authentic records. In said Affidavit, petitioner
further certified that he has not commenced any other action or proceeding, or filed any claims involving the same
issues in the Supreme Court, Court of Appeals, or any Division thereof, or in any other court, tribunal or agency; to
the best of his knowledge, no such other action, proceeding, or claim is pending before the Supreme Court, Court of
Appeals, or any division thereof, or in any court, tribunal or agency; if there is any other action or proceeding which
is either pending or may have been terminated, he will state the status thereof; if he should thereafter learn that a
similar action, proceeding or claim has been filed or is pending before the Supreme Court, Court of Appeals, or any
division thereof, or in any court, tribunal or agency, he undertakes to promptly report the fact within five days from
notice thereof. Petitioner explained further that he was out of the country, and could not return on account of his
physical condition, which thus constrained him to resort to the execution of a sworn statement in lieu of his actual
verification and certification as required under the Rules. Petitioner likewise ratified Atty. Daos’s acts done on his
behalf relative to the labor case and the filing of the CA Petition, and implored the appellate court to reconsider its
November 5, 2009 Resolution and excuse his procedural oversight in respect of the improper verification and
certification in his CA Petition.
On March 24, 2010, the CA issued the second assailed Resolution denying petitioner’s Motion for Reconsideration,
stating that a writ of certiorari is merely a "prerogative writ, never demandable as a matter of right, never issued
except in the exercise of judicial discretion. Hence, he who seeks a writ of certiorari must apply for it only in the
manner and strictly in accordance with the provisions of the law and the Rules."24
Thus, the present Petition was instituted.
Issues
4.1. THE COURT OF APPEALS SHOULD NOT HAVE DISMISSED THE SUBJECT PETITION.
A PARTY UNABLE TO SIGN THE CERTIFICATION AGAINST FORUM SHOPPING CAN AUTHORIZE HIS
COUNSEL TO SIGN THE CERTIFICATION. IN HIS AFFIDAVIT AND SPECIAL POWER OF ATTORNEY,
PETITIONER EFFECTIVELY EMPOWERED HIS COUNSEL TO EXECUTE THE REQUIRED VERIFICATION AND
CERTIFICATION. MOREOVER, PETITIONER, BEING ABROAD AND PHYSICALLY UNABLE TO TRAVEL TO
THE NEAREST CONSULAR OFFICE, MERITED THE RELAXATION OF THE TECHNICAL RULES
ONVERIFICATION AND CERTIFICATION. IN ANY EVENT, PETITIONER SUBSEQUENTLY SUBMITTED THE
NECESSARY DOCUMENT, IN SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF VERIFICATION
AND CERTIFICATION. VERIFICATION BY COUNSEL IS LIKEWISE ADEQUATE AND SUBSTANTIALLY
COMPLIANT.THE REQUIREMENT OF VERIFICATION IS ALSO DEEMED SUBSTANTIALLY COMPLIED WITH
WHEN THE AFFIANT ACTED IN GOOD FAITH AND X X X [POSSESSES] X X X SUFFICIENT KNOWLEDGE TO
TRUTHFULLY ATTEST THAT THE ALLEGATIONS ARE TRUE AND CORRECT, AS IN THE CASE AT BAR. IN
ANY CASE, VERIFICATION IS A FORMAL, NOT A JURISDICTIONAL,REQUISITE. IT AFFECTS ONLY THE
FORM OF PLEADINGBUT DOES NOT RENDER THE PLEADING FATALLY DEFECTIVE.
4.2. THE COURT OF APPEALS SHOULD HAVE GIVEN DUE COURSE TO THE SUBJECT PETITION.
THE MERITS, SPECIAL CIRCUMSTANCES AND COMPELLING REASONS FOR THE ALLOWANCE OF THE
SUBJECT PETITION, SPECIFICALLY, THAT IN THE ABSENCE OF A PRIOR VALID SERVICE ON PETITIONER
OF THE RESOLUTION SUPPOSEDLY DISPOSING OF HIS APPEAL OF THE DECEMBER 6, 2004 DECISION,
THE SAID DECISION CANNOT BE IMPLEMENTED AND EXECUTED BECAUSE IT HAS NOT ATTAINED
FINALITY AND JURIDICAL EXISTENCE, IS APPARENT. IF NOT CORRECTED, IT WOULD CAUSE GREAT AND
IRREPARABLE DAMAGE AND INJURY, NOT TO MENTION GRAVE INJUSTICE, TO PETITIONER, WHO WILL
BECOMPELLED TOSATISFY A JUDGMENT THAT OBVIOUSLY HAS NOT ATTAINED FINALITY AND
JURIDICAL EXISTENCE.25
Essentially, petitioner in his Petition and Reply26 argues that if, for reasonable or justifiable reasons, a party is unable
to sign the verification and certification against forum-shopping, he could execute a special power of attorney
authorizing his lawyer to execute the verification and sign the certification on his behalf. Which is exactly what
petitioner did: he executed a special power of attorney in favor of his counsel, Atty. Daos, authorizing the latter to file
the Petition in CA-G.R. SP No. 111098 and thus sign the verification and certification against forum-shopping
contained therein. Petitioner asserts that, going by the dispositions of the Court in past controversies,27 the said
procedure is allowed.
Petitioner next argues that there are compelling reasons to grant his Petition for Certiorari. He asserts that the
NLRC committed grave abuse of discretion in issuing its assailed November 28, 2008 and July 27, 2009
Resolutions remanding the case to the Labor Arbiter for further proceedings on execution, claiming that the
December 6, 2004 Decision of the Labor Arbiter had not attained finality since the NLRC failed to furnish him with a
copy of its September 30, 2005 Resolution which dismissed his appeal for failure to post the required bond and thus
perfect the appeal. Since the Labor Arbiter’s Decision has not attained finality, execution proceedings could not
commence; the NLRC may not direct the Labor Arbiter to conduct execution proceedings below.
Petitioner therefore prays that the Court annul and set aside the assailed Resolutions of the CA and order the
reinstatement of his Petition for Certiorari in the appellate court.
In his Comment,28 respondent contends that with the dismissal of petitioner’s certiorari petition by the CA, it is for all
intents and purposes deemed to have never been filed, and thus may not be corrected by resorting to a Petition for
Review under Rule 45. Respondent reiterates the view taken by the CA that certiorari under Rule 65 is a prerogative
writ that is not demandable as a matter of right.
Respondent notes further that the Verification and Certification against forum-shopping accompanying the instant
Petition was not signed by petitioner, but by his counsel, in consistent violation of the Court’s Circular No. 28-91 and
Rule 7 of the 1997 Rules of Civil Procedure. 1âwphi 1
Respondent cites that he is already 71 years old, yet petitioner continues to undermine execution of the judgment
rendered in the labor case through the instant Petition, which he prays the Court to deny.
Our Ruling
The Court finds that the Petition has become moot and academic.
It is true, as petitioner asserts, that if for reasonable or justifiable reasons he is unable to sign the verification and
certification against forum shopping in his CA Petition, he may execute a special power of attorney designating his
counsel of record to sign the Petition on his behalf. In Altres v. Empleo,29 this view was taken:
For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential pronouncements
already reflected above respecting noncompliance with the requirements on, or submission of defective, verification
and certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or submission of defective
verification, and non-compliance with the requirement on or submission of defective certification against forum
shopping.
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading fatally
defective. The court may order its submission or correction or act on the pleading if the attending circumstances are
such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served
thereby.
3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of
the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been
made in good faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in verification, is
generally not curable by its subsequent submission or correction thereof, unless there is a need to relax the Rule on
the ground of "substantial compliance" or presence of "special circumstances or compelling reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise,
those who did not sign will be dropped as parties to the case. Under reasonable or justifiable circumstances,
however, as when all the plaintiffs or petitioners share a common interest and invoke a common cause of action or
defense, the signature of only one of them in the certification against forum shopping substantially complies with the
Rule.
6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his counsel. H,
however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must execute a Special Power
of Attorney designating his counsel of record to sign on his behalf.30 (Emphasis supplied)
However, while the Court takes the petitioner's side with regard to the procedural issue dealing with verification and
the certification against forum shopping, it nonetheless appears that the Petition has been overtaken by events. In a
May 24, 2011 Manifestation,31 respondent informed this Court that the judgment award has been satisfied in full. The
petitioner does not dispute this claim, in which case, the labor case is now deemed ended. "It is axiomatic that after
a judgment has been fully satisfied, the case is deemed terminated once and for all."32 And "when a judgment has
been satisfied, it passes beyond review, satisfaction being the last act and the end of the proceedings, and payment
or satisfaction of the obligation thereby established produces permanent and irrevocable discharge; hence, a
judgment debtor who acquiesces to and voluntarily complies with the judgment is estopped from taking an appeal
therefrom."33
With the above development in the case, the instant Petition is rendered moot and academic. The satisfaction of the
judgment in full has placed the case beyond the Court's review. "Indeed, there are no more proceedings to speak of
inasmuch as these were terminated by the satisfaction of the judgment."34
WHEREFORE, the Petition is DENIED for being moot and academic.
SO ORDERED.
SECOND DIVISION
G.R. No. 169247 June 2, 2014
MA. CONSOLACION M. NAHAS, doing business under the name and style PERSONNEL EMPLOYMENT AND
TECHNICAL RECRUITMENT AGENCY, Petitioner,
vs.
JUANITA L. OLARTE, Respondent.
DECISION
DEL CASTILLO, J.:
"A party will not be allowed to make a mockery of justice by taking inconsistent positions which, if allowed, would
result in brazen deception."1
Assailed in this Petition for Review on Certiorari is the April 29, 2005 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 79028 which denied the Petition for Certiorari filed therewith and affirmed the February 28, 2003
Decision3 and June 30, 2003 Resolution4 of the National Labor Relations Commission (NLRC) in NLRC CA No.
032482-02. The NLRC dismissed the appeal from the Labor Arbiter's March 20, 2002 Decision5 in NLRC-NCR OFW
Case No. (L) 01-07-1411-00 which held Personnel Employment and Technical Recruitment Agency (PETRA), Royal
Dream International Agency (Royal Dream) and petitioner Ma. Consolacion M. Nahas (Nahas) jointly and severally
liable for the unpaid salaries, compensation for the unexpired portion of employment contract, moral and exemplary
damages and attorney’s fees of respondent Juanita L. Olarte (Olarte).
Factual Antecedents
On August 27, 1999, Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a contract term of two
years. Per her employment contract,6 she was to serve her employer, Fahad Abdulaziz Mohammed Al-Mijary
(Fahad) for a basic monthly salary of US$200.00. Fajad’s information sheet, on the other hand, provides that there
are two adults and three children living in his household and that no disabled or sick person is to be put under
Olarte’s care.
Upon arriving in Fahad’s home, Olarte was surprised that there were four children with one suffering from serious
disability. This notwithstanding, Olarte served Fahad’s family diligently. However, she was not paid her salaries. It
was only in December 1999 that she was given US$200.00 which was the only pay she received for the whole
duration that she worked for Fahad.
In the succeeding months, Olarte started feeling intense pain in her legs. Since she was not given immediate
medical attention, her condition became critical such that in February 2000 she had to be operated on due to water
retention in her leg bones. She was later diagnosed to be suffering from ostro-arthritis. Because of her condition,
Olarte requested Fahad to just allow her go home to the Philippines. But her pleas fell on deaf ears. At that point,
Fahad was already frequently maltreating her since she could no longer accomplish all the household chores due to
her illness.
Olarte finally saw an opportunity to escape from the abusive hands of her employer when she was allowed to go to
Riyadh, Saudi Arabia on June 16, 2000 and there sought refuge at the Philippine Embassy. Notwithstanding her
worsening condition, she could not be repatriated immediately because her passport was being withheld by Fahad
and had to stay for a while in the office of the Overseas Workers Welfare Administration (OWWA). When at last she
was able to return to the Philippines on August 21, 2000, Olarte had to be brought home from the airport by an
emergency ambulance.
Several months later, Olarte filed a Complaint7 for illegal dismissal, damages, attorney’s fees and refund of
placement fees against her foreign employer Fahad and Nahas/PETRA/Royal Dream.
In her pleadings,8 Olarte alleged that she went to the office of PETRA/Royal Dream at Room 401, Gochangco
Building, T.M. Kalaw, Ermita, Manila to apply for work abroad as a domestic helper. She was met and interviewed
by Nahas, the manager and owner of the said agencies, who instructed her to sign what appeared to be a contract
of employment for work as a domestic helper. Subsequently and upon completion of all the necessary papers, she
was deployed to Hail, Saudi Arabia in August 1999 and there experienced her horrible ordeal. As the ones
responsible for her deployment abroad, Olarte sought that Nahas, PETRA and Royal Dream be held jointly and
severally liablewith her foreign employer for all her claims.
In the Position Paper9 she filed for PETRA, Nahas acknowledged that she is the President/Manager of the said
agency. Nevertheless, she denied having a hand in Olarte’s deployment abroad. While she admitted that Olarte
indeed went to PETRA’s office as a walk-in applicant sometime in May 1999, the latter allegedly withdrew her
application on the pretext that she would just go home to the province. To support this, Nahas purportedly attached
to the said pleading the alleged withdrawal request of Olarte as Annex "A." However, the said Annex "A" turned out
to be a filled-up bio-data form of Olarte bearing the letterhead of Royal Dream,10the local agency which according to
Nahas was the one responsible for Olarte’s deployment.
In a Decision11 dated March 20,2002, the Labor Arbiter ruled that PETRA/Royal Dream/Nahas failed to discharge the
burden of proving that Olarte’s termination and repatriation were for just cause; and also rejected their claim against
liability after giving weight to the fact that Nahas admitted to have interviewed Olarte but failed to substantiate the
claim that the latter withdrew her application. The dispositive portion of the said Decision reads:
WHEREFORE, prescinding from the foregoing considerations, respondents Petra Agency/Royal [Dream]
International Services/Consolacion "Marla" Nahas are hereby jointly and severally ordered to pay the complainant
her unpaid salaries for eight (8) months in the amount of US$1,600.00; three (3) months salary of the unexpired
portion of the contract in the amount [of] US$600.00; moral damages in the amount of ₱100,000.00 and exemplary
damages amounting to ₱50,000.00 and attorney’s fees equivalent to ten (10%) percent of the total monetary
awards.
SO ORDERED.12
Nahas appealed to the NLRC.

In her Memorandum of Appeal,13 Nahas recanted her earlier admission that Olarte went to PETRA as a walk-in
applicant sometime in May 1999, claiming that the same was a mistake. She asserted that Olarte could not have
possibly applied with PETRA during that time as the latter was issued a license by the POEA only on July 16, 1999.
Moreover, Fahad was not one of PETRA’s accredited foreign employers.
To further avoid personal liability, Nahas denied involvement in Olarte’s deployment. She made a new allegation,
though, i.e., that if at all, her only involvement was that she interviewed Olarte when she was still connected with
Royal Dream as a mere employee. Even with this participation, she averred that she could not be made liable for
Olarte’s claims because she was neither the owner nor an officer of Royal Dream. Lastly, while Nahas was quick in
passing the buck to Royal Dream she nevertheless stressed that no summons was served upon the latter. Thus, the
Labor Arbiter’s Decision is not binding on it.
The NLRC, however, was not persuaded and disposed of the case in its Decision14 of February 28, 2003 as follows:
The facts of this case are never disputed by herein appellants, and as such they are now the law of the case.
Records will disclose, as admitted by the herein parties that it was with respondent PETRA that complainant applied
for overseas employment as domestic helper. It was respondent Nahas herself who interviewed complainant and in
all probability furnished her all the requisite[s] for her deployment. All along she (Nahas) represented [to be the
owner of] and [was connected] with both PETRA and Royal Dream to facilitate her deployment. In fact complainant
was successfully deployed by Royal Dream as represented to by Nahas. Obviously, complainant’s overseas
employment was made possible by respondent[’]s agencies, thru the efforts of [respondent] Nahas.
While it was claimed by PETRA that the application of complainant was withdrawn, no evidence on [record] appear
to support it.
The same holds true with appellants[’] claim that respondent Nahas was no longer connected with respondent Royal
Dream when complainant was deployed abroad.
The fact that complainant was finally deployed thru the intercession of [respondent] Nahas with the aid of both
respondent agencies, convinces us, as the Labor Arbiter ruled, that both agencies, indeed did so in recognition of
the former’s authority.
Suffice it to [state] therefore that We find no cogent reason to deviate from the findings of the Labor Arbiter a quo,
and finding the same in order, [affirm] it en toto.
WHEREFORE, the instant appeal should be, as it is hereby dismissed for lack of merit.
SO ORDERED.15
Nahas filed a Motion for Reconsideration16 which was denied in a Resolution17 dated June 30, 2003.Hence, the
recourse to the CA via a Petition for Certiorari.
Nahas advanced the same arguments she raised before the labor tribunals, but failed to convince the CA as in its
Decision18 dated April 29, 2005 it ruled in this wise:
Private respondent Olarte unequivocally declared at the [outset] that it was Nahas who interviewed her and
facilitated her application for work abroad as a domestic helper by instructing the former to sign the Contract of
Employment. Nahas, in her Position Paper, her Reply to Olarte’s Position Paper and her Rejoinder, admitted to
having interviewed Olarte for her application to work abroad. Though she quickly added that she did so only
because Olarte applied with PETRA first and that the latter eventually withdrew the same, Nahas subsequently
recanted this and instead admitted that her agency PETRA was only granted a license by the POEA on 16 July1999
or after Olarte accomplished and filed her application form with ROYAL on 18 May 1999. In the same vein, Nahas
likewise admitted being connected with ROYAL before and that she was the one who met and entertained Olarte
when the latter applied with ROYAL. While Nahas claim[s] that she is neither the proprietress nor one of the officers
of ROYAL at that time, her role or position with ROYAL was undeniably significant considering that she took charge
[of] interviewing Olarte and eventually made her sign the Contract of Employment. Clearly, Nahas exercised
discretion in determining who among the applicants of ROYAL should be accepted and deployed. It is also worthy to
point out that the accomplished bio-data of Olarte with the letterhead of ROYAL referred to earlier was attached by
no less than Nahas herself in her earlier pleading before the Labor Arbiter supposedly to show that Olarte withdrew
her application with PETRA. It would be uncanny for Nahas to have in her possession and custody such document,
if indeed she was but a mere staff of ROYAL or that she is no longer connected in any way with ROYAL, unless
there remains an intimate relationship between her and ROYALor that she once held an important position in the
same.
With the foregoing, We find nothing capricious or whimsical with the NLRC’s finding and thus affirm Nahas’ liability
in accordance with Section 64 of the Omnibus Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of1995 (RA 8024), to wit:
‘Section 64. Solidary Liability – The liability of the principal/employer and the recruitment placement agency on any
and all claims under this Rule shall be [joint] and solidary. x x x.
If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case
may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and damages.
xxxx
WHEREFORE, the instant petition is DENIED and the assailed Decision of the NLRC dated 28 February2003 and
its Resolution of 30 June 2003 are hereby AFFIRMED.
SO ORDERED.19
The Motion for Reconsideration20 thereto having been denied in the CA Resolution21 dated July 8, 2005, Nahas now
comes to this Court via the present Petition for Review on Certiorari.
Nahas insists that it is Royal Dream which is solely responsible for Olarte’s deployment and thus should be the one
to answer for her claims. Be that as it may, she contends that Royal Dream was not served with summons; hence,
the proceedings in this case is not binding upon it. Nahas also refutes the CA’s conclusion that since she
interviewed and caused Olarte to sign an employment contract, she held an important position in Royal Dream. She
maintains that she is a mere employee of Royal Dream and that interviewing and entertaining applicants per se do
not establish that she is a corporate officer, director or partner in said company who could be held solidarily liable.
Lastly, she avers that Olarte’s Complaint is bereft of allegations of attendant circumstances which warrant the grant
of moral and exemplary damages.
On the other hand, Olarte asserts that the argument that PETRA is different from Royal Dream is clearly an attempt
on the part of Nahas, PETRA and Royal Dream to evade liability. She stresses that it was Nahas, for and in behalf
of PETRA/Royal Dream, who performed the acts of recruitment which led to her deployment abroad; hence, all of
them should be held jointly and solidarily liable with their foreign principal.
Our Ruling
The Court is not a trier of facts; factual findings of the labor tribunals when affirmed by the CA are generally
accorded not only respect, but even finality, and are binding on this Court.
It must be stressed, at the outset, that the resolution of the issue of whether Nahas acted for and in behalf of PETRA
and/or Royal Dream in deploying Olarte abroad is a question of fact. "Well-settled is the rule that this Court is not a
trier of facts and this doctrine applies with greater force in labor cases. Questions of fact are for the labor tribunals to
resolve. Only errors of law are generally reviewed in petitions for review on certiorari criticizing decisions of the
CA."22 Also "[s]ettled is the rule that the findings of the [Labor Arbiter], when affirmed by the NLRC and the CA, are
binding on the Supreme Court, unless patently erroneous."23 In this case, the Labor Arbiter, the NLRC, and the CA
are one in their factual conclusion that Nahas, acting for and in behalf of PETRA and Royal Dream, interviewed
Olarte, caused her to sign an employment contract, and facilitated and made possible her deployment abroad. The
Court is, therefore, not duty-bound to inquire into the accuracy of this factual finding, particularly in this case where
there is no showing that it was arbitrary and bereft of any rational basis.24
Nahas’ inconsistent positions militate against her case; her claim of lack of service of summonsupon Royal Dream is
likewise untenable.
The Court notes that in her quest to evade liability, Nahas introduced several conflicting assertions. Before the
Labor Arbiter, she admitted that Olarte indeed applied with PETRA and was interviewed by her but later withdrew
the application. While Nahas intended to support this position with a document showing that Olarte requested for the
withdrawal of her application, the same was, however, never submitted. What was instead unwittingly attached to
her Position Paper was Olarte’s accomplished bio-data bearing the letterhead of Royal Dream. This did not escape
the Labor Arbiter’s attention such that her March 20, 2002 Decision states:
x x x While [PETRA/Nahas] admits that complainant was a [walk]-in applicant, respondent [PETRA] Agency’s claim
that[Olarte] subsequently withdrew her application has not been satisfactorily established by concrete evidence. x x
x [I]t is incumbent upon the party who asserts a fact [to prove the same].
More significantly, respondent Consolacion "Marla" Nahas never denied [Olarte’s claim] that it was [Nahas] who
interviewed her.
It is basic that mere [allegation]is neither equivalent to proof nor evidence.25
Later in her Memorandum of Appeal with the NLRC, Nahas repudiated her earlier admission and averred that Olarte
did not at all apply with PETRA. While still maintaining that she interviewed Olarte, she now claimed to have done
so when she was still connected with Royal Dream as a mere employee. 1âwphi1
It is quite obvious that Nahas started singing a different song, so to speak, after the Labor Arbiter did not buy her
claim that Olarte withdrew her application with PETRA due to her utter failure to support the same. And with her still
seeming inability to produce the alleged withdrawal request before the NLRC, the most convenient way out is for her
to claim that Olarte did not at all apply with PETRA. While Nahas attempted to bolster this new allegation by
averring that PETRA was issued a license only on July16, 1999 thereby making it impossible for Olarte to apply in
May 1999, the same, however, hardly convinces. Aside from the lack of any evidence showing the date of the
POEA’s issuance of license to PETRA, the fact that it was yet to be issued a license does not preclude the
possibility that it was already accepting applicants on behalf of Royal Dream which at that time already possesses
the required license. This explains why the accomplished bio-data of Olarte dated May 18, 1999 bears the
letterhead of Royal Dream and also why the pertinent documents from POEA and OWWA26 reflect the said agency
as Olarte’s local agency.
Neither does the unsupported averment of Nahas before the NLRC that she was previously connected with Royal
Dream as a former employee help her cause. For one, she could have easily submitted a certificate of employment
from Royal Dream showing that she was a mere employee of the latter during the time material to this case. But she
failed to do so. It must be stressed "that he who alleges must prove."27
Clearly, Nahas’ vacillating from one story to another and not being able to support them is nothing but a mere ruse
to evade the lawful claims of Olarte. This cannot be tolerated. It has been held that "[a] party will not be allowed to
make a mockery of justice by taking inconsistent positions which, if allowed, would result in brazen
deception."28Inconsistent and unsupported as they are, the labor tribunals and the CA correctly rejected the
contentions of Nahas.
Anent the assertion that Royal Dream was not served with summons, it must be stressed that Olarte had
categorically declared at the outset that it was in the office of PETRA/Royal Dream at Room 401, Gochangco
Building, T.M. Kalaw, Ermita, Manila where she applied for work as domestic helper, was interviewed, and made to
sign an employment contract. This was effectively corroborated by Nahas herself when she admitted before the
Labor Arbiter that Olarte was a walk-in applicant in the said office. When finally deployed, the local agency
appearing in Olarte’s papers was Royal Dream. Hence, when Olarte was repatriated and later filed a Complaint, she
lodged it against Nahas and PETRA/Royal Dream and summons was served upon them at Room 401, Gochangco
Building, T.M., Kalaw, Ermita, Manila.29 Besides, to concede to this claim of Nahas would in effect allow her, PETRA
and Royal Dream to hide behind the cloak of corporate fiction in order to evade the rightful claims of Olarte. It bears
emphasizing that "the statutorily granted privilege of a corporate veil may be used only for legitimate
purposes."30 "[T]he corporate vehicle cannot be used as a shield to protect fraud or justify wrong,"31 which clearly in
this case is what Nahas, PETRA and Royal Dream are attempting to achieve but which the Court cannot allow.
The propriety of the grant of moral and exemplary damages in favor of Olarte is being raised for the first time with
this Court.
Notably, Nahas did not question before the NLRC and the CA the Labor Arbiter’s grant of moral and exemplary
damages in favor of Olarte; hence, the Court need not belabor upon the same. "[P]oints of law, theories, issues, and
arguments not adequately brought to the attention of the lower court (or in this case, the appropriate quasi-judicial
administrative body) need not be considered by the reviewing court as they cannot be raised for the first time on
appeal x x x because this would be offensive to the basic rules of fair play, justice and due process."32
As a final note, it is worth stating that recruitment agencies, as part of their bounden duty to protect the welfare of
the Filipino workers sent abroad from whom they take their profit,33 should in conscience not add to the misery of
maltreated and abused Filipino workers by denying them the reparation to which they are entitled. Instead, they
must "faithfully comply with their government prescribed responsibilities"34 and be the first to ensure the welfare of
the very people upon whose patronage their industry thrives.35
WHEREFORE, the Petition is DENIED. The assailed Decision dated April 29, 2005 and Resolution dated July 8,
2005 of the Court of Appeals in CAG.R. SP No. 79028 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 181949 April 23, 2014
HEIRS OF FRANCISCO BIHAG, NAMELY: ALEJANDRA BIHAG, NICOMEDES B. BIHAG, VERONICA B.

ACOSTA, SUSANA B. MINOZA, PAULINO B. BIHAG, DANILO B. BIHAG, TIMOTEO B. BIHAG JR.,
EDILBERTO B. BIHAG, JOSEPHINE B. MINOZA, and MA. FEB. ARDITA,* Petitioners,
vs.
HEIRS OF NICASIO BATHAN, NAMELY: PRIMITIV AB. BATHAN and DUMININA B.
GAMALIER,** Respondents,
DECISION
DEL CASTILLO, J.:
The doctrine of finality of judgment dictates that, at the risk of occasional errors, judgments or orders must become
final at some point in time.1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the October 26, 20073 and
January 14, 20084 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 03019.
Factual Antecedents
On April 23, 1992, petitioners heirs of Francisco Bihag (Francisco), namely: Teofilo T. Bihag, Jorge T. Bihag, Leona
B. Velasquez, Vivencia B. Suson and Timoteo T. Bihag,5 represented by his heirs Nicomedes Bihag, Alejandra
Bihag, Veronica B. Acosta, Susana Miñoza, Paulino Bihag, Danilo Bihag, Edilberto Bihag, Timoteo Bihag, Jr.,
Josephine B. Miñoza, and Ma. Fe Bihag, filed with the Regional Trial Court (RTC) of Mandaue City a Complaint6 for
Quieting of Title, Damages, and Writ of Injunction and Temporary Restraining Order (TRO), docketed as Civil Case
No. MAN-1311, against respondents spouses Nicasio7 and Primitiva (Primitiva) Bathan and their daughter,
Duminina Bathan Gamalier. Petitioners alleged that sometime in the 1960’s, respondent Primitiva approached her
brother, Francisco, to borrow money.8 But since he did not have money at that time, she instead asked him to
mortgage his unregistered land in Casili, Mandaue City, to the Rural Bank of Mandaue City so that she could get a
loan.9 She promised that she would pay the obligation to the bank and that she would return to him the documents,
which were submitted to the bank in support of the loan application.10 Francisco agreed on the condition that
respondent Primitiva would pay the real property tax of the subject land while it was mortgaged.11 When Francisco
died on December 13, 1976, petitioners found out that the mortgage had long been cancelled.12 They confronted
respondents to return the documents but to no avail.13 Petitioners later discovered that respondents took possession
of the land and were hauling materials and limestones from it to the prejudice of petitioners.14 Thus, petitioners
prayed that a TRO be issued against the latter to enjoin them from entering the land and from hauling materials
therefrom.15
On the same day, the RTC issued a TRO16 against respondents for a period of 20 days, pending the resolution of
petitioners’ application for a Writ of Preliminary Injunction.
Respondents, in their Answer,17 denied the material allegations of the Complaint and interposed the defenses of lack
of cause of action and laches. They claimed that respondent spouses already owned the land when it was
mortgaged to the Rural Bank of Mandaue City in the 1960’s.18 They alleged that in 1956, Francisco borrowed money
from Primitiva using the tax declarations of the land as collateral;19 that he failed to pay the loan;20 and thus, in 1959,
he verbally sold the land to respondent spouses.21 Respondents insisted that petitioners knew about the sale,22 as
evidenced by the Extra-Judicial Declaration of Heirs with Deed of Sale,23 which was signed by some of the
petitioners in 1984.
In response, petitioners countered that the signatures of those who signed the Extra-Judicial Declaration of Heirs
with Deed of Sale were obtained through fraud as they barely know how to read and were in their twilight years
when they signed the document.24
On June 2, 1992, the RTC issued an Order25 granting petitioners’ application for the issuance of a Writ of Preliminary
Injunction.
Thereafter, trial ensued.
On March 20, 2006, the RTC issued a Decision26 in favor of respondents. It gave credence to their version that
Francisco sold the land to respondent Primitiva in 1959.27 In addition, the RTC ruled that petitioners are estopped
from claiming ownership over the said land by reason of laches, pointing out that respondents have been in
possession of the land for more than 30 years and that Francisco, during his lifetime, never disputed their public and
peaceful possession of the land.28 Thus, the RTC decreed:
Foregoing considered, the Court decides in favor of the [respondents].
1. the dismissal of the case;
2. Plaintiffs to surrender possession and ownership of the property under consideration to Nicasio Bathan and
Primitiva Bihag-Bathan;
3. Plaintiffs to pay moral damages of Fifty Thousand Pesos (₱50,000.00); Attorney’s fees of Fifty Thousand Pesos
(₱50,000.00) as well as litigation expenses in the amount of Ten Thousand Pesos (₱10,000.00).
SO ORDERED.29
Petitioners moved for a reconsideration but the RTC denied the same in its August 11, 2006 Order.30
Unfazed, petitioners filed a Notice of Appeal on October 2, 2006.31
On January 5, 2007, the RTC issued an Order32 denying the Notice of Appeal. The RTC declared that:
A reading of the Notice of Appeal will show that [petitioners] received a copy of the Decision on April 20, 2006 but
filed the Motion for Reconsideration on April 28, 2006 after the lapse of eight (8) days. Furthermore, [petitioners]
received a copy of the Order denying their motion on September 22, 2006 but filed the Notice of Appeal on October
2, 2006 after the lapse of ten (10) days. Thus, the Notice of Appeal was filed after the lapse of [the] fifteen (15) days
reglementary period or to be exact after the lapse of eighteen (18) days.
xxxx
[Based] on the case cited above, [petitioners] only [have] (7) seven days from the date of receipt of the Order
denying the Motion for Reconsideration to file the Notice of Appeal.
Considering that the Notice of Appeal was filed on the 15th day from receipt of the Order denying Motion for
Reconsideration which is beyond the reglementary period to file the Notice of Appeal, the same is DENIED due
course.
Notify counsels.
SO ORDERED.33
Thereafter, respondents filed a Motion for the Issuance of a Writ of Execution,34 which petitioners did not oppose.
On April 24, 2007, the RTC issued an Order35 granting the Motion and on May 2, 2007, it issued a Writ of
Execution.36
On October 10, 2007, petitioners filed with the CA a Petition for Certiorari with prayer for the issuance of a TRO
and/or Writ of Preliminary Injunction37 under Rule 65 of the Rules of Court.
On October 26, 2007, the CA issued a Resolution38 dismissing the Petition for being insufficient in form and
substance. It found that the Petition failed to indicate the material dates as required under Section 3,39 Rule 46 of the
Rules of Court; that no prior motion for reconsideration was taken; that one of the petitioners, Jorge T. Bihag, failed
to sign the verification and certification of non- forum shopping; that the verification appended to the Petition was a
photocopy; that affiants failed to indicate the date of issue of their Community Tax Certificate; and that petitioners
failed to submit the certified true copy of the RTC’s April 24, 2007 Order, granting the issuance of a Writ of
Execution.
Aggrieved, petitioners filed a Motion for Reconsideration40 attaching a copy of the RTC’s August 24, 2007 Order and
explaining that no motion for reconsideration was filed since they never received a copy of the RTC’s January 5,
2007 Order, denying their Notice of Appeal.
Respondents opposed the Motion, contending that petitioners received a copy of the RTC’s January 5, 2007 Order
as evidenced by the Certification issued by the assistant postmaster, attesting that petitioners, through their
counsel’s receiving clerk, received a copy of the Order on January 22, 2007.41
On January 14, 2008, the CA issued a Resolution42 denying the Motion for Reconsideration filed by petitioners for
lack of merit.
Issue
Hence, the instant Petition for Review on Certiorari with Application for Preliminary Injunction with the sole issue of
"whether x x x the disapproval of the Notice of Appeal undertaken by petitioners from the judgment of the [RTC] was
in accordance with law."43
Acting on petitioners’ application for Preliminary Injunction, this Court, in its April 2, 2008 Resolution,44 issued a TRO
enjoining respondents from implementing the May 2, 2007 Writ of Execution issued by the RTC in Civil Case No.
MAN-1311.
Petitioners’ sole contention is that the RTC’s denial of their Notice of Appeal contravenes the ruling in Neypes v.
Court of Appeals,45 which grants an aggrieved party a fresh period of 15 days from receipt of the denial of a motion
for new trial or motion for reconsideration within which to file the notice of appeal.46
Petitioners claim that their Notice of Appeal was timely filed on October 2, 2006 or within 10 days after they received
the Order denying their Motion for Reconsideration on September 22, 2006.47
Instead of responding to petitioners’ contention, respondents put in issue petitioners’ failure to move for a
reconsideration of the denial of their Notice of Appeal.48 Respondents assert that the absence of a motion for
reconsideration justifies the CA’s denial of the Petition for Certiorari filed by petitioners.49
Anent petitioners’ alleged non-receipt of the January 5, 2007 Order, respondents insist that this is belied by the
Certification issued by the assistant postmaster certifying that on January 22, 2007, the receiving clerk of the office
of petitioners’ counsel received a copy of the January 5, 2007 Order.50 Respondents further contend that even if
petitioners did not receive a copy of the said Order, they should have at least opposed the Motion for Issuance of a
Writ of Execution filed by respondents or moved for a reconsideration of the RTC’s April 24, 2007 Order granting
respondents’ Motion for the Issuance of a Writ of Execution.51 Failing to do so, petitioners lost the right to question
the RTC’s Orders.52 Thus, the CA correctly dismissed the Petition for Certiorari filed by petitioners under Rule 65 of
the Rules of Court.
Our Ruling
An aggrieved party is allowed a fresh

period of 15 days counted from receipt
of the order denying a motion for a new
trial or motion for reconsideration
within which to file the notice of appeal
in the RTC.
In Neypes, the Supreme Court, in order to standardize the appeal periods provided in the Rules and to afford
litigants fair opportunity to appeal their cases, declared that an aggrieved party has a fresh period of 15 days
counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration, within which to
file the notice of appeal in the RTC.53
In light of the foregoing jurisprudence, we agree with petitioners that their Notice of Appeal was timely filed as they
had a fresh 15-day period from the time they received the Order denying their Motion for Reconsideration within
which to file their Notice of Appeal.
The January 5, 2007 Order has attained finality. 1âw phi 1
But while we agree with petitioners that their Notice of Appeal was erroneously denied by the RTC, we are
nevertheless constrained to deny the instant Petition as the January 5, 2007 Order, denying petitioners’ Notice of
Appeal, has attained finality. It is a settled rule that a decision or order becomes final and executory if the aggrieved
party fails to appeal or move for a reconsideration within 15 days from his receipt of the court’s decision or order
disposing of the action or proceeding.54 Once it becomes final and executory, the decision or order may no longer be
amended or modified, not even by an appellate court.55
In this case, petitioners, through their counsel, received a copy of the assailed January 5, 2007 Order, under
Registry Receipt No. E-0280, on January 22, 2007, as evidenced by the Certification of the assistant postmaster. As
such, petitioners should have filed their motion for reconsideration within 15 days, or on or before February 6, 2007,
but they did not. Instead, they filed a Petition for Certiorari before the Court of Appeals on October 10, 2007. At this
time, the RTC’s January 5, 2007 Order denying the Notice to Appeal had long become final and executory.
Petitioners’ mere denial of the receipt of the assailed Order cannot prevail over the Certification issued by the
assistant postmaster as we have consistently declared that "[t]he best evidence to prove that notice was sent would
be a certification from the postmaster, who should certify not only that the notice was issued or sent but also as to
how, when and to whom the delivery and receipt was made."56
Considering that the January 5, 2007 Order has attained finality, it may no longer be modified, altered, or disturbed,
even if the modification seeks to correct an erroneous conclusion by the court that rendered it.57
In view of the foregoing, we find no error on the part of the CA in denying the Petition for Certiorari.
WHEREFORE, the Petition is hereby DENIED. The assailed October 26, 2007 and January 14, 2008 Resolutions of
the Court of Appeals in CA-G.R. SP No. 03019 are hereby AFFIRMED.
The Temporary Restraining Order issued by the Court on April 2, 2008 is hereby LIFTED.
SO ORDERED.
SECOND DIVISION
G.R. No. 196753 April 21, 2014

vs.
ERWIN LALOG, ROOSEVELT CONCEPCION, EDWIN RAMIREZ, and RICKY LITADA, Accused-Appellants.
RESOLUTION
DEL CASTILLO, J.:
The facts of this case as summarized by the Court of Appeals are as follows:
On September 29, 1999 at around 8:00 o'clock in the evening, Ryan Gain [Gain], Roswel Mercado [Mercado], Rex
Rey [Rey] and Jayson Manzo [Manzo] were strolling at the Municipal Park of Poblacion, Municipality of
Pinamalayan, Oriental Mindoro, when they were blocked by four (4) persons, namely Erwin Lalog [Lalog], Roosevelt
Concepcion [Concepcion], Edwin Ramirez [Ramirez] and Ricky Litada [Litada]. xx x Lalog angrily talked to x x x
Gain, but x x x Mercado intervened and apologized to the group of xx x Lalog x x x.
Later, x x x Gain and x x x Mercado went down the stairs of the park locally known as the "RAINBOW[.]" x x x
Mercado [was] walking ahead ofx x x Gain by six (6) arms length[;] when he looked back, he saw xx x Gain being
ganged upon by the group of the accused-appellants x xx [held] both the hands of x x x Gain, while x x x Lalog
stabbed x x x Gain. x x x [Fearing for his life,] Roswel x x x immediately fled the scene.
Sensing that the assailants had left the scene, x xx Mercado approached x x x Gain and brought him to the hospital
x x x but it was already too late for he was declared x x x [d]ead on [a]rrival x x x.
On the other hand, x x x Lalog admitted stabbing x x x Gain in self-defense, while the other three appellants, x x x
Concepcion, x x x Ramirez, and x x x Litada denied their participation in the stabbing incident, claiming that the
three of them were in a drinking session, in the house of [Ramirez’s aunt] in Quezon Street, Pinamalayan, Oriental
Mindoro.1
Thus, on October 28, 1999, an Information2 was filed charging appellants Lalog, Concepcion, Ramirez, and Litada
with the crime of murder. During their arraignment on February 21, 2000, appellants pleaded not guilty.3 The case
was set for pre-trial on April 27, 2000.4 However, upon agreement by both parties, the pre-trial was terminated. Trial
on the merits ensued.
In a Decision5 dated October 17, 2003, the Regional Trial Court of Pinamalayan, Oriental Mindoro, Branch 42, found
appellants guilty as charged, viz:
ACCORDINGLY, judgment is hereby rendered finding accused Erwin Lalog, Roosevelt Concepcion, Edwin Ramirez
and Ricky Litada guilty beyond reasonable doubt as principal[s] of the crime of MURDER for having conspired in
killing Ryan Gain, qualified by treachery, which is defined and penalized under Article 248 of the Revised Penal
Code by RECLUSION PERPETUA to DEATH. Considering that there is neither a mitigating nor aggravating
circumstance in the commission of the crime, all accused are hereby sentenced to suffer the penalty of
RECLUSION PERPETUA with all the accessory penalties and to jointly and severally pay the heirs of Ryan Gain the
sum of ₱50,000.00 as civil indemnity, the sum of ₱29,510 as expenses incurred during the wake of deceased Ryan
Gain including the funeral expenses, the sum of ₱50,000.00 as moral damages and to pay costs of suit.
SO ORDERED.6
The trial court lent credence to the testimony of Mercado who never wavered in his narration that he saw appellants
gang up on the victim and that appellant Lalog stabbed the victim at the back. It was not persuaded by Lalog’s claim
of self-defense as it was quite improbable for Lalog to have stabbed the victim on the back while he was lying on the
ground and the victim on top of him. The number of wounds sustained by the victim negated Lalog’s claim of self-
defense; rather, it was indicative of appellants’ intent to kill. The trial court disregarded Concepcion’s, Ramirez’, and
Litada’s defense of alibi considering that the place where they claim to be was only about a hundred meters away
from the scene of the crime. Thus, it was not physically impossible for them to be present at the crime scene. The
trial court found that the qualifying circumstance of evident premeditation did not attend the commission of the
crime. It noted that appellants and the victim met only by chance at Pinamalayan Park; there was no showing that
appellants planned the killing. However, it found that the killing was done in a treacherous manner. The prosecution
established that appellants first held the hands of the victim to render him immobile and to foreclose any defense
from the latter. Thereafter, appellant Lalog stabbed him at the back. As regards the aggravating circumstance of
abuse of superior strength, the same was absorbed in the qualifying circumstance of treachery. Nocturnity was not
considered to have qualified the crime because there was no showing that appellants took advantage of the same to
perpetrate the crime or to conceal their identity.
Aggrieved, appellants appealed to the Court of Appeals. However, in its November 11, 2010 Decision,7 the appellate
court affirmed in full the Decision of the trial court, viz:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Pinamalayan, Oriental
Mindoro, in Criminal Case No. P-6043 convicting the accused-appellants of the crime of Murder and sentencing
them to suffer the penalty of Reclusion Perpetua, with all the accessory penalties, and to jointly and severally pay
the heirs of Ryan Gain the sum of ₱50,000.00 as civil indemnity, the sum of ₱29,510.00 as expenses incurred
during the wake of deceased Ryan Gain including the funeral expenses, the sum of ₱50,000.00 as moral damages
and to pay costs of suit, is hereby AFFIRMED.
SO ORDERED.8
Hence, this appeal.
Appellants claim that Mercado’s testimony should not have been given credence by the trial court and the appellate
court as there were inconsistencies. They allege that Mercado initially testified that appellants attacked the victim at
the place known in the locality as the "rainbow" but later recanted and stated that the stabbing occurred on the
ground near the "rainbow".
This contention deserves no consideration. Whether the victim was stabbed at the "rainbow" or near the "rainbow" is
inconsequential. What is important is the fact that Mercado unwaveringly testified that he saw appellants gang up on
the victim, render him immobile, and then stab him at the back several times.
Appellants next argue that the trial court and the appellate court erred in disregarding Lalog’s claim of self-defense.
We are not persuaded. As correctly held by the trial court:
To avail of self-defense as a justifying circumstance so as not to incur any criminal liability, it must be proved with
certainty by satisfactory and convincing evidence which excludes any vestige of criminal aggression on the part of
the person invoking it. It cannot be entertained where it is not only uncorroborated by any separate competent
evidence but is also doubtful. If the accused fails to discharge the burden of proof, his conviction, shall of necessity
follow on the basis of his admission of the killing (People v. Suyum et. al. G.R. No. 137518, March 6, 2002).
The claim of x x x Lalog that he stabbed x x x Gain at the back portion of the latter’s body (Lumbar area) while the
former was lying down is not only uncorroborated by any other evidence but it is improbable and contrary to the
physical evidence because how could x x x Lalog [stab] x x x Gain’s back when the former was lying on the ground
while the latter was on top and at the same time choking him. The testimony of prosecution witness x x x Mercado
that x x x Gain was stabbed at his back by x x x Lalog while x x x [both his hands were being held by the other
appellants] is more logical, believable and [in] consonance with the physical evidence. x x x Gain could not have
been easily stabbed at his back if his x x x hands were not being held x x x considering that x x x Gain is much taller
and bigger in built than the accused particularly x x x Lalog unless x x x Gain just simply let his back (lumbar area)
[be] stabbed without any resistance or struggle on his part which is impossible under any state of circumstances.
Furthermore, the number of wounds [sustained by Gain] (Exh. "A") [is] indicative of x x x Lalog’s desire to kill the
former and not really defend himself because not a single moment of the incident was his life and limb being
endangered which is the essence of self-defense. The fact that the deceased x x x Gain was not armed all the more
negates self-defense.9
Finally, we are not persuaded by appellants’ argument that the qualifying circumstance of treachery was not proved.
We agree with the trial court’s observation that appellants attacked Gain in a treacherous manner. They held Gain’s
arms, rendered him immobile and then thrust the knife into his body several times.
Both the trial court and the Court of Appeals properly sentenced appellants to reclusion perpetua there being no
aggravating circumstance other than the qualifying circumstance of treachery. However, appellants are not eligible
for parole.10
As regards damages, the award of civil indemnity must be increased to ₱75,000.00 in line with prevailing
jurisprudence.11 The awards of moral damages in the amount of ₱50,000.00 and actual damages in the amount of
₱29,510.00 are proper. In addition, the heirs of the victim are entitled to an award of exemplary damages in the
amount of ₱30,000.00.12 Finally, interest at the rate of 6% per annum from date of finality of this judgment until the
awards of damages are fully paid is imposed.13
WHEREFORE, the appeal is DISMISSED. The November 11, 2010 Decision of the Court of Appeals in CA-G.R CR-
HC No. 00325 which affirmed the October 17, 2003 Decision of the Regional Trial Court of Pinamalayan, Oriental
Mindoro, Branch 42, finding appellants Erwin Lalog, Roosevelt Concepcion, Edwin Ramirez and Ricky Litada guilty
beyond reasonable doubt of the crime of murder and sentencing them to suffer the penalty of reclusion perpetua is
AFFIRMED with MODIFICATIONS that appellants are without eligibility for parole; the award of civil indemnity is
increased to ₱75,000.00; appellants are ordered to pay the heirs of the victim ₱30,000.00 as exemplary damages;
and interest on all damages awarded is imposed at the rate of 6% per annum from date of finality of this judgment
until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 199442 April 7, 2014

vs.
FRANCISCO ABAIGAR, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:

An Information1 was filed charging appellant Francisco Abaigar with the crime of murder, the accusatory portion of
which reads:
That on or about the 11th day of July 2001, at about 9:00 o'clock in the evening, at Barangay Rosalim, Municipality
of San Jorge, Province of Samar, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused did then and there willfully, unlawfully and feloniously, without any justifiable cause, with intent to kill, and
by means of treachery and evident premeditation, attack, assault and use personal violence upon the person of
JOSEPH GABUY A by shooting him with the use of a homemade shotgun locally known as "Bardog", which the
accused had conveniently provided himself for the purpose, hitting the victim's left side of the face and behind the
head, thereby inflicting upon him serious and mortal wounds which were the direct and immediate cause of his
death.
CONTRARY TO LAW.2
During his arraignment on August 4, 2004, appellant pleaded not guilty to the charge.3
On December 6, 2007, the trial court rendered its Judgment4 finding appellant guilty as charged. The dispositive
portion of the Judgment reads:
WHEREFORE, accused Francisco Abaigar is hereby found GUILTY beyond reasonable doubt of the crime of
Murder and is hereby meted the penalty of Reclusion Perpetua.
Said accused shall also indemnify the heirs of deceased Joseph Gabuya death indemnity in the amount of
Php75,000.00, moral damages of Php50,000.00 and exemplary damages in the amount of Php20,000.00.
In line with Sec. 5, Rule 114 of the Rules on Criminal Procedure, the Warden of the Sub-Provincial Jail, Calbayog
City, is hereby directed to immediately transmit the living body of accused Francisco Abaigar to the New Bilibid
Prison, Muntinlupa City, Metro Manila, where he may remain to be detained.
In the service of his sentence he shall be credited for the period he was under preventive detention, provided he has
previously expressed his written conformity to comply with the discipline, rules and regulations by the detention
center otherwise he shall be entitled to only 4/5 thereof pursuant to Article 29 of the Revised Penal Code as
amended.
SO ORDERED.5
The trial court lent credence to the testimony of prosecution witness Relecita del Monte (Relecita) that at about 9
o’clock in the evening of July 11, 2001, at a distance of about 3 1/2 meters, she saw appellant shoot Joseph Gabuya
(Gabuya) from behind hitting the victim at the back of his head. The trial court disregarded appellant’s denial and
alibi. It found incredulous appellant’s claim that he returned to sleep immediately after hearing bursts of gunshots
near his house and his disavowal of any knowledge about the death of Gabuya whose house is just 30 arms length
away from his house. His flight after the incident was considered an indication of guilt. The trial court also found that
treachery attended the killing as the victim was merely in the act of opening the front door of his house without any
inkling of the impending attack coming from behind.
Aggrieved, appellant appealed before the Court of Appeals. In a Decision6 dated June 22, 2010, the appellate court
affirmed in full the Judgment of the trial court, viz:
WHEREFORE, the Judgment of the Regional Trial Court (RTC), Branch 41, of Gandara, Samar, in Criminal Case
No. 02-0100 finding accused-appellant, Francisco Abaigar, guilty beyond reasonable doubt of the crime of Murder is
AFFIRMED in toto.
SO ORDERED.7
Hence, this appeal.

In a Resolution8 dated January 25, 2012, we required both parties to submit their Supplemental Briefs but they opted
to adopt the briefs they filed before the Court of Appeals.
Appellant basically argues that the trial court and the Court of Appeals erred in lending credence to the testimony of
eyewitness Relecita. Appellant claims that Relecita could have forewarned the victim of his presence if indeed
Relecita saw him in the vicinity; and that it was improbable that Relecita could see him considering the poor lighting
condition of the place.
It is settled that the assessment of the credibility of witnesses is within the province and expertise of the trial court. In
this case, we find no cogent reason to depart from the findings of the trial court. The court below categorically found
that Relecita had no ill motive to testify against appellant; she "has no reason to impute on him the heinous crime of
murder had she not witnessed the actual killing of the victim."9 Similarly, the appellate court found Relecita to have
"positively identified the appellant as the perpetrator of the crime."10 Also, the failure of Relecita to warn the victim of
the appellant’s impending attack should not be taken against her.
Neither should it be taken as a blemish to her credibility.
As regards the visibility, the appellate court correctly ruled that the distance between Relecita and appellant, the
light coming from a 50-watt bulb on the street post about eight meters away from the place where the victim was
shot, the light coming from passing vehicles, and the light coming from the kerosene lamp in the house of the
appellant are enough to illuminate the place and for Relecita to positively identify the appellant.
We agree with the trial court and the Court of Appeals that treachery attended the commission of the crime. Records
show that the victim was about to enter his house when suddenly he was shot from behind by the appellant hitting
him at the back of his head. The victim suffered five gunshot wounds, four of which proved fatal.
Considering the qualifying circumstance of treachery, appellant was correctly found guilty of murder; there being no
aggravating circumstance other than the qualifying circumstance of treachery, both the trial court and the appellate
court correctly sentenced appellant to reclusion perpetua pursuant to Article 248 of the Revised Penal Code.
However, he is not eligible for parole.11
As regards the damages awarded, we note that the trial court did not award actual damages. In lieu thereof, the
1âwphi1
heirs of the victim are entitled to an award of temperate damages in the amount of ₱25,000.00 "as it cannot be
denied that the heirs of the [victim] suffered pecuniary loss although the exact amount was not proved."12 "This
award is adjudicated so that a right which has been violated may be recognized or vindicated, and not for the
purpose of indemnification."13 Exemplary damages must likewise be increased to ₱30,000.00 in line with prevailing
jurisprudence. In addition, all damages awarded shall earn interest at the rate of 6% per annum from finality of this
judgment until fully paid.
WHEREFORE, the appeal is DISMISSED. The June 22, 2010 Decision of the Court of Appeals in CA-G.R. CR-HC
No. 00866 which affirmed in full the December 6, 2007 Judgment of the Regional Trial Court of Gandara, Samar,
Branch 41, finding appellant Francisco Abaigar guilty beyond reasonable doubt of the crime of murder is AFFIRMED
with MODIFICATIONS that appellant is without eligibility for parole; he is ordered to pay the heirs of the victim the
amount of ₱25,000.00 as temperate damages; and the award of exemplary damages is increased to ₱30,000.00. In
addition, interest on all damages awarded is imposed at the rate of 6% per annum from date of finality of this
SO ORDERED.
SECOND DIVISION
G.R. No. 198059 April 7, 2014

vs.
ANTONIO LUJECO y MACANOQUIT alias "TONYO", Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Antonio Lujeco y Macanoquit was charged with the crime of rape1 committed on June 29, 2002 against
"AAA,"2 a seven-year old minor.3 Appellant pleaded not guilty when arraigned on February 27, 2003.4 After trial, the
Regional Trial Court of Malaybalay, Branch 8, rendered a Decision5 finding appellant guilty of statutory rape.6
As found by the trial court, the prosecution has satisfactorily established that in the morning of June 29, 2002, "AAA"
was playing with her friends near the old market at Don Carlos, Bukidnon, which was about 20 meters away from
her house. After her playmates left, appellant suddenly grabbed "AAA" and dragged her to the house of his
granddaughter which was located nearby. Inside the house, appellant forcibly undressed "AAA," poked a knife at
her, and then had carnal knowledge of her. After satiating his lust, appellant told "AAA" to go home.
Aggrieved, appellant appealed to the Court of Appeals which rendered its Decision7 dated April 29, 2011 affirming in
full the Decision of the trial court, viz:
WHEREFORE, the assailed Decision of the Regional Trial Court, Branch 8, Malaybalay City, finding accused-
appellant Antonio Lujeco alias Tonyo guilty beyond reasonable doubt of the crime of rape is AFFIRMED in toto with
costs against accused-appellant.
SO ORDERED.8
Hence, this appeal.9
In his Supplemental Brief,10 appellant claims that the trial court and the appellate court erred in giving credence to
the testimony of "AAA".11 He argues that "AAA" was "under pressure by her mother"12 or was coached as the latter
was embracing "AAA" while "AAA" was on the witness stand.
This contention deserves no consideration.
It is worth emphasizing that "AAA" was only seven years of age when raped; and eight years old when placed on
the witness stand. At the start of her testimony, the trial judge asked if "AAA" needed a "support person."13 The
prosecution replied that her mother would act as her support. Notably, the defense offered no objection. Thus, it is
now too late in the proceedings for appellant to assail the same.
Besides, we have perused the records14 and found that "AAA’s" mother never uttered any word while "AAA" was
testifying. If at all, the records only showed that her mother was embracing "AAA" while the latter was testifying.
There was no coaching whatsoever. That she admitted during cross-examination that her mother told her "to always
remember"15 when testifying, does not diminish her credibility. On the contrary, we interpret this as a mere reminder
from her mother for "AAA" to remember every detail so that appellant would stay in jail. For reference, the pertinent
testimony of "AAA" reads as follows:
Q. What did your mother tell you before you testified today?
A. She told me to always remember.
Q. What in particular was that she wanted you to always remember?
A. She said, "AAA, you have to remember always so that they will [be] put to shame."
Q. Do you know who was that your mother was referring to be put to shame when she told you to remember always
something?
A. Yes.
Q. Who?
A. Them, Tonyo.
Q. Tonyo Lujeco, the one whom you pointed to earlier, am I correct?
A. Yes.
Q. What else did your mother tell you?
A. My mother told me that if I will not remember always, if I am not going to remember always, that will cause Tonyo
to be released.16
More importantly, the records show that "AAA" testified in a categorical and straightforward manner despite her
youth. She was unequivocal in her narration and in pointing to the appellant as the rapist. As correctly observed by
the trial court:
Her tender age notwithstanding, "AAA" nonetheless appeared to possess the necessary intelligence and
perceptiveness sufficient to invest her with the competence to testify about her experience. She might have been an
impressionable child – as all others of her age are – but her narration of the facts relating to the incident is clear. x x
x Her demeanor as a witness – manifested during trial by her unhesitant spontaneous and plain responses to
questions further enhanced her claim to credit and trustworthiness.17
xxxx
x x x This court observed the clear, candid, and straightforward manner that the victim narrated how the accused
sexually violated her. This court finds no cogent reason to deviate from that observation. Moreover the court finds
simply inconceivable for "AAA", eight (8) years of age, with all her naivete and innocence, to fabricate a story of
defloration, allow an examination of her private parts, and thereafter submit herself to a public trial or ridicule, if she
had not, in fact, been a victim of rape and deeply motivated by a sincere desire to have the culprit apprehended and
punished. x x x18
The Court of Appeals also correctly observed that:
Based on AAA’s testimony, it is clear that the appellant had carnal knowledge of the victim who was under twelve
(12) years old. AAA categorically recounted the details of how appellant raped her by pushing hard to insert his
penis into her labia majora. She was only seven (7) years old when she was raped. It is improbable that a victim of
tender years, especially one unexposed to the ways of the world as AAA must have been, would impute a crime as
serious as rape if it were not true. There is no doubt that AAA was impelled solely by a desire to let justice find its
way. In this regard, it is worthy to note that jurisprudence is one in recognizing that when the offended parties are
young and immature girls, courts are inclined to lend credence to their version of what transpired, considering not
only their relative vulnerability but also the shame and embarrassment to which they would be exposed by court trial
if the matter about which they testified is not true.19
Besides, "AAA’s" testimony was corroborated by the medical findings of Dr. Marichu Macias (Dr. Macias). Dr.
Macias testified that "AAA" suffered fresh20 hymenal lacerations;21 that the victim was "positive for sexual molestation
injury"22 as there were "contusion-hematoma x x x triangular in shape found in both sides of the labia majora of the
victim."23
We find no merit in appellant’s argument that the contusion or hematoma in "AAA’s" private part could have been
caused by riding a bike. Even at her tender age, "AAA" categorically testified that appellant inserted his penis into
her vagina and pushed it hard.24Finally, appellant claims that his alibi, although concededly a weak defense, should
not be disregarded. We are not persuaded. We agree with the ruling of the appellate court, viz:
As regards appellant’s contention that the trial court gravely erred in convicting him despite the fact that during the
time that the alleged rape was committed, he was at the public market of Don Carlos, the Court finds the same
wanting in merit.
It has been held, time and again, that alibi, as a defense, is inherently weak and crumbles in light of positive
identification by truthful witnesses. It should be noted that for alibi to prosper, it is not enough for the accused to
prove that he was in another place when the crime was committed. He must likewise prove that it was physically
impossible for him to be present at the crime scene or its immediate vicinity at the time of its commission. As
testified by the appellant, he was at the public market of Don Carlos, Bukidnon x x x. Undoubtedly, x x x it [was not]
impossible for him to be at the crime scene x x x.25
Both the trial court and the Court of Appeals properly convicted appellant of statutory rape defined under Article 266-
A26 of the Revised Penal Code. "The elements of [statutory rape] are: (1) that the accused had carnal knowledge of a
woman; and (2) that the woman is below 12 years of age or is demented."27 In this case, the prosecution
satisfactorily established that appellant had carnal knowledge of "AAA." It was also established beyond reasonable
doubt that "AAA" was below 12 years of age.28 "The sentence of reclusion perpetua imposed upon accused-
appellant by the [trial court], affirmed by the Court of Appeals, for the crime of statutory rape x x x is in accordance
with Article 266-B of the Revised Penal Code, as amended."29 However, appellant is not eligible for parole.30
As regards the damages awarded by the trial court and affirmed by the Court of Appeals, the same must be
modified. The award of civil indemnity must be reduced from ₱75,000.00 to ₱50,000.00 in line with the prevailing
jurisprudence.31 Likewise, the award of moral damages must be decreased from ₱75,000.00 to ₱50,000.00.32 The
award of actual damages in the amount of ₱25,000.00 must be deleted for lack of basis. However, "AAA" is entitled
to an award of exemplary damages in the amount of ₱30,000.00.33 In addition, all the damages awarded shall earn
legal interest at the rate of 6% per annum from date of finality of this Resolution until fully paid.34
WHEREFORE, the appeal is DISMISSED. The April 29, 2011 Decision of the Court of Appeals in CA-G.R. CR-H.C.
No. 00772 finding appellant Antonio Lujeco y Macanoquit guilty beyond reasonable doubt of the crime of statutory
rape and sentencing him to suffer the penalty of reclusion perpetua is AFFIRMED with MODIFICATIONS that
appellant is not eligible for parole; the awards of civil indemnity and moral damages are each reduced to
₱50,000.00; the award of actual damages in the amount of ₱25,000.00 is deleted for lack of basis; instead, "AAA" is
entitled to an award of exemplary damages in the amount of ₱30,000.00; and all damages awarded shall earn
interest at the rate of 6% per annum from date of finality of judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 196970 April 2, 2014

vs.
RENE SANTIAGO, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Rene Santiago was charged with two counts of rape. The Informations1 read as follows:
Criminal Case No. 3541:
That on December 25, 2004 at around 12:30 in the morning in Brgy. Pingit, Municipality of Baler, Province of Aurora
and within the jurisdiction of this Honorable Court, the said accused, did then and there willfully, unlawfully and
feloniously, by means of threats and intimidation, [have] carnal knowledge of "AAA",2 who was then an eleven[-]year
old girl, by inserting his penis into her vagina against her will and consent and effectively prejudicing her
development as a child.
CONTRARY TO LAW.
Criminal Case No. 3542:
That on January 21, 2005 in Brgy. Zabali, Municipality of Baler, Province of Aurora and within the jurisdiction of this
Honorable Court, the said accused, did then and there willfully, unlawfully and feloniously, by means of threats and
intimidation, [have] carnal knowledge of "AAA", who was then an eleven[-]year old girl, by inserting his penis into her
vagina against her will and consent and effectively prejudicing her development as a child.
CONTRARY TO LAW.
When arraigned on March 24, 2006, appellant entered a plea of not guilty.3 Appellant’s defense of denial and alibi
was not given any credence by the trial court for being self-serving and unsubstantiated and considering his positive
identification by "AAA". Consequently, on June 7, 2007, the Regional Trial Court of Baler, Aurora, Branch 96,
rendered a Joint Decision4 convicting appellant of two counts of simple rape, viz:
WHEREFORE, premises considered, the Court finds accused Rene Santiago GUILTY beyond reasonable doubt of
two counts of the crime of RAPE, defined under Article 266-A(1)(a) and penalized under Article 266-B of the
Revised Penal Code, and hereby sentences him to suffer the penalty of reclusion perpetua for each of the two
cases and to pay the victim "AAA", for said two counts of rape, the amount of One Hundred Thousand Pesos
(Php100,000.00) as civil indemnity, the amount of One Hundred Thousand Pesos (Php100,000.00) as moral
damages, and Fifty Thousand Pesos (Php50,000.00) as exemplary damages.
SO ORDERED.5
Aggrieved, appellant appealed to the Court of Appeals.6 In its Decision7 of October 21, 2010, the appellate court
affirmed in toto the trial court’s ruling, viz:
WHEREFORE, premises considered, the appealed decision is wholly AFFIRMED.
SO ORDERED.8
Hence, this appeal.9
In a Resolution10 dated July 13, 2011, we required both parties to file their Supplemental Briefs. However, they opted
to adopt the briefs they filed before the Court of Appeals as their Supplemental Briefs.11
Appellant argues that "AAA" did not resist his sexual advances;12 neither were they against her will.13 Interestingly, by
arguing in this manner, appellant changed the theory of his defense, i.e., from denial and alibi to consensual
intercourse, to his utter detriment. As correctly observed by the Court of Appeals:
From a complete denial of the occurrence of the rape incidents when he testified before the trial court, appellant now
makes a sudden turn-around by admitting in the present appeal having had sexual intercourse with AAA that were,
however, consensual as the latter never resisted his advances. But he offered no reason why AAA would consent to
having sexual liaison with him.
Albeit, a change in theory merely accentuates the accused’s lack of credibility and candor. Changing the defense
1âwphi1
on appeal is an indication of desperation on the part of the accused-appellant, due to the seeming inadequacy of his
defense adopted in the first instance.14
Appellant next claims that the prosecution failed to establish that he intimidated or coerced "AAA" into having sexual
intercourse with him.
Contrary to appellant’s contention, "AAA" testified that she was threatened, forced, and coerced into sexual
copulation. When "AAA" was placed on the witness stand, she categorically testified that during the first rape
incident, appellant threatened to hurt her if she would report the incident to anyone.15 As regards the second rape
incident, "AAA" declared that appellant consummated the dastardly act by pointing an "ice pick" at her.16 Admittedly,
these were not mentioned in "AAA’s" Sinumpaang Salaysay; however, they did not diminish her credibility. As
correctly held by the appellate court:
That AAA failed to mention in her Sinumpaang Salaysay what she narrated in open court about appellant’s threats
on her life and his use of an ice pick as he unleashed his perversity, hardly affects her credibility.
It is generally conceded that ex parte affidavits tend to be incomplete and inaccurate for lack of or absence of
searching inquiries by the investigating officer. It is not a complete reproduction of what the declarant has in mind
because it is generally prepared by the administering officer and the affiant simply signs it after it has been read to
him. Hence, whenever there is a variance between the statements in the affidavit and those made in open court by
the same witness, the latter generally [prevail]. Indeed, it is doctrinal that open court declarations take precedence
over written affidavits in the hierarchy of evidence.
Moreover, during re-direct examination, AAA explained that her fear of appellant lingered in her consciousness and
her young mind had yet to recover its bearings at the time she executed the Sinumpaang Salaysay leading to the
incomplete account she made therein. In any case, an errorless recollection of a harrowing incident cannot be
expected from a minor innocent rape victim, like AAA, especially when she was recounting details of an experience
so humiliating and so painful as forced copulation. What is important is that the victim’s declarations, both in her
sworn statement and her testimony in court, are consistent on basic matters constituting the elements of the crime
of rape and the positive identification of the culprit.17
Finally, both the trial court and the Court of Appeals correctly convicted appellant of simple rape, instead of statutory
rape. "The elements of [statutory rape] are: (1) that the accused had carnal knowledge of a woman; and (2) that the
woman is below 12 years of age x x x."18 In this case, although the Informations alleged that "AAA" was 11 years of
age when the rape incidents transpired, she was actually 13 years of age when the rape incidents transpired on
December 25, 2004 and January 21, 2005, as her Certificate of Birth19 showed that she was born on March 10,
1991. Thus, appellant is guilty only of simple, not statutory rape for which he was properly imposed the sentence of
reclusion perpetua pursuant to Article 266-B of the Revised Penal Code. However, it must be mentioned that
appellant is not eligible for parole pursuant to Section 320 of Republic Act No. 9346.21
The awards of ₱50,000.00 as moral damages and ₱50,000.00 as civil indemnity are likewise proper. However, the
award of exemplary damages must be increased to ₱30,000.00 in line with prevailing jurisprudence.22 Also, interest
at the rate of 6% per annum shall be imposed from date of finality of this judgment until fully paid.
WHEREFORE, the October 21, 2010 Decision of the Court of Appeals in CA-G.R. CR H.C. No. 02880 finding
appellant Rene Santiago guilty beyond reasonable doubt of two counts of simple rape and sentencing him to suffer
the penalty of reclusion perpetua and to pay "AAA" civil indemnity of ₱50,000.00 and moral damages of PS0,000.00
for each count is AFFIRMED with MODIFICATIONS that appellant is not eligible for parole; the amount of exemplary
damages is increased to ₱30,000.00 for each count; and all damages awarded shall earn interest at the rate of 6%
per annum from date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 180496 April 2, 2014

vs.
ROY SAN GASPAR, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
On appeal is the July 31, 2007 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 00237, which affirmed
with modification the January 29, 2003 Decision2 of the Regional Trial Court (RTC), Branch 19 of Isulan, Sultan
Kudarat in Criminal Case No. 2679. The RTC convicted Roy San Gaspar (appellant) of the crime of Parricide under
Article 246 of the Revised Penal Code (RPC) and imposed upon him the penalty of reclusion perpetua.
Factual Antecedents
On June 2, 2000, appellant was charged with the crime of Parricide under Article 246 of the RPC in an
Information3which reads as follows:
That on or about 11:30 o'clock in the evening of April 25, 1999, at Purok Ma-oy, Barangay Bambad, Municipality of
Isulan, Province of Sultan Kudarat, Philippines, and within the jurisdiction of this Honorable Court, the said accused,
armed with a [.12] Gauge Homemade Shotgun, with intent to kill, did then and there, [willfully], [unlawfully] and
feloniously, attack, assault and shot IMELDA E. SAN GASPAR, his legitimate wife, thereby inflicting gunshot wound
upon the latter, which directly caused her death.
CONTRARY TO LAW, particularly Article 246 of the Revised Penal Code of the Philippines, as amended by
Republic Act 7659.4
Upon being arraigned on July 12, 2000, appellant, with the assistance of counsel, pleaded not guilty to the crime
charged.5 After pre-trial was terminated, trial on the merits ensued.
The following witnesses testified for the prosecution: Joramel Estimo (Joramel) and Cherme Estimo (Cherme),
children of the victim Imelda E. San Gaspar (Imelda) and stepchildren of the appellant; Norman Estimo, the brother
of Imelda who spent for her wake and funeral services; PO3 Rannie Arroza (PO3 Arroza), the officer on duty who
investigated the incident; and Dr. Flocerpida V. Jocson (Dr. Jocson), the Municipal Health Officer who conducted the
autopsy on the body of the victim. Their collective testimonies are summarized as follows:
In the afternoon of April 25, 1999, appellant, without informing his lawfully married wife Imelda, went to Norala,
South Cotabato together with his father to attend the funeral of a relative.6 At that time, appellant and Imelda were
not on speaking terms for about a week already.7
At around 11:30 p.m. of the same day and while Imelda and her two children Joramel and Cherme were already fast
asleep, appellant returned home and pounded on their front door. The thudding sound roused the whole household.
Apparently, appellant was mad because nobody immediately opened the door for him. He got even more furious
when he entered the house and saw Imelda sleeping side-by-side with her grown-up children. Appellant thus kicked
Imelda on the leg while she was still lying on the floor and this started a heated altercation between them.8 Appellant
exclaimed, "What kind of wife [are you?],"9 to which Imelda retorted, "what kind of a husband is a person who just
leaves his family behind without asking permission or informing his wife of his whereabouts"? Imelda also told
appellant that her sleeping with Joramel and Cherme is without any malice as they are her children.
Still enraged, appellant went upstairs and returned with a .12 gauge shotgun. He loaded it and lit a kerosene lamp
which he placed near the door of their room.10 He then aimed the .12 gauge shotgun at his wife and in front of
Joramel and Cherme, shot Imelda on the head.11 Appellant thereafter immediately ran away.12 Imelda was brought to
Sultan Kudarat Provincial Hospital where she passed away.
The Municipal Health Officer of Isulan, Sultan Kudarat, Dr. Jocson, conducted an autopsy on Imelda’s body.
According to the Autopsy Report,13 the cause of death was craniocerebral injury secondary to gunshot wound.
Imelda suffered a fatal gunshot wound on the front left side of her head which penetrated her brain tissue with a
depth of six inches.14 Gunpowder residue surrounded the entry wounds, an indication that the distance of the barrel
of the gun from the victim could not have been more than six feet.15 In other words, Imelda was shot at close-range.
The defense, on the other hand, presented the following witnesses: Librada San Gaspar, the mother of the
appellant; Vicente Martinez (Vicente), the owner of the tricycle used in transporting Imelda to the hospital; and the
appellant himself. Their testimonies are summarized as follows:
In the morning of April 25, 1999, appellant went to Norala, South Cotabato with his father to attend the funeral of a
relative.16 He returned home by himself at around 7:00 p.m. just to change clothes and again returned to Norala after
asking permission from Imelda.17 Imelda and her two children from her previous relationship, Joramel and Cherme,
were left behind in their house.
It was already around 11:00 p.m. when appellant came home. But as he pushed the door to enter their room, he
heard a gunshot from a .12 gauge shotgun.18 Since it was dark, appellant rushed downstairs to fetch a lamp to see
what had just happened.19 With a lit lamp, he saw Imelda lying on the floor drenched in her own blood. Joramel and
Cherme were beside her crying. Appellant thus immediately went out of their house to look for a tricycle to transport
Imelda to the hospital.20 Using Vicente’s tricycle, they then brought Imelda to the Sultan Kudarat Provincial
Hospital.21 Thereafter, PO3 Arroza brought appellant to the police station for investigation. After questioning, he was
detained at the Municipal Jail of Isulan.22
From the above narration, the defense postulates that when appellant pushed the door open, it hit the shotgun,
causing it to accidentally discharge and hit Imelda.
Ruling ofthe Regional Trial Court
The RTC in its Decision23 on January 29, 2003 convicted appellant of the crime of Parricide, viz:
WHEREFORE, upon all the foregoing considerations, the Court finds the accused, Roy San Gaspar, guilty beyond a
reasonable doubt of the crime of PARRICIDE.
Accordingly, the Court hereby sentences the accused, Roy San Gaspar, to suffer the penalty of RECLUSION
PERPETUA; to indemnify:
(a)- Norman Estimo the amount of ₱20,800.00, representing the total expenses he incurred by reason of the death,
wake and burial of the deceased victim, Imelda Estimo San Gaspar, who was buried in Midsayap, Cotabato;
(b)- the heirs of the said deceased victim, the amount of ₱50,000.00, as statutory indemnity to death; as well as, the
reasonable amount of ₱30,000.00, by way of moral damages; and the further sum of ₱20,000.00, as exemplary
damages; and to pay the costs.
Being a detention prisoner, the accused, Roy San Gaspar, is entitled to full credit of the entire period of his
preventive imprisonment, pursuant to Article 29 of the Revised Penal Code, as amended by R.A. No. 6127, provided
that the said accused had agreed in writing to abide by the same disciplinary rules and regulations imposed upon
convicted prisoners, otherwise, with only four-fifths (4/5) thereof.
IT IS SO ORDERED.24
The RTC relied on the testimonies of the witnesses for the prosecution particularly, Joramel and Cherme. Having
witnessed the shooting incident, both of them positively identified appellant as the person who shot their mother,
Imelda. To the RTC, such positive identification, without any showing of ill-motive on the part of the eyewitnesses,
was enough to establish the guilt of the appellant beyond reasonable doubt.25 On the other hand, the RTC found
appellant’s defense of denial doubtful and unreliable. It further held that denial is a weak defense and that the same
cannot prevail over the eyewitnesses’ positive identification of appellant as the culprit.26
Ruling ofthe Court of Appeals
On appeal, the CA affirmed with modification the Decision of the RTC through a Decision27 dated July 31, 2007, the
dispositive portion of which states:
WHEREFORE, the assailed Decision of 29 January 2003 of the Regional Trial Court of Isulan, Sultan Kudarat,
Branch 19 in Criminal Case No. 2679 convicting appellant Roy San Gaspar of parricide under Article 246 of the
Revised Penal Code and sentencing him to suffer the penalty of reclusion perpetua is hereby AFFIRMED with the
modification that he is ordered to pay the heirs of Imelda Estimo the sums of ₱50,000.00 as civil indemnity;
₱50,000.00 as moral damages; and ₱25,000.00 as temperate damages.
SO ORDERED.28
The CA held that since appellant asserted that the shooting was accidental, it was incumbent upon him to prove the
existence of the elements of the exempting circumstance of accident.29 However, he failed to discharge this burden.
Furthermore, appellant’s version of the circumstances leading to Imelda’s death was incredulous. Contrary to his
claim of accidental firing of the shotgun, the trajectory of the gunshot and the gunpowder burns around Imelda’s
wound suggest that the shooting was intentional.30
Not satisfied, appellant now appeals to this Court asserting that the lower courts erred in not giving exculpatory
weight to the defense he interposed.
The Parties’ Argument
Appellant in his Supplemental Brief31 argues that the lower courts erred in not giving exculpatory weight to his
defense that the shooting of Imelda was entirely accidental. He alleges that it was when he pushed the door of their
room that he heard the bursting sound of the .12 gauge shotgun. Clearly, therefore, the proximate cause of the
discharge of the shotgun that hit Imelda and eventually led to her death was the movement of their bedroom door.
On the other hand, appellant labels the prosecution’s version of what transpired as "unnatural, implausible, and
contrary to human nature and experience."32 He asserts that his act of immediately taking Imelda to the hospital after
seeing her shot is contrary to the prosecution’s claim that it was he who shot her. He avers that if that was the case,
it would have been more plausible for him to immediately flee from the crime scene. But instead, he went out to find
any means of transportation to rush her to the hospital.
On the other hand, the appellee People of the Philippines, as represented by the Office of the Solicitor General
(OSG), agrees with the lower courts in finding appellant guilty of the crime of Parricide. It argues that appellant’s
defense of denial is weak considering that he failed to rebut the testimonies of Joramel and Cherme that a heated
altercation between him and Imelda immediately preceded the shooting.33 Furthermore, appellant failed to establish
any ill motive on the part of his stepchildren to falsely impute a serious crime against him.
Our Ruling
Elements of Parricide obtaining in this case; Factual findings of the trial court, as affirmed by the CA, cannot be
disturbed.
"Parricide is committed when: (1) a person is killed; (2) the deceased is killed by the accused; (3) the deceased is
the father, mother, or child, whether legitimate or illegitimate, or a legitimate other ascendant or other descendant, or
the legitimate spouse of the accused."34
In this case the prosecution was able to satisfactorily establish that Imelda was shot and killed by appellant based
on the eyewitnesses’ account. Joramel narrated the details of the shooting incident as follows:
[Fiscal Alamada]: Now what happened after your step[father], Roy San Gaspar, arrived and entered the house?
[Joramel]: He saw us sleeping and I was sleeping beside my mother.
xxxx
Q: And after he noticed that you and the rest of your sisters were sleeping together in that one room with your
mother, what did your step[father] do?
A: He got mad, sir.
Q: Why did you say that he got mad, how did you know that he got mad?
A: He got mad because [he was] not [on] talking terms with my mother x x x [and] because the door was not opened
for him immediately.
xxxx
Q: Upon entering the room [and] having seen that you were all sleeping together near each other with your mother,
what did your step[father] say[,] if [any]?
A: He said, it is [not] good that you were sleeping side by [side] with your children.
Q: And what was the remark of your mother?
A: My mother told him that do not give any malice because they are my children.
Q: And after that, what happened?
A: He kicked my mother, sir.
xxxx
Q: And now, what followed x x x after your mother confronted her husband of being kicked by him?
A: He got the firearm upstairs, sir.
Q: Now, what kind of firearm was that?
A: .12 gauge.
xxxx
Q: Now, after your stepfather [had] taken from upstairs this firearm xxx, what happened next?
A: He loaded it, sir.
Q: With what?
A: With bullet.
xxxx
Q: And what did he do with the firearm after getting it from upstairs and after loading the same?
A: He used that in shooting my mother.
Q: Was your mother hit?
A: Yes, sir.
Q: Where was [s]he hit?
A: On her head.35
Cherme, on the other hand, corroborated the testimony of her brother on material points. Thus:
[Fiscal Alamada]: After your step[father] kicked your mother, what happened?
[Cherme]: After my step[father] kicked my mother they discussed and my step[father] took the long firearm and [lit]
the lamp and placed [it] near the door, sir.
xxxx
Q: And after your step[father] took that firearm, what did he do?
A: He shot my mother, sir.
xxxx
Q: Where were you at the time when your step[father] shot your mother?
A: I was [beside] my mother.
Q: How about this [Joramel], where was he?
A: He was also [beside] my mother, sir.36
Joramel and Cherme positively and categorically identified appellant as the one who shot and killed Imelda. Their
testimonies corroborated each other on material details. Moreover, there is no showing that Joramel and Cherme
were impelled by any ill motive to testify against appellant. It has been held that in the absence of any ill motives on
the part of the witnesses, their testimonies are worthy of full faith and credit.37 On the other hand, appellant only
offered his bare denial of the offense. However, "[t]he Court had consistently stressed that denial, like alibi, is a
weak defense that becomes even weaker in the face of positive identification of the accused by prosecution
witnesses."38 The Court, therefore, finds no reason to disturb the factual findings of the trial court. "It is a well-settled
rule that factual findings of the trial court involving the credibility of witnesses are accorded respect since trial courts
have first-hand account on the witnesses’ manner of testifying and demeanor during trial. The Court shall not
supplant its own interpretation of the testimonies for that of the trial judge since he is in the best position to
determine the issue of credibility."39 Furthermore, "in the absence of misapprehension of facts or grave abuse of
discretion on the court a quo, and especially when the findings of the judge have been adopted and affirmed by the
CA, the factual findings of the trial court shall not be disturbed."40
Anent the relationship of appellant and Imelda as legitimate husband and wife, the CA correctly observed that the
same has been sufficiently established by appellant’s admission41 that Imelda was his wife and by a copy of their
Marriage Certificate42 presented during trial.43
Clearly, all the elements of the crime of Parricide under Article 246 of the RPC are present in this case.
Appellant’s defense of accident deserves
no credence.
While appellant describes the prosecution’s version of events as "unnatural, implausible, and contrary to human
nature and experience,"44 the Court finds that it is his story of accidental discharge of the shotgun that is incredulous
and unbelievable. Contrary to what appellant wants this Court to believe, a .12 gauge shotgun will not go off unless
it is loaded, cocked, and its trigger squeezed. To this Court, appellant’s allegation is nothing but a self-serving
statement without an ounce of proof or a lick of credibility. Moreover, the same does not jibe with the result of the
autopsy conducted on Imelda’s body. As aptly observed by the CA:
x x x We reject appellant’s testimony for it failed to explain how and why the victim sustained a gunshot wound on
her forehead. If the .12 gauge firearm fell, why was the trajectory of the bullet frontal? And, why was there
gunpowder burns around the wound of the victim, suggesting that the assailant was not more than six (6) feet away
from the victim? There is nothing [nearer to] the truth than the testimony of the attending physician who examined
Imelda on this matter:
Atty. Ramos : Will you be able to know what was the trajectory of that injury sustained by the victim?
Dra. Jocson : It is in the front, sir.
xxx xxx xxx
Court : Will you kindly tell us, [D]octor, about how far is the barrel of the gun from the victim in order that gunpowder
burn could be noticed around the wound?
A : At least not more than six feet from the victim, your [H]onor.
xxx xxx xxx
Q : Will you please point to us, [D]octor, the location of the gunshot wound on the face?
A : Left aspect of the frontal, your [H]onor. (witness pointing to the left portion of the forehead.
We thus entertain no reasonable doubt as to appellant’s culpability. The location of the gunshot wound with
1âw phi 1
gunpowder burns clearly shows that the shooting was not accidental, but rather indicative of an intentional killing. x x
x45
All told, the Court sustains the trial court’s conviction of appellant, as affirmed by the CA, of the crime of Parricide.
Penalties
Article 246 of the RPC provides that the penalty for the crime of Parricide is Reclusion Perpetua to Death. The RTC
and the CA correctly imposed upon appellant the penalty of reclusion perpetua, which is the lower of the two
indivisible penalties, due to the absence of any aggravating circumstances in the commission of the
crime.46However, appellant is not eligible for parole.47
The Court also affirms the awards of civil indemnity and moral damages in the amount of ₱50,000.00 each.48 The
CA’s award of temperate damages must also be sustained. In People v. Andres49 and People v. Magdaraog50 the
Court said:
"[W]e declared in the case of People v. Villanueva, that:
x x x when actual damages proven by receipts during the trial amount to less than ₱25,000.00, as in this case, the
award of temperate damages for ₱25,000.00 is justified in lieu of actual damages of a lesser amount. Conversely, if
the amount of actual damages proven exceeds ₱25,000.00, then the temperate damages may no longer be
awarded; actual damages based on the receipts presented during trial should instead be granted.
The victim's heirs should, thus, be awarded temperate damages in the amount of ₱25,000.00."
Since the receipt presented during trial covering the funeral services only amounted to ₱15,0000.00, the CA's award
of ₱25,000.00 as temperate damages in lieu of actual damages is in order.
In addition and pursuant to prevailing jurisprudence, an increased amount of ₱30,000.00 as exemplary damages on
account of relationship, a qualifying circumstance which was alleged and proved, must likewise be awarded in the
crime of parricide.51
WHEREFORE, the appeal is DISMISSED. The July 31, 2007 Decision of the Court of Appeals in CA-G.R. CR-HC
No. 00237 which affirmed with modification the January 29, 2003 Decision of the Regional Trial Court of lsulan,
Sultan Kudarat, Branch 19 in Criminal Case No. 2679, finding appellant Roy San Gaspar guilty of the crime of
Parricide and sentencing him to suffer the penalty of reclusion perpetua, is hereby AFFIRMED with modifications
that appellant is not eligible for parole and the award of exemplary damages is increased to ₱30,000.00. In addition,
an interest of 6% per annum is imposed on all monetary awards from the date of finality of this Decision until fully
paid.
SO ORDERED.
SECOND DIVISION
March 31, 2014
G.R. No. 191727

vs.
MANUEL APLAT y SUBLINO and JACKSON DANGLAY y BOTIL, Accused
MANUEL APLAT y SUBLINO, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This is an appeal from the November 27, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
03156 which affirmed the November 5, 2007 Decision2 of the Regional Trial Court (RTC), Branch 61, Baguio City,
finding appellant Manuel Aplat y Sublino (appellant) and his co-accused Jackson Danglay y Botil (Danglay) guilty of
violating Section 5, Article II of Republic Act (RA) No. 9165 or the Comprehensive Dangerous Drugs Act of 2002 in
Criminal Case No. 26080-R and thereby sentencing each of them to suffer the penalties of life imprisonment and to
pay a fine of P500,000.00.
Factual Antecedents
In an Information3 dated April 19, 2006, appellant and Danglay were charged with Violation of Section 5, Article II of
RA 9165, thepertinent portion of which reads:
That on or about the 12th day of April 2006, in the City of Baguio, Philippines, and with in the jurisdiction of this
Honorable Court, the above-named accused, conspiring, confederating and mutually aiding one another, did then
and there willfully, unlawfully and feloniously sell and deliver one (1) brick of dried marijuana leaves with fruiting tops
wrapped in a newspaper weighing 950 grams, more or less, for [P]1,500.00 to PO3 PHILIP R. FINES, a bona fide
member of the Drug Enforcement Unit of the Baguio City Police Office, who acted as poseur-buyer, knowing fully
well that said drug is a dangerous drug and that the sale and delivery of such drug is prohibited without authority of
law to do so, in violation of the aforementioned provision of law.
CONTRARY TO LAW.
Appellant and Danglay pleaded not guilty to the charge upon their separate arraignment held on September 14,
2006 and June 22, 2006, respectively.
The prosecution presents its version of the facts in the following manner:
At around 3:00 p.m. of April 12, 2006, SPO4 Edelfonso L. Sison (SPO4 Sison), while on duty at the Baguio City
Police Office Drug Enforcement Section,4 received information from a civilian informant that his acquaintance named
"Manuel" was looking for a prospective buyer of dried marijuana leaves. Forthwith, SPO4 Sison instructed the
informant to get in touch with Manuel and accept the latter’s offer. The informant acceded and shortly thereafter
returned to tell SPO4 Sison that Manuel accepted the offer to buy and that the sale would take place between 4:30
to 5:00 p.m. of the same day in front of JR Bakery along Kayang corner Hilltop Streets, Baguio City.
SPO4 Sison immediately relayed the information to his superior, Police Senior Inspector Damian Dulnuan Olsim
(P/Sr. Insp. Olsim), who, acting on the same, organized a buy-bust team for Manuel’s entrapment. The team was
composed of SPO4 Sison as team leader, PO3 Philip R. Fines (PO3 Fines) as poseur-buyer, with PO3 Robert
Sagmayao (PO3 Sagmayao) and PO2 Roy C. Mateo (PO2 Mateo) as back-ups. PO3 Fines was provided with one
P1,000.00 bill and one P500.00 bill as buy-bust money.5 He photocopied the bills and had them authenticated by
Prosecutor Victor Dizon and then coordinated the operation with the Philippine Drug Enforcement Agency.
Accompanied by the informant, the team proceeded to the target area, which is only about 50 meters away from
their office. Upon arrival thereat at about 4:30 p.m., PO3 Fines and the informant posted themselves at the terminal
of Sablan-bound passenger jeepneys, just across JR Bakery. Simultaneously, the rest of the team members took
strategic positions at the loading area of the jeepneys bound for Plaza Quezon Hill where they would wait for the
pre-arranged signal from the poseur-buyer. Not long thereafter, two men, one with a sando plastic bag, arrived from
Upper Kayang. Manuel, who turned out to be the appellant, approached the informant and asked where the buyer
was. The informant pointed to PO3 Fines and introduced him as the prospective buyer. After a brief conversation,
appellant demanded the payment from PO3 Fines who immediately handed to him the marked money. Upon
receipt, appellant in turn took an item wrapped in a newspaper from the sando bag held by his companion, later
identified as Danglay, and gave the same to PO3 Fines. PO3 Fines smelled and assessed the item and once
convinced that it was a brick of marijuana leaves, tapped appellant’s shoulder as a signal to his companions that the
sale was already consummated. With the brick in hand, PO3 Fines then introduced himself as a police officer and
with the aid of SPO4 Sison arrested appellant. Danglay, on the other hand, was arrested by PO3 Sagmayao and,
when frisked by the latter, was found possessing 1½ bricks of suspected marijuana.6 After appellant and Danglay
were apprised of their violation and constitutional rights, the team brought them to the police station.
At the police station, PO3 Fines marked the suspected marijuana brick he bought from appellant with "PRF, 04-12-
06, BB" representing his initials, date of operation and the word buy-bust. PO3 Sagmayao, on the other hand,
marked the confiscated bricks from Danglay with "RPS, 04-12-06." They likewise placed their signatures on the
sando plastic bag. Appellant and Danglay were also identified at the police station and the suspected dried
marijuana leaves inventoried7 and photographed8 in their presence as well as of the representatives from the
Department of Justice (DOJ), the media and an elected barangay official. After a preliminary test on the bricks were
made at their office, PO2 Mateo brought on the same day the confiscated items to the Regional Crime Laboratory at
Camp Baldo Dangwa, La Trinidad, Benguet for chemistry examination per request of P/Sr. Insp. Olsim.9 Forensic
Chemist Officer P/Sr. Insp. Emilia Gracio Montes10 then examined the bricks and found them positive for marijuana,
a dangerous drug.11Version of the Defense
Appellant and Danglay interposed the defense of denial. Both claimed that there was no buy-bust operation, no
money recovered and no bricks of marijuana seized from them. They averred that they were just having their snacks
at the JR Bakery when they were suddenly arrested and brought to the police station.
In its Decision dated November 5, 2007, the RTC found appellant and Danglay guilty as charged. The dispositive
portion of the RTC Decision with its corresponding amendment12 reads as follows:
WHEREFORE, judgment is rendered finding both the accused GUILTY beyond any reasonable doubt in Criminal
Case No. 26080-R and both are hereby sentenced to suffer LIFE IMPRISONMENT and each to pay a fine of
P500,000.00 and the costs.
xxxx
SO ORDERED.
Aggrieved, appellant and Danglay separately appealed to the CA13 wherein they questioned the chain of custody of
the subject drugs and the finding of guilt beyond reasonable doubt against them.
Like the RTC, the CA gave credence to the police officers’ narration of the incident as prosecution witnesses. It
brushed aside for being minor inconsistencies the discrepancies in the testimonies of the said witnesses regarding
the details of the buy-bust operation, the actual color of the bag containing the subject drugs as well as who was
carrying the same. Moreover, the CA rejected appellant and Danglay’s defense of denial as they were caught
in flagrante delicto during a legitimate entrapment operation. Thus, on November 27, 2009, the CA affirmed the
amended RTC Decision, viz:
WHEREFORE, the assailed Decision dated November 5, 2007, as amended by the Order dated November 14,
2007, in Criminal Case Nos. 26080-R xxx of the RTC,Branch 61,Baguio City,isAFFIRMED.
SO ORDERED.14
Undeterred, appellant interposed the present appeal.15
Issue
The sole issue presented for the Court’s consideration is whether appellant’s guilt for the illegal sale of marijuana, a
dangerous drug, was proven beyond reasonable doubt.
Our Ruling
The appeal is bereft of merit.
The alleged defects in the prosecution’s version of the incident as well as in the testimonies of its witnesses, as
pointed out by appellant, do not affect the material points of the crime charged.
In his quest for the reversal of his conviction, appellant asserts that there was no valid buy-bust operation since, per
the prosecution’s version, a mere exchange of goods and money without any negotiation, particularly on the quantity
and value of the drugs, transpired between him, as the alleged seller, and PO3 Fines, as the poseur-buyer.
Moreover, PO3 Fines merely looked at the confiscated item which was then wrapped in paper and packing tape and
did not even inspect the same prior to his handing over of the marked money to appellant.
Appellant’s arguments fail to impress. While it may be true that it was the informant who brokered the transaction,
appellant and the poseur-buyer talked to each other after the informant introduced to appellant PO3 Fines as the
prospective buyer. As testified to by PO3 Fines, appellant demanded the money from him after their brief
conversation. And upon receipt of the item from appellant, he immediately smelled and assessed the contents of the
wrapped item and found the same to be a brick of marijuana.16
Appellant further challenges the legality of the buy-bust operation by adverting to the alleged inconsistency between
the testimony of PO3 Fines, who claims that he did not notice who was carrying the plastic bag containing the
alleged dangerous drug or where it came from, and that of SPO4 Sison, who stated that it was Danglay who was
carrying the bag. He also invites the Court’s attention to the conflicting testimonies of the prosecution witnesses as
to the color of the bag. While PO3 Fines mentioned a red colored bag, SPO4 Sison and PO3 Sagmayao stated that
Danglay was carrying a blue coloredsando bag.
The Court, however, finds that the CA correctly agreed with the appellee that the perceived inconsistencies in the
testimonies of the prosecution witnesses are insufficient to diminish their credibility. Indeed, the inconsistencies
alluded to by the appellant refer merely to minor details and collateral matters that do not in any way affect the
material points of the crime charged. As held in People v. Castro,17 "[i]nconsistencies on minor details and collateral
matters do not affect the substance of their declaration, their veracity or the weight of their testimonies". "It is
perfectly natural for different witnesses testifying on the occurrence of a crime to give varying details as there may
be some details which one witness may notice while the other may not observe or remember."18
Elements of the crime adequately established; Buy-bust operation regularly conducted.

"In prosecutions for illegal sale of dangerous drugs, the following must be proven: (1) that the transaction or sale
took place; (2) the corpus delicti or the illicit drug was presented as evidence; and (3) that the buyer and seller were
identified."19 "The commission of the offense of illegal sale of dangerous drugs requires merely the consummation of
the selling transaction, which happens the moment the buyer receives the drug from the seller. Settled is the rule
that as long as the police officer went through the operation as a buyer and his offer was accepted by appellant and
the dangerous drugs delivered to the former, the crime is considered consummated by the delivery of the goods.20
In this case, the prosecution was able to establish that a sale of one brick of marijuana for P1,500.00 took place
between PO3 Fines, as buyer, and appellant as seller. The brick of marijuana was presented before the trial court
1âw phi1
as Exhibit "O." PO3 Fines positively identified appellant as the seller. It is, therefore, beyond doubt that a buy-bust
operation involving the illegal sale of marijuana, a dangerous drug, actually took place. Moreover, such buy-bust
operation, in the absence of any evidence to the contrary and based on the facts obtaining in this case, was
regularly carried out by the police operatives.
"A buy-bust operation is a form of entrapment whereby ways and means are resorted to for the purpose of trapping
and capturing the lawbreakers in the execution of their criminal plan."21 In this regard, police authorities are given a
wide discretion in the selection of effective means to apprehend drug dealers and the Court is hesitant to establish
on a priori basis what detailed acts they might credibly undertake in their entrapment operations for there is no
prescribed method on how the operation is to be conducted. As ruled in People v. Salazar,22 a buy-bust operation
deserves judicial sanction as long as it is carried out with due regard to constitutional and legal safeguards, such as
in this case.
The police officers’ alleged non- compliance with the requirements under Section 21, Article II of RA 9165 was
raised by appellant for the first time on appeal; Chain of Custody properly observed in this case.
Appellant harps on the buy-bust team’s alleged deviation from the mandated procedure in taking post-seizure
custody of the dangerous drug as provided under Section 21, Article II of RA 9165. In his Brief, appellant contends
that the physical inventory and marking of the subject illegal drug were not made in his presence and at the place of
seizure. Such omission, he asserts, cast grave doubt on whether the drug submitted for laboratory examination, and
subsequently presented as evidence in court, was the very same drug allegedly sold by him.
Appellant’s insinuation hardly lends credence.
Before anything else, it must be stressed that appellant raised the police operatives’ alleged non-compliance with
Section 21 of RA 9165 for the first time on appeal. We have painstakingly scrutinized the transcripts of stenographic
notes in this case and found no instance wherein appellant at the very least intimated during trial that there were
lapses in the safekeeping of the seized item which affected its integrity and evidentiary value. Neither did he try to
show that doubts were cast thereon. Such belated attempt on the part of appellant to raise this issue at this point in
time can no longer be entertained. Following our ruling in People v. Sta. Maria,23 several subsequent cases24 teem
with pronouncement that objection to evidence cannot be raised for the first time on appeal; when a party desires
the court to reject the evidence offered, he must so state in the form of objection. Without such objection, he cannot
raise the question for the first time on appeal. The above ruling finds proper application in the present case.
Be that as it may, the fact that the inventory and marking of the subject item were not made onsite is of no moment
and will not lead to appellant’s exoneration. From a cursory reading of Section 21(a)25 of the Implementing Rules and
Regulations of RA 9165, it can be gleaned that in cases of warrantless seizures, as in this case, inventory and
marking of the seized item can be conducted at the nearest police station or office of the apprehending authorities,
whichever is practicable, and not necessarily at the place of seizure. As held in People v. Resurreccion,26 "marking
upon immediate confiscation" does not exclude the possibility that marking can be done at the police station or
office of the apprehending team.27 Thus, in the present case, the apprehending team cannot be faulted if the
inventory and marking were done at their office where appellant was immediately brought for custody and further
investigation.
Moreover, "[t]he integrity of the evidence is presumed to have been preserved unless there is a showing of bad
faith, ill will or proof that the evidence has been tampered with."28 Notably here, appellant, upon whom the burden of
proving that the inventory and marking of the item was not done in his presence, failed to overcome such
presumption. While he admitted that there was an inventory, appellant insists that he does not remember if he was
present when the same was made. But the photographs29 taken during the inventory before the representative of the
DOJ, media and a barangay official belie appellant’s protestation.
It bears stressing that the Court has already held in numerous cases30 that non-compliance with Section 21, Article II
of RA 9165 is not fatal and will not render an accused’s arrest illegal or the items seized/confiscated from him
inadmissible. What is of utmost importance is that the integrity and the evidentiary value of the seized items was
properly preserved and safeguarded through an unbroken chain of custody, as further illustrated below.
To wrap up, the totality of the evidence adduced by the prosecution, both testimonial and documentary, clearly
shows an unbroken chain of custody as follows: Immediately after the brick of marijuana was handed to PO3 Fines
and the arrest of appellant was made, the buy-bust team brought him and the seized item to the police station.
Thereat, PO3 Fines marked the wrapping of the brick with "PRF, 04-12-06, BB" referring to his initials, date of
operation and "buy- bust" and affixed his signature thereon.31 An inventory of the seized item was thereafter
conducted and the corresponding certificate of inventory was signed by representatives from the DOJ, media and an
elected barangay official.32 Afterwards, the seized item was forwarded by PO2 Mateo, a member of the team, to the
PNP Regional Crime Laboratory for forensic examination through a request for laboratory examination33 prepared
and signed by P/Sr. Insp. Olsim. Upon chemical examination, P/Sr. Insp. Montes found the brick of marijuana, which
contained the same marking placed by PO3 Fines, positive for marijuana as reflected in her Chemistry Report No.
D-016-2006.34 When presented in court during the trial, PO3 Fines positively identified the marked brick of marijuana
as the same brick of marijuana appellant sold to him.35 Hence, the Court agrees with the following pronouncement of
the CA:
x x x In view of the properly documented accounts of the marking, transfer, and submission to chemistry
examination, which ensured the prudent preservation thereof by the apprehending team, we find no reason to rule
that the identity and integrity of the subject drugs has been compromised. xxx36
Appellant's defense of denial must fail.
Against the credible and positive testimonies of the prosecution witnesses duly supported by documentary evidence,
appellant's defense of denial and frame- up necessarily crumble. 1bis line of defense cannot prevail over the
established fact that a valid buy-bust operation was indeed conducted and that the identity of the seller and the drug
subject of the sale are proven. Moreover, such defenses have been invariably viewed by the court with disfavor for
they can easily be concocted and are common and standard defense ploys in most cases involving violations of
Dangerous Drugs Act.37
The Imposable Penalty
Appellant sold and delivered a brick of marijuana, a dangerous drug, weighing 931.4 grams. Under Section 5, Article
II of RA 9165, the sale of dangerous drug, regardless of its quantity and purity, is punishable by life imprisonment to
death and a fine of P500,000.00 to P10 million. With the advent of RA 934638 the penalty of death cannot, however,
be imposed and consequently, appellant has to be meted only the penalties of life imprisonment and payment of
fine. Hence, the Court sustains the penalties of life imprisonment and payment of fine of P500,000.00 imposed by
the RTC upon appellant, as affirmed by the CA, for being in accordance with law.
WHEREFORE, the appeal is DISMISSED. The Decision of the Court of Appeals in CA-G.R. No. CR-H.C. No. 03156
affirming the Decision of the Regional Trial Court of Baguio City, Branch 61, finding appellant Manuel Aplaty Sublino
guilty beyond reasonable doubt in Criminal Case No. 26080-R of illegal sale of dangerous drug and sentencing him
to suffer life imprisonment and to pay a fine ofP500,000.00 and the costs of suit, is AFFIRMED.
SO ORDERED.
SECOND DIVISION
March 26, 2014
G.R. No. 196142

VENUS B. CASTILLO, LEAH J. EVANGELISTA, DITAS M. DOLENDO, DAWN KAREN S. SY and PRUDENTIAL
PLANS, INC. EMPLOYEES UNION - FEDERATION OF FREE WORKERS (PPEU-FFW), Petitioners,
vs.
PRUDENTIALIFE PLANS, INC., and/or JOSE ALBERTO T. ALBA, ATTY. CEFERINO A. PATINO, JR., and
ROSEMARIE DE LEMOS,, Respondent.
DECISION
DEL CASTILLO, J.:
In a labor case, the written statements of co-employees admitting their participation in a scheme to defraud the
employer are admissible in evidence. The argument by an employee that the said statements constitute hearsay
because the authors thereof were not presented for their cross-examination does not persuade, because the rules
of evidene are not strictly observed in proceedings before the National Labor Relations Co)Illnission (NLRC), which
are summary in nature and decisions may be made on the basis ofposition papers.
This Petition for Review on Certiorari1 assails the January 14, 2011 Decision2 of the Court of Appeals (CA) in CA-
G.R. SP No. 111981 which reversed and set aside the dispositions of the NLRC, as well as the CA's March 16,2011
Resolution3 denying reconsideration thereof.
Factual Antecedents
Individual petitioners Venus B. Castillo (Castillo), Leah J. Evangelista (Evangelista), Ditas M. Dolendo (Dolendo),
and Dawn Karen S. Sy (Sy) were regular employees of respondent Prudentialife Plans, Inc. (Prudentialife), to wit:
Employee Name Position Date Employed

Venus B.Castillo CFP Clerk November 27, 1995
Leah J.Evangelista Data Encoder October 16, 2000
Ditas M. Dolendo Data Control Clerk February 2002
Dawn Karen S. Sy Data Control Clerk October 1999
Prudential Plans Employees Union – FFW (PPEU-FFW), on the other hand, is a local chapter of the Federation of
Free Workers and is the authorized bargaining agent of Prudentialife’s rank-and-file employees. The individual
petitioners are members of PPEU-FFW.
Respondent Prudentialife is an insurance company, while respondents Jose Alberto T. Alba (Alba), Atty. Ceferino A.
Patiño, Jr. (Patiño) and Rosemarie de Lemos (de Lemos) are its President, First Vice-President for Corporate
Services Group,and Assistant Vice-President for Human Resources, espectively.
Under Section 4, Article X of the parties’ Collective Bargaining Agreement (CBA), Prudentialife employees were
granted an optical benefit allowance of P2,500.00 to subsidize prescription eyeglasses for those who have
developed vision problems in the course of employment. The pertinent CBA provision states:
Section 4. Optical benefit. – The Company shall provide an amount not to exceed P2,500.00 inclusive of VAT to any
covered employee to defray the cost of eyeglasses that may be prescribed by the accredited HMO physician or
employee’s personal optometrist. The benefit can be availed of only once every two(2)years.4
Many Prudentialife employees – petitioners included – availed thereof and Prudentialife was flooded with requests
for reimbursement for eyeglasses the employees supposedly purchased from a single outfit/supplier, Alavera
Optical. Suspecting fraud, Prudentialife began an investigation into the matter, and on February 22, 2006, it sent
individual written Notices to Explain5 to petitioners and other employees who availed of the benefit. The notices
revealed its initial findings – that the given address and telephone number of Alavera Optical were fictitious; that the
official receipts and prescriptions issued by Alavera Optical appear to have been forged; that the eyeglasses were
grossly overpriced; and that Prudentialife was being required to pay for the eyeglasses even though they have not
been released as yet. The notices required the recipients thereof to submit their written explanation relative to acts
of dishonesty and fraud which they may have committed in connivance with Alavera Optical.
Petitioners and the other availing employees submitted their respective written explanations. Prudentialife brought
the subject eyeglasses to reputable optical shops – particularly Sure Vision and Sarabia Optical – for comparative
examination as to quality and price. The eyeglasses of Evangelista and Dolendo were brought to Sure Vision
Optical, Star Mall branch, Mandaluyong City, and Sy’s were brought to Sarabia Optical, Greenbelt I branch, Makati
City. The two optical shops found that Dolendo and Sy’s eyeglasses had no grade, while the grade on Evangelista’s
eyeglasses did not match the prescription issued to her. It was likewise discovered that the cost of petitioners’
eyeglasses, as declared in their respective official receipts and reimbursement requests, was excessive compared
to similar frames and lenses being sold by SureVision and Sarabia Optical.6
In her written explanation, Castillo claimed that she acted in good faith in availing of the optical benefit allowance;
that she did not conspire with Alavera Optical in the overpricing of her eyeglasses; that she was made to believe
that her transaction with Alavera Optical – whereby the latter would issue an official receipt for the eyeglasses even
without actual payment thereof, which Castillo would then claim from Prudentialife – was regular; that she was
unaware that Alavera Optical was using a fictitious address and telephone number; and that she had no intention to
defraud Prudentialife.7
Evangelista wrote that on January 27, 2006, a certain Dr. Simeona Alavera of Alavera Optical offered to prepare her
eyeglasses which she could pay later, or after the release of her optical benefit allowance to which she agreed; that
on January 30, 2006, her eyeglasses, together with the prescription and official receipt, were delivered to her, and
she submitted the same to Prudentialife to claim reimbursement; that on February 1, 2006, she obtained a
P2,500.00 reimbursement for her eyeglasses, which she used to pay Dr. Simeona Alavera; and that she acted in
good faith and pursuant to company policy.8
For her part, Dolendo stated that she met Dr. Simeona Alavera through her colleague at work; that she heard that
the doctor was conducting eye examinations at the third floor of their building, thus she had her eyes examined as
well; that on January 30, 2006, she received the official receipt for her eyeglasses in the amount of P2,500.00 and
the doctor’s prescription therefor, which she forwarded to Prudentialife; and that she had no knowledge of any
dishonesty or overpricing of the eyeglasses relative to the optical benefit allowance.9
Petitioner Sy explained that Dr. Simeona Alavera arrived at the Prudentialife office on January 27, 2006, complete
with eye examination equipment and charts; that she subjected herself to examination; that thereafter, Dr. Simeona
Alavera offered to give her the official receipt and prescription for eyeglasses even before actual payment thereof;
that she did not bother to investigate the authenticity, qualifications or integrity of Dr. Simeona Alavera or Alavera
Optical, but was confident of her diagnosis; that she was not aware of the market value of the eyeglasses but was
satisfied of the price at which she bought them; and that she believed that the refraction grade of her eyeglasses
was the same as that written on the prescription issued by Alavera Optical.10
Other Prudentialife employees admitted that the eyeglasses they obtained cost only so much, yet were overpriced
for purposes of reimbursement. Thus, employees Roselle Marquez, Edgardo Cayanan, Jennifer Garcia, Nerissa
Rivera, Orlando Labicane, Michael Arceo, Jennifer Fronda and Leopoldo Padlan acknowledged that the true cost of
their respective eyeglasses ranged from only P1,200.00 – P1,800.00, and yet Alavera Optical issued official receipts
for a greater amount ranging from P2,500.00 – P2,600.00 with their full knowledge and consent, which latter
amounts were actually reimbursed to them by Prudentialife even before the eyeglasses were released or paid for;
that the fraudulent scheme was spearheaded by a certain "Elvie of Head Office"; and that Elvie and Dr. Simeona
Alavera told them that the scheme was being carried out in other departments/offices within Prudentialife.11
Prudentialife discovered that the employees who availed of the optical benefit allowance obtained their eyeglasses
from Alavera Optical, based on the employees’ reimbursement requests/petty cash vouchers and the official
receipts12 that the prescriptions13 for the eyeglasses were issued by a certain Dr. Alan Alavera, yet the address,
telephone number and Tax Identification Number of Alavera Optical were fictitious; that it was Prudentialife
employee Elvie Villaviaje who arranged with Alavera Optical for the conduct of eye examinations within company
premises; that to entice the employees, Alavera Optical offered to release the eyeglasses and issue the
prescriptions and official receipts even before actual payment is made; and that the reimbursements sought for the
eyeglasses were more or less the same, or averaged at P2,500.00, yet they cost much less. Likewise, Prudentialife
found that some of the eyeglass purchases were fictitious; that some of the eyeglasses purchased had no lens or
grade; and that Alavera Optical issued prescriptions, released the eyeglasses, and issued the official receipts there
for even though they have not been paid for.
Thus, Prudentialife concluded that petitioners and other employees knowingly availed of the optical benefit
allowance to obtain a refund of the maximum P2,500.00 benefit even though they did not have vision problems, or
that their eyeglasses were worth less thanP2,500.00.
On April 10, 2006, Prudentialife issued individual Notices of Termination14 to petitioners and other employees. The
notices, signed by respondent Patiño, stated in part that–
In sum, we find that your explanation consisted mainly of bare denials and professions of innocence. We regret to
inform you that we find your explanation to be not acceptable on the following grounds:
1. Based on the statements made by the other employees involved in this case, our investigation reveals that you
are aware of the scheme by which the attending optometrist, Mrs. Simeona Alavera, would issue to you an Official
Receipt for an amount grossly in excess of the real cost of your eyeglasses to enable you to collect the excess
amount for your personal use.
2. You and the other employees were examined by Mrs. Alavera in the presence of one another and you were
apprised of the scheme during the examination/checkup.
3. During the investigation, we confirmed that there was never any actual delivery of the eyeglasses to you, yet you
submitted a reimbursement request. You therefore submitted an O.R. for an item which you have not actually
received.
4. Your failure and refusal to divulge the whole truth shows your lack of any effort to come clean and help in the
investigation of the case. In fact, it displays an attempt on your part to mislead the investigation and further confirms
our findings of your dishonesty.
After careful and thorough evaluation, we find you culpable of DISHONESTY which, under Section 2.6 (i) of the
Personnel Manual is punishable by Dismissal, to wit:
2.6 DISHONESTY
The disciplinary actions for offenses on Dishonesty shall be the following but not limited to:
xxxx
(i) Padding receipt for reimbursement or liquidation of advances or expenses
1st Offense–Dismissal
Hence, you are terminated effective immediately upon receipt hereof and your separation benefits under the
Company’s Optional Retirement Program are hereby forfeited.
Furthermore, please be informed that your termination is without prejudice to whatever legal action which the
Company may pursue to protect its interests.15
On May 5, 2006, petitioners filed a Complaint for illegal dismissal, money claims and damages (illegal dismissal
case) against respondents, docketed as NLRC-NCR Case No. 00-05-03815-06.16 Another case was filed for unfair
labor practice, docketed as NLRC-NCR Case No. 00-07-05882-06, which was later on consolidated with the illegal
dismissal case.
In their Position Paper,17 petitioners mainly contended that they were illegally dismissed based on a charge of
dishonesty that was not proved, but was mainly founded on suspicion, conjecture and suppositions. They claimed
that they did not commit any padding of the cost of the eyeglasses they bought from Alavera Optical; nor did they
commit any act detrimental to Prudentialife’s interests. They argued that quite the contrary, their transactions with
Alavera Optical were valid and done in the ordinary course of business; that their right to due process was violated
as they were not given ample time and opportunity to defend themselves; that they were deprived of their right to
counsel; and that their bargaining agent PPEU-FFW was not informed of the case against them. For these reasons,
petitioners argued that they should be awarded their money claims and damages.
In their Position Paper18 seeking dismissal of the Complaint, respondents cited Prudentialife’s emphasis on
promoting integrity and honesty among its ranks, which policy is embodied in its Personnel Manual, the pertinent
provision of which was precisely utilized in indicting petitioners. They insisted that petitioners were dishonest in
knowingly claiming reimbursement for overpriced or padded eyeglasses, in falsifying the official receipts and other
documents relative to the optical benefit allowance, and in obtaining reimbursement for eyeglasses which they did
not pay for or receive. They charged that petitioners’ bare denials are drowned by overwhelming evidence gathered
– which include confessions by other employees – proving their knowledge, complicity, and participation in the
fraudulent scheme. Respondents pointed out that when the fraudulent scheme was carried out on January 27, 2006,
petitioners – except for Castillo – were all present in one room where the eye examinations were conducted,
together with the employees who confessed to the scheme; they were all issued official receipts on the same day,
and claimed reimbursement at the same time on January 30, 2006. Respondents added that Alavera Optical applied
the same modus operandi to all the employees it dealt with in regard to the optical benefit program; that petitioners
could not have been excepted, and that their eyeglasses were similarly priced and within the range of the
eyeglasses of those who confessed to the scheme; and that having committed falsification of company documents,
petitioners were guilty of serious misconduct and dishonesty, which merit dismissal and denial of respondents’
monetary claims and prayer for an award of damages.
On the issue of due process, respondents argued that the twin notice requirements were satisfied: the notices to
explain apprised the recipients thereof of their supposed acts and the rule violated, as well as the penalty prescribed
for such violations. Moreover, notices of termination were duly sent to petitioners. All in all, petitioners were afforded
due process and given the opportunity to defend themselves. Finally, respondents took exception to the inclusion of
Prudentialife officers as respondents to the Complaint, claiming that their acts were done pursuant to their duties
and in furtherance of the corporate objective, which should thus exempt them from personal liability.
On April 30, 2007, Labor Arbiter Fe S. Cellan issued a Decision19 in the illegal dismissal case, decreeing as follows:
WHEREFORE, in view of the foregoing, the instant consolidated complaints are hereby DISMISSED for lack of
merit.
SO ORDERED.20
The Labor Arbiter held that there was ground to dismiss petitioners, finding that there was a concerted and
premeditated scheme to defraud Prudentialife, using the optical benefit provision in the CBA to enrich the availing
employees by declaring overpriced eyeglasses, obtaining reimbursement therefor, and pocketing the difference
between the amount reimbursed and the actual cost or selling price of the spectacles. This constituted dishonesty.
The Labor Arbiter added that respondents took pains to investigate and substantiate the charges against the guilty
employees, submitting the subject eyeglasses to other optical shops for examination and comparison instead of
merely relying upon the written explanations of the employees and the admissions obtained fromsomeofthem.
Having established breach of trust through a scheme perpetrated to defraud Prudentialife, the Labor Arbiter held
that the company possessed the right to dismiss the guilty employees as a measure of self-protection.
The Labor Arbiter held further that the dismissal of an estafa charge21 against the guilty employees does not
necessarily result in a finding of illegal dismissal. Conversely, the filing of a subsequently dismissed estafa charge
cannot constitute unfair labor practice, as this is a right granted to Prudentialife as a party injured by the fraudulent
scheme; the filing of criminal charges could not have the effect of preventing petitioners from filing the illegal
dismissal case, nor were the latter cowed into fear as a result of the filing of the charges.
The Labor Arbiter found baseless petitioners’ monetary claims, prayer for damages, and their effort to hold the
individual respondents liable, stating that petitioners have not substantiated these claims and it has not been shown
that the individual respondents exceeded their authority in the performance of their functions,orthattheyacted inbad
faith.
Respondents filed an appeal with the NLRC. In a December 8, 2008 Decision,22 the NLRC reversed the Labor
Arbiter, decreeing thus:
CONFORMABLY WITH ALL THE FOREGOING, the present appeal ispartly Granted in that complainants-
appellants were illegally dismissed and hence, should be reinstated and be paid their full backwages from the time
they were illegally dismissed up to the finalityofthisdecision.
All other claims of complainants-appellants are dismissed for lack ofmerit.
SO ORDERED.23
In sum, the NLRC held that petitioners’ liability has not been substantiated, it not having been shown that petitioners
were privy to the fraudulent scheme. The NLRC believed that the admissions of the other employees do not prove
petitioners’ complicity and participation in the scheme. It declared that respondents failed to submit independent
evidence to show the petitioners’ guilt, and that petitioners were not given the opportunity to meet and cross-
examine respondents’ witnesses – or those employees who submitted written explanations admitting the presence
of an illegal scheme to profit by the optical benefit provision in the CBA, namely Roselle Marquez, Edgardo
Cayanan, Jennifer Garcia, Nerissa Rivera, Orlando Labicane, Michael Arceo, Jennifer Fronda and Leopoldo Padlan;
thus, their statements are in admissible.
Nonetheless, the NLRC declared that there was no denial of procedural due process, since petitioners were
afforded the opportunity to meet the charges against them and respondents were not remiss in their duty to accord
them this right during the process. Regarding the charge of unfair labor practice, the NLRC was convinced that
respondents are not guilty of undue discrimination in initiating criminal charges against petitioners for their perceived
violation of the Revised Penal Code.
Respondents moved for reconsideration, but in an August 8, 2009 Resolution,24 the NLRC stood its ground.
Respondents went up to the CA via an original Petition for Certiorari,25 insisting that there was just cause to dismiss
the petitioners for serious misconduct. OnJanuary14,2011, the CA issued the assailed Decision, decreeing as
follows:
WHEREFORE, the foregoing considered, the petition is GRANTED.
The assailed Decision dated 08 December 2008 of public respondent NLRC as well as its assailed Resolution dated
28 August 2009 are REVERSED and SET ASIDE, and the Decision dated 30 April 2007 of Labor Arbiter Fe S.
Cellan is hereby REINSTATED.
SO ORDERED.26
In reversing the NLRC, the CA found that there was indeed cause to dismiss petitioners, the evidence indicating that
petitioners and the other employees knew, assented and took part in the scheme to profit by pocketing the
difference between the declared cost and actual cost of the eyeglasses; that based on the written statements of the
other participants to the scheme, petitioners are guilty of serious misconduct, dishonesty, fraud and breach of trust,
which rendered them unfit to continue working for Prudentialife. The appellate court cited particularly the fact that
the eyeglasses purchased by petitioners from Alavera Opticaldidnothaveanygrade.
The CA added that since the instant case is a labor case, only substantial evidence – and not guilt beyond
reasonable doubt – is required in establishing petitioners’ liability; that due process was observed by respondents,
as petitioners were furnished with the requisite twin notices before their services were terminated; and that
petitioners were afforded the opportunity to be heard on their defense through their respective written explanations,
and no hearing was required before a decision on their case could be properly arrived at.
Petitioners moved to reconsider, reiterating that the CA based its Decision on conjecture; that the evidence against
them was not substantial; and that due process was not observed. In a March 16, 2011 Resolution,27 however, the
CA stood its ground. Thus, the instant Petition.
Issues
Petitioners submit the following assignment of errors:
THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RENDERED ITS DECISION NOT IN
ACCORD WITH LAW AND JURISPRUDENCE AS ALREADY DETERMINEDBYTHISHONORABLECOURT;
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN

EXCESS OF JURISDICTION WHEN IT REVERSED THE DECISION RENDERED BY THE NATIONAL LABOR
RELATIONS COMMISSION WHICH DETERMINEDTHAT:
1.While the affidavits offered in evidence by respondents-appellees indeed recounted how the fraudulent scheme is
being undertaken by Alavera Optical and some employees who availed of their services, it cannot however, escape
our attention the fact that there is nothing in the said affidavits that categorically implicate complainants-appellants to
the subject transactions;
2.Let it be emphasized that in labor cases, substantial evidence is required to establish one’s case. By substantial
evidence, it means such relevant evidence which a reasonable mind might accept to support a conclusion. x x x this
Commission would not be amiss to state that time and again it held that unsubstantiated accusation no matter how
sincerely felt is nothing but hearsay that deserves no probative value;
3.Be it noted that in the cases of Aniceto W. Naguit Jr. v. NLRC, 408 SCRA 617 and the case of Mario Hornales v.
NLRC, 364 SCRA 778, it has been settled that for an affidavit to be given evidentiary weight, the affiants must testify
on [their]statements therein to attest [to]the veracity of [their] testimony and; the opposing party must be given the
opportunity to meet and cross-examine the affiants in order for them to test the truthfulness of their statements. x x x
it is palpably clear complainants-appellants were not afforded by respondents-appellees the opportunity to meet the
affiants and to cross-examine them. Likewise, neither were these affiants testified [sic] on the veracity of their
statements either during the administrative investigation conducted by therespondents-
appelleesnorbeforetheLaborArbiter.xxx28
In their Petition and Reply,29 petitioners urge a judicious review of the case given the conflicting decisions of the
labor tribunals and the appellate court. They add that it was improper for the CA to adjudge them guilty of
wrongdoing based on the written admissions of their co-employees and not on evidence pointing to their
wrongdoing, and it is unfair for the CA to sweepingly rule that the acts of some employees were attributable to all
who availed of the optical benefit allowance.
Petitioners further cite that while Prudentialife supposedly found that the eyeglasses they purchased had no grade,
they were not afforded the opportunity to meet and contest this finding; that this finding was not included in the
written notice to explain which they received, and thus could not be a valid basis for their dismissal since they were
unable to explain their side on such issue. Petitioners reiterate the NLRC findings that the other employees who
admitted to the illegal scheme did not implicate them, nor can these employees’ statements be used to show
petitioners’ guilt or privity to the illegal scheme since these written statements are inadmissible in evidence as they
were not given the opportunity to contest them, nor were they allowed to cross-examine the employees who
prepared and submitted them; that in Garcia v. Malayan Insurance Co., Inc.,30 it was held that the statement of a co-
employee may not be used to prove the guilt of an employee accused of theft of company property; and that there
can be no other conclusion than that their dismissal was based on mere conjecture and suspicion, and for this
reason, the burden of proof – which falls on Prudentialife – has not been properly discharged.
Additionally, petitioners claim that they did not unduly profit from availing of the optical benefit provision under the
CBA, since they did not claim or receive anything other than the eyeglasses; that no evidence was shown to support
respondents’ claim that their eyeglasses were overpriced, and any variation in prices of eyeglasses between the
various optical shops merely shows that free market forces were in operation – not that the particular eyeglasses
they obtained from Alavera Optical were overpriced; and that their categorical denial was sufficient to negate any
accusation or suspicion of involvement in the scheme or conspiracy surrounding the optical benefit provision in the
CBA. 1âwphi1
Petitioners thus pray for the reversal of the assailed dispositions and the reinstatement of the December 8, 2008
NLRC Decision. In addition, they seek an award of damages and attorney’s fees.
In their Comment,31 respondents pray for the denial of the Petition, arguing against a departure from the CA
pronouncement and insisting that the appellate court’s disposition of the issues was sound and based on substantial
evidence. They contest the NLRC Decision, claiming that it is gravely erroneous and based on a misapprehension
of the facts. They insist on the validity of petitioners’ dismissal, which according to them was based on adequate
documentary evidence; and that the fact that not all who were involved in the illegal scheme were dismissed does
not affect the liability of petitioners. Besides, some of them resigned or left Prudentialife right after the incident
occurred while others have shown that their availment of the optical benefit was genuine. They hold that the
petitioners’ dismissal was based on substantial evidence gathered in an investigation duly conducted, and on the
findings of reputable optical shops which made an examination and comparison of the petitioners’ eyeglasses; that
overall, petitioners are guilty of dishonesty; that they did not violate petitioners’ right to due process; and finally, that
petitioners are not entitled to their money claims, damages, and attorney’s fees given that their dismissal was for
cause and no bad faith attended the same.
Our Ruling
The Court affirms.
When there is a divergence between the findings of facts of the labor tribunals and the CA, there is a need to refer
to the record. "It is an established rule that the jurisdiction of the Supreme Court in cases brought before it from the
CA via Rule 45 of the 1997 Rules of Civil Procedure is generally limited to reviewing errors of law. This Court is not
a trier of facts. In the exercise of its power of review, the findings of fact of the CA are conclusive and binding and
consequently, it is not our function to analyze or weigh evidence all over again. There are, however, recognized
exceptions to this rule such as when there is a divergence between the findings of facts of the NLRC and that of the
CA."32
The evidence on record suggests that, with the aim in view of availing the optical benefit provision under the CBA,
Prudentialife employee Elvie Villaviaje initiated acompany-wides cheme with Alavera Optical where by the latter,
through its optometrists, conducted eye examinations within company premises and issued prescriptions on January
27, 2006, and subsequently prepared and released eyeglasses to the participating Prudentialife employees. In turn,
these employees claimed reimbursement for the cost of their eyeglasses through the optical benefit provision, to the
allowable extent of P2,500.00. The evidence shows that even before they could pay for the cost of their eyeglasses,
Alavera Optical offered to issue, as it did issue, official receipts in advance to the availing employees, which they
used to secure reimbursements from Prudentialife ahead of the actual payment of the eyeglasses; the petitioners
acknowledged this fact in their individual and respective written explanations. Likewise, some of the availing
employees33 – except petitioners – admitted that they knew that the true cost of their respective eyeglasses ranged
from only P1,200.00 – P1,800.00; that Alavera Optical deliberately issued official receipts for a greater amount
ranging from P2,500.00 – P2,600.00 with their full knowledge and consent; that they used these official receipts to
claim reimbursement; and that Prudentialife actually reimbursedthemtotheextentofP2,500.00.
It as well appears that after some of the subject eyeglasses were submitted to other optical shops for inspection,
comparison and examination, it turned out that these did not have any grade, or that the grade did not match the
prescription issued for the eyeglasses. Specifically, Dolendo and Sy’s eyeglasses had no grade, while the grade on
Evangelista’s eyeglasses did not match the prescription issued to her. It was likewise found that the cost of the
eyeglasses – including petitioners’, as declared in the respective official receipts and reimbursement requests
covering them, was excessive compared to similar frames and lenses beings old or offered by other optical shops.
For its part, Alavera Optical submitted a fictitious address, telephone number and Tax Identification Number, using
these in the written prescriptions it issued. And to entice Prudentialife employees into participating in the scheme,
Alavera Optical offered to release the eyeglasses and issue the prescriptions and official receipts even before actual
payment therefor is made – which meant that participating employees need not pay for the cost of their eyeglasses
from their own pockets, but could use the documents to obtain immediate reimbursement fromPrudentialife.
It likewise appears that based on the reimbursement requests/petty cash vouchers and official receipts, the cost of
the eyeglasses is more or less the same, or at an average of P2,500.00, which coincidentally is the maximum
reimbursable amount under the optical benefit provision in the CBA.
From the above, it appears that there was a conspiracy to defraud Prudentialife using the optical benefit provision in
the CBA to unduly enrich the availing employee, and possibly Alavera Optical, through overpricing of the latter’s
eyeglasses and appropriation of the difference between the bloated price and the actual cost. Employees who
participated in the scheme knew, as they were informed by the proponents of the scheme – namely Elvie Villaviaje
and Alavera Optical, of the fact that if they participated and underwent eye examination through Alavera Optical,
they would be issued a prescription and official receipt indicating that they paid up to P2,600.00 for the frames and
lenses that were prescribed, which documents they could then use to obtain reimbursements of up to P2,500.00
from Prudentialife – even if they did not actually pay for them, and though the cost of the eyeglasses was less than
P2,500.00. Any employee who, knowing of the scheme, yet participates therein, becomes a co-conspirator to the
fraud.It is elementary that "when there is a conspiracy, the act of one is the act of all the conspirators, and a
conspirator may be held as a principal even if he did not participate in the actual commission of every act
constituting the offense. In conspiracy, all those who in one way or another helped and cooperated in the
consummation of the crime are considered co-principals since the degree or character of the individual participation
of each conspirator in the commission of the crime becomes immaterial."34 In proving complicity, direct evidence is
not necessary, as it can be clearly deduced from the acts of the conspirators;35 it may be proved through a series of
acts done in pursuance of a common unlawful purpose.36
Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and
decide to commitit. Conspiracy need not be proved by direct evidence and may be inferred from the conduct of the
accused before, during and after the commission of the crime, which are indicative of a joint purpose, concerted
action and concurrence of sentiments. In conspiracy, the act of one is the act of all. Conspiracy is present when one
concurs with the criminal design of another, indicated by the performance of an overt act leading to the crime
committed. It may be deduced from the mode and manner in which the offense was perpetrated.37
From the evidence on record, it has been sufficiently shown that petitioners actually took part in the commission of
the acts complained of, which makes them co-conspirators to the scheme. For sure, it cannot be said that they are
exceptions to the rule simply because they categorically denied participation, or that there is no direct evidence of
their complicity. Quite the contrary, there is evidence pointing to their participation in the fraudulent scheme. First of
all, they all knew that even though they were not paying for the eyeglasses, Alavera Optical would issue, as it did
issue, an official receipt falsely showing that the eyeglasses have beenpaidfor,which they would
thenuse,astheydiduse,toobtain reimbursement from Prudentialife. By presenting the false receipt to their employer
to obtain reimbursement for an expense which they did not in fact incur, this constituted dishonesty.
Secondly, it was discovered that Dolendo’s and Sy’s eyeglasses had no grade, while Evangelista’s eyeglass lens
did not match the prescription issued to her. An eyeglass without graded lenses could only indicate that the wearer
1âw phi 1
thereof has no vision problems, which does away with the necessity of availing of the optical benefit provision under
the CBA which is understandably reserved for those employees who have developed vision problems in the course
of employment. By availing of the benefit, the employee represents to Prudentialife that he has developed vision
problems. If this is not true, then he has committed an act of dishonesty as well. Given the circumstances then
obtaining, the same principle holds true with respect to eyeglasses whose lenses do not match the corresponding
prescription.
For their dishonesty, the penalty of dismissal is justified pursuant to Section 2.6 (i) of the Prudentialife Personnel
Manual which prescribes the penalty of dismissal for acts of padding receipts for reimbursement or liquidation of
advances or expenses. Dishonesty is a serious offense, and "no employer will take to its bosom a dishonest
employee."38 Dishonesty implies a "[d]isposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of
integrity[; l]ack of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to
defraud, deceive or betray."39 Acts of dishonesty have been held to be sufficient
groundsfordismissalasameasureofself-protectiononthepartoftheemployer.40
The written statements of petitioners’ co-employees admitting their participation in the scheme are admissible to
establish the plan or scheme to defraud Prudentialife; the latter had the right to rely on them for such purpose. The
argument that the said statements are hearsay because the authors thereof were not presented for cross-
examination does not persuade; the rules of evidence are not strictly observed in proceedings before the NLRC,
which are summary in nature and decisions may be made on the basis of position papers.41 Besides, these written
declarations do not bear directly on petitioners’ participation in the scheme;theirguilthasbeen
establishedbyevidenceotherthan thesestatements.
Petitioners’ reliance on Garcia v. Malayan Insurance Co., Inc.42 is misplaced. Far from declaring that the statement
of a co-employee may not be used to prove the guilt of an employee accused of theft of company property, the
Court held therein that the affidavit of the co-employee cannot serve as basis for the finding that said petitioner
conspired in the theft because it was so lacking in crucial details. The opposite is thus true: the affidavit or statement
of a co- employee in a labor case may prove an employee’s guilt or wrongdoing if it recites crucial details of his
involvement.
Furthermore, petitioners’ contention that they were not apprised of the fact that it has been discovered that their
eyeglasses had no grade comes as a surprise. The truth or falsity of this fact or allegation is readily ascertainable by
the petitioners themselves; the answer is literally right before their very eyes. If their eyeglasses indeed had a grade,
then they would have said so outright – and not relegate the matter to a mere due process issue. They are
presumed to wear these very spectacles each and every day. Besides, as early as in the respondents’ Position
Paper below, it was raised as an issue that petitioners’ eyeglasses either had no grade or did not match the
prescription issued therefor; indeed, petitioners have been given sufficient opportunity to meet such accusation in
the Labor Arbiter stage.
Finally, petitioners’ argument and prayer for an award of damages and attorney’s fees may not be allowed, since
they did not question the NLRC’s denial thereof in its December 8, 2008 Decision. Only respondents went up to the
CA on certiorari. "It is well-settled that a party who does not appeal from the decision may not obtain any affirmative
relief from the appellate court other than what he has obtained from the lower court whose decision is brought up on
appeal. The exceptions to this rule, such as where there are (1) errors affecting the lower court’s jurisdiction over the
subject matter, (2) plain errors not specified, and (3) clerical errors, do not apply in this case."43 "[A] party who did not
appeal cannot assign such errors as are designed to have the judgment modified. All that he can do is to make a
counter-assignment of errors or to argue on issues raised below only for the purpose of sustaining the judgment in
his favor."44
WHEREFORE, the Petition is DENIED. The January 14, 2011 Decision and March 16, 2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 111981 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 199740, March 24, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff–Appellee, v. JERRY OBOGNE, Accused–Appellant.
RESOLUTION
DEL CASTILLO, J.:
Appellant Jerry Obogne was charged with the crime of rape in an Information that reads as follows: chanRoblesvi rt ualLaw lib rary
That on or about the 29th day of July 2002, in the afternoon, in barangay Ogbong, municipality of Viga, province of
Catanduanes, Philippines, within the jurisdiction of the Honorable Court, the said accused by means of force and intimidation,
willfully, unlawfully and feloniously x x x succeeded in having carnal knowledge of “AAA”,1 a 12–year old mentally retarded
person, to the damage and prejudice of the said “AAA”.2
When arraigned on December 17, 2004, appellant entered a plea of not guilty.3 On March 13, 2008, the Regional Trial Court
of Virac, Catanduanes, Branch 43, rendered a Judgment,4viz: chanRo blesvi rtua lLawl ib rary
WHEREFORE, judgment is, hereby, rendered finding Jerry Obogne guilty beyond reasonable doubt of the crime of simple rape
committed against “AAA” and, hereby, sentences him to suffer a penalty of reclusion perpetua and to indemnify “AAA” the
amount of P50,000.00 as civil indemnity, P50,000.00 as moral damages, and P25,000.00 as exemplary damages; and to pay
the costs.
SO ORDERED.5
The trial court did not consider “AAA’s” mental retardation as a qualifying circumstance considering that the Information
failed to allege that appellant knew of “AAA’s” mental disability.
Aggrieved, appellant appealed to the Court of Appeals.6 In its Decision7 of March 28, 2011, the appellate court affirmed the
trial court’s ruling with modifications, viz: chanRoble svi rtual Lawli bra ry
WHEREFORE, the appeal is DISMISSED. The Judgment, dated March 13, 2008, of the Regional Trial Court of Virac,
Catanduanes, Branch 34,8 in Criminal Case No. 3303, is AFFIRMED with MODIFICATION that accused–appellant is further
ordered to pay “AAA” the additional amount of P50,000.00 as civil indemnity apart from the award of P50,000.00 as moral
damages and of P25,000.00 as exemplary damages.
SO ORDERED.9
Hence, this appeal.
In a Resolution10 dated February 15, 2012, we required both parties to file their Supplemental Briefs. However, they opted
to adopt the briefs they filed before the Court of Appeals as their Supplemental Briefs.11
Appellant argues that the testimony of “AAA” deserves no credence because she was incapable of intelligently making known
her perception to others by reason of her mental disability.
Sections 20 and 21, Rule 130 of the Rules of Court provide: chanRob lesvi rtua lLawl ibra ry
Sec. 20. Witnesses; their qualifications. – Except as provided in the next succeeding section, all persons who can perceive,
and perceiving, can make known their perception to others, may be witnesses.
xxxx
Sec. 21. Disqualification by reason of mental incapacity or immaturity. – The following persons cannot be witnesses: chanRoble svirtual Lawli bra ry
(a) Those whose mental condition, at the time of their production for examination, is such that they are incapable of
intelligently making known their perception to others;
(b) Children whose mental maturity is such as to render them incapable of perceiving the facts respecting which they are
examined and of relating them truthfully.
In this case, “AAA” is totally qualified to take the witness stand notwithstanding her mental condition. As correctly observed
by the trial court:
chanRob lesvi rtual Lawl ibra ry
When “AAA” was presented on November 14, 2006, defense counsel manifested his objection and called the Court’s attention
to Rule 130, Section 21 of the Rules of Court, which lists down persons who cannot be witnesses; i.e. those whose mental
condition, at the time of their production for examination, is such that they are incapable of intelligently making known their
perception to others x x x.
During the continuation of AAA’s testimony x x x she was able to recall what [appellant] did to her x x x.
“AAA” recalled that while she was playing, [appellant] saw her and asked her to go with him because he would give her a
sugar cane. [Appellant] brought “AAA” to his house and while inside, ‘he removed her panty, and then inserted his penis into
her vagina and he got the knife and then he took a sugar cane and then he gave it to her and then she went home.’
xxxx
This Court finds “AAA” a very credible witness, even in her mental condition. Contrary to defense counsel’s objection that
“AAA” was not capable of intelligently making known her perception to others, “AAA” managed to recount the ordeal she had
gone through in the hands of the accused, though in a soft voice and halting manner x x x.
“AAA’s” simple account of her ordeal clearly reflects sincerity and truthfulness.
While it is true that, on cross–examination, “AAA” faltered in the sequence of events x x x this is understandable because
even one with normal mental condition would not be able to recall, with a hundred percent accuracy, events that transpired
in the past. But “AAA” was certain that ‘it was a long time x x x after the incident’ when it was reported to the
police. Likewise, she was very certain that the accused inserted his penis into her vagina x x x.12
In the same vein, the appellate court found “AAA” qualified to take the witness stand, viz: chanRob lesvi rtua lLawl ibra ry
Our own evaluation of the records reveals that “AAA” was shown to be able to perceive, to make known her perception to
others and to remember traumatic incidents. Her narration of the incident of rape given in the following manner is worthy of
note:chanRoble svirtual Lawlib ra ry
xxxx
Private complainant “AAA” provided a clear, convincing and competent testimonial evidence to prove the guilt of the
accused–appellant of the crime of rape beyond reasonable doubt. As found by the trial court, the testimony of “AAA” was
replete with consistent details, negating the probability of fabrication.
We stress that, contrary to accused–appellant’s assertions, mental retardation per se does not affect a witness’ credibility. A
mental retardate may be a credible witness.13
Appellant’s assertion that the trial court and the appellate court should have considered his alibi must likewise fail. For alibi
to prosper, it must not only be shown that appellant was at another place at the time of the commission of the crime but that
it was also impossible for him to be present at the crime scene. In this case, appellant attempted to show that he was
at barangay Ananong at the time of the rape incident. However, as found by the trial court, the distance
between barangay Ananong and barangay Ogbong is only four kilometers and could be traversed in one hour or even less.14
Finally, the trial court and the Court of Appeals correctly found appellant guilty of simple rape and properly imposed upon
him the penalty of reclusion perpetua pursuant to Article 266–B, par. 1 of the Revised Penal Code. The trial court correctly
ruled that “AAA’s” mental disability could not be considered as a qualifying circumstance because the Information failed to
allege that appellant knew of such mental condition at the time of the commission of the crime. As held in People v. Limio:15
By itself, the fact that the offended party in a rape case is a mental retardate does not call for the imposition of the death
penalty, unless knowledge by the offender of such mental disability is specifically alleged and adequately proved by the
prosecution.
For the Anti–Rape Law of 1997, now embodied in Article 266–B of the Revised Penal Code (RPC) expressly provides that the
death penalty shall also be imposed if the crime of rape is committed with the qualifying circumstance of ‘(10) when the
offender knew of the mental disability, emotional disorder and/or physical handicap of the offended party at the time of the
commission of the crime.’ Said knowledge x x x qualifies rape as a heinous offense. Absent said circumstance, which must
be proved by the prosecution beyond reasonable doubt, the conviction of appellant for qualified rape under Art. 266–B (10),
RPC, could not be sustained, although the offender may be held liable for simple rape and sentenced to reclusion
perpetua.16
xxxx
[T]he mere fact that the rape victim is a mental retardate does not automatically merit the imposition of the death
penalty. Under Article 266–B (10) of the Revised Penal Code, knowledge by the offender of the mental disability, emotional
disorder, or physical handicap at the time of the commission of the rape is the qualifying circumstance that sanctions the
imposition of the death penalty. As such this circumstance must be formally alleged in the information and duly proved by
the prosecution.
Rule 110 of the 2000 Rules of Criminal Procedure requires both qualifying and aggravating circumstances to be alleged with
specificity in the information. x x x But in the absence of a specific or particular allegation in the information that the
appellant knew of her mental disability or retardation, as well as lack of adequate proof that appellant knew of this fact,
Article 266–B (10), RPC, could not be properly applied x x x
Hence, the appellant can only be convicted of simple rape, as defined under Article 266–A of the [Revised] Penal Code, for
which the imposable penalty is reclusion perpetua.17
However, it must be mentioned that appellant is not eligible for parole pursuant to Section 318 of Republic Act No. 9346.19
The awards of P50,000.00 as moral damages and P50,000.00 as civil indemnity are likewise proper. However, the award of
exemplary damages must be increased to P30,000.00 in line with prevailing jurisprudence.20 Also, interest at the rate of
6% per annum shall be imposed from date of finality of this judgment until fully paid.
WHEREFORE, the March 28, 2011 Decision of the Court of Appeals in CA–G.R. CR H.C. No. 03270 finding appellant Jerry
Obogne guilty beyond reasonable doubt of the crime of simple rape and sentencing him to suffer the penalty of reclusion
perpetua and to pay “AAA” civil indemnity of P50,000.00 and moral damages of P50,000.00
is AFFIRMED with MODIFICATIONS that appellant is not eligible for parole; the amount of exemplary damages is
increased to P30,000.00; and all damages awarded shall earn interest at the rate of 6% per annum from date of finality of
this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
March 24, 2014
G.R. No. 193516
VILMA MACEDONIO, Petitioner,

vs.
CATALINA RAMO, YOLANDA S. MARQUEZ, SPOUSES ROEL and OPHELIA PEDRO, SPOUSES JOEFFRY
and ELIZA BALANAG, and BPI FAMILY SAVINGS BANK, INC., Respondents.
DECISION
DEL CASTILLO, J.:
In resolving whether to dismiss a case for violation of the rules covering certifications against forum-shopping, the
courts should be mindful of the facts and merits of the case, the extant evidence, the principles of justice, and the
rules of fair play. They should not give in to rigidity, indifference, indolence, or lack of depth.
This Petition for Review on Certiorari1 seeks to set aside the July 20, 2010 Order2 of the Regional Trial Court of
Baguio City (Baguio RTC), Branch 6, in Civil Case No. 7150-R, entitled "Vilma Macedonio, Plaintiff, versus Catalina
Ramo, Yolanda S Marquez, Sps. Roel and Ophelia Pedro, Sps. Joeffry and Eliza Balanag, and BPI Family Savings
Bank, Inc., Defendants," which dismissed Civil Case No. 7150-R with prejudice.
Factual Antecedents
Civil Case No. 5703-R
On January 6, 2004, Vilma Macedonio (petitioner) filed with the Baguio RTC a civil case for rescission of contract
under Article 1191 of the Civil Code,3 with damages, against respondent Catalina Ramo (Ramo). Docketed as Civil
Case No. 5703-R and assigned to Branch 3 of the Baguio RTC, the Complaint4 alleged that on October 29, 2003,
petitioner and Ramo entered into an agreement for the purchase by petitioner of a 240-square meter portion of
Ramo's 637-square meter unregistered lot located at Brgy. Sto. Rosario Valley, Baguio City (the subject property);
that Ramo assured petitioner that the subject property was free from liens and encumbrances; that of the agreed
Pl,700,000.00 sale price, petitioner paid P850,000.00 as earnest money; that a "Deed of Sale with Mortgage to
Secure Payment of Price" (October 29, 2003 deed of sale) was executed between the parties, and Ramo handed to
petitioner a copy of the tax declaration covering the property, which indicated that it was subject to several liens and
encumbrances, namely a) levy made in relation to a case before Branch 60 of the Baguio RTC and b) mortgage to
ARGEM, a lending institution; that Ramo assured petitioner that she would clear the property of liens and
encumbrances before petitioner pays the balance of the price on January 3, 2004 as stipulated in the October 29,
2003 deed of sale; that petitioner failed to clear the property of the ARGEM mortgage. Consequently, petitioner
prayed that the October 29, 2003 deed of sale be rescinded and that she be awarded P850,000.00 actual damages,
P50,000.00 moral damages, P25,000.00 exemplary damages, P25,000.00 attorney's fees, and costs.
During the course of the proceedings, the parties mutually agreed to settle. Thus, the trial court set the case for
further proceedings on November 11, 2005, but on said date, the parties were unable to submit a compromise
agreement. As a result, the trial court in an Order5 of even date dismissed Civil Case No. 5703-R for failure to
prosecute, to wit:
Although there is a motion to reset filed by Atty. Johnico Alim, the parties are supposed to submit to this Court the
terms of settlement before this hearing considering this case is already more than a year and they have promised in
the last hearing that they will submit their compromise agreement. For failure to comply, this case is hereby
dismissed for failure to prosecute.
IT IS SO ORDERED.6
Petitioner filed a motion for reconsideration. On June 8, 2006, the trial court issued another Order,7 stating that-
Until the parties submit their Compromise Agreement, no incident will betaken up.
IT IS SO ORDERED.8
On August 16, 2006, the trial court issued still another Order,9 as follows:
Plaintiff is given until the end of this month of August, 2006 in order to substantiate her Motion for Reconsideration, it
appearing that she has been given [since] November 24, 2005 up to the present, or for a period of almost NINE (9)
MONTHS to do the same.
A resolution will be issued on September 4, 2006.
IT IS SO ORDERED.10
The September 4, 2006 hearing did not push through, as petitioner's counsel filed a motion to reset which the trial
court granted and reset the case for hearing on October 23, 2006.
Meanwhile, it appears that Ramo was able to secure in her name a Sales Patent, and on October 16, 2006, a
certificate of title (Katibayan ng Orihinal na Titulo Big. P-353511 or OCT P-3535) over the subject property.
The trial court issued yet another Order12 on October 23, 2006, viz:
This case is considered terminated.
IT IS SO ORDERED13
In June 2007, Ramo caused the subject property to be subdivided into three lots,14 which she then transferred to
herein respondents, spouses Roel and Ophelia Pedro (the Pedros), Yolanda S. Marquez (Marquez), and spouses
Joeffry and Elisa Balanag (the Balanags). The transfer to the Pedros and Marquez were through Acknowledgment
Trusts,15 whereby Ramo admitted that she was not the owner of the lots but merely held them in trust for the true
owners - the Pedros and Marquez. On the other hand, the transfer ofthe remaining lot to the Balanags was through
a deed of sale.16 No part of the subject property was transferred to petitioner.
On February 11, 2008, petitioner filed a Motion17 praying that the trial court issue an order directing the parties to
comply with their oral agreement for Ramo to return petitioner's money - or the ,P850,000.00 advance she made.
Ramo opposed the motion, arguing that the subject of the motion has become moot and academic for petitioner's
failure to file a motion for reconsideration of the trial court's October 23, 2006 Order, and for failure of petitioner to
comply with her obligation to pay the balance of the purchase price even after title to the property was presented in
court. On the scheduled hearing of the motion, or on March 24, 2008, the trial court issued an Order18 stating-
Although this case is already terminated, there is nothing in the law to prevent the lawyers from exhorting their
clients to comply with their obligations under an oral settlement.
IT IS SO ORDERED.19
On June 22, 2009, it appears that Ramo agreed in open court to pay petitioner and thus settle the case, whereupon
the trial court issued an Order,20 which reads as follows:
The parties have talked to each other in order for the plaintiff to be paid.
IT IS SO ORDERED.21
Thereafter, petitioner received a June 29, 2009 letter22 signed by Ramo and her counsel, admitting that Ramo
received the total amount of ,P850,000.00 as down payment for the subject property, but proposing to return to
petitioner only the amount ofP255,000.00 within a period of four years, without interest.
In October 2009, petitioner's new counsel filed a Notice of Appearance with Manifestation and Motion23 informing the
court of Ramo's June 29, 2009 letter and offer, petitioner's refusal of the offer, and praying that the case be set for
pre-trial since all efforts to settle the issues between the parties failed. Ramo opposed the same manifestation and
motion, insisting that the case has been terminated.24 The trial court did not act on petitioner's manifestation and
motion; instead, it issued another Order25 dated December 7, 2009, to wit:
Atty. Gregory F. Buhangin appeared on his Formal Manifestation.
IT IS SO ORDERED.26
On February 2, 2010, an Entry of Judgment27 was issued by the trial court, certifying that the October 23, 2006 Order
- which declared that Civil Case No. 5703-R was already terminated - became final and executory on November 17,
2006.
Department of Environment and Natural Resources (DENR) Protest
On December 2, 2009, petitioner filed a written Protest28 with the office of the Regional Executive Director of the
DENR Cordillera Administrative Region, seeking an investigation into Ramo's acquisition of the subject property,
and claiming that Ramo's sales patent was issued despite her having committed multiple violations of the law.
Petitioner thus prayed for the DENR to 1) nullify Ramo's sales patent as well as the subsequent original certificate of
title and its derivative titles issued in the name of the other individual respondents herein, and 2) allow her to bid and
acquire the subject property claiming that she possessed the qualifications that would entitle her to become a
beneficiary thereof
It appears that to this date, no action has been taken on the protest.
Civil Case No. 7150-R
On April 21, 2010, petitioner filed with the Baguio RTC another civil case against respondents for specific
performance, annulment of documents and titles, with damages. Docketed as Civil Case No. 7150-R and assigned
to Branch 6, petitioner prayed in the Complaint29 that the trial court: 1) rescind and nullify the trust and sale
agreements between Ramo and the other individual respondents; 2) annul the certificates of title issued in favor of
the Pedros, Marquez, and the Balanags; 3) annul the mortgage contract subsequently executed by and between the
Balanags and respondent BPI Family Savings Bank, Inc. (BPI Family Bank) covering the portion sold to the former;
4) nullify the subdivision plan covering the property as it did not segregate the portion sold to petitioner, and
thereafter order that a new subdivision plan be made to segregate the 240 square meters sold to petitioner; 5) in the
alternative, rescind petitioner and Ramo's agreements and order a refund of petitioner's payments with interest; 6)
award moral and exemplary damages in the total amount of Pl00,000.00, and attorney's fees and litigation expenses
in the total amount of Pl 00,000.00.
Ramo filed her answer with motion to dismiss the case, claiming that in filing the case, petitioner violated the rule
against forum-shopping since there had already been a prior terminated case (Civil Case No. 5703-R) and a
pending Protest with the DENR. To this, petitioner filed her comment and opposition, arguing that since Civil Case
No. 5703-R was not decided on the merits and no trial was conducted, Civil Case No. 7150-R is not barred.30
On July 20, 2010, the trial court issued the assailed Order dismissing Civil Case No. 7150-R with prejudice due to:
a) violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure31 (1997 Rules), that is, for failure to inform the
court of the existence of Civil Case No. 5703-R and the DENR Protest; b) forum- shopping; and c) litis
pendentiaunder Section 1(e), Rule 16 of the 1997 Rules.32 The trial court held that petitioner filed multiple cases
based on the same cause of action, although with different prayers for relief; that while Civil Case No. 5703-R was
for rescission and Civil Case No. 7150-R was for specific performance and, annulment of documents and titles, both
cases are premised on the same cause of action - Ramo's purported wrongful conduct in connection with the
cancelled sale of the subject property; that rescission and specific performance could not be prayed for in two
separate cases without violating the rule against splitting a cause of action; and that the pending DENR Protest
which seeks to nullify the sales patent and certificates oftitle issued to Ramo and the other individual respondents is
identical to petitioner's cause of action in Civil Case No. 7150-R for annulment ofdocuments and titles.
Petitioner moved to reconsider, but in an August 16, 2010 Order,33 the trial court stood its ground. Thus, petitioner
1âw phi 1
instituted this direct recourse.
In a July 29, 2013 Resolution,34 the Court resolved to give due course to the Petition.
Issues
Petitioner raises the following issues coming to this Court:
The decision of the Honorable Regional Trial Court, Branch 6, Baguio City is sought to be reversed because the
said court erred in its outright and undiscerning application of the sanction against forwn[-]shopping in dismissing
with prejudice the complaint filed by Petitioner. The court erred in ruling that Civil Case No. 5703-R, Civil Case No.
7150-R and the Protest case is (sic) founded on the same cause of action which is not in accord with the law or with
the applicable decisions ofthe Supreme Court.
xxxx
CIVIL CASE NO. 5703-R AND CIVIL CASE NO. 7150-R DOES (SIC) NOT INVOLVE THE SAME CAUSE OF
ACTION THE FILING OF CIVIL CASE NO. 7150-R WITH RTC, BRANCH 6 DOES NOT CONSTITUTE FORUM[-
]SHOPPING THE PROTEST CASE FILED BEFORE THE OFFICE OF THE DENR CONSTITUTES DIFFERENT
CAUSE OF ACTION THUS LITIS [PENDENTIA] DOES NOT EXIST35
In her Petition and Reply,36 petitioner maintains that the first case - or Civil Case No. 5703-R - cannot bar the filing of
the second case - or Civil Case No. 7150-R, because while the first case was terminated, it was not tried on the
merits, and was dismissed solely for failure of the parties to submit their compromise agreement. For this reason,
petitioner argues that the dismissal of the first case without prejudice left the parties to freely litigate the matter in the
second action as though the first case had not been commenced.37
Next, petitioner concedes that while she failed to inform the trial court of the first case and her DENR Protest, it was
not her intention to conceal the existence of these cases; she simply believed that the causes of action in the
second case and the Protest were different from those in the first. Petitioner adds that the DENR Protest is not a
proceeding that bars the second case she filed against Ramo, since it is not a judicial action and it involves a
different cause of action, that is, reversion of the property due to Ramo's fraud and misrepresentation in filing her
application for a sales patent, which does not affect the causes of action in Civil Case No. 7150-R.
Petitioner thus prays that the assailed dispositions of the trial court be reversed and that the case be remanded for
further proceedings and trial on the merits.
Praying that the Petition be denied, the individual respondents in their Comment38 plainly echo the assailed
disquisition of the trial court, adding that petitioner's claim of good faith, omission, inadvertence or lapse in failing to
mention the first case and her DENR protest is irrelevant and could not cure her violation ofthe 1997 Rules.
Respondent BPI Family Bank, on the other hand, argues in its Comment39 that petitioner waived and relinquished
her rights over the subject property by filing the action for rescission, or Civil Case No. 5703-R; this being the case,
petitioner could only recover what she paid Ramo, which leaves Ramo's sale of a portion of the subject property to
the Balanags valid and binding. Consequently, the mortgage executed between the Balanags and BPI Family Bank
should not be disturbed as well. It adds that assuming petitioner has a cause of action to recover payments made to
Ramo, she cannot seek specific performance of their sale agreement; by filing the rescission case first, petitioner
waived her rights and is now precluded from resorting to an action for specific performance. Finally, it maintains that
the trial court correctly dismissed Civil Case No. 7150-R on the ground of splitting a single cause of action.
Our Ruling
The trial court in Civil Case No. 5703-R committed grave abuse of discretion in terminating or dismissing the case
for failure ofthe parties to submit a compromise agreement. In Goldloop Properties, Inc. v. Court ofAppeals,40 the
Court held that dismissing the action without allowing the parties to present evidence and after ordering them to
compromise is tantamount to deprivation of due process, and the "dismissal of an action for failure to submit a
compromise agreement, which is not even required by any rule, is definitely a harsh action."41 The Court likewise
held therein that ''the fact that negotiations for a compromise agreement persisted even up to the time of the
dismissal of the case strongly demonstrates their earnest efforts to abide by the trial court's order to settle their
dispute amicably";42 thus, "dismissing an action on account of the failure of the parties to compromise, would be to
render nugatory the pronounced policy of the law to encourage compromises, and thus open the floodgates to
parties refusing to agree upon an amicable settlement by simply railroading their opposing parties' position, or even
defeating the latter's claim by the expedient of an outright dismissal."43
It is understandable why the trial court in Civil Case No. 5703-R should not have precipitately dismissed the case:
petitioner sought a refund of her payments but evidently, Ramo was not willing to pay her. Thus, the compulsion for
Ramo to pay what she owed could only come from the trial court, after trial on the merits is conducted. Indeed, even
as Ramo made a judicial admission of her liability to petitioner - that is, in open court on June 22, 2009 - and an
extrajudicial admission thereafter - via her June 29, 2009 letter which she and her counsel signed - she refuses to
pay petitioner what she owes. It is thus clear that Ramo would by all means avoid all efforts at compromising the
case in earnest, which should have prompted the court to enter trial and cancel all efforts at settlement, which Ramo
used effectively to delay her final reckoning. Even as Ramo's actions patently revealed her intentions, the trial court
in Civil Case No. 5703-R did not see through her stratagem.
For the same reasons, the Court finds that the dismissal of Civil Case No. 7150-R was unwarranted. It is true that
while it was incumbent for petitioner to have informed the trial court of Civil Case No. 5703-R and the pending
DENR Protest, this Court is inclined to forego petitioner's failure to abide by the requirements of the 1997 Rules
regarding certifications against forum-shopping, favor of deciding the case on the basis of merit, seeing, as the
Court does, that a rigid interpretation of the 1997 Rules would result in substantial injustice to petitioner. The
circumstances require that substance must prevail over form, keeping in mind, as the Court has held countless
times, that procedural rules are mere tools designed to facilitate the attainment of justice; their application should be
relaxed when they hinder instead of promote substantial justice. Public policy dictates that court cases should as
much as possible be resolved on the merits and not on technicalities.44 Besides, "the Rules of Civil Procedure on
forum shopping are not always applied with inflexibility."45
More to the point, "the hallowed office and cardinal objective of the Rules [is] to provide, at each possible instance,
an expeditious and full resolution of issues involving the respective rights and liabilities of the parties under
substantive law."46 "[T]he interests of truth and justice are better served where the court, giving due consideration to
technical objections, goes deeper into the basic legal merits of the controversy and concentrates itself on the
fundamental principles of fairness and square dealing which always outweigh technical considerations."47
A lenient stance becomes imperative and more significant in light of respondents' further admission in their
Comment, that:
ANTECEDENTS
Respondent CATALINA RAMO was the applicant under a Townsite Sales Application (TSA) with the Department of
Environment and Natural Resources-Cordillera Administrative Region (DENR-CAR) for the award of a 637 square
meters [sic] lot at Res. Sec. "A", Baguio City.
On November 29, 2003, before an award from the DENR-CAR was issued, she sold a portion of said land in the
area of 240 square meters to Petitioner Vilma Macedonio for the sum of Pl,700,000.00 paying a partial
amount of P850,000.00.
The transaction between them was not consummated and for which reason, the Petitioner fded several
cases against Respondent Catalina Ramo.48 (Emphasis supplied)
In her pleadings, Ramo admitted and confessed her liability to petitioner: that to this day, she owes petitioner the
amount of P850,000.00 as a result of the botched sale. A refund of the said amount is what petitioner prays for in
the alternative in her Complaint in Civil Case No. 7150-R. At the very least, this is what she is entitled to, including
interest and attorney's fees for having been compelled to litigate. The trial court in Civil Case No. 7150-R should
appreciate petitioner's cause this much. Indeed, if the trial court felt at any point that the DENR Protest should
substantially affect the outcome of the case before it and that it should give deference to the better judgment of the
DENR, it could restrict itself to petitioner's alternative prayer for a refund.
In arriving at the foregoing conclusions, the Court took into consideration the evidence and Ramo's admissions that
while she refuses to honor her obligations under the sale or at least return petitioner's money, she went on to
subdivide and transfer or sell the property to other individuals, which is absolutely unfair if not perverse. Apparently,
this injustice has been lost on the trial court, having decided the way it did by disregarding the basic facts and
adhering to technicalities.
Given the foregoing, ifjustice is to be truly served, the trial court should not have dismissed Civil Case No. 7150-R.
Nonetheless, by filing a Protest with the DENR and claiming that Ramo is guilty of fraud and misrepresentation in
filing her application for a sales patent, and prodding the DENR to initiate reversion proceedings so that she may
apply for, bid, and acquire the property, petitioner is deemed to have admitted that Ramo is not the owner ofthe
subject property, and was not so when the same was sold to her. This being the case, petitioner concedes that her
purchase of the property is illegal as the same belongs to the State; thus, her only recourse is to obtain a refund of
what she paid.
WHEREFORE, the Petition 1s GRANTED. Judgment 1s hereby rendered as follows:
1. The assailed July 20, 2010 and August 16, 2010 Orders ofthe Regional Trial Court ofBaguio City, Branch 6, in
Civil Case No. 7150-R are SET ASIDE;
2. The Regional Trial Court of Baguio City, Branch 6, is ORDERED to continue with the proceedings in Civil Case
No. 7150-R.
SO ORDERED.
SECOND DIVISION
G.R. No. 176055 March 17, 2014
SPOUSES EDMUNDO DELA CRUZ and AMELIA CONCIO-DELA CRUZ, Petitioners,

vs.
SPOUSES RUFINO R. CAPCO AND MARTY1 C. CAPCO, Respondents.
DECISION
DEL CASTILLO, J.:
This case involves two spouses battling for the material possession of a piece of land.
Assailed in this Petition for Review on Certiorari is the August 18, 2006 Decision 2 of the Court of Appeals (CA) in
CA-G.R. SP No. 90736 which (1) granted the petition for review filed therewith by respondents spouses Rufino R.
Capco and Marty C. Capco (spouses Capco ); (2) set aside the January 20, 2005 Decision3 and June 27, 2005
Omnibus Order4 of the Regional Trial Court (RTC) of Pasig City, Branch 153; and (3) dismissed the Complaint for
Unlawful Detainer filed by petitioners spouses Edmundo Dela Cruz and Amelia Concio-Dela Cruz (spouses Dela
Cruz) against the spouses Capco. Likewise questioned is the December 21, 2006 Resolution5 which denied the
spouses Dela Cruz' Motion for Reconsideration thereto.
Factual Antecedents
On October 6, 2003, the spouses Dela Cruz filed a Complaint6 for Unlawful Detainer against the spouses Capco
before the Metropolitan Trial Court (MeTC) of Pateros. They alleged that Teodora T. Concio (Teodora), mother of
petitioner Amelia Concio-Dela Cruz (Amelia), acquired ownership over a piece of land by virtue of a Decision dated
October 3, 1983 rendered by the RTC of Pasig, Branch 151 in Land Registration Case No. 9511. The said property
was eventually registered in her name under Transfer Certificate of Title (TCT) No. 31873. Teodora, out of
neighborliness and blood relationship, tolerated the spouses Capco’s occupation thereof.
Subsequently, the subject property was conveyed to the spouses Dela Cruz. Intending to construct a house thereon
and utilize the space for their balut and salted eggs business, the spouses Dela Cruz thus demanded that the
spouses Capco vacate the property. As the spouses Capco refused, the matter was brought before the Barangay
Lupon for conciliation wherein several meetings were held but to no avail.7 Hence, the said Complaint.
In their Answer, the spouses Capco pointed out that the Complaint is defective for failing to allege the exact metes
and bounds of the property. Neither is a title attached thereto to show that the spouses Dela Cruz are the owners of
the disputed property. Be that as it may, the spouses Capco asserted that they have all the rights to occupy the
subject property since respondent Rufino Capco (Rufino) is an heir of its true owner. In fact, they established their
balutan business and built their house thereon as early as 1947. By way of counterclaim, the spouses Capco prayed
that the spouses Dela Cruz be ordered to pay them exemplary damages, attorney’s fees and litigation expenses.
The exhibits submitted by the spouses Dela Cruz, included, among others, copies of the (1) RTC Decision dated
October 3, 1983 in Land Registration Case No. 9511;8 (2) TCT No. 31873 in the name of Teodora;9 and, (3) Deed of
Extra-Judicial Settlement of the Estate of Teodora T. Concio wherein her heirs agreed to assign, transfer and
convey the property to Amelia.10 For their part, the spouses Capco presented (1) two 1993 tax declarations covering
their house and a camarin which both stand on a lot owned by Juan E. Cruz (Juan)11 and (2) several receipts
evidencing their payment of real property taxes.12
The MeTC rendered a Decision13 on July 9, 2004. It did not give credence to the spouses Capco’s assertion that the
Complaint did not properly identify the property and instead found sufficient the identification of the same through
the technical description in TCT No. 31873 submitted by the spouses Dela Cruz.
Anent the conflicting claims of the parties as to their right to possess the subject property, the MeTC endeavored to
ascertain the source of the parties’ claimed rights, viz:
x x x Plaintiff Amelia Concio-dela Cruz is the daughter of the late Teodora Tulad Concio, to whom the property
subject matter of the instant case and which is covered by TCT No. 31873 was registered. Prior to the issuance of
TCT No. 31873 in the name of [Amelia’s] mother, the subject property used to form part of one-half of a property
owned by one Juan Cruz, which was previously administered by one Gregorio Reyes, the grandfather of herein
defendant Rufino Capco. This property owned by Juan Cruz was later involved in a family land dispute upon his
death after the son of Gregorio Reyes, Hermogenes Reyes, instituted an action to have the subject property
registered in the latter’s name. But [the spouses Dela Cruz’] predecessor-in-interest Teodora Tulad Concio filed her
opposition to the application.
In a decision rendered by the said court, one-half of that property was adjudicated in favor of Hermogenes Reyes,
and the other half was awarded to Teodora Tulad Concio x x x. The subject decision paved the way for the issuance
of TCT No. 31873 in the name of Teodora Tulad Concio x x x and TCT No. 31874 in the name of Hermogenes
Reyes.
Notwithstanding the decision of the Regional Trial Court in the Land Registration proceedings and the consequent
issuance of TCT No. 31873 in favor of Teodora Tulad Concio, [the spouses Capco] remained in possession of the
subject property by reason of the tolerance extended to them by the Concios.
Upon the death, however, of Teodora Tulad Concio on August 31, 1993, her heirs including plaintiff Amelia T.
Concio, executed a Deed of Extra-Judicial Settlement of the Estate of Teodora Concio. In that extrajudicial
settlement dated May 14, 2002, all the heirs adjudicated upon themselves the property covered by TCT No. 31783
and thereafter assigned, transferred and conveyed to plaintiff Amelia T. Concio-Dela Cruz and her heirs, assigns
and successors the said property.14
Based on this, the MeTC rejected the spouses Capco’s claimed right to possess the subject property as follows:
x x x [T]he [spouses Capco’s] stay in the subject premises was originally lawful as they based it then from their right
as heirs of the lawful possessor thereof, Mr. Hermogenes Reyes, who initially caused the application of title in his
name of that parcel of land which included the lot now subject matter of this case. That right of the [spouses Capco],
however, ceased when the Land Registration Court in that application for land title filed by Reyes ruled that only
one-half of that property being applied for shall be titled in his name while the other half, which is now the subject of
this complaint shall be adjudged in favor of Oppositor Teodora Concio Tulad, the [spouses Dela Cruz’] predecessor-
in-interest.
Since title to the property which the [spouses Capco] are now occupying had already been legally transferred to
Teodora Concio Tulad, the right of the former in occupying the same is deemed to have been anchored from the
right of the latter as owner of the subject land. The court is, therefore, of the considered view that [the spouses
Capco’s] continued stay in the property covered by TCT No. 31783 was truly through the sheer generosity and
tolerance of the registered owner Teodora Concio Tulad during her lifetime and extended only upon her death by
her successor-in-interest, the [spouses Dela Cruz].15
The MeTC concluded that since the spouses Capco’s possession of the subject property was by mere tolerance of
the spouses Dela Cruz, the latter have the better right to possess and thus may recover the same upon demand.
Hence, the dispositive portion of its Decision:
VIEWED FROM THE FOREGOING, judgment is hereby rendered in favor of [the spouses Dela Cruz] and against
[the spouses Capco], ordering the latter and all persons claiming rights under them to vacate the subject land being
occupied by them which is covered by TCT No. 31873 located at Interior P. Herrera St., Pateros, Metro Manila, and
surrender possession thereof to the plaintiffs, and to pay the following:
a. Php500.00 a month as reasonable compensation with legal interest thereon from September 1, 2003, until the
subject property is finally vacated;
b. Php20,000.00, as and by way of attorney’s fees; and,
c. Costs of suit.
SO ORDERED.16
The spouses Capco appealed to the RTC.17
The RTC did not find merit in the spouses Capco’s appeal,18 hence, the dispositive portion of its January 20, 2005
Decision reads:19
WHEREFORE, foregoing premises duly considered, the appealed decision is affirmed in toto.
SO ORDERED.20
In view of the Decision of the RTC, the spouses Dela Cruz filed a Motion to Remand and Direct Court of Origin to
Issue a Writ of Execution,21 and later, a Motion to Withdraw Back Rentals under Judicial Custody.22 The spouses
Capco, for their part, moved for the reconsideration of the RTC Decision.23 These motions were resolved by the RTC
through an Omnibus Order24 dated June 27, 2005, viz:
WHEREFORE, in the light of the foregoing premises, for being pro forma, the motion for reconsideration is DENIED.
Further, the Motion to Remand is GRANTED and the Motion To Withdraw Back Rentals is deferred for the
consideration of the court of origin.
SO ORDERED.25
Undeterred, the spouses Capco filed a Petition for Review with the CA.
The CA found in favor of the spouses Capco in its Decision26 of August 18, 2006.
Citing Go, Jr. v. Court of Appeals27 and Heirs of Demetrio Melchor v. Melchor,28 it declared that a complaint for
unlawful detainer must aver facts showing that the [MeTC] has jurisdiction to try the case by describing how the
defendant’s entry was effected or how and when dispossession started. It found the Complaint wanting in this
aspect, thus:
In this case, the [spouses Dela Cruz’] complaint merely alleged that the [spouses Capco’s] possession of the
property was by the tolerance of their predecessors-in-interest and ‘out of neighborliness and blood relationship’.
The evidence presented or adduced before the [MeTC] does not show how the [spouses Capco] came into
possession. x x x29
Moreover, the CA observed that while the spouses Dela Cruz claimed that their property pertains to half of the land
previously belonging to Juan that was later adjudicated to Teodora by virtue of the judgment in aforementioned land
registration case, it is not clear whether the portion occupied by the spouses Capco lies therein or in the other half
adjudicated in favor of Hermogenes Reyes. In view of this, it opined that there is a need to physically determine the
exact boundaries of the land covered by TCT No. 31873 which, however, cannot be done in a mere summary
proceeding in an ejectment case but rather in an accion publiciana or accion reindivicatoria before the RTC.
Hence, the CA disposed of the petition in this wise:
WHEREFORE, the instant petition is GRANTED. The decision dated January 20, 2005 and omnibus order dated
June 27, 2005 of the RTC, Branch 153, Pasig City in SCA Case No. 2695, are SET ASIDE. In lieu thereof, the
complaint is DISMISSED for reasons discussed therein.
SO ORDERED.30
As their Motion for Reconsideration31 was denied in the CA Resolution32 of December 21, 2006, the spouses Dela
Cruz are now before this Court through this Petition for Review on Certiorari ascribing error upon the CA in setting
aside the rulings of the MeTC and the RTC.
Parties’ Arguments
The spouses Dela Cruz assert that contrary to the CA’s findings, they were able to describe with particularity the
property subject of the case through the technical description in TCT No. 31873. Besides, the spouses Capco
admitted in the Pre-Trial Conference that the property occupied by them is the same property which is the subject of
the case. The CA likewise erred in not considering as settled the issue of ownership of the land per the judgment in
the land registration case and in not recognizing their right to posses based thereon.
On the other hand, the spouses Capco reiterate that they are the rightful possessors of the property as Rufino is an
heir of the true owner. They stress that they have been occupying the same as early as 1947, have established their
home and business thereon, and introduced improvements which are even of higher value than the land itself. In
contrast, the spouses Dela Cruz failed to present before the MeTC any title showing that they are the owners of the
subject property. Also, their Complaint is fatally defective for failing to allege the exact metes and bounds of the
property which possession they sought to recover. The spouses Capco likewise question TCT No. 31873 of
Teodora by contending that the Agreement of Subdivision33 used as basis for its issuance is spurious. According to
them, Teodora could not have executed the said agreement on June 23, 1998 since she died on August 31, 1993.
Our Ruling
It must be stated at the outset that this Court is not a trier of facts. However, the conflicting findings of facts of the
MeTC and the RTC on one hand, and the CA on the other, compel us to revisit the records of this case for proper
dispensation of justice.34
Contrary to the CA’s pronouncement, the Complaint sufficiently makes out a case for unlawful detainer.
The CA intimated in its assailed Decision that the MeTC did not acquire jurisdiction over the spouses Dela Cruz’
Complaint for ejectment since the same failed to describe how the spouses Capco’s entry to the property was
effected or how and when the dispossession started, as held in Go and Melchor. Such a requirement, however,
does not apply in this case. The Court has already clarified in Delos Reyes v. Odones35 that:
The requirement that the complaint should aver, as jurisdictional facts, when and how entry into the property was
made by the defendants applies only when the issue is the timeliness of the filing of the complaint before the MTC x
x x.
This is because, in forcible entry cases, the prescriptive period is counted from the date of defendants’ actual entry
into the property; whereas, in unlawful detainer cases, it is counted from date of the last demand to vacate. Hence,
to determine whether the case was filed on time, there is a necessity to ascertain whether the complaint is one for
forcible entry or for unlawful detainer; and since the main distinction between the two actions is when and how
defendant entered the property, the determinative facts should be alleged in the complaint.36
The timeliness of the filing of the Complaint for unlawful detainer is not an issue in this case. Hence, the failure of
the Complaint to allege when and how the spouses Capco came into possession of the property does not mean that
the MeTC did not acquire jurisdiction over it. "To give the court jurisdiction to effect the ejectment of an occupant or
deforciant on the land, it is necessary that the complaint should embody such a statement of facts as brings the
party clearly within the class of cases for which the statutes provide a remedy, as these proceedings are summary in
nature. The complaint must show enough on its face to give the court jurisdiction without resort to parol testimony."37
A complaint, to sufficiently make out a case for unlawful detainer and fall under the jurisdiction of the MeTC, must
allege that:
1. initially, possession of property by the defendant was by contract with or by tolerance of the plaintiff;
2. eventually, such possession became illegal upon notice by plaintiff to 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 year from the last demand on defendant to vacate the property, the plaintiff instituted the complaint for
ejectment.38
Here, the Complaint alleged that the spouses Dela Cruz’ predecessor-in-interest, Teodora, is the registered owner
of the property per TCT No. 31873 and that she tolerated the spouses Capco’s occupation of the lot. The spouses
Dela Cruz subsequently acquired the property through conveyance and they extended the same tolerance to the
spouses Capco. The spouses Dela Cruz demanded for the spouses Capco to vacate the property but to no avail;
hence, they sent the latter a formal demand letter which, per the attached copy to the Complaint, is dated
September 1, 2003.39 The Complaint was filed on October 6, 2003 or within one year from the time the formal
demand to vacate was made. Clearly, the Complaint sufficiently established a case for unlawful detainer as to vest
the MeTC jurisdiction over it.
The lot occupied by the spouses Capco and the lot over which the spouses Dela Cruz claim to have a better right to
possess pertain to the same property.
The CA opined that there is a need to determine if the lot occupied by the spouses Capco really forms part of the
property over which the spouses Dela Cruz claim to have a better right to possess.
The Court, however, thinks otherwise.
One of the three issues defined during the preliminary conference is "whether or not the [spouses Capco] are
occupying the subject property by mere tolerance of the plaintiffs".40 It is therefore safe to conclude that there is no
dispute with respect to the identity of the property. What was clearly up for resolution before the MeTC was only the
question of whether the spouses Capco are occupying the property by mere tolerance of the spouses Dela Cruz.
Moreover, the evidence submitted in this case establishes that the lot subject of this Complaint for ejectment is the
same lot being occupied by the spouses Capco. As mentioned, the spouses Capco submitted tax declarations
covering their house and a camarin as well as the corresponding receipts evidencing their payments of real property
taxes. Notably, the declared owner of the lot on which these properties stand, as written in the receipts for the years
1995, 1996, 1997 and 1998, is Juan.41 Yet, the receipts for the years 2000, 2001, 2002, and 2003 no longer reflect
Juan as the owner but Teodora.42 This change tends to support the conclusion that the lot occupied by the spouses
Capco, which was previously owned by Juan, is the portion adjudicated in favor of the spouses Dela Cruz’
predecessor-in-interest, Teodora. This is further confirmed by the affidavit of the Municipal Assessor of Pateros, Mr.
Emmanuel España.43 Besides, the spouses Capco appear to have acknowledged the fact that the spouses Dela
Cruz owned the lot that they are occupying. As shown by the records during the first meeting before the Barangay
Lupon, respondent Marty C. Capco asked Amelia if the latter could just sell the lot to them [the spouses Capco] so
that their business built thereon would not suffer.44
It is thus clear that the lot being occupied by the spouses Capco is the same lot over which the spouses Dela Cruz
claim to have a better right to possess. Contrary therefore to the CA’s pronouncement, there is no need to physically
determine the extent of the land covered by T.C.T. No. 31873.
The spouses Dela Cruz are able to establish by preponderance of evidence that they are the rightful possessors of
the property.
"The only issue in an ejectment case is the physical possession of real property – possession de facto and not
possession de jure."45 But "[w]here the parties to an ejectment case raise the issue of ownership, the courts may
pass upon that issue to determine who between the parties has the better right to possess the property."46 Here,
both parties anchor their right to possess based on ownership, i.e., the spouses Dela Cruz by their own ownership
while the spouses Capco by the ownership of Rufino as one of the heirs of the alleged true owner of the property.
Thus, the MeTC and the RTC correctly passed upon the issue of ownership in this case to determine the issue of
possession. However, it must be emphasized that "[t]he adjudication of the issue of ownership is only provisional,
and not a bar to an action between the same parties involving title to the property."47
The spouses Dela Cruz were able to prove by preponderance of evidence that they are the owners of the lot. Their
allegation that the subject property was adjudicated to Teodora by virtue of a decision in a land registration case and
was later conveyed in their favor, is supported by (1) a copy of the Decision in the said land registration case; (2) the
title of the land issued to Teodora (TCT No. 31873), and, (3) the Deed of Extra-Judicial Settlement of the Estate of
Teodora wherein the latter’s heirs agreed to convey the said property to Amelia.
The spouses Capco, on the other hand, aside from their bare allegation that respondent Rufino is an heir of the true
owners thereof, presented nothing to support their claim. While they submitted receipts evidencing their payments of
the realty taxes of their house and the camarin standing in the subject property, the same only militates against their
claim since the latest receipts indicate Teodora as the owner of the land. Moreover, the spouses Capco’s attempt to
attack the title of Teodora is futile. "It has repeatedly been emphasized that when the property is registered under
the Torrens system, the registered owner's title to the property is presumed legal and cannot be collaterally
attacked, especially in a mere action for unlawful detainer. It has even been held that it does not even matter if the
party's title to the property is questionable."48
All told, the Court agrees with the MeTC's conclusion, as affirmed by the RTC, that the spouses Dela Cruz are
better entitled to the material possession of the subject property. As its present owners, they have a right to the
possession of the property which is one of the attributes of ownership.
WHEREFORE, the Petition is GRANTED. The August 18, 2006 Decision and the December 21, 2006 Resolution of
the Court of Appeals in CA-G.R. No. 90736 are ANNULLED and SET ASIDE. The January 20, 2005 Decision of the
Regional Trial Court of Pasig City, Branch 153, and the July 9, 2004 Decision of the Metropolitan Trial Court of
Pateros, Branch 73 are REINSTATED and AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 183034 March 12, 2014
SPOUSES FERNANDO and MA. ELENA SANTOS, Petitioners,

vs.
LOLITA ALCAZAR, represented by her Attorney-in-Fact DELFIN CHUA, Respondent.
DECISION
DEL CASTILLO, J.:
The rule that the genuineness and due execution of the instrument shall be deemed admitted, unless the adverse
party specifically denies them under oath, applies only to parties to such instrument.
Assailed in this Petition for Review on Certiorari1 are the September 27, 2007 Decision2 of the Court of Appeals (CA)
in CA-G.R. CV No. 87935, entitled "Lolita Alcazar, represented by her Attorney-in-Fact, Delfin Chua, Plaintiff-
Appellee, versus Spouses Fernando T. Santos, Defendants-Appellants," and its May 23, 2008 Resolution3 denying
petitioners' Motion for Reconsideration.
Factual Antecedents
In February 2001, respondent Lolita Alcazar, proprietor of Legazpi Color Center (LCC), instituted through her
attorney-in-fact Delfin Chua a Complaint4 for sum of money against the petitioners, spouses Fernando and Ma.
Elena Santos, to collect the value of paint and construction materials obtained by the latter from LCC amounting to
₱1,456,000.00, which remained unpaid despite written demand. The case was docketed as Civil Case No. 9954 and
assigned to Branch 5 of the Regional Trial Court of Legazpi City. Respondent’s cause of action is based on a
document entitled "Acknowledgment"5 apparently executed by hand by petitioner Fernando, thus:
ACKNOWLEDGMENT
This is to certify that I acknowledge my obligation in the amount of One Million Four Hundred Fifty Six Thousand
(₱1,456,000), Philippine Currency with LEGAZPI COLOR CENTER, LEGAZPI CITY.
Signed at No. 32 Agno St. Banaue, Quezon City on December 12, 2000.
(signed)
FERNANDO T. SANTOS
Debtor
Signed in the presence of:

(signed)
TESS ALCAZAR
Proprietress
Legazpi Color Center
Witnesses in the signing:
(signed) (signed)
DELFIN A. CHUA AILEEN C. EDADES6
Respondent alleged in her Complaint:
xxxx
4. That as part of the agreement, defendants also obligated themselves to pay plaintiff at the rate of 3% interest per
month based on the unpaid principal, to cover the cost of money;
5. That as of December, 2000, the total obligation of defendants with plaintiff which consists of principal and interest
was ₱1,456,000.00, a copy of the document where defendants acknowledged their unpaid obligation is hereto
attached as Annex "B"; (referring to the above Acknowledgment)
6. That on January 5, 2001, plaintiff sent a final demand to defendants to pay the indebtedness, but said demand fell
on deaf ears and defendants did not even bother to communicate with plaintiff, copy of the demand letter is hereto
attached as Annex "C";7
She thus prayed that judgment be rendered ordering petitioners to pay her the sum of ₱1,456,000.00, with interest
at the rate of 3% per month; attorney’s fees in the amount of ₱72,800.00, and ₱1,500.00 per court appearance; and
costs of the suit.
In their Answer,8 petitioners sought the dismissal of the Complaint, alleging among others that –
4. Paragraph 5 is specifically denied as the document which Defendant Fernando T. Santos signed does not reflect
the true contract or intention of the parties, the actionable document is incorrect and has to be reformed to reflect
the real indebtedness of the defendants;
5. Paragraph 6 of the complaint is specifically denied as the same does not reflect the correct amount. The
defendants[’] computation is that the amount of ₱600,000.00 is the only amount due and the instrument used as the
actionable document does not reflect the correct substance of the transaction and indicates a reformation of the
actionable document;
6. Paragraph 7 is specifically denied as defendants are willing to pay the correct amount, not the amount in the
complaint as the same does not indicate the correct amount owing to the plaintiff;
xxxx
VERIFICATION
I, Fernando T. Santos[,] of legal age, Filipino[,] married and resident of Banawe, Quezon City[,] under oath declare:
1. That I am the defendant in the above entitled case;
2. That I have read and understood the contents thereof and affirm that the allegations contained therein are true
and correct of my personal knowledge[;]
3. That I have not commenced any other action or proceeding involving x x x the same issues in the Supreme Court,
Court of Appeals or any other tribunal/agency[;]
4. That to the best of my knowledge, no such action or proceeding involving the same issues in the Supreme Court,
Court of Appeals or any other tribunal/agency [is pending];
5. That if I should thereafter learn that a similar action or proceeding has been filed or is pending before the
Supreme Court, Court of Appeals or any other tribunal/agency, I undertake to report the fact within 5 days therefrom
to this court.
IN WITNESS WHEREOF, I have hereunto set [my] hand this April 18, 2001 x x x.
(signed)
Fernando T. Santos
Defendant9
Pre-trial was conducted. On September 26, 2005, the trial court issued its Pre-trial Order10 setting forth the matters
taken up during the pre-trial conference and the schedule of hearings. The presentation of respondent’s evidence
was set on October 10; November 8 and 21; and December 6 and 13, 2005. Petitioners were scheduled to present
their case on January 9 and 23; and February 6, 2006.11
On November 8, 2005, respondent presented her evidence and testified in court as the lone witness. On November
21, 2005, she made a formal offer of her evidence and rested her case.
On January 17, 2006, petitioners filed a Demurrer to Evidence,12 which respondent opposed. Petitioners argued that
the Acknowledgment – respondent’s Exhibit "A" which was presented in court – was not an original copy and thus
inadmissible; petitioners’ receipt of the written demand was not proved; the alleged deliveries of paint and
construction materials were not covered by delivery receipts; and respondent’s testimony was merely hearsay and
uncorroborated.
On January 26, 2006, the trial court issued an Order13 denying petitioners’ demurrer for lack of merit. In the same
Order, the trial court scheduled the presentation of petitioners’ evidence in the morning and afternoon sessions of
February 20, 2006.
Petitioners moved to reconsider the trial court’s January 26, 2006 Order. On February 20, 2006, the trial court
issued an Order14 denying petitioners’ Motion for Reconsideration and scheduled the presentation of evidence for
the petitioners on March 20, 2006.
On March 15, 2006, petitioners moved to reset the March 20, 2006 scheduled hearing, on the ground that on said
date and time, their counsel was to appear in another scheduled case.
On March 20, 2006, or the day of the scheduled hearing, petitioners’ counsel failed to appear, prompting the trial
court to issue an Order15 1) denying petitioners’ March 15, 2006 motion to reset for lack of merit and for violating
Section 4, Rule 15 of the 1997 Rules of Civil Procedure;16 2) declaring that petitioners have waived their right to
present evidence; and 3) declaring that Civil Case No. 9954 is deemed submitted for decision.
Petitioners went up to the CA on certiorari. Docketed as CA-G.R. SP. No. 93889, the Petition questioned the denial
of petitioners’ demurrer. Meanwhile, they filed a Motion for Reconsideration17 of the March 20, 2006 Order denying
their motion to reset, but the trial court denied the same in an Order dated April 24, 2006.18
The Decision of the Regional Trial Court
On June 27, 2006, the trial court rendered its Decision19 in Civil Case No. 9954, which contained the following
decretal portion:
WHEREFORE, Premises Considered, judgment is rendered ordering the defendants to pay the plaintiff the following
amounts, to wit:
1. The sum of 1,456,000 pesos plus interest thereon at the legal rate commencing from the time the complaint was
filed in court until such time such amount has been paid in full;
2. The sum of 10,000 pesos as litigation expenses; and
3. The sum of 25,000 pesos as attorney’s fees.
The defendants shall pay the costs of suit.
Needless to say, the counterclaim in the Answer is Dismissed.
SO ORDERED.20
The trial court essentially held that petitioners, in their Answer, admitted that they entered into transactions with the
respondent for the delivery of paint and construction materials, which remained unpaid; that from the
Acknowledgment, Exhibit "A," signed by Fernando and duly presented, authenticated, and identified by respondent
during trial, petitioners admitted that their unpaid obligation – including interest – amounted to ₱1,456,000.00; and
that petitioners’ plea for reformation has no basis.
Petitioners filed their Motion for Reconsideration,21 arguing that the trial court should not have pre-empted CA-G.R.
SP No. 93889, and instead should have awaited the resolution thereof; that the Acknowledgment was signed by
Fernando alone, and thus the judgment should not bind his co-defendant and herein petitioner Ma. Elena Santos;
that petitioners’ liability has not been established since no delivery receipts, invoices and statements of account
were presented during trial to show delivery of paint and construction materials; that respondent was unable to
present the original of the Acknowledgment, which puts the Decision of the trial court – declaring that the original
thereof was presented and authenticated by respondent – in serious doubt; and that there is no evidentiary basis to
hold petitioners liable for ₱1,456,000.00.
In an Order22 dated August 8, 2006, the trial court denied petitioners’ Motion for Reconsideration.
The Assailed Court of Appeals Decision
Petitioners interposed an appeal with the CA. Docketed as CA-G.R. CV No. 87935, the ruling in the appeal is the
subject of the present Petition. Petitioners claimed that the trial court erred in allowing respondent to present her
evidence ex parte; the Acknowledgment has not been authenticated; the adjudged liability in the amount of
₱1,456,000.00 was not sufficiently proved by respondent, as she failed to present receipts and statements of
account which would show the true amount of their obligation, including interest; the trial court based its findings on
erroneous conclusions, assumptions and inferences; and the trial court erred in declaring them to have waived their
right to present evidence.
Meanwhile, in CA-G.R. SP. No. 93889, the CA issued its Decision23 dated March 30, 2007, dismissing petitioners’
certiorari petition and sustaining the trial court’s denial of their demurrer. The CA held that petitioners failed to deny
specifically under oath the genuineness and due execution of the Acknowledgment; consequently, 1) its
genuineness and due execution are deemed admitted, 2) there was thus no need to present the original thereof,
and 3) petitioners’ liability was sufficiently established.24 The CA added that under the circumstances, certiorari was
not the proper remedy; petitioners should have gone to trial and awaited the trial court’s Decision, which they could
appeal if adverse.
The Decision became final and executory on April 27, 2007.25
On September 27, 2007, the CA issued the herein assailed Decision in CA-G.R. CV No. 87935, which held as
follows:
WHEREFORE, the instant appeal is DENIED and consequently DISMISSED for lack of merit.
SO ORDERED.26
The CA held that in their Answer, petitioners admitted that they owed respondent, albeit to the extent of
₱600,000.00; this judicial admission of liability required no further proof. And with this admission of liability, the
Acknowledgment which was duly authenticated and formally offered in evidence was sufficient to establish their
liability, and no further proof in the form of receipts and statements of account was required. The appellate court
stated that Fernando’s categorical admission of liability as contained in the Acknowledgment as well as petitioners’
admissions in their Answer sufficed. It held further that respondent was competent to testify on the Acknowledgment
as she was a signatory therein.
The CA likewise held that since they failed to oppose the Acknowledgment in the court below as a result of their
having waived their right to present evidence, petitioners cannot now belatedly question the document. Moreover,
their claim of a lesser liability in the amount of ₱600,000.00 remained to be plain unsubstantiated allegations as a
result of their failure to refute respondent’s evidence and present their own.
Finally, the CA held that petitioners were not deprived of due process during trial; on the contrary, they were
afforded sufficient opportunity to participate in the proceedings by way of constant strict reminders by the court and
several continuances, but they failed to take part in the proceedings.
Petitioners moved to reconsider, but in the second assailed May 23, 2008 disposition, the appellate court stood its
ground. Thus, the instant Petition seeking a reversal of the assailed CA dispositions and the dismissal of the
Complaint in Civil Case No. 9954.
Issues
Petitioners now raise the following issues for the Court’s resolution:
IN THE RESOLUTION OF THE COURT OF APPEALS, THE ARGUMENT IN PETITIONERS’ MOTION FOR
RECONSIDERATION THAT RESPONDENT FAILED TO PRODUCE AND PRESENT THE ORIGINAL COPY OF
THE ACKNOWLEDGMENT RECEIPT EXHIBIT "A" WHICH IS A VIOLATION OF THE BEST EVIDENCE RULE,
WAS NOT ACTED UPON AND CONSIDERED "REHASH".
THE COURT OF APPEALS27 FOUND THE NEED FOR RECEIPTS OF STATEMENTS OF ACCOUNT TO BE
PRESENTED REFLECTING THE ACTUAL OBLIGATION OF PETITIONERS IN ITS DECISION DATED JULY 20,
2004 AND THUS SET ASIDE AND REMANDED TO THE COURT A QUO THE CASE FOR FURTHER
PROCEEDINGS BUT THE SAME WAS COUNTERMANDED IN THE ASSAILED DECISION.
CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, PETITIONERS DID NOT ADMIT IN THEIR
ANSWER THAT THEY ARE INDEBTED TO RESPONDENT IN THE AMOUNT OF ₱1,456,000.00.
THE COURT OF APPEALS FAILED TO RULE ON THE ABSENCE OF ANY RECORD OF THE PROCEEDINGS
OF THE PRE-TRIAL CONFERENCE HELD ON SEPTEMBER 26, 2005. THE COURT OF APPEALS SHOULD
HAVE SERIOUSLY CONSIDERED TACKLING THE ISSUE OF PRESUMPTIONS, INFERENCES, AND
MISCONCEPTION OF FACTS USED BY THE COURT A QUO [IN ARRIVING AT] ITS FINDINGS AND
CONCLUSIONS.
PETITIONERS WERE NOT DULY NOTIFIED OF THE NOVEMBER 8, 2005 HEARING IN VIOLATION OF
SECTIONS 4 AND 5 [OF RULE 15] OF THE RULES OF COURT WHICH THE COURT OF APPEALS FAILED TO
RULE.
PETITIONERS HAVE BEEN DEPRIVED OF THEIR DAY IN COURT WHEN THEY WERE CONSIDERED TO
HAVE WAIVED THEIR RIGHT TO PRESENT EVIDENCE AND THE CASE SUBMITTED FOR DECISION, THE
CONTRARY RULING OF THE COURT OF APPEALS NOTWITHSTANDING.28
Petitioners, in their Petition and Reply,29 assert that during the proceedings below, only a photocopy of the
Acknowledgment was presented and identified by respondent even as the original was not lost, the same having
been made part of the record of the case when respondent’s evidence was first presented ex parte.30 For this
reason, they argue that the photocopy presented and offered in evidence is inadmissible and could not be the basis
for arriving at a finding of liability on their part, pursuant to the best evidence rule.
Petitioners further point out that in the first CA disposition, specifically in CA-G.R. CV No. 71187, the appellate
court’s Thirteenth Division ruled that in establishing petitioners’ pecuniary liability, receipts and statements of
account reflecting the actual amount of their obligation and interest thereon were necessary. Later on, in CA-G.R.
CV No. 87935, the same division of the CA made a complete turnaround, declaring that receipts and statements of
account were no longer necessary. For petitioners, this retraction by the CA was irregular.
Petitioners add that the pre-trial conference in Civil Case No. 9954 is a sham, as there are no records to show that it
was ever conducted. Consequently, this irregularity renders the proceedings below – including the assailed
judgment – null and void. They add that the trial court irregularly proceeded to receive respondent’s evidence ex
parte on November 8, 2005 despite lack of notice of hearing.
Next, petitioners point out inconsistencies and erroneous assumptions made by the appellate court which formed
the basis of its decision, such as Ma. Elena’s undue inclusion in the judgment of liability, when it is evident from the
Acknowledgment that it was executed and signed by Fernando alone.
Finally, petitioners submit that in denying a continuance of the March 20, 2006 hearing and declaring them to have
waived their right to present evidence, the trial court deprived them of their day in court.
In her Comment,31 respondent counters that the Petition presents no valid cause for the Court’s exercise of its power
of review; that the issues raised therein have been duly taken up and conclusively resolved by the CA; that with the
finality of the Decision in CA-G.R. SP No. 93889, petitioners may no longer raise any issue pertaining to the
Acknowledgment, the genuineness and due execution of which they are considered to have admitted; and that with
the resolution by the CA of the issues revived in the Petition, petitioners are guilty of forum shopping.
Respondent adds that petitioners are bound by the proceedings taken during the pre-trial conference, and may not
pretend to be ignorant of the hearing dates agreed upon and set by the trial court. Respondent argues that
petitioners may not claim to be oblivious of the pre-trial conference itself, since their representative was present all
throughout the proceedings, and a pre-trial order was issued thereafter which contained the matters taken up during
pre-trial and the hearing dates scheduled by the court.
Our Ruling
Respondent’s failure to present the original copy of the Acknowledgment during the taking of her testimony for the
second time, and the presentation of a mere photocopy thereof at said hearing, does not materially affect the
outcome of the case. It was a mere procedural inadvertence that could have been cured and did not affect
petitioners’ cause in any manner. As conceded by them and as held by the CA, the original exists and was made
part of the records of the case when respondent’s evidence was first taken. Though respondent now claims that she
had lost the original, the CA proclaimed that the document resides in the record. This would explain then why
respondent cannot find it in her possession; it is with the court as an exhibit. Besides, it evidently appears that there
is no question raised on the authenticity and contents of the photocopy that was presented and identified in court;
petitioners merely insist that the photocopy is inadmissible as a result of respondent’s failure to present the original,
which they nevertheless admit to exist and is found and included in the record of the case.
While it is a basic rule of evidence that the original copy prevails over a mere photocopy,32 there is no harm if in a
case, both the original and a photocopy thereof are authenticated, identified and formally offered in evidence by the
party proponent.
More to the point is the fact that petitioners failed to deny specifically under oath the genuineness and due execution
of the Acknowledgment in their Answer. The effect of this is that the genuineness and due execution of the
Acknowledgment is deemed admitted. "By the admission of the genuineness and due execution [of such document]
is meant that the party whose signature it bears admits that he signed it or that it was signed by another for him with
his authority; that at the time it was signed it was in words and figures exactly as set out in the pleading of the party
relying upon it; that the document was delivered; and that any formal requisites required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are waived by him. Hence, such defenses as that the signature
is a forgery x x x; or that it was unauthorized x x x; or that the party charged signed the instrument in some other
capacity than that alleged in the pleading setting it out x x x; or that it was never delivered x x x, are cut off by the
admission of its genuineness and due execution."33
"There is no need for proof of execution and authenticity with respect to documents the genuineness and due
execution of which are admitted by the adverse party."34 With the consequent admission engendered by petitioners’
failure to properly deny the Acknowledgment in their Answer, coupled with its proper authentication, identification
and offer by the respondent, not to mention petitioners’ admissions in paragraphs 4 to 6 of their Answer that they
are indeed indebted to respondent, the Court believes that judgment may be had solely on the document, and there
is no need to present receipts and other documents to prove the claimed indebtedness. The Acknowledgment, just
as an ordinary acknowledgment receipt, is "valid and binding between the parties who executed it, as a document
evidencing the loan agreement they had entered into."35 The absence of rebutting evidence occasioned by
petitioners’ waiver of their right to present evidence renders the Acknowledgment as the best evidence of the
transactions between the parties and the consequential indebtedness incurred.36 Indeed, the effect of the admission
is such that "a prima facie case is made for the plaintiff which dispenses with the necessity of evidence on his part
and entitles him to a judgment on the pleadings unless a special defense of new matter, such as payment, is
interposed by the defendant."37
However, as correctly argued by petitioners, only Fernando may be held liable for the judgment amount of
₱1,456,000.00, since Ma. Elena was not a signatory to the Acknowledgment. She may be held liable only to the
extent of ₱600,000.00, as admitted by her and Fernando in paragraph 5 of their Answer; no case against her may
be proved over and beyond such amount, in the absence of her signature and an acknowledgment of liability in the
Acknowledgment. The rule that the genuineness and due execution of the instrument shall be deemed admitted,
unless the adverse party specifically denies them under oath, applies only to parties to the document.38
As for petitioners’ claim that in CA-G.R. CV No. 87935, the same division of the CA made a complete turnaround
from its original pronouncement in CA-G.R. CV No. 71187 – thus doing away with the requirement of presenting
receipts and statements of account which it originally required in the latter case, the Court finds no irregularity in
this. The admission of liability resulting from petitioners’ admission of indebtedness in their Answer and other
pleadings,39 their failure to specifically deny under oath the genuineness and due execution of the Acknowledgment,
as well as their waiver of their right to present evidence – all these did away with the necessity of producing receipts
and statements of account which would otherwise be required under normal circumstances.
On the claim that they were denied their day in court, the Court notes that despite reminders and admonitions by the
trial court, petitioners caused several continuances of trial, which understandably prompted the trial court to finally
deny their March 15, 2006 motion to reset the scheduled March 20 hearing and declare a waiver of their right to
present evidence. Thus, as found by the CA,
In its September 26, 2005 Pre-Trial Order, the trial court fixed the hearing dates with a firm declaration that the
same "shall be strictly followed and all postponements made by the parties shall be deducted from such party’s
allotted time to present evidence.
When plaintiff-appellee finished her presentation of evidence ahead of schedule, the appellants were again advised
of their schedule for presentation of evidence – i.e., December 6 and 13, 2005 and January 9 and 23 and February
6, 2006. Despite said schedule, the appellants failed to appear in court.
On January 9, 2006, the lower court reiterated the scheduled hearing set on January 26, 2006 and included
February 20, 2006 as an additional hearing date.
Instead of presenting their evidence, the appellants filed a Demurrer to Evidence on January 17, 2006 which,
however, was denied by the trial court in its Order dated January 26, 2006.
On February 20, 2006, the trial court again allowed another hearing date – March 20, 2006 – to afford the appellants
added opportunity to present their evidence.
The foregoing clearly show that not only were appellants given an opportunity to be heard, an added mileage in due
process was extended to them by the trial court.40
Petitioners submit further that the trial court’s subsequent denial of their motion for continuance of the March 20,
2006 hearing was improper. Yet again, the Court does not subscribe to this view. Petitioners filed their motion to
reset the March 20, 2006 previously scheduled hearing, but the trial court did not act on the motion. Instead of
attending the March 20, 2006 hearing, petitioners’ counsel proceeded to absent himself and attended the supposed
hearing of another case. This was improper. As we have held before,
[A] party moving for postponement should be in court on the day set for trial if the motion is not acted upon favorably
before that day. He has no right to rely either on the liberality of the court or on the generosity of the adverse party. x
xx
[A]n attorney retained in a case the trial of which is set for a date on which he knows he cannot appear because of
his engagement in another trial set previously on the same date, has no right to presume that the court will
necessarily grant him continuance. The most ethical thing for him to do in such a situation is to inform the
prospective client of all the facts so that the latter may retain another attorney, If the client, having full knowledge of
all the facts, still retain[s] the attorney, he assumes the risk himself and cannot complain of the consequences if the
postponement is denied and finds himself without attorney to represent him at the trial.41
The grant or denial of a motion for postponement rests on the court’s sound discretion; it is a matter of privilege, not
a right. "A movant for postponement should not assume beforehand that his motion will be granted. The grant or
denial of a motion for postponement is a matter that is addressed to the sound discretion of the trial court. Indeed,
an order declaring a party to have waived the right to present evidence for performing dilatory actions upholds the
trial court's duty to ensure that trial proceeds despite the deliberate delay and refusal to proceed on the part of one
party."42
On the other questions raised by petitioners, specifically that the pre-trial conference is a sham for lack of records of
the proceedings, and that the November 8, 2005 hearing where respondent's evidence was taken exparte was
irregular for lack of a notice of hearing - the Court finds them to be without merit. It is evident that a pre-trial
conference was held, and that petitioners' representative was present therein; moreover, the proceedings were
covered by the required pre-trial order, which may itself be considered a record of the pre-trial.43 In said order, the
November 8, 2005 pre-scheduled hearing was particularly specified.44 Thus, from the very start, petitioners knew of
the November 8 hearing; if they failed to attend, no fault may be attributed to the trial court.
WHEREFORE, the Petition is DENIED. The September 27, 2007 Decision and May 23, 2008 Resolution of the
Court of Appeals in CA-G.R. CV No. 87935 are AFFIRMED, with MODIFICATION in that petitioner Ma. Elena
Santos is held liable for the principal and interest only to the extent of ₱600,000.00.
SO ORDERED.
SECOND DIVISION
G.R. No. 181806 March 12, 2014
WESLEYAN UNIVERSITY-PHILIPPINES, Petitioner,

vs.
WESLEYAN UNIVERSITY-PHILIPPINES FACULTY and STAFF ASSOCIATION, Respondent.
DECISION
DEL CASTILLO, J.:
A Collective Bargaining Agreement (CBA) is a contract entered into by an employer and a legitimate labor
organization concerning the terms and conditions of employment.1 Like any other contract, it has the force of law
between the parties and, thus, should be complied with in good faith.2 Unilateral changes or suspensions in the
implementation of the provisions of the CBA, therefore, cannot be allowed without the consent of both parties.
This Petition for Review on Certiorari3 under Rule 45 of the Rules of Court assails the September 25, 2007
Decision4 and the February 5, 2008 Resolution5 of the Court of Appeals (CA) in CA-G.R. SP No. 97053.
Factual Antecedents
Petitioner Wesleyan University-Philippines is a non-stock, non-profit educational institution duly organized and
existing under the laws of the Philippines.6 Respondent Wesleyan University-Philippines Faculty and Staff
Association, on the other hand, is a duly registered labor organization7 acting as the sole and exclusive bargaining
agent of all rank-and-file faculty and staff employees of petitioner.8
In December 2003, the parties signed a 5-year CBA9 effective June 1, 2003 until May 31, 2008.10
On August 16, 2005, petitioner, through its President, Atty. Guillermo T. Maglaya (Atty. Maglaya), issued a
Memorandum11 providing guidelines on the implementation of vacation and sick leave credits as well as vacation
leave commutation. The pertinent portions of the Memorandum read:
1. VACATION AND SICK LEAVE CREDITS
Vacation and sick leave credits are not automatic. They have to be earned. Monthly, a qualified employee earns an
equivalent of 1.25 days credit each for VL and SL. Vacation Leave and Sick Leave credits of 15 days become
complete at the cut off date of May 31 of each year. (Example, only a total of 5 days credit will be given to an
employee for each of sick leave [or] vacation leave, as of month end September, that is, 4 months from June to
September multiplied by 1.25 days). An employee, therefore, who takes VL or SL beyond his leave credits as of
date will have to file leave without pay for leaves beyond his credit.
2. VACATION LEAVE COMMUTATION
Only vacation leave is commuted or monetized to cash. Vacation leave commutation is effected after the second
year of continuous service of an employee. Hence, an employee who started working June 1, 2005 will get his
commutation on May 31, 2007 or thereabout.12
On August 25, 2005, respondent’s President, Cynthia L. De Lara (De Lara) wrote a letter13 to Atty. Maglaya
informing him that respondent is not amenable to the unilateral changes made by petitioner.14 De Lara questioned
the guidelines for being violative of existing practices and the CBA,15 specifically Sections 1 and 2, Article XII of the
CBA, to wit:
ARTICLE XII
VACATION LEAVE AND SICK LEAVE
SECTION 1. VACATION LEAVE - All regular and non-tenured rank-and-file faculty and staff who are entitled to
receive shall enjoy fifteen (15) days vacation leave with pay annually.
1.1 All unused vacation leave after the second year of service shall be converted into cash and be paid to the
entitled employee at the end of each school year to be given not later than August 30 of each year.
SECTION 2. SICK LEAVE - All regular and non-tenured rank-and-file faculty and staff shall enjoy fifteen (15) days
sick leave with pay annually.16
On February 8, 2006, a Labor Management Committee (LMC) Meeting was held during which petitioner advised
respondent to file a grievance complaint on the implementation of the vacation and sick leave policy.17 In the same
meeting, petitioner announced its plan of implementing a one-retirement policy,18 which was unacceptable to
respondent.
Ruling of the Voluntary Arbitrator
Unable to settle their differences at the grievance level, the parties referred the matter to a Voluntary Arbitrator.
During the hearing, respondent submitted affidavits to prove that there is an established practice of giving two
retirement benefits, one from the Private Education Retirement Annuity Association (PERAA) Plan and another from
the CBA Retirement Plan. Sections 1, 2, 3 and 4 of Article XVI of the CBA provide:
ARTICLE XVI
SEPARATION, DISABILITY AND RETIREMENT PAY
SECTION 1. ELIGIBILITY FOR MEMBERSHIP - Membership in the Plan shall be automatic for all full-time, regular
staff and tenured faculty of the University, except the University President. Membership in the Plan shall commence
on the first day of the month coincident with or next following his statement of Regular/Tenured Employment Status.
SECTION 2. COMPULSORY RETIREMENT DATE - The compulsory retirement date of each Member shall be as
follows:
a. Faculty – The last day of the School Year, coincident with his attainment of age sixty (60) with at least five (years)
of unbroken, credited service.
b. Staff – Upon reaching the age of sixty (60) with at least five (5) years of unbroken, credited service.
SECTION 3. OPTIONAL RETIREMENT DATE - A Member may opt for an optional retirement prior to his
compulsory retirement. His number of years of service in the University shall be the basis of computing x x x his
retirement benefits regardless of his chronological age.
SECTION 4. RETIREMENT BENEFIT - The retirement benefit shall be a sum equivalent to 100% of the member’s
final monthly salary for compulsory retirement.
For optional retirement, the vesting schedule shall be:
x x x x19
On November 2, 2006, the Voluntary Arbitrator rendered a Decision20 declaring the one-retirement policy and the
Memorandum dated August 16, 2005 contrary to law. The dispositive portion of the Decision reads:
WHEREFORE, the following award is hereby made:
1. The assailed University guidelines on the availment of vacation and sick leave credits and vacation leave
commutation are contrary to law. The University is consequently ordered to reinstate the earlier scheme, practice or
policy in effect before the issuance of the said guidelines on August 16, 2005;
2. The "one retirement" policy is contrary to law and is hereby revoked and rescinded. The University is ordered x x
x to resume and proceed with the established practice of extending to qualified employees retirement benefits under
both the CBA and the PERAA Plan.
3. The other money claims are denied.21
Aggrieved, petitioner appealed the case to the CA via a Petition for Review under Rule 43 of the Rules of Court.
On September 25, 2007, the CA rendered a Decision22 finding the rulings of the Voluntary Arbitrator supported by
substantial evidence. It also affirmed the nullification of the one-retirement policy and the Memorandum dated
August 16, 2005 on the ground that these unilaterally amended the CBA without the consent of respondent.23 Thus:
WHEREFORE, the instant appeal is DISMISSED for lack of merit.
SO ORDERED.24
Petitioner moved for reconsideration but the same was denied by the CA in its February 5, 2008 Resolution.25
Issues
Hence, this recourse by petitioner raising the following issues:
a.
Whether x x x the [CA] committed grave and palpable error in sustaining the Voluntary Arbitrator’s ruling that the
Affidavits submitted by Respondent WU-PFSA are substantial evidence as defined by the rules and jurisprudence
that would substantiate that Petitioner WU-P has long been in the practice of granting its employees two (2) sets of
Retirement Benefits.
b.
Whether x x x the [CA] committed grave and palpable error in sustaining the Voluntary Arbitrator’s ruling that a
university practice of granting its employees two (2) sets of Retirement Benefits had already been established as
defined by the law and jurisprudence especially in light of the illegality and lack of authority of such alleged grant.
c.
Whether x x x the [CA] committed grave and palpable error in sustaining the Voluntary Arbitrator’s ruling that it is
incumbent upon Petitioner WU-P to show proof that no Board Resolution was issued granting two (2) sets of
Retirement Benefits.
d.
Whether x x x the [CA] committed grave and palpable error in revoking the 16 August 2005 Memorandum of
Petitioner WU-P for being contrary to extant policy.26
Petitioner argues that there is only one retirement plan as the CBA Retirement Plan and the PERAA Plan are one
and the same.27 It maintains that there is no established company practice or policy of giving two retirement benefits
to its employees.28 Assuming, without admitting, that two retirement benefits were released,29 petitioner insists that
these were done by mere oversight or mistake as there is no Board Resolution authorizing their release.30 And since
these benefits are unauthorized and irregular, these cannot ripen into a company practice or policy.31 As to the
affidavits submitted by respondent, petitioner claims that these are self-serving declarations,32 and thus, should not
be given weight and credence.33
In addition, petitioner claims that the Memorandum dated August 16, 2005, which provides for the guidelines on the
implementation of vacation and sick leave credits as well as vacation leave commutation, is valid because it is in full
accord with existing policy.34
Respondent belies the claims of petitioner and asserts that there are two retirement plans as the PERAA Retirement
Plan, which has been implemented for more than 30 years, is different from the CBA Retirement Plan.35 Respondent
further avers that it has always been a practice of petitioner to give two retirement benefits36 and that this practice
was established by substantial evidence as found by both the Voluntary Arbitrator and the CA.37
As to the Memorandum dated August 16, 2005, respondent asserts that it is arbitrary and contrary to the CBA and
existing practices as it added qualifications or limitations which were not agreed upon by the parties.38
Our Ruling
The Non-Diminution Rule found in Article 10039 of the Labor Code explicitly prohibits employers from eliminating or
reducing the benefits received by their employees. This rule, however, applies only if the benefit is based on an
express policy, a written contract, or has ripened into a practice.40 To be considered a practice, it must be
consistently and deliberately made by the employer over a long period of time.41
An exception to the rule is when "the practice is due to error in the construction or application of a doubtful or difficult
question of law."42 The error, however, must be corrected immediately after its discovery;43 otherwise, the rule on
Non-Diminution of Benefits would still apply.
The practice of giving two retirement

benefits to petitioner’s employees is
supported by substantial evidence.
In this case, respondent was able to present substantial evidence in the form of affidavits to support its claim that
there are two retirement plans. Based on the affidavits, petitioner has been giving two retirement benefits as early as
1997.44 Petitioner, on the other hand, failed to present any evidence to refute the veracity of these affidavits.
Petitioner’s contention that these affidavits are self-serving holds no water. The retired employees of petitioner have
nothing to lose or gain in this case as they have already received their retirement benefits. Thus, they have no
reason to perjure themselves. Obviously, the only reason they executed those affidavits is to bring out the truth. As
we see it then, their affidavits, corroborated by the affidavits of incumbent employees, are more than sufficient to
show that the granting of two retirement benefits to retiring employees had already ripened into a consistent and
deliberate practice.
Moreover, petitioner’s assertion that there is only one retirement plan as the CBA Retirement Plan and the PERAA
Plan are one and the same is not supported by any evidence. There is nothing in Article XVI of the CBA to indicate
or even suggest that the "Plan" referred to in the CBA is the PERAA Plan. Besides, any doubt in the interpretation of
the provisions of the CBA should be resolved in favor of respondent. In fact, petitioner’s assertion is negated by the
announcement it made during the LMC Meeting on February 8, 2006 regarding its plan of implementing a "one-
retirement plan." For if it were true that petitioner was already implementing a one-retirement policy, there would
have been no need for such announcement. Equally damaging is the letter-memorandum45 dated May 11, 2006,
entitled "Suggestions on the defenses we can introduce to justify the abolition of double retirement policy," prepared
by the petitioner’s legal counsel.
These circumstances, taken together, bolster the finding that the two-retirement policy is a practice. Thus, petitioner
1âwphi 1
cannot, without the consent of respondent, eliminate the two-retirement policy and implement a one-retirement
policy as this would violate the rule on non-diminution of benefits.
As a last ditch effort to abolish the two-retirement policy, petitioner contends that such practice is illegal or
unauthorized and that the benefits were erroneously given by the previous administration. No evidence, however,
was presented by petitioner to substantiate its allegations.
Considering the foregoing disquisition, we agree with the findings of the Voluntary Arbitrator, as affirmed by the CA,
that there is substantial evidence to prove that there is an existing practice of giving two retirement benefits, one
under the PERAA Plan and another under the CBA Retirement Plan.
The Memorandum dated August 16,

2005 is contrary to the existing CBA.
Neither do we find any reason to disturb the findings of the CA that the Memorandum dated August 16, 2005 is
contrary to the existing CBA.
Sections 1 and 2 of Article XII of the CBA provide that all covered employees are entitled to 15 days sick leave and
15 days vacation leave with pay every year and that after the second year of service, all unused vacation leave shall
be converted to cash and paid to the employee at the end of each school year, not later than August 30 of each
year.
The Memorandum dated August 16, 2005, however, states that vacation and sick leave credits are not automatic as
leave credits would be earned on a month-to-month basis. This, in effect, limits the available leave credits of an
employee at the start of the school year. For example, for the first four months of the school year or from June to
September, an employee is only entitled to five days vacation leave and five days sick leave.46 Considering that the
Memorandum dated August 16, 2005 imposes a limitation not agreed upon by the parties nor stated in the CBA, we
agree with the CA that it must be struck down.
In closing, it may not be amiss to mention that when the provision of the CBA is clear, leaving no doubt on the
intention of the parties, the literal meaning of the stipulation shall govem.47
However, if there is doubt in its interpretation, it should be resolved in favor of labor,48 as this is mandated by no less
than the Constitution.49
WHEREFORE, the Petition is hereby DENIED. The assailed September 25, 2007 Decision and the February 5,
2008 Resolution of the Court of Appeals in CA-G.R. SP No. 97053 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 191360 March 10, 2014

vs.
SHERWIN BIS y AVELLANEDA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
In prosecutions involving narcotics, the narcotic substance itself constitutes the corpus delicti of the offense and the
fact of its existence is vital to sustain a judgment of conviction beyond reasonable doubt. The prosecution is duty-
bound to establish with unwavering exactitude that the dangerous drug presented in court as evidence against the
accused is the same prohibited substance seized from him.
For final review is the September 22, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 03348
which affirmed the Regional Trial Court's (RTC) January 31, 2008 Decision2 in Criminal Case No. 7555 finding
appellant Sherwin Bis y Avellaneda (appellant) guilty beyond reasonable doubt of violating Section 5,3 Article II of
Republic Act (RA) No. 91654 and sentencing him to suffer the penalty of life imprisonment and to pay a fine of
₱500,000.00.
Factual Antecedents
Appellant was charged before the San Fernando, La Union RTC, Branch 29 with violation of Section 5, Article II of
RA 9165 committed as follows:
That on or about the 28th day of November 2006, in the City of San Fernando, Province of La Union, and within the
jurisdiction of this Honorable Court, the above[-]named accused did then and there, willfully, unlawfully and
feloniously distribute, sell and deliver three (3) heat sealed transparent plastic sachet[s] containing
methamphetamine hydrochloride otherwise known as "shabu", with a corresponding weight of ZERO POINT ZERO
FORTY THREE (0.043) gram; ZERO POINT ZERO SIXTEEN (0.016) gram; and ZERO POINT ZERO TEN (0.010)
gram with a total weight of ZERO POINT ZERO SIXTY NINE (0.069) gram to PO2 Manuel Espejo who posed as the
poseur-buyer thereof and in consideration of said shabu, used marked money, a piece of One thousand peso bill
(₱1,000.00) with serial number EB 893087, without first securing the necessary permit, license from the proper
government agency.
CONTRARY TO LAW.5
On January 23, 2007, appellant assisted by his counsel, pleaded not guilty to the crime charged.
On November 26, 2006, a civilian informant tipped the San Fernando City Police Station about the alleged drug
pushing activity of appellant at his residence in Pagdalagan Norte, San Fernando City, La Union. Hence, a team
composed of Police Officers Manuel Espejo (Espejo), Jose Arce (Arce) and Joselito Casem (Casem) went to the
area on the same day to conduct a surveillance. They stayed at a store about 10 meters away from appellant’s
house and from there saw people coming in and out. Another surveillance conducted by the same team on the
following evening confirmed that drug activities were indeed happening in that place.
The said police officers immediately reported the matter to their superior who ordered them to conduct a buy-bust
operation on November 28, 2006. Espejo was designated as poseur-buyer while Arce and Casem were to serve as
back-ups. Following the usual procedure, Espejo was provided with a ₱1,000.00 bill bearing the initials "MCE" as
marked money.
At about 10:40 p.m., the team proceeded to the target area on a tricycle. Upon arriving at the locus criminis, Arce
and Casem posted themselves at a store near appellant’s house while Espejo approached appellant who was
standing in front of his house. He told him, "Pards pakikuha ng isang bulto." Appellant looked at Espejo and asked
"where is your money?" After Espejo handed the ₱1,000.00 bill to appellant, the latter went inside the house. He
emerged after a while and gave Espejo three plastic sachets placed in another plastic container. Convinced that the
white crystalline substance inside the plastic sachets is shabu, Espejo made the pre-arranged signal by putting his
hand on top of his head. At once, Espejo introduced himself together with Arce and Casem who already rushed to
assist him, as members of the San Fernando City Police. Forthwith, appellant was placed under arrest and apprised
of his constitutional rights.
Thereafter, he was brought to the police station wherein a further search on him by Espejo yielded aluminum
foils6and the marked money.
In the meantime, Espejo marked the three plastic sachets he bought from appellant with the initials "MC-1," "MC-2"
and "MC-3."7 Afterwards, the team brought the Request for Laboratory Examination8 together with the confiscated
items to the Regional Chief of the PNP Crime Laboratory Service. The results of the laboratory examination on the
specimen yielded positive for the presence of methamphetamine hydrochloride or shabu, a dangerous drug.9
Appellant denied all the allegations against him. He claimed that while he was going out of his house at around
10:00 p.m. of November 28, 2006, Espejo, whom he did not know at the time, suddenly grabbed him. He was then
taken to a place near the highway where he was frisked. When nothing was found on his possession, he was taken
to the police station at Pagdalagan. From there, he was whisked away to the main police station in San Fernando
City on the pretext that he would be asked on something and would be released the following day. Upon reaching
the main police station, however, Espejo showed him three aluminum foils and three plastic sachets containing
white crystalline substance which were allegedly found on him.
On cross examination, appellant claimed to not know Espejo, Arce and Casem prior to the November 28, 2006
incident. That except for the said incident, there was no other reason for the said police officers to file a case against
him.
According full faith and credence to the version of the prosecution, the RTC found that the elements necessary to
prove the illegal sale of dangerous drugs have been sufficiently established.10 It debunked appellant’s denial after
considering the positive testimonies of the prosecution witnesses in line with the presumption that law enforcement
officers have performed their duties in a regular manner. Consequently, the RTC found appellant guilty beyond
reasonable doubt of the crime charged in its Decision11 of January 31, 2008, the dispositive portion of which reads:
WHEREFORE, the Court finds the accused Sherwin Bis, GUILTY as charged and sentences him to suffer the
penalty of Life Imprisonment and to pay a fine of Php500,000.00 and to pay costs. 1âw phi 1
The three (3) sachets of shabu with a total weight of 0.069 gram is hereby confiscated and ordered turned over to
PDEA for proper disposition.
SO ORDERED.12
On appeal, appellant questioned the RTC Decision on the ground that his guilt was not proved beyond reasonable
doubt. He also averred that the police officers failed to regularly perform their official functions.
Concurring with the findings and conclusions of the RTC, the CA affirmed the said lower court’s judgment in its now
assailed Decision13 of September 22, 2009, disposing thusly:
WHEREFORE, premises considered, the January 31, 2008 Decision of the Regional Trial Court of San Fernando,
La Union, Branch 29, in Criminal Case No. 7555, is AFFIRMED.
SO ORDERED.14
Unable to accept both lower courts’ verdict of conviction, appellant is now before this Court for final determination of
the very same issues he submitted before the CA.
Our Ruling
We find no merit in the appeal.
Credibility of witnesses not affected by minor inconsistencies.
Appellant points out inconsistencies in the testimonies of prosecution witnesses Espejo and Arce, to wit: (1) Espejo
testified that he found the aluminum foils and the marked money tucked on appellant’s waistline while Arce testified
that he saw Espejo frisk appellant and found the specimen in the latter’s pocket; (2) Espejo stated that appellant
was then wearing basketball shorts while Arce described him as wearing a six-pocket short pants. Appellant argues
that these inconsistent statements render Espejo and Arce incredible witnesses.
The Court is not convinced. While there are indeed minor contradictions in Espejo and Arce’s testimonies, the same
are nevertheless inconsequential and do not detract from the proven elements of the offense of illegal sale of
dangerous drugs. As the CA correctly observed:
The foregoing inconsistencies, however, relate only to minor matters and do not touch on the essence of the crime.
Jurisprudence is replete with pronouncement by the Supreme Court that a few discrepancies and inconsistencies in
the testimonies of witnesses referring to minor details which do not touch the essence of the crime do not impair
their credibility.15
It is now too well-settled to require extensive documentation that "inconsistencies in the testimonies of witnesses,
which refer only to minor details and collateral matters, do not affect the veracity and weight of their testimonies
where there is consistency in relating the principal occurrence and the positive identification of the
accused."16Significantly, in the case at bench, the testimonies of the said witnesses for the prosecution were in
harmony with respect to their positive identification of appellant as the one who sold the illegal drugs to Espejo, the
poseur-buyer, in a planned buy-bust operation, as well as to the other surrounding circumstances that transpired
during the said operation.
Chain of custody properly established.

Appellant posits that the prosecution did not strictly comply with the procedures laid down in Section 21, Article II of
RA 9165 and its Implementing Rules and Regulations regarding the physical inventory and photograph of the seized
items. Non-compliance therewith, he argues, casts doubt on the validity of his arrest and the identity of the
suspected shabu allegedly bought and confiscated from him.
On the matter of handling the confiscated illegal drugs after a buy-bust operation, Section 21(1), Article II of RA
9165 provides:
of the inventory and be given a copy thereof;
Accordingly, Section 21(a) of the Implementing Rules and Regulations of RA 9165 which implements the afore-
quoted provision reads:
whom such items were confiscated and/or seized or his/her representative or counsel, a representative from the
of the inventory and be given a copy thereof; Provided, that the physical inventory and photograph shall be
the apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided, further that non-
seizures of and custody over said items;
Case law has it that non-compliance with the abovequoted provision of RA 9165 and its Implementing Rules and
Regulations is not fatal and will not render an accused’s arrest illegal or the items seized/confiscated from him
inadmissible. "What is of utmost importance is the preservation of the integrity and the evidentiary value of the
seized items as the same would be utilized in the determination of the guilt or innocence of the accused."17
In the present case, the totality of the prosecution’s evidence shows the integrity of the drugs seized to be
intact. The identity of the drugs was proven and the chain of its custody and possession has been duly accounted
1âwphi 1
for and not broken. This can be gleaned from the testimonies of Espejo and Arce who narrated that from the
moment the items were seized from appellant, the same were brought to the police station where Espejo marked
them with his initials "MC-1," "MC-2" and "MC-3," properly inventoried, and, together with the laboratory request,
were immediately delivered by Espejo himself to the PNP Crime Laboratory for examination to determine the
presence of dangerous drugs. Police Inspector Melanie Joy Ordoño conducted an examination on the specimens
submitted with the corresponding markings and concluded that the three heat sealed transparent plastic sachets
contained methamphetamine hydrochloride or shabu, a dangerous drug. Incidentally, this conclusion is bolstered by
the defense’s admission18 of the existence and due execution of the request for laboratory examination, the
Chemistry Report and the specimens submitted. Moreover, Espejo, when confronted during trial, identified the three
plastic sachets containing white crystalline substance as the very same items confiscated from the
appellant.19 Under the situation, this Court finds no circumstance whatsoever that would hint any doubt as to the
identity, integrity and evidentiary value of the items subject matter of this case. "Besides, the integrity of the
evidence is presumed to be preserved unless there is a showing of bad faith, ill will or proof that the evidence has
been tampered with"20 and in such case, the burden of proof rests on the appellant.21 Here, appellant miserably failed
to discharge this burden. Moreover, and as aptly observed by the CA, appellant did not seasonably question these
procedural gaps before the trial court. Suffice it to say that objection to evidence cannot be raised for the first time
on appeal.22
In fine, the prosecution’s evidence positively identified appellant as the seller of white crystalline substance found to
be methamphetamine hydrochloride or shabu, a dangerous drug, for ₱1,000.00 to Espejo, a police officer who acted
as a poseur-buyer in a buy-bust operation. The plastic sachets containing the said substance presented during the
trial as Exhibits "F-1 to F-3" were positively identified by Espejo as the same substance which were sold and
delivered to him by appellant during the said operation.
Appellant’s defense of denial properly rejected.
Appellant’s defense hinges principally on denial. But such a defense is unavailing considering that appellant was
caught in flagrante delicto in a legitimate buy-bust operation. "The defense of denial or frame-up, like alibi, has been
invariably viewed by the courts with disfavor for it can just as easily be concocted and is a common and standard
defense ploy in most prosecutions for violation of the Dangerous Drugs Act."23
Penalty
Section 5 of RA 9165 provides the penalty for the illegal sale of dangerous drugs, viz:
Section 5. Sale, Trading, Administration, Dispensation, Delivery, Distribution and Transporation of Dangerous Drugs
and/or Controlled Precursors and Essential Chemicals. -The penalty of life imprisonment to death and a fine ranging
from Five hundred thousand pesos (₱500,000.00) to Ten million pesos (₱10,000,000.00) shall be imposed upon any
person, who, unless authorized by law, shall sell, trade, administer, dispense, deliver, give away to another,
distribute, dispatch in transit or transport any dangerous drug, including any and all species of opium poppy
regardless of the quantity and purity involved, or shall act as a broker in any of such transactions.
Pursuant to the above-quoted provision of the law, appellant was properly sentenced by the lower courts to suffer
the penalty of life imprisonment and to pay a fine off ₱500,000.00.
WHEREFORE, the Decision dated September 22, 2009 of the Court of Appeals in CA-G.R. CR-H.C. No. 03348,
which affirmed the Decision dated January 31, 2008 of the Regional Trial Court, Branch 29, San Fernando City, La
Union in Criminal Case No. 7555 finding accused-appellant SHERWIN BIS y AVELLANEDA guilty beyond
reasonable doubt of Violation of Section 5, Article II of Republic Act No. 9165 and sentencing him to suffer the
penalty of Life Imprisonment and to pay a fine off ₱500,000.00, is hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 193684 March 5, 2014
ONE NETWORK RURAL BANK, INC.,* Petitioner,

vs.
DANILO G. BARIC, Respondent.
DECISION
DEL CASTILLO, J.:
A third party who did not commit a violation or invasion of the plaintiff or aggrieved party's rights may not be held
liable for nominal damages.
This Petition for Review on Certiorari1 seeks to set aside the January 29, 2009 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 73713, entitled "Danilo G. Barie, Petitioner, versus James S. Pa/ado and Network Rural
Bank, Inc., Respondents," as well as its August 23, 2010 Resolution3 denying reconsideration of the assailed
judgment.
Factual Antecedents
Jaime Palado (Palado) was the registered owner of real property with a building containing commercial spaces for
lease (subject property), located in Barangay Piapi, Davao City and covered by Transfer Certificate of Title No.
231531 (TCT 231531). Respondent Danilo G. Baric (Baric) was a lessee therein, operating a barber shop on one of
the commercial spaces. The lease was governed by a written agreement, or "Kasabutan."4
In December 2000, Baric received a written notice5 from Palado demanding the return of the leased commercial
space within 40 days from December 15, 2000.
Baric took the matter to the office of the barangay Lupong Tagapamayapa (Lupon). However, on the scheduled
dates of conciliation/mediation hearing held on January 19 and 24, 2001, Baric failed to attend, which prompted the
Barangay Chairman to issue a Certificate to Bar Action.
In the meantime, it appears that the building was demolished.
In February 2001, Baric filed a case for forcible entry with prayer for injunctive relief against Palado and herein
petitioner One Network Rural Bank, Inc. (Network Bank), which was docketed as Civil Case No. 9955-F-2001 and
ultimately assigned to Branch 66 of the Municipal Trial Court in Cities (MTCC), 11th Judicial Region, Davao City. In
his Amended Complaint,7 Baric alleged that he had been occupying the leased space since 1994; that in 2000, he
renovated the leased space with Palado’s consent and knowledge, and the renovation cost him ₱27,000.00; that in
December 2000, Palado sent him a notice to vacate the premises; that he filed a Complaint with the Barangay
Chairman of Piapi; that on January 29, 2001, Palado enclosed and fenced the premises and thus prevented him
from entering and using the same; that he reported the incident to the police and caused the same to be recorded in
the police blotter;8 that he was thus excluded from the leased premises by means of strategy, violence, force and
threat. Baric thus prayed that injunctive relief be granted to restrain Palado and Network Bank from depriving him of
possession; that he be restored in his possession of the commercial space, and that any structure built thereon in
the meantime be demolished; that he be indemnified attorney’s fees in the amount of ₱30,000.00, and appearance
fees, as well as litigation costs.
Baric’s Amended Complaint was prompted by Network Bank’s subsequent purchase on April 25, 2001 of the subject
property from Palado, whereupon TCT 231531 was cancelled and TCT T-338511 was issued in the bank’s name. It
then constructed a new building on the lot.
In its Answer (With Counterclaim and Crossclaim),9 Network Bank essentially claimed that as a buyer in good faith
and new owner of the subject property, it should not be made liable; that Baric resorted to forum shopping in filing
the Amended Complaint; and that it had no participation in the dispute between Baric and Palado. It prayed that the
Amended Complaint be dismissed for lack of merit; that the prayer for injunctive relief be denied; that Baric be
ordered to pay the bank exemplary damages and attorney’s fees; and that its co-defendant Palado be ordered to
reimburse the bank for such liabilities as may be adjudged against it.
Palado, on the other hand, claimed in his Answer with Counterclaim10 that Baric had no cause of action against him;
that Baric’s lease was merely on a month-to-month basis; that Baric voluntarily vacated the leased premises and
posted a signboard informing the public that his barber shop had transferred to the Agdao Public Market; that the
premises were fenced and enclosed for security and safety reasons after Baric had left; that Baric and the other
lessees were given until January 25, 2001 to vacate the premises; that on January 18, 2001, Baric complained
before the Lupon, but on the scheduled January 19 and 24, 2001 conciliation hearings, he failed to attend; that the
Lupon thus issued a certification barring Baric from filing a court action; and that after Baric voluntarily vacated the
premises, he demolished the barber shop. Palado sought damages and attorney’s fees, and likewise moved to
cancel a notice of lis pendens which Baric previously caused to be annotated on TCT 231531.
On April 20, 2001, the MTCC issued an Order11 cancelling the notice of lis pendens annotated on TCT 231531.
Ruling of the Municipal Trial Court in Cities
On February 8, 2002, the MTCC rendered its Decision12 dismissing Baric’s Complaint for forcible entry, thus:
WHEREFORE, premises considered, judgment is hereby rendered in favor of defendant and against the plaintiff by
ordering the dismissal of the complaint.
SO ORDERED.13
The MTCC held that Baric’s voluntary departure from the premises, and his subsequent posting of a signboard
informing the public that his barber shop had transferred to a new address within the Agdao Public Market,
constituted clear and categorical evidence of his intention to voluntarily vacate the premises. For this reason, it
cannot be said that Palado forcibly evicted Baric. It held further that although the Barangay Chairman of Agdao
District certified in writing that Baric did not operate his barber shop within the Agdao Public Market after he vacated
Palado’s building, the evidence would suggest that Baric nonetheless withdrew seven of his 12 barber’s chairs from
the vacated premises. Finally, the MTCC decried Baric’s abandonment of his complaint in the barangay level and
his undue resort to court action; it held that Baric’s pretense of including a prayer for injunctive relief in his Amended
Complaint for forcible entry in order to skirt Sections 408 and 412 of Republic Act No. 716014 cannot be tolerated.
Baric filed an appeal with the Regional Trial Court (RTC) of Davao City which, in a June 28, 2002
Decision,15sustained the MTCC Decision in its totality, as follows:
WHEREFORE, finding no serious irreversible error committed by the court-a-quo in its decision, dated February 8,
2002, said decision is AFFIRMED-IN-TOTO, for lack of sufficient evidence of defendant for an award of his prayer
for attorney’s fees and litigation expenses, are denied but this case is ordered dismissed.
SO ORDERED.16
Apart from echoing the MTCC’s findings, the RTC added that Palado had the right, as owner, to dispose of the
subject property even while Baric’s lease was outstanding; Baric’s lease is irrelevant to the subsequent sale to
Network Bank by Palado.
Baric moved to reconsider, but the RTC stood its ground. Thus, he filed a Petition for Review with the CA.
On January 29, 2009, the CA issued the assailed Decision which contains the following decretal portion:
WHEREFORE, the appeal is granted and the challenged decision is hereby reversed. Petitioner is hereby awarded
₱50,000.00 in nominal damages for which respondents are solidarily liable.
SO ORDERED.17
Reversing the lower courts, the CA held that Palado was guilty of forcible entry in that while Palado’s notice to
vacate required Baric to vacate the premises within 40 days, the latter was granted, under the "Kasabutan," the right
to at least four months advance notice. It held further that there was no basis to believe that Baric voluntarily
vacated the premises and posted a signboard notifying the public that he has transferred to the Agdao Public
Market. On the contrary, Baric complained to the police on January 29, 2001 as evidenced by the written entry in the
police blotter, to the effect that Palado was destroying the leased premises without his consent as the occupant
thereof. Besides, it cannot be said that Baric had transferred to another business address when his equipment –
consisting of five barber’s chairs, seven fluorescent light sets, one ceiling fan, one airconditioning unit, a typewriting
table, and four plastic stools – remained in the leased premises, as shown by photographs taken of the premises
while the old building was being demolished.18 Moreover, it held that the Agdao District Barangay Chairman’s
certification in writing to the effect that Baric did not transfer his barber shop to the Agdao Public Market – which
remained uncontroverted – suggested that it was Palado, and not Baric, who posted the signboard in order to make
it appear that Baric "voluntarily" vacated the premises. The CA added that it is inconceivable that Baric should
renovate the premises and simply vacate the premises without insisting on his right to four months advance notice
under the "Kasabutan"; besides, it can be said that the four months advance notice granted by Palado to Baric was
in consideration of the latter’s renovations introduced on the premises.
On Baric’s failure to exhaust his remedies at the barangay level, the CA held that the inclusion of a prayer for
injunctive relief in Baric’s Complaint did away with the need to refer the case to the Lupon; the lower courts’
respective findings that Baric’s inclusion of injunctive relief in his Complaint was a mere ploy to circumvent the Local
Government Code could not find support from the record. And regarding Network Bank, the CA declared that the
issue of its being a purchaser in good or bad faith was not material, since Network Bank’s purchase of the property
was subject to all liens and encumbrances found thereon, and the bank merely stepped into the shoes of the former
owner.
Finally, the CA concluded that since ownership has been transferred to Network Bank and a new building built on
the property, it has become impracticable to restore Baric in his possession. Instead, his case has become one for
vindication of right; thus, the CA opted to award Baric nominal damages in the amount of ₱50,000.00.
Network Bank filed its Motion for Reconsideration,19 but in an August 23, 2010 Resolution, the CA stood its ground.
Hence, Network Bank filed the present Petition.
Issues
Network Bank raises the following issues in its Petition:
A. WHETHER X X X A BUYER OF X X X REAL PROPERTY AFTER THE CANCELLATION OF NOTICE OF LIS

PENDENS IS CONSIDERED A TRANSFEREE PENDENTE LITE;
B. WHETHER X X X IN THE INSTANT FORCIBLE ENTRY CASE, THE DETERMINATION OF GOOD FAITH ON
THE PART OF THE HEREIN PETITIONER IS MATERIAL, WHICH THE APPELLATE COURT HAS RELEGATED
AND DISREGARDED THE FINDINGS OF FACT OF THE LOWER COURTS WHICH BOTH RENDERED
CONGRUENT RULINGS IN FAVOUR OF THE HEREIN PETITIONER.20
In its Petition and Reply21 seeking to be absolved from liability on the award of ₱50,000.00 nominal damages in favor
of Baric, Network Bank substantially argues that because it is not privy to the transaction between Palado and Baric,
and since it acquired the property in good faith on April 25, 2001 – or after the respondent’s eviction from the
premises and the cancellation of the notice of lis pendens via the April 20, 2001 Order of the MTCC – and it
acquired merely the existing rights and obligations of the previous owner Palado as are reflected on the latter’s title,
it may not be held liable together with Palado under the CA judgment. It adds that it was error for the CA to hold it
liable for forcible entry when it entered the fray only when the notice of lis pendens was already cancelled.
On the other hand, Baric in his Comment22 merely echoes the CA’s pronouncements and maintains that Network
Bank should be held liable for "surreptitiously transferring" title in its name. He nonetheless disapproved of the CA’s
failure to restore him in his possession and award damages in his favor; presumably, he implores the Court to grant
him continued possession of the premises and damages.
Our Ruling
While the Petition does not squarely address the true issue involved, it is nonetheless evident that the CA gravely
erred in holding Network Bank solidarily liable with Palado for the payment of nominal damages.
"Nominal damages are recoverable where a legal right is technically violated and must be vindicated against an
invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no
substantial injury or actual damages whatsoever have been or can be shown.
Under Article 2221 of the Civil Code, nominal damages may be awarded to a plaintiff whose right has been violated
or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff
for any loss suffered."23 "Nominal damages are not for indemnification of loss suffered but for the vindication or
recognition of a right violated or invaded."24
Network Bank did not violate any of Baric's rights; it was merely a purchaser or transferee of the property. Surely, it
1âw phi1
is not prohibited from acquiring the property even while the forcible entry case was pending, because as the
registered owner of the subject property, Palado may transfer his title at any time and the lease merely follows the
property as a lien or encumbrance. Any invasion or violation of Baric's rights as lessee was committed solely by
Palado, and Network Bank may not be implicated or found guilty unless it actually took part in the commission of
illegal acts, which does not appear to be so from the evidence on record. On the contrary, it appears that Barie was
ousted through Palado's acts even before Network Bank acquired the subject property or came into the picture.
Thus, it was error to hold the bank liable for nominal damages.
With regard to Baric's argument that he should be reinstated to the premises and awarded damages, this may not
be allowed. He did not question the CA ruling in an appropriate Petition before this Court. "It is well-settled that a
party who has not appealed from a decision cannot seek any relief other than what is provided in the judgment
appealed from. An appellee who has himself not appealed may not obtain from the appellate court any affirmative
relief other than the ones granted in the decision of the court below."25
WHEREFORE, the Petition is GRANTED. The January 29, 2009 Decision and August 23, 2010 Resolution of the
Court of Appeals in CA-G.R. SP No. 73713 are MODIFIED in that petitioner One Network Rural Bank, Inc. is
ABSOLVED from liability.
SO ORDERED
SECOND DIVISION
G.R. No. 193047 March 3, 2014
FIL-PRIDE SIDPPING COMPANY, INC., CAPTAIN NICOLAS T. DOLLOLASA and OCEAN EAGLE
SIDPMANAGEMENT COMPANY, PTE.LTD., Petitioners,
vs.
EDGAR A. BALASTA, Respondent.
DECISION
DEL CASTILLO, J.:
The company-designated physician must arrive at a definite assessment of the seafarer's fitness to work or
permanent disability within the period of 120 or 240 days,1 pursuant to Article 192 (c)(l) of the Labor Code and Rule
X, Section 2 of the Amended Rules on Employees Compensation (AREC). If he fails to do so and the seafarer's
medical condition remains unresolved, the latter shall be deemed totally and permanently disabled. On the other
hand, an employee's disability becomes permanent and total even before the lapse of the statutory 240-day
treatment period, when it becomes evident that the employee's disability continues and he is unable to engage in
gainful employment during such period because, for instance, he underwent surgery and it evidently appears that he
could not recover therefrom within the statutory period.
This Petition for Review on Certiorari2 assails the April 20, 2010 Decision3 of the Court of Appeals (CA) in CA-G.R.
SP No. 107330 and its July 21, 2010 Resolution4 denying reconsideration thereof.
Factual Antecedents
Respondent Edgar A. Balasta was hired by petitioner Fil-Pride Shipping Company, Inc. (Fil-Pride) for its foreign
principal, petitioner Ocean Eagle Ship Management Company, PTE. Ltd. (Ocean Eagle). Respondent was assigned
as Able Seaman onboard M/V Eagle Pioneer. His Employment Contract5 states the following terms and conditions:
Duration of Contract : TWELVE MONTHS
Position : ABLE SEAMAN
Basic Monthly Salary : US$390.00
Hours of Work : 48 HRS/WEEK

Overtime : FIXED US$156.00
(CONTAINER ALLOW US$39.00)
Vacation leave with pay : US$52.00
Point of hire : MANILA/PHILS
Respondent was declared fit to work after undergoing the mandatory Pre-Employment Medical Examination
(PEME). He commenced his duties as Able Seaman aboard M/V Eagle Pioneer on February 23, 2005. Among
respondent’s duties as Able Seaman are the following:
a. Watch standers and may be required to supervise day work of junior rating;
b. Stands watch at bow or on wing of bridge to look for obstructions in path of vessel;
c. Measures depth of water in shallow or unfamiliar waters, using lead line, and telephones or shouts information to
bridge;
d. Steers ship by automatic/remote control or manual control and/or uses emergency steering apparatus to steer
vessel as directed by navigating officer, chief mate or the ship captain;
e. Breaks out rigs, overhauls and stows cargo handling gears, stationary rigging, and running gears;
f. Overhauls lifeboats, winch and falls;
g. Paints and chips rust on deck and superstructure of ship;
h. May be concerned only with one phase of duties such as:
1. Maintenance of ships’ gears and decks or watch duties;
2. May be known as skilled deckhand on various repairs and maintenance works on deck;
3. Performs other deck works as required by superior officers.6
Sometime in August and September 2005, while aboard M/V Eagle Pioneer, respondent experienced chest pains,
fatigue, and shortness of breath. He was examined by a physician in Gangyou Hospital in Tianjin, China, and was
diagnosed as having myocardial ischemia and coronary heart disease. He was declared unfit for duty and was
recommended for repatriation.7
Respondent was thus repatriated on September 18, 2005 and was immediately referred to the company-designated
physician, Dr. Nicomedes G. Cruz (Dr. Cruz). He was subjected to laboratory, X-ray, 2D echo, and
electrocardiogram tests, as well as 24-hour Holter monitoring. In Dr. Cruz’s September 18, 2005 medical
report,8respondent was diagnosed with hypertension and myocardial ischemia.
Respondent was further examined by Dr. Cruz on September 21, 23 and 30, 2005; October 6, 2005; February 2, 13
and 17, 2006; March 6 and 20, 2006; and on April 19, 2006.9 From the February 2, 2006 medical report onward, it
may be seen that respondent was diagnosed with severe 3-vessel coronary artery disease, and was scheduled for
coronary artery bypass surgery on February 24, 2006.
On his own initiative, respondent underwent coronary angiogram at the St. Luke’s Medical Center (St. Luke’s) on
October 14, 2005. In a medical report10 of even date signed by St. Luke’s Cardiac Catheterization Laboratory
Interventional Cardiologist Paterno F. Dizon, Jr., respondent was diagnosed with coronary artery atherosclerosis
and severe three-vessel coronary artery disease.
On February 16, 2006, respondent consulted and was examined by an independent physician, Dr. Efren R. Vicaldo
(Dr. Vicaldo), who issued a medical certificate11 containing the following diagnosis:
February 16, 2006
TO WHOM IT MAY CONCERN:
This is to certify that, Edgar A. Balasta, 48 years of age, of Imus, Cavite was examined and treated as out[-
]patient/confined in this hospital on/from February 16, 2006 with the following findings and/or diagnosis/diagnoses:
Hypertensive cardiovascular disease

Coronary artery disease, 3[-]vessel involvement
Stable angina pectoris
Impediment Grade 1 (120%)
(signed)
EFREN R. VICALDO, M.D.
JUSTIFICATION OF IMPEDIMENT GRADE 1 (120%)
FOR SEAMAN EDGAR A. BALASTA
This patient/seaman presented with a history of chest pain, easy fatigue and shortness of breath noted [in] August
2005 after some strenuous activity while working on board ship. He was seen in consult in Mainland China where he
underwent chest Xray and ECG. He was diagnosed as [sic] coronary artery disease.
He was repatriated on September 18, 2005 and was admitted for 1 week at Manila Medical Center. He underwent
laboratory exams which included Chest Xray, ECG, 2D echo and 24 hour Holter monitoring. He consequently
underwent coronary angiography at St. Luke’s Medical Center on October 14, 2005 which revealed severe 3 vessel
disease involving the proximal LAD, first diagonal and proximal and distal LCx.
When seen at the clinic, his blood pressure was elevated at 140/90 mmHg; the rest of the PE findings were
unremarkable.
He is now unfit to resume work as seaman in any capacity.
His illness is considered work aggravated/related.
He requires maintenance medication to maintain normal blood pressure and low cholesterol to prevent worsening of
his coronary artery disease and other cardiovascular complications such as stroke and renal insufficiency.
He requires immediate coronary artery bypass graft surgery to alleviated (sic) his symptom of angina and prevent
the occurrence of possible acute myocardial infarction.
He has to modify his lifestyle to include low salt, low fat diet, regular exercise and nicotine abstinence.
He is not expected to land a gainful employment given his medical background.
Thank you.
(signed)
Efren R. Vicaldo, M.D.12
Respondent filed a claim for permanent disability benefits with petitioners, but the latter denied the same.
On February 10, 2006, respondent filed against the petitioners a Complaint13 for the recovery of disability benefits,
illness allowance, reimbursement of medical expenses, damages and attorney’s fees.
It appears from the record that on February 24, 2006, respondent underwent coronary artery bypass graft surgery.
He then continued his treatment with Dr. Cruz, who for his part continued to diagnose respondent with severe
coronary artery disease.
In his Position Paper14 and Reply,15 respondent stated and argued that in the performance of his duties as Able
Seaman, he inhaled, was exposed to, and came into direct contact with various injurious and harmful chemicals,
dust, fumes/ emissions, and other irritant agents; that he performed strenuous tasks such as lifting, pulling, pushing
and/or moving equipment and materials on board the ship; that he was constantly exposed to varying temperatures
of extreme hot and cold as the ship crossed ocean boundaries; that he was exposed as well to harsh weather
conditions; that in most instances, he was required to perform overtime work; that the work of an Able Seaman is
both physically and mentally stressful; and that as a result, he contracted his illness which required him to undergo
bypass surgery. He added that despite being examined by the company-designated physician, he continued to
suffer episodes of severe chest pain, difficulty in breathing and other discomforts related to his illness; that his health
has not improved, and was instead deteriorating, which thus led him to consult an independent physician (Dr.
Vicaldo); that Dr. Vicaldo declared him unfit to work as seaman in any capacity and that his illness was work-related;
that despite the lapse of more than six months, the company-designated physician has failed to make a finding
regarding his condition, which thus entitles him to permanent total disability benefits; that his just claim for disability
benefits was denied by petitioners, which forced him to file the labor complaint; and that he should thus be paid
US$60,000.00 disability benefits with interest, 120 days illness allowance based on his salary of US$390.00 or the
amount of US$1,560.00 with interest, ₱500,000.00 damages, and attorney’s fees of 10% of the recoverable amount.
Petitioners, on the other hand, stated and argued in their Position Paper16 and Reply17 that respondent filed a labor
complaint even before the company-designated physician, Dr. Cruz, could complete his examination and treatment
of respondent’s condition, which thus prompted them to deny his claim for disability benefits; that the independent
physician Dr. Vicaldo examined respondent only once on February 16, 2006, and thus could not have arrived at a
competent diagnosis of respondent’s condition; that in the absence of a competent diagnosis and substantial
evidence, respondent’s claim for benefits cannot stand; that respondent’s illness is not work-related, and that his
lifestyle caused, or was a contributing factor to, his illness; that contrary to respondent’s claim, the latter has been
paid his illness allowance in full; that respondent’s medical expenses are being shouldered by them; and that
respondent is not entitled to damages and attorney’s fees as a result of prematurely filing the labor case. Petitioners
thus prayed that the labor case be dismissed.
On April 30, 2007, a Decision18 was rendered by the Labor Arbiter which decreed as follows:
WHEREFORE, judgment is hereby rendered ordering respondents to pay, jointly and severally, the complainant the
following amount[s]:
(1) US$60,000.00 or its peso equivalent at the time of payment as disability benefit; and (2) US$6,000.00 or its peso
equivalent at the time of payment as attorney’s fees.
All other claims are Dismissed for lack of merit.
SO ORDERED.19
The Labor Arbiter held essentially that respondent contracted his illness while serving out his employment contract
with petitioners; that his illness was work-related/aggravated; that while respondent was under the care of Dr. Cruz
from September 18, 2005 until April 19, 2006, the latter could have come up with a declaration of fitness or
disability, yet he did not; that respondent’s illness rendered him unfit for duty and required bypass surgery to treat
the same; and that respondent’s condition constituted permanent total disability as the same is equivalent to
Impediment Grade 1 (120%) as assessed by Dr. Vicaldo, which thus entitles respondent to the maximum disability
compensation of US$60,000.00. For lack of basis, however, respondent’s claim for damages and reimbursement of
medical expenses was denied.

Petitioners appealed to the National Labor Relations Commission (NLRC).
On September 22, 2008, the NLRC rendered its Decision20 granting petitioners’ appeal and reversing the Labor
Arbiter’s April 30, 2007 Decision, thus:
WHEREFORE, the appeal is GRANTED. The Labor Arbiter’s Decision dated April 30, 2007 is hereby SET ASIDE.
SO ORDERED.21
Respondent moved for reconsideration, but in a November 27, 2008 Resolution,22 the motion was denied.
In reversing the Labor Arbiter, the NLRC declared that respondent’s illness – atherosclerosis/coronary artery
disease – was not work-connected. Thus, it held:
Medical studies show that atherosclerosis is a disease affecting arterial blood vessels. It is commonly referred to as
a "hardening" or "furring" of the arteries. It is caused by the formation of multiple plaques within the arteries. It
develops from low-density lipoprotein cholesterol (LDL), colloquially called "bad cholesterol". It typically begins in
early adolescence and is usually found in most major arteries, yet is asymptomatic and not detected by most
diagnostic methods during life. Some risk factors for atherosclerosis are: advanced age, having diabetes or impaired
glucose tolerance, dysliporproteinemia or unhealthy patterns of serum proteins carrying fats and cholesterol, male
sex, tobacco smoking, having high blood pressure, being obese, a sedentary lifestyle, having close relatives who
have had some complication[s] of atherosclerosis, elevated serum level of triglycerides, elevated serum insulin
levels, stress or symptoms of clinical depression and hyperthyroidism x x x.23
In a Petition for Certiorari filed with the CA, respondent sought a reversal of the NLRC Decision, arguing that the
latter committed grave abuse of discretion and gross error in declaring that his illness was not work-related and in
subsequently denying his claims.
On April 20, 2010, the CA issued the assailed Decision containing the following decretal portion:
WHEREFORE, the instant petition is GRANTED. The assailed Decision dated September 22, 2008 and Resolution
dated November 27, 2008 of public respondent National Labor Relations Commission ("NLRC"), Third Division, in
NLRC LAC NO. OFW (M) 08-000086-07, are REVERSED and SET ASIDE for having been issued with grave abuse
of discretion amounting to lack or excess of jurisdiction. The decision dated April 30, 2007 of Labor Arbiter Donato
G. Quinto, Jr. in NLRC-NCR-OFW 06-02-00543-00 is hereby REINSTATED.
SO ORDERED.24
The CA held that respondent suffered permanent disability as a result of Dr. Cruz’s failure to make a definite
assessment of his condition within the statutory 120-day period prescribed under the labor laws,25 or from
September 18, 2005 – date of repatriation – up to April 19, 2006, or date of last medical intervention, or a total of
213 days. The CA held further that as early as September 2005, respondent was declared unfit for duty by a
company-designated physician in Tianjin, China, and later on, after tests were conducted, respondent was
diagnosed with coronary artery atherosclerosis and severe three-vessel coronary artery disease; thus, respondent
suffered a serious occupational disease that prevented his further deployment as seaman.
The CA added that respondent’s illness was work-related, and can be attributed to the conditions he was working
under as able seaman; he was exposed and subjected to stress and pressures at work which, after six months,
resulted in his experiencing chest pain, fatigue and difficulty in breathing – and eventually, a diagnosis of coronary
heart disease.
The CA noted further that even during the pendency of the labor case before the Labor Arbiter, Dr. Cruz did not
render a final assessment of respondent’s condition; as a result, the diagnosis of the company-designated physician
in Gangyou Hospital in Tianjin, China that respondent was unfit for duty has not been overturned. Thus, the CA
concluded that since Dr. Cruz failed to make a definite assessment of respondent’s fitness or disability within the
statutory 240-day period – and even thereafter, there can be no other conclusion than that respondent suffered
permanent total disability.
Petitioners filed a Motion for Reconsideration,26 but the CA denied the same in its July 21, 2010 Resolution. Hence,
Issues
Petitioners submit that –
THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) ORDERING THE
DISMISSAL OF THE ABOVE-CAPTIONED LABOR COMPLAINT FINDS AMPLE SUPPORT IN THE EVIDENCE
ON RECORD, IN MEDICAL RESEARCH, IN THE PERTINENT PROVISIONS OF THE POEA STANDARD
CONTRACT, AND IN APPLICABLE JURISPRUDENCE. THE HONORABLE COURT OF APPEALS, IN ITS
QUESTIONED DECISION PROMULGATED ON 20 APRIL 2010 AND RESOLUTION PROMULGATED ON 21
JULY 2010, GRAVELY ERRS [sic] WHEN IT ELECTED TO SET ASIDE AND/OR COMPLETELY IGNORE SUCH
FACTUAL AND LEGAL FINDINGS ON THE PART OF THE NATIONAL LABOR RELATIONS COMMISSION
(THIRD DIVISION) AND WHEN IT THEREAFTER RULED TO REVERSE AND TO SET ASIDE THE DECISION OF
THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) ORDERING THE DISMISSAL OF THE
ABOVE-CAPTIONED LABOR COMPLAINT FOR LACK OF MERIT.27
Praying that the assailed CA dispositions be set aside and that a pronouncement be made dismissing respondent’s
labor complaint, petitioners maintain in their Petition and Reply28 that contrary to the CA’s declarations, respondent’s
illness is not work-related; that respondent’s labor complaint was prematurely filed, while he was still undergoing
treatment for his illness and before the company-designated physician/s could complete treatment and make a
definite assessment of his condition; that they may not be blamed for the company-designated physician’s failure to
arrive at a final assessment of respondent’s condition; that it has not been shown that respondent’s treatment lasted
for the statutory duration of 240 days, since he filed his labor complaint even before the said maximum 240-day
treatment period could be reached and a definite assessment of his condition could be made; and that overall,
respondent has not shown by substantial evidence that he is entitled to his claims.
In his Comment,29 respondent argues that the issues raised in the Petition are factual in nature and no question of
law is involved; that his illness is compensable as it is work-connected and constitutes an occupational disease
under the POEA Contract Standard Terms and Conditions Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels; that Dr. Cruz already knew of the gravity and serious nature of his condition, yet he
refused to make the required definite assessment of his fitness or disability; and that the award of attorney’s fees
was proper.
Our Ruling
Compensability
Regarding the issue of compensability, it has been the Court’s consistent ruling that in disability compensation, "it is
not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s
earning capacity."30 Moreover, "the list of illnesses/diseases in Section 32-A31 does not preclude other
illnesses/diseases not so listed from being compensable. The POEA-SEC cannot be presumed to contain all the
possible injuries that render a seafarer unfit for further sea duties."32
Just the same, in several cases, cardiovascular disease, coronary artery disease, as well as other heart ailments
were held to be compensable.33 Likewise, petitioners failed to refute respondent’s allegations in his Position Paper
that in the performance of his duties as Able Seaman, he inhaled, was exposed to, and came into direct contact with
various injurious and harmful chemicals, dust, fumes/emissions, and other irritant agents; that he performed
strenuous tasks such as lifting, pulling, pushing and/or moving equipment and materials on board the ship;
that he was constantly exposed to varying temperatures of extreme hot and cold as the ship crossed ocean
boundaries; that he was exposed as well to harsh weather conditions; that in most instances, he was required to
perform overtime work; and that the work of an Able Seaman is both physically and mentally stressful. It does not
require much imagination to realize or conclude that these tasks could very well cause the illness that respondent,
then already 47 years old, suffered from six months into his employment contract with petitioners. The following
pronouncement in a recent case very well applies to respondent:
x x x His constant exposure to hazards such as chemicals and the varying temperature, like the heat in the kitchen
of the vessel and the coldness outside, coupled by stressful tasks in his employment caused, or at least aggravated,
his illness. It is already recognized that any kind of work or labor produces stress and strain normally resulting in
wear and tear of the human body.34
Notably, it is "a matter of judicial notice that an overseas worker, having to ward off homesickness by reason of
being physically separated from his family for the entire duration of his contract, bears a great degree of emotional
strain while making an effort to perform his work well. The strain is even greater in the case of a seaman who is
constantly subjected to the perils of the sea while at work abroad and away from his family."35
Assessment by company-designated physician
The company-designated physician must arrive at a definite assessment of the seafarer’s fitness to work or
permanent disability within the period of 120 or 240 days, pursuant to Article 192 (c)(1) of the Labor Code and Rule
X, Section 2 of the AREC.36 If he fails to do so and the seafarer’s medical condition remains unresolved, the latter
shall be deemed totally and permanently disabled.
Respondent was repatriated on September 18, 2005. He was further examined by the company-designated
physician Dr. Cruz on September 21, 23 and 30, 2005; October 6, 2005; February 2, 13 and 17, 2006; March 6 and
20, 2006; and on April 19, 2006. And beginning from the February 2, 2006 medical report, respondent was
diagnosed by Dr. Cruz with severe 3-vessel coronary artery disease, and was scheduled for coronary artery bypass
surgery on February 24, 2006. After surgery, respondent continued his treatment with Dr. Cruz, who on the other
hand continued to diagnose respondent with severe coronary artery disease even on respondent’s last consultation
on April 19, 2006.
Concededly, the period September 18, 2005 to April 19, 2006 is less than the statutory 240-day – or 8-month –
period. Nonetheless, it is impossible to expect that by May 19, 2006, or on the last day of the statutory 240-day
period, respondent would be declared fit to work when just recently – or on February 24, 2006 – he underwent
coronary artery bypass graft surgery; by then, respondent would not have sufficiently recovered. In other words, it
became evident as early as April 19, 2006 that respondent was permanently and totally disabled, unfit to return to
work as seafarer and earn therefrom, given his delicate post-operative condition; a definitive assessment by Dr.
Cruz before May 19, 2006 was unnecessary. Respondent would to all intents and purposes still be unfit for sea-
duty. Even then, with Dr. Cruz’s failure to issue a definite assessment of respondent’s condition on May 19, 2006, or
the last day of the statutory 240-day period, respondent was thus deemed totally and permanently disabled pursuant
to Article 192 (c)(1) of the Labor Code and Rule X, Section 2 of the AREC.
Premature labor complaint
Neither may it be argued by the petitioners that respondent’s filing of the labor complaint on February 10, 2006
should affect the outcome of the case. It is difficult to blame respondent for deciding to sue, considering that he has
been diagnosed by no less than three separate physicians – Drs. Dizon, Vicaldo, and Cruz – with severe three-
vessel coronary artery disease which required bypass procedure. Respondent may have been acting under a sense
of extreme urgency given the life-threatening nature of his illness. The filing of the labor complaint may have been
designed to pressure petitioners into taking action to address his condition, or to recover expenses should he decide
to proceed with the bypass procedure on his own. Either way, the Court cannot subscribe to the view that there was
a premature resort to litigation since respondent was still undergoing treatment for his illness and the company-
designated physician has not completed treatment and made a definite assessment of his condition.
Indeed, it may even be said that with Dr. Cruz’s February 2, 2006 diagnosis that respondent was suffering from
severe three-vessel coronary artery disease which required immediate bypass graft procedure or surgery,
respondent believed himself permanently and totally disabled which thus led him to demand disability benefits and
thereafter file the labor case when petitioners ignored his demand. 1âw phi 1
Attorney's fees
On the issue of attorney's fees, while petitioners have not been shown to act in gross and evident bad faith in
refusing to satisfy respondent's demands, it is nonetheless true as a matter of law and it has been held in the past
that where an employee is forced to litigate and incur expenses to protect his right and interest, he is entitled to an
award of attorney's fees equivalent to ten percent (10%) of the total award at the time of actual payment.37
WHEREFORE, the Petition is DENIED. The assailed April 20, 2010 Decision and July 21, 2010 Resolution of the
Court of Appeals in CA-G.R. SP No. 107330 are AFFIRMED in toto.
SO ORDERED.
SECOND DIVISION
G.R. No. 180962 February 26, 2014
PIDLTRANCO SERVICE ENTERPRISES, INC., represented by its Vice-President for Administration, M/GEN.
NEMESIO M. SIGAYA, Petitioner,
vs.
PHILTRANCO WORKERS UNION-ASSOCIATION OF GENUINE LABOR ORGANIZATIONS (PWU-AGLO),
represented by JOSE JESSIE OLIVAR, Respondent.
DECISION
DEL CASTILLO, J.:
While a government office1 may prohibit altogether the filing of a motion for reconsideration with respect to its
decisions or orders, the fact remains that certiorari inherently requires the filing of a motion for reconsideration,
which is the tangible representation of the opportunity given to the office to correct itself. Unless it is filed, there
could be no occasion to rectify. Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the
proscription against the filing of a motion for reconsideration, the same may be filed on the assumption that
rectification of the decision or order must be obtained, and before a petition for certiorari may be instituted.
This Petition for Review on Certiorari2 seeks a review and setting aside of the September 20, 2007 Resolution3 of the
Court of Appeals (CA) in CA-G.R. SP No. 100324,4 as well as its December 14, 2007 Resolution5 denying
petitioner’s Motion for Reconsideration.
Factual Antecedents
On the ground that it was suffering business losses, petitioner Philtranco Service Enterprises, Inc., a local land
transportation company engaged in the business of carrying passengers and freight, retrenched 21 of its
employees. Consequently, the company union, herein private respondent Philtranco Workers Union-Association of
Genuine Labor Organizations (PWU-AGLU), filed a Notice of Strike with the Department of Labor and Employment
(DOLE), claiming that petitioner engaged in unfair labor practices. The case was docketed as NCMB-NCR CASE
No. NS-02-028-07.
Unable to settle their differences at the scheduled February 21, 2007 preliminary conference held before Conciliator-
Mediator Amorsolo Aglibut (Aglibut) of the National Conciliation and Mediation Board (NCMB), the case was
thereafter referred to the Office of the Secretary of the DOLE (Secretary of Labor), where the case was docketed as
Case No. OS-VA-2007-008.
After considering the parties’ respective position papers and other submissions, Acting DOLE Secretary Danilo P.
Cruz issued a Decision6 dated June 13, 2007, the dispositive portion of which reads, as follows:
WHEREFORE, premises considered, we hereby ORDER Philtranco to:
1. REINSTATE to their former positions, without loss of seniority rights, the ILLEGALLY TERMINATED 17 "union
officers", x x x, and PAY them BACKWAGES from the time of termination until their actual or payroll reinstatement,
provided in the computation of backwages among the seventeen (17) who had received their separation pay should
deduct the payments made to them from the backwages due them.
2. MAINTAIN the status quo and continue in full force and effect the terms and conditions of the existing CBA –
specifically, Article VI on Salaries and Wages (commissions) and Article XI, on Medical and Hospitalization – until a
new agreement is reached by the parties; and
3. REMIT the withheld union dues to PWU-AGLU without unnecessary delay.
The PARTIES are enjoined to strictly and fully comply with the provisions of the existing CBA and the other
dispositions of this Decision.
SO ORDERED.7
Petitioner received a copy of the above Decision on June 14, 2007. It filed a Motion for Reconsideration on June 25,
2007, a Monday. Private respondent, on the other hand, submitted a "Partial Appeal."
In an August 15, 2007 Order8 which petitioner received on August 17, 2007, the Secretary of Labor declined to rule
on petitioner’s Motion for Reconsideration and private respondent’s "Partial Appeal", citing a DOLE
Regulation9which provided that voluntary arbitrators’ decisions, orders, resolutions or awards shall not be the subject
of motions for reconsideration. The Secretary of Labor held:
WHEREFORE, the complainant’s and the respondent’s respective pleadings are hereby NOTED as pleadings that
need not be acted upon for lack of legal basis.
SO ORDERED.10
The Assailed Court of Appeals Resolutions
On August 29, 2007, petitioner filed before the CA an original Petition for Certiorari and Prohibition, and sought
injunctive relief, which case was docketed as CA-G.R. SP No. 100324.
On September 20, 2007, the CA issued the assailed Resolution which decreed as follows:
WHEREFORE, premises considered, the instant Petition for Certiorari and Prohibition with Prayer for Temporary
Restraining Order and Preliminary Injunction is hereby DISMISSED. Philtranco’s pleading entitled "Reiterating
Motion for The Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order" is NOTED.
SO ORDERED.11
The CA held that, in assailing the Decision of the DOLE voluntary arbitrator, petitioner erred in filing a petition for
certiorari under Rule 65 of the 1997 Rules, when it should have filed a petition for review under Rule 43 thereof,
which properly covers decisions of voluntary labor arbitrators.12 For this reason, the petition is dismissible pursuant
to Supreme Court Circular No. 2-90.13 The CA added that since the assailed Decision was not timely appealed within
the reglementary 15-day period under Rule 43, the same became final and executory. Finally, the appellate court
ruled that even assuming for the sake of argument that certiorari was indeed the correct remedy, still the petition
should be dismissed for being filed out of time. Petitioner’s unauthorized Motion for Reconsideration filed with the
Secretary of Labor did not toll the running of the reglementary 60-day period within which to avail of certiorari; thus,
from the time of its receipt of Acting Labor Secretary Cruz’s June 13, 2007 Decision on June 14 or the following day,
petitioner had until August 13 to file the petition – yet it filed the same only on August 29.
Petitioner filed a Motion for Reconsideration, which was denied by the CA through the second assailed December
14, 2007 Resolution. In denying the motion, the CA held that the fact that the Acting Secretary of Labor rendered the
decision on the voluntary arbitration case did not remove the same from the jurisdiction of the NCMB, which thus
places the case within the coverage of Rule 43.
Issues
In this Petition,14 the following errors are assigned:
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONER AVAILED OF THE
ERRONEOUS REMEDY IN FILING A PETITION FOR CERTIORARI UNDER RULE 65 INSTEAD OF UNDER
RULE 43 OF THE RULES OF COURT.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT THE PETITION FOR CERTIORARI
WAS FILED OUT OF TIME.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE PETITION OUTRIGHT ON THE
BASIS OF PURE TECHNICALITY.15
In its Petition and Reply,16 petitioner argues that a petition for certiorari under Rule 65 – and not a petition for review
under Rule 43 – is the proper remedy to assail the June 13, 2007 Decision of the DOLE Acting Secretary, pointing
to the Court’s pronouncement in National Federation of Labor v. Hon. Laguesma17 that the remedy of an aggrieved
party against the decisions and discretionary acts of the NLRC as well as the Secretary of Labor is to timely file a
motion for reconsideration, and then seasonably file a special civil action for certiorari under Rule 65 of the 1997
Rules of Civil Procedure.
Petitioner adds that, contrary to the CA’s ruling, NCMB-NCR CASE No. NS-02-028-07 is not a simple voluntary
arbitration case. The character of the case, which involves an impending strike by petitioner’s employees; the nature
of petitioner’s business as a public transportation company, which is imbued with public interest; the merits of its
case; and the assumption of jurisdiction by the Secretary of Labor – all these circumstances removed the case from
the coverage of Article 262,18 and instead placed it under Article 263,19 of the Labor Code. Besides, Rule 43 does not
apply to judgments or final orders issued under the Labor Code.20
On the procedural issue, petitioner insists that it timely filed the Petition for Certiorari with the CA, arguing that Rule
65 fixes the 60-day period within which to file the petition from notice of the denial of a timely filed motion for
reconsideration, whether such motion is required or not. It cites the Court’s pronouncement in ABS-CBN Union
Members v. ABS-CBN Corporation21 that "before a petition for certiorari under Rule 65 of the Rules of Court may be
availed of, the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity for the
correction of the error or mistake complained of" and since "a decision of the Secretary of Labor is subject to judicial
review only through a special civil action of certiorari x x x [it] cannot be resorted to without the aggrieved party
having exhausted administrative remedies through a motion for reconsideration".
In its Comment,22 respondent argues that the Secretary of Labor decided Case No. OS-VA-2007-008 in his capacity
as voluntary arbitrator; thus, his decision, being that of a voluntary arbitrator, is only assailable via a petition for
review under Rule 43. It further echoes the CA’s ruling that even granting that certiorari was the proper remedy, the
same was filed out of time as the filing of a motion for reconsideration, which was an unauthorized pleading, did not
toll the running of the 60-day period. Finally, it argues that on the merits, petitioner’s case could not hold water as it
failed to abide by the requirements of law in effecting a retrenchment on the ground of business losses.
Our Ruling

It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the Secretary of Labor did so in
a limited capacity, i.e., as a voluntary arbitrator. The fact is undeniable that by referring the case to the Secretary of
Labor, Conciliator-Mediator Aglibut conceded that the case fell within the coverage of Article 263 of the Labor Code;
the impending strike in Philtranco, a public transportation company whose business is imbued with public interest,
required that the Secretary of Labor assume jurisdiction over the case, which he in fact did. By assuming jurisdiction
over the case, the provisions of Article 263 became applicable, any representation to the contrary or that he is
deciding the case in his capacity as a voluntary arbitrator notwithstanding.
It has long been settled that the remedy of an aggrieved party in a decision or resolution of the Secretary of Labor is
to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then
seasonably file a special civil action for certiorari under Rule 65 of the 1997 Rules on Civil Procedure.23 There is no
distinction: when the Secretary of Labor assumes jurisdiction over a labor case in an industry indispensable to
national interest, "he exercises great breadth of discretion" in finding a solution to the parties’ dispute.24 "[T]he
authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to national interest includes and extends to all questions and controversies
arising therefrom. The power is plenary and discretionary in nature to enable him to effectively and efficiently
dispose of the primary dispute."25 This wide latitude of discretion given to the Secretary of Labor may not be the
subject of appeal.
Accordingly, the Secretary of Labor’s Decision in Case No. OS-VA-2007-008 is a proper subject of certiorari,
pursuant to the Court’s pronouncement in National Federation of Labor v. Laguesma,26 thus:
Though appeals from the NLRC to the Secretary of Labor were eliminated, presently there are several instances in
the Labor Code and its implementing and related rules where an appeal can be filed with the Office of the Secretary
of Labor or the Secretary of Labor issues a ruling, to wit:
xxxx
(6) Art. 263 provides that the Secretary of Labor shall decide or resolve the labor dispute [over] which he assumed
jurisdiction within thirty (30) days from the date of the assumption of jurisdiction. His decision shall be final and
executory ten (10) calendar days after receipt thereof by the parties.
From the foregoing we see that the Labor Code and its implementing and related rules generally do not provide for
any mode for reviewing the decision of the Secretary of Labor. It is further generally provided that the decision of the
Secretary of Labor shall be final and executory after ten (10) days from notice. Yet, like decisions of the NLRC which
under Art. 223 of the Labor Code become final after ten (10) days, decisions of the Secretary of Labor come to this
Court by way of a petition for certiorari even beyond the ten-day period provided in the Labor Code and the
implementing rules but within the reglementary period set for Rule 65 petitions under the 1997 Rules of Civil
Procedure. x x x
xxxx
In fine, we find that it is procedurally feasible as well as practicable that petitions for certiorari under Rule 65 against
the decisions of the Secretary of Labor rendered under the Labor Code and its implementing and related rules be
filed initially in the Court of Appeals. Paramount consideration is strict observance of the doctrine on the hierarchy of
the courts, emphasized in St. Martin Funeral Homes v. NLRC, on "the judicial policy that this Court will not entertain
direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction."27
On the question of whether the Petition for Certiorari was timely filed, the Court agrees with petitioner’s submission.
Rule 65 states that where a motion for reconsideration or new trial is timely filed, whether such motion is required or
not, the petition shall be filed not later than 60 days counted from the notice of the denial of the motion.28 This can
only mean that even though a motion for reconsideration is not required or even prohibited by the concerned
government office, and the petitioner files the motion just the same, the 60-day period shall nonetheless be counted
from notice of the denial of the motion. The very nature of certiorari – which is an extraordinary remedy resorted to
only in the absence of plain, available, speedy and adequate remedies in the course of law – requires that the office
issuing the decision or order be given the opportunity to correct itself. Quite evidently, this opportunity for
rectification does not arise if no motion for reconsideration has been filed. This is precisely what the Court said in the
ABS-CBN Union Members case, whose essence continues to this day. Thus:
Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides:
"The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of the records of
the case. The decision of the Secretary shall be final and inappealable." x x x
The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be
reconsidered since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the
law requires a motion for reconsideration to enable the public respondent to correct his mistakes, if any. In Pearl S.
Buck Foundation, Inc., vs. NLRC, this Court held:
"Hence, the only way by which a labor case may reach the Supreme Court is through a petition for certiorari under
Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. Such petition may
be filed within a reasonable time from receipt of the resolution denying the motion for reconsideration of the NLRC
decision." x x x
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion
for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake
complained of.
So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil
action of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative
remedies through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration
of the same so that he can bring a special civil action for certiorari before the Supreme Court.29
Indeed, what needs to be realized is that while a government office may prohibit altogether the filing of a motion for
reconsideration with respect to its decisions or orders, the fact remains that certiorari inherently requires the filing of
a motion for reconsideration, which is the tangible representation of the opportunity given to the office to correct
itself. Unless it is filed, there could be no occasion to rectify. Worse, the remedy of certiorari would be unavailing.
Simply put, regardless of the proscription against the filing of a motion for reconsideration, the same may be filed on
the assumption that rectification of the decision or order must be obtained, and before a petition for certiorari may be
instituted.
Petitioner received a copy of the Acting Secretary of Labor’s Decision on June 14, 2007. It timely filed a Motion for
1âwphi1
Reconsideration on June 25, which was a Monday, or the first working day following the last day (Sunday, June 24)
for filing the motion. But for lack of procedural basis, the same was effectively denied by the Secretary of Labor via
his August 15, 2007 Order which petitioner received on August 17. It then filed the Petition for Certiorari on August
29, or well within the fresh 60-day period allowed by the Rules from August 17. Given these facts, the Court finds
that the Petition was timely filed.
Going by the foregoing pronouncements, the CA doubly erred in dismissing CA-G.R. SP No. 100324.
WHEREFORE, the Petition is GRANTED. The assailed September 20, 2007 and December 14, 2007 Resolutions of
the Court of Appeals are REVERSED and SET ASIDE. The Petition in CA-G.R. SP No. 100324 is ordered
REINSTATED and the Court of Appeals is DIRECTED to RESOLVE the same with DELIBERATE DISPATCH.
SO ORDERED.
SECOND DIVISION
G.R. No. 179625 February 24, 2014
NICANORA G. BUCTON (deceased), substituted by REQUILDA B. YRAY, Petitioner,

vs.
RURAL BANK OF EL SALVADOR, INC., MISAMIS ORIENTAL, and REYNALDO CUYONG, Respondents,
vs.
ERLINDA CONCEPCION AND HER HUSBAND AND AGNES BUCTON LUGOD, Third Party Defendants.
DECISION
DEL CASTILLO, J.:
A mortgage executed by an authorized agent who signed in his own name without indicating that he acted for and
on behalf of his principal binds only the agent and not the principal.
This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the August 17, 2005 Decision2and
the June 7, 2007 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 60841.
Factual Antecedents
On April 29, 1988, petitioner Nicanora G. Bucton filed with the Regional Trial Court (RTC) of Cagayan de Oro a
case4 for Annulment of Mortgage, Foreclosure, and Special Power of Attorney (SPA) against Erlinda Concepcion
(Concepcion) and respondents Rural Bank of El Salvador, Misamis Oriental, and Sheriff Reynaldo Cuyong. 5
Petitioner alleged that she is the owner of a parcel of land, covered by Transfer Certificate of Title (TCT) No. T-3838,
located in Cagayan de Oro City;6 that on June 6, 1982, Concepcion borrowed the title on the pretext that she was
going to show it to an interested buyer;7 that Concepcion obtained a loan in the amount of ₱30,000.00 from
respondent bank;8 that as security for the loan, Concepcion mortgaged petitioner’s house and lot to respondent bank
using a SPA9 allegedly executed by petitioner in favor of Concepcion;10 that Concepcion failed to pay the loan;11 that
petitioner’s house and lot were foreclosed by respondent sheriff without a Notice of Extra-Judicial Foreclosure or
Notice of Auction Sale;12 and that petitioner’s house and lot were sold in an auction sale in favor of respondent
bank.13
Respondent bank filed an Answer14 interposing lack of cause of action as a defense.15 It denied the allegation of
petitioner that the SPA was forged16 and averred that on June 22, 1987, petitioner went to the bank and promised to
settle the loan of Concepcion before September 30, 1987.17 As to the alleged irregularities in the foreclosure
proceedings, respondent bank asserted that it complied with the requirements of the law in foreclosing the house
and lot.18 By way of cross-claim, respondent bank prayed that in the event of an adverse judgment against it,
Concepcion, its co-defendant, be ordered to indemnify it for all damages.19
However, since summons could not be served upon Concepcion, petitioner moved to drop her as a
defendant,20which the RTC granted in its Order dated October 19, 1990.21
This prompted respondent bank to file a Third-Party Complaint22 against spouses Concepcion and Agnes Bucton
Lugod (Lugod), the daughter of petitioner. Respondent bank claimed that it would not have granted the loan and
accepted the mortgage were it not for the assurance of Concepcion and Lugod that the SPA was valid.23 Thus,
respondent bank prayed that in case it be adjudged liable, it should be reimbursed by third-party defendants.24
On January 30, 1992, spouses Concepcion were declared in default for failing to file a responsive pleading.25
During the trial, petitioner testified that a representative of respondent bank went to her house to inform her that the
loan secured by her house and lot was long overdue.26 Since she did not mortgage any of her properties nor did she
obtain a loan from respondent bank, she decided to go to respondent bank on June 22, 1987 to inquire about the
matter.27 It was only then that she discovered that her house and lot was mortgaged by virtue of a forged SPA.28 She
insisted that her signature and her husband’s signature on the SPA were forged29 and that ever since she got
married, she no longer used her maiden name, Nicanora Gabar, in signing documents.30 Petitioner also denied
appearing before the notary public, who notarized the SPA.31 She also testified that the property referred to in the
SPA, TCT No. 3838, is a vacant lot and that the house, which was mortgaged and foreclosed, is covered by a
different title, TCT No. 3839.32
To support her claim of forgery, petitioner presented Emma Nagac who testified that when she was at Concepcion’s
boutique, she was asked by the latter to sign as a witness to the SPA;33 that when she signed the SPA, the
signatures of petitioner and her husband had already been affixed;34 and that Lugod instructed her not to tell
petitioner about the SPA.35
Respondent bank, on the other hand, presented the testimonies of its employees36 and respondent sheriff. Based on
their testimonies, it appears that on June 8, 1982, Concepcion applied for a loan for her coconut production
business37 in the amount of ₱40,000.00 but only the amount of ₱30,000.00 was approved;38 that she offered as
collateral petitioner’s house and lot using the SPA;39 and that the proceeds of the loan were released to Concepcion
and Lugod on June 11, 1982.40
Edwin Igloria, the bank appraiser, further testified that Concepcion executed a Real Estate Mortgage41 over two
properties, one registered in the name of petitioner and the other under the name of a certain Milagros Flores.42 He
said that he inspected petitioner’s property;43 that there were several houses in the compound;44 and although he
was certain that the house offered as collateral was located on the property covered by TCT No. 3838, he could not
explain why the house that was foreclosed is located on a lot covered by another title, not included in the Real
Estate Mortgage.45
On February 23, 1998, the RTC issued a Decision46 sustaining the claim of petitioner that the SPA was forged as the
signatures appearing on the SPA are different from the genuine signatures presented by petitioner.47 The RTC
opined that the respondent bank should have conducted a thorough inquiry on the authenticity of the SPA
considering that petitioner’s residence certificate was not indicated in the acknowledgement of the SPA.48 Thus, the
RTC decreed:
WHEREFORE, the court hereby declares null and void or annuls the following:
1. The special power of attorney which was purportedly executed by [petitioner] x x x;
2. The real estate mortgage x x x
3. The sheriff’s sale of Lot No. 2078-B-1-E, and the certificate of title issued in favor of the Rural Bank of El
Salavador [by] virtue thereof, as well as the sheriff’s sale of the two[-]story house described in the real estate
mortgage.
4. The certificate of title in the name of the Rural Bank of El Salvador if any, issued [by] virtue of the sheriff’s sale.
The court hereby also orders [respondent] bank to pay [petitioner] attorney’s fees of ₱20,000 and moral damages of
₱20,000 as well as the costs of the case.
SO ORDERED.49
On reconsideration,50 the RTC in its May 8, 1998 Resolution51 rendered judgment on the Third-Party Complaint filed
by respondent bank, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered under the third-party complaint and against third-party defendants
Erlinda Concepcion and her husband:
To indemnify or reimburse [respondent bank] all sums of money plus interests thereon or damages that [respondent
bank] has in this case been forced to pay, disburse or deliver to [petitioner] including the costs.
SO ORDERED.52
Dissatisfied, respondent bank elevated the case to the CA arguing that the SPA was not forged53 and that being a
notarized document, it enjoys the presumption of regularity.54 Petitioner, on the other hand, maintained that the
signatures were forged55 and that she cannot be made liable as both the Promissory Note56 and the Real Estate
Mortgage, which were dated June 11, 1982, were signed by Concepcion in her own personal capacity.57
On August 17, 2005, the CA reversed the findings of the RTC. The CA found no cogent reason to invalidate the
SPA, the Real Estate Mortgage, and Foreclosure Sale as it was not convinced that the SPA was forged. The CA
declared that although the Promissory Note and the Real Estate Mortgage did not indicate that Concepcion was
signing for and on behalf of her principal, petitioner is estopped from denying liability since it was her negligence in
handing over her title to Concepcion that caused the loss.58 The CA emphasized that under the Principle of Equitable
Estoppel, where one or two innocent persons must suffer a loss, he who by his conduct made the loss possible
must bear it.59 Thus:
WHEREFORE, the above premises considered, the Decision and the Resolution of the Regional Trial Court (RTC),
10th Judicial Region, Br. 19 of Cagayan de Oro City in Civil Case No. 88-113 is hereby REVERSED and SET
ASIDE. The Second Amended Complaint of Nicanora Bucton is DISMISSED. Accordingly, the following are
declared VALID:
1. The Special Power of Attorney of Nicanora Gabar in favor of Erlinda Concepcion, dated June 7, 1982;
2. The Real Estate Mortgage, the foreclosure of the same, and the foreclosure sale to the Rural Bank of El
Salvador, Misamis Oriental; and
3. The certificate of title issued to the Rural Bank of El Salavador, Misamis Oriental as a consequence of the
foreclosure sale.
Costs against [petitioner].
SO ORDERED.60
Petitioner moved for reconsideration61 but the same was denied by the CA in its June 7, 2007 Resolution.62
Issues
FIRST
X X X WHETHER X X X THE [CA] WAS RIGHT IN DECLARING THE PETITIONER LIABLE ON THE LITIGATED
LOAN/MORTGAGE WHEN (i) SHE DID NOT EXECUTE EITHER IN PERSON OR BY ATTORNEY-IN-FACT
SUBJECT MORTGAGE; (ii) IT WAS EXECUTED BY CONCEPCION IN HER PERSONAL CAPACITY AS
MORTGAGOR, AND (iii) THE LOAN SECURED BY THE MORTGAGE WAS CONCEPCION’S EXCLUSIVE LOAN
FOR HER OWN COCONUT PRODUCTION
SECOND
X X X WHETHER X X X UNDER ARTICLE 1878 (NEW CIVIL CODE) THE [CA] WAS RIGHT IN MAKING
PETITIONER A SURETY PRIMARILY ANSWERABLE FOR CONCEPCION’S PERSONAL LOAN, IN THE
ABSENCE OF THE REQUIRED [SPA]
THIRD
WHETHER X X X THE [CA] WAS RIGHT WHEN IT RULED THAT PETITIONER’S DECLARATIONS ARE SELF-
SERVING TO JUSTIFY ITS REVERSAL OF THE TRIAL COURT’S JUDGMENT, IN THE FACE OF THE
RESPONDENTS’ DOCUMENTARY EVIDENCES X X X, WHICH INCONTROVERTIBLY PROVED THAT
PETITIONER HAS ABSOLUTELY NO PARTICIPATION OR LIABILITY ON THE LITIGATED LOAN/MORTGAGE
FOURTH
WHETHER X X X THE [CA] WAS RIGHT WHEN IT FOUND THAT IT WAS PETITIONER’S NEGLIGENCE WHICH
MADE THE LOSS POSSIBLE, DESPITE [THE FACT] THAT SHE HAS NO PART IN [THE] SUBJECT
LOAN/MORTGAGE, THE BANK’S [FAILURE] TO CONDUCT CAREFUL EXAMINATION OF APPLICANT’S TITLE
AS WELL AS PHYSICAL INVESTIGATION OF THE LAND OFFERED AS SECURITY, AND TO INQUIRE AND
DISCOVER UPON ITS OWN PERIL THE AGENT’S AUTHORITY, ALSO ITS INORDINATE HASTE IN THE
PROCESSING, EVALUATION AND APPROVAL OF THE LOAN.
FIFTH
WHETHER X X X THE [CA] WAS RIGHT WHEN IT DISREGARDED THE FALSE TESTIMONY OF THE
[RESPONDENT] BANK’S EMPLOYEE, [WHEN HE DECLARED] THAT HE CONDUCTED ACTUAL INSPECTION
OF THE MORTGAGED PROPERTY AND INVESTIGATION WHERE HE ALLEGEDLY VERIFIED THE
QUESTIONED SPA.
SIXTH
WHETHER THE [CA] WAS RIGHT WHEN IT DISREGARDED ESTABLISHED FACTS AND CIRCUMSTANCES
PROVING THAT THE [SPA] IS A FORGED DOCUMENT AND/OR INFECTED BY INFIRMITIES DIVESTING IT OF
THE PRESUMPTION OF REGULARITY CONFERRED BY LAW ON NOTARIZED DEEDS, AND EVEN IF VALID,
THE POWER WAS NOT EXERCISED BY CONCEPCION.63
Petitioner maintains that the signatures in the SPA were forged64 and that she could not be held liable for the loan as
it was obtained by Concepcion in her own personal capacity, not as an attorney-in-fact of petitioner.65 She likewise
denies that she was negligent and that her negligence caused the damage.66 Instead, she puts the blame on
respondent bank as it failed to carefully examine the title and thoroughly inspect the property.67 Had it done so, it
would have discovered that the house and lot mortgaged by Concepcion are covered by two separate
titles.68Petitioner further claims that respondent sheriff failed to show that he complied with the requirements of
notice and publication in foreclosing her house and lot.69
Respondent bank’s Arguments
Respondent bank, on the other hand, relies on the presumption of regularity of the notarized SPA.70 It insists that it
was not negligent as it inspected the property before it approved the loan,71 unlike petitioner who was negligent in
entrusting her title to Concepcion.72 As to the foreclosure proceedings, respondent bank contends that under the
Rural Bank Act, all loans whose principal is below ₱100,000.00 are exempt from publication.73 Hence, the posting of
the Notice of Foreclosure in the places defined by the rules was sufficient.74 Besides, respondent sheriff is presumed
to have regularly performed his work.75
Our Ruling

The Real Estate Mortgage was entered
into by Concepcion in her own personal
capacity.
As early as the case of Philippine Sugar Estates Development Co. v. Poizat,76 we already ruled that "in order to bind
the principal by a deed executed by an agent, the deed must upon its face purport to be made, signed and sealed in
the name of the principal."77 In other words, the mere fact that the agent was authorized to mortgage the property is
not sufficient to bind the principal, unless the deed was executed and signed by the agent for and on behalf of his
principal. This ruling was adhered to and reiterated with consistency in the cases of Rural Bank of Bombon
(Camarines Sur), Inc. v. Court of Appeals,78 Gozun v. Mercado,79 and Far East Bank and Trust Company (Now Bank
of the Philippine Island) v. Cayetano.80
In Philippine Sugar Estates Development Co., the wife authorized her husband to obtain a loan and to secure it with
mortgage on her property. Unfortunately, although the real estate mortgage stated that it was executed by the
husband in his capacity as attorney-in-fact of his wife, the husband signed the contract in his own name without
indicating that he also signed it as the attorney-in-fact of his wife.
In Rural Bank of Bombon, the agent contracted a loan from the bank and executed a real estate mortgage.
However, he did not indicate that he was acting on behalf of his principal.
In Gozun, the agent obtained a cash advance but signed the receipt in her name alone, without any indication that
she was acting for and on behalf of her principal.
In Far East Bank and Trust Company, the mother executed an SPA authorizing her daughter to contract a loan from
the bank and to mortgage her properties. The mortgage, however, was signed by the daughter and her husband as
mortgagors in their individual capacities, without stating that the daughter was executing the mortgage for and on
behalf of her mother.
Similarly, in this case, the authorized agent failed to indicate in the mortgage that she was acting for and on behalf
of her principal. The Real Estate Mortgage, explicitly shows on its face, that it was signed by Concepcion in her own
name and in her own personal capacity. In fact, there is nothing in the document to show that she was acting or
signing as an agent of petitioner. Thus, consistent with the law on agency and established jurisprudence, petitioner
cannot be bound by the acts of Concepcion.
In light of the foregoing, there is no need to delve on the issues of forgery of the SPA and the nullity of the
foreclosure sale. For even if the SPA was valid, the Real Estate Mortgage would still not bind petitioner as it was
signed by Concepcion in her personal capacity and not as an agent of petitioner. Simply put, the Real Estate
Mortgage is void and unenforceable against petitioner.
Respondent bank was negligent.
At this point, we find it significant to mention that respondent bank has no one to blame but itself. Not only did it act
1âwphi1
with undue haste when it granted and released the loan in less than three days, it also acted negligently in preparing
the Real Estate Mortgage as it failed to indicate that Concepcion was signing it for and on behalf of petitioner. We
need not belabor that the words "as attorney-in-fact of," "as agent of," or "for and on behalf of," are vital in order for
the principal to be bound by the acts of his agent. Without these words, any mortgage, although signed by the
agent, cannot bind the principal as it is considered to have been signed by the agent in his personal capacity.
Respondent bank is liable to pay

petitioner attorney’s fees, and the costs
of the suit.
Considering that petitioner was compelled to litigate or to incur expenses to protect her interest,81 the RTC was right
when it ruled that respondent bank is liable to pay petitioner attorney’s fees in the amount of ₱20,000.00. However,
we are not convinced that petitioner is entitled to an award of moral damages as it was not satisfactorily shown that
respondent bank acted in bad faith or with malice. Neither was it proven that respondent bank’s acts were the
proximate cause of petitioner’s wounded feelings. On the contrary, we note that petitioner is not entirely free of
blame considering her negligence in entrusting her title to Concepcion. In any case, the RTC did not fully explain
why petitioner is entitled to such award.
Concepcion is liable to pay respondent

bank her unpaid obligation and
reimburse it for all damages, attorney’s
fees and costs of suit.
Concepcion, on the other hand, is liable to pay respondent bank her unpaid obligation under the Promissory Note
dated June 11, 1982, with interest. As we have said, Concepcion signed the Promissory Note in her own personal
capacity; thus, she cannot escape liability. She is also liable to reimburse respondent bank for all damages,
attorneys' fees, and costs the latter is adjudged to pay petitioner in this case.
WHEREFORE, the Petition is hereby GRANTED. The assailed August 17, 2005 Decision and the June 7, 2007
Resolution of the Court of Appeals in CA-G.R. CV No. 60841 are hereby REVERSED and SET ASIDE.
The February 23, 1998 Decision of the Regional Trial Court of Cagayan de Oro, Branch 19, in Civil Case No. 88-113
is hereby REINSTATED, insofar as it (a) annuls the Real Estate Mortgage dated June 11, 1982, the Sheriffs Sale of
petitioner Nicanora Bucton's house and lot and the Transfer Certificate of Title issued in the name of respondent
Rural Bank of El Salvador, Misamis Oriental; and (b) orders respondent bank to pay petitioner attorney's fees in the
amount of ₱20,000.00 and costs of suit with MODIFICATION that the award of moral damages in the amount of
₱20,000.00 is deleted for lack of basis.
Likewise, the May 8, 1998 Resolution of the Regional Trial Court of Cagayan de Oro, Branch 19, in Civil Case No.
88-113 ordering the Third-Party Defendants, Erlinda Concepcion and her husband, to indemnify or reimburse
respondent bank damages, attorneys' fees, and costs the latter is adjudged to pay petitioner, is hereby
REINSTATED.
Finally, Third-Party Defendants, Erlinda Concepcion and her husbahd, are hereby ordered to pay respondent bank
the unpaid obligation under the Promissory Note dated June 11, 1982 with interest.
SO ORDERED.
SECOND DIVISION
G.R. No. 179031 November 14, 2012

vs.
BENJAMIN SORIA y GOMEZ, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This case involves a father’s detestable act of abusing his daughter through rape by sexual assault.
Factual Antecedents
Accused-appellant Benjamin Soria y Gomez (appellant) seeks a review of the December 29, 2006 Decision1 of the
Court of Appeals (CA) in CA-G.R. CR-H.C. No. 01442 which affirmed with modification the June 30, 2005
Judgment2 of the Regional Trial Court (RTC) of Quezon City, Branch 94, in Criminal Case No. Q-01-98692. Said
RTC Judgment found appellant guilty beyond reasonable doubt of the crime of rape committed against his daughter
"AAA",3 as described in an Information,4 the relevant portion of which reads:
That on or about the 26th day of February, 2000, in Quezon City, Philippines, the said accused, who is the father of
private complainant "AAA", did then and there willfully, unlawfully, and feloniously with force and intimidation commit
an act of sexual assault upon the person of one "AAA", a minor, 7 years of age[,] by then and there inserting his
penis into [the] genital of said complainant, all against her will and consent, which act debases, degrades, or
demeans the intrinsic worth and dignity of said "AAA", as a human being, in violation of said law.
CONTRARY TO LAW.5
Appellant pleaded not guilty to the crime charged. Pre-trial and trial thereafter ensued.
On February 26, 2000, "AAA" and her siblings enjoyed the spaghetti their father (appellant) brought home for
merienda. After eating, "AAA" went to the bedroom to rest. Thereafter, appellant also entered the room and
positioned himself on top of "AAA", took off her clothes and inserted his penis into her vagina. "AAA" felt intense
pain from her breast down to her vagina and thus told her father that it was painful. At that point, appellant
apologized to his daughter, stood up, and left the room. This whole incident was witnessed by "AAA’s" brother,
"BBB".
The pain persisted until "AAA’s" vagina started to bleed. She thus told her aunt about it and they proceeded to a
hospital for treatment. Her mother was also immediately informed of her ordeal. Subsequently, "AAA" was taken into
the custody of the Department of Social Welfare and Development.
On March 15, 2000, Medico-Legal Officer Francisco A. Supe, Jr., M.D. (Dr. Supe) examined "AAA", which
examination yielded the following results:
GENERAL AND EXTRA-GENITAL: Fairly developed, fairly nourished and coherent female child. Breasts are
undeveloped. Abdomen is flat and soft.
GENITAL: There is absent growth of pubic hair. Labia majora are full, convex, and coaptated with light brown labia
minora presenting in between. On separating the same, disclosed an elastic, fleshy type, hyperemic and intact
hymen. Posterior fourchette is sharp.
CONCLUSION: The subject is in virgin state physically. There are no external signs of application of any form of
physical trauma.6
Appellant admitted that he was at home on the day and time of "AAA’s" alleged rape but denied committing the
same. Instead, he claimed that the filing of the rape case against him was instigated by his wife, whom he
confronted about her illicit affair with a man residing in their community. According to appellant, he could not have
molested "AAA" because he treated her well. In fact, he was the only one sending his children to school since his
wife already neglected them and seldom comes home.
On June 30, 2005, the trial court rendered its Judgment7 finding appellant guilty beyond reasonable doubt of the
crime of rape against "AAA", his daughter of minor age, as charged in the Information. It ruled that the lack of
tenacious resistance on the part of "AAA" is immaterial considering that appellant’s moral ascendancy and influence
over her substitute for violence and intimidation.8 It also held that his wife could not have instigated the filing of the
rape case since as the mother of "AAA", it would not be natural for her to use her child as a tool to exact revenge
especially if it will result in her embarrassment and stigma.9 The trial court gave credence to the testimony of "AAA"
and her positive identification of appellant as her rapist, and rejected the latter’s defense of denial. The dispositive
portion of the Judgment reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered finding the herein accused, BENJAMIN SORIA
Y GOMEZ − GUILTY beyond reasonable doubt of the crime as charged and sentences him to suffer the supreme
penalty of DEATH and to indemnify the offended party the amount of P75,000.00, to pay moral damages in the
amount of P50,000.00, and the amount of P25,000.00 as exemplary damages to deter other fathers with perverse
proclivities for aberrant sexual behavior for sexually abusing their own daughters.
SO ORDERED.10
In its Decision11 dated December 29, 2006, the CA found partial merit in the appeal. While the appellate court was
convinced that appellant raped "AAA", it nevertheless noted the prosecution’s failure to present her birth certificate
as competent proof of her minority. Thus, the CA concluded that the crime committed by appellant against his
daughter was only simple rape and accordingly modified the penalty imposed by the trial court from death to
reclusion perpetua and reduced the civil indemnity awarded from P75,000.00 to P50,000.00. The dispositive portion
of the appellate court’s Decision reads as follows:
WHEREFORE, premises considered, the appeal is hereby GRANTED and the June 30, 2005 Decision of the
Regional Trial Court of Quezon City, Branch 94, in Criminal Case No. Q-01-98692, is hereby MODIFIED, in that, the
penalty imposed is reduced to reclusion perpetua instead of death and the civil indemnity to be paid by the offender
to the victim is hereby reduced to the amount of P50,000.00 instead of P75,000.00 pursuant to prevailing
jurisprudence as explained in this decision.
Pursuant to Section 13(c), Rule 124 of the 2000 Rules of Criminal Procedure as amended by A.M. No. 00-5-03-SC
dated September 28, 2004, which became effective on October 15, 2004, this judgment of the Court of Appeals may
be appealed to the Supreme Court by notice of appeal filed with the Clerk of Court of the Court of Appeals.
SO ORDERED.12
Still insisting on his innocence, appellant comes to this Court through this appeal.
Appellant adopts the same assignment of errors he raised before the appellate court, viz:
I. THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED GUILTY OF THE CRIME OF RAPE
DESPITE THE FAILURE OF THE PROSECUTION TO OVERTHROW THE CONSTITUTIONAL PRESUMPTION
OF INNOCENCE X X X.
II. ASSUMING ARGUENDO THAT THE ACCUSED IS GUILTY OF THE CRIME CHARGED, THE TRIAL COURT
GRAVELY ERRED IN IMPOSING THE DEATH PENALTY UPON HIM.13
Appellant asserts that he should be acquitted of the crime of rape since there is no evidence that would establish the
fact of sexual intercourse. Aside from the prosecution’s failure to prove penile contact, "AAA’s" testimony was also
wanting in details as to how he took off her underwear or whether she saw his penis during the incident despite
leading questions propounded on the matter by the prosecution. The medical report even revealed that "AAA’s"
hymen remained intact and that there were no notable lacerations or external physical injuries thereon. Appellant
therefore surmises that his wife merely instigated "AAA" to file this baseless rape case against him in retaliation for
his act of confronting her about her illicit relationship with a neighbor.
Our Ruling
The crime of rape under Article 266-A of

the Revised Penal Code (RPC).
Republic Act No. 8353, otherwise known as the Anti-Rape Law of 1997, classified the crime of rape as a crime
against persons. It also amended Article 335 of the RPC and incorporated therein Article 266-A which reads:
Article 266-A. Rape, When and How Committed. – Rape is committed –
1) By a man who shall have carnal knowledge of a woman under any of the following circumstances:
a) Through force, threat or intimidation;
b) When the offended party is deprived of reason or is otherwise unconscious,
c) By means of fraudulent machination or grave abuse of authority;
d) When the offended party is under twelve (12) years of age or is demented, even though none of the
circumstances mentioned above be present;
2) By any person who, under any of the circumstances mentioned in paragraph 1 hereof, shall commit an act of
sexual assault by inserting his penis into another person’s mouth or anal orifice, or any instrument or object, into the
genital or anal orifice of another person.
Thus, rape can now be committed either through sexual intercourse or by sexual assault. Rape under paragraph 1
of the above-cited article is referred to as rape through sexual intercourse. Carnal knowledge is the central element
and it must be proven beyond reasonable doubt.14 It is commonly denominated as "organ rape" or "penile rape"15and
must be attended by any of the circumstances enumerated in subparagraphs (a) to (d) of paragraph 1.
On the other hand, rape under paragraph 2 of Article 266-A is commonly known as rape by sexual assault. The
perpetrator, under any of the attendant circumstances mentioned in paragraph 1, commits this kind of rape by
inserting his penis into another person’s mouth or anal orifice, or any instrument or object into the genital or anal
orifice of another person. It is also called "instrument or object rape", also "gender-free rape".16
The Information did not specify whether

the crime of rape was committed through
sexual intercourse or by sexual assault.
The Information in this case did not specify with certainty whether appellant committed the rape through sexual
intercourse under paragraph 1 of Article 266-A, or rape by sexual assault as described in paragraph 2 thereof. The
Information stated that appellant inserted his penis into the genital of "AAA," which constituted rape by sexual
intercourse under the first paragraph of Article 266-A. At the same time, the Information alleged that appellant used
force and intimidation to commit an act of sexual assault. While these allegations cause ambiguity, they only pertain
to the mode or manner of how the rape was committed and the same do not invalidate the Information or result in
the automatic dismissal of the case. "[W]here an offense may be committed in any of the different modes and the
offense is alleged to have been committed in two or more modes specified, the indictment is sufficient,
notwithstanding the fact that the different means of committing the same offense are prohibited by separate sections
of the statute. The allegation in the information of the various ways of committing the offense should be regarded as
a description of only one offense and the information is not thereby rendered defective on the ground of
multifariousness."17 Any objection from the appellant with respect to the Information is held to have been waived
failing any effort to oppose the same before trial.18 He therefore can be convicted of rape through sexual intercourse
or rape by sexual assault, depending on the evidence adduced during trial.
The findings of the RTC and the CA on
the credibility of "AAA" deserve respect
and great weight.
Both the trial court and the CA held that "AAA" was a credible witness. They ruled that her testimony deserved
credence and is sufficient evidence that she was raped by appellant. We find no cogent reason to overturn these
findings.
It would be highly inconceivable for "AAA" to impute to her own father the crime of raping her unless the imputation
is true.19 In fact, it takes "a certain amount of psychological depravity for a young woman to concoct a story which
would put her own father in jail for the rest of his remaining life and drag the rest of the family including herself to a
lifetime of shame"20 unless the imputation is true.
When a rape victim’s testimony on the manner she was defiled is "straightforward and candid, and is corroborated
by the medical findings of the examining physician as in this case, the same is sufficient to support a conviction for
rape."21
Appellant is guilty of rape by sexual
assault and not through sexual
intercourse.
The trial court’s conviction of the appellant was for rape through sexual intercourse under paragraph 1(a) of Article
266-A. The CA sustained the trial court’s finding that appellant had sexual intercourse with "AAA" against her will.
In determining whether appellant is indeed guilty of rape through sexual intercourse under paragraph 1 of Article
266-A, it is essential to establish beyond reasonable doubt that he had carnal knowledge of "AAA". There must be
proof that his penis touched the labia of "AAA" or slid into her female organ, and not merely stroked the external
surface thereof, to ensure his conviction of rape by sexual intercourse.221ªvvph!1
We reviewed the testimony of "AAA" and found nothing therein that would show that she was raped through sexual
intercourse. While "AAA" categorically stated that she felt something inserted into her vagina, her testimony was
sorely lacking in important details that would convince us with certainty that it was indeed the penis of appellant that
was placed into her vagina.
When "AAA" was placed on the witness stand, she narrated that:
Q - The earlier statement which you made when you said that you wanted to explain something about your father, is
that true?
A - Yes, sir.
Q - So, you said that you wanted to explain something about your father, what was that?
A - What he did, sir.
Q - What was that?
A - I was raped, sir.
Q - What did he do when you said he raped you?
A - He laid on top of me, sir.23
xxxx
Q - So when you said he laid on top of you, did you feel anything? Did you feel any pain in any part of your body?
A - Yes, sir.
Q - In what part of your body did you feel pain?
A - I felt pain in my breast and my stomach.
Q - What about your private part?
A - Yes, sir.
Q - Did you know why your stomach as well as your body and your private part hurt or become painful?
A - I don’t know, sir.
Q - Did you feel something inserted into your private part?
A - Yes, sir.
Q - What is that, if you know?

A - The bird of my papa.
Q - Why did you know that?
A - Because my brother, "BBB", told me.
Q - Why? Was "BBB", your brother, present when your father was on top of you?
A - Yes, sir.
Q - Why do you know that he was there?
A - He told me so, sir.
Q - Who?
A - "BBB".
Q - Okay, when you felt pain as something was inserted [into] your private part, what did you say to your father?
A - He left the room.
Q - Before he went away and left?
A - It was painful, sir.
Q - And what was the answer of your father?
A - He said sorry, sir.
Q - How long was he or how long were you in that position, you were lying down and your father was on top of you?
A - I do not know, sir.24
xxxx
Q - Earlier, you were making reference to your father whom you said abused you. I am asking you now to tell us if
your father is around?
A - Yes, sir.
Q - Will you please point x x x to him?
A - Yes, sir. (Witness pointing to a man who is wearing yellow t-shirt and maong pants who when asked identified
himself as Benjamin Soria.)
Q - Is he the same person who according to you laid on top of you and inserted something into your vagina or
private part?
A - Yes, sir.25
It is evident from the testimony of "AAA" that she was unsure whether it was indeed appellant’s penis which touched
her labia and entered her organ since she was pinned down by the latter’s weight, her father having positioned
himself on top of her while she was lying on her back. "AAA" stated that she only knew that it was the "bird" of her
father which was inserted into her vagina after being told by her brother "BBB". Clearly, "AAA" has no personal
knowledge that it was appellant’s penis which touched her labia and inserted into her vagina. Hence, it would be
erroneous to conclude that there was penile contact based solely on the declaration of "AAA’s" brother, "BBB",
which declaration was hearsay due to "BBB’s" failure to testify. Based on the foregoing, it was an error on the part of
the RTC and the CA to conclude that appellant raped "AAA" through sexual intercourse.
Instead, we find appellant guilty of rape by sexual assault. It cannot be denied that appellant inserted an object into
"AAA’s" female organ. "AAA" categorically testified that appellant inserted something into her vagina. She claimed to
have suffered tremendous pain during the insertion. The insertion even caused her vagina to bleed necessitating
her examination at the hospital. Both the trial court and the CA found "AAA’s" testimony to be credible. We find no
compelling reason not to lend credence to the same.
This defilement constitutes rape under paragraph 2 of Article 266-A of the RPC, which provides that rape by sexual
assault is committed "by any person who, under any of the circumstances mentioned in paragraph 1 hereof, shall
commit an act of sexual assault by inserting x x x any instrument or object, into the genital or anal orifice of another
person."
Moreover, Dr. Supe corroborated her testimony as follows:
Q - Doctor, with respect to Exhibit A, the Medico-Legal Report pertaining to the entry into the genital, which reads:
On separating the hymen, disclosed was an elastic, fleshy type, hyperemic and intact hymen. Will you please tell us,
Doctor, what is this hyperemic hymen?
A - Hyperemic hymen, sir, means that at the time of examination, I found out that it was reddish in color.
Q - Considering the age of the child or the patient, the victim whom you examined at that time who was about 6
years old, will you be able to tell us, Doctor, what could have caused this kind of injury, because this is an injury to
the hymen?
A - Hyperemic, sir, is observed whenever there is friction applied to an area, such as in the form of scratching.
Q - What about insertion of object, would this result into hyperemic hymen?
A - If the object is being rubbed, sir, there is a possibility.
Q - A finger will produce this kind of injury?
A - Possible, sir.26
According to Dr. Supe, it is possible that "AAA’s" hyperemic hymen may be the result of the insertion of a finger or
object. While Dr. Supe said that the injury could also be attributed to scratching, "AAA’s" testimony is bereft of any
showing that she scratched her genital organ thus causing the reddening. Appellant would also want to make it
appear that the injury of "AAA" was the result of friction from playing or riding a bicycle since the doctor testified that
this was also possible. However, there is likewise no evidence that friction was applied on "AAA’s" female organ
when she played hide and seek with her playmates or that she actually rode a bicycle. On the other hand, "AAA"
was categorical in stating that in the afternoon of February 26, 2000, appellant removed her clothes, laid on top of
her, and that she felt something being inserted into her vagina and that thereafter she experienced pain in her
genitals. The foregoing thus proved that appellant inserted an object into "AAA’s" vagina against her will and without
consent. Simply put, appellant committed the crime of rape by sexual assault.
The following are the elements of rape by sexual assault:
(1) That the offender commits an act of sexual assault;
(2) That the act of sexual assault is committed by any of the following means:
(a) By inserting his penis into another person’s mouth or anal orifice; or
(b) By inserting any instrument or object into the genital or anal orifice of another person;
(3) That the act of sexual assault is accomplished under any of the following circumstances:
(a) By using force and intimidation;
(b) When the woman is deprived of reason or otherwise unconscious; or
(c) By means of fraudulent machination or grave abuse of authority; or
(d) When the woman is under 12 years of age or demented.27
In the instant case, it was clearly established that appellant committed an act of sexual assault on "AAA" by inserting
an instrument or object into her genital. We find it inconsequential that "AAA" could not specifically identify the
particular instrument or object that was inserted into her genital. What is important and relevant is that indeed
something was inserted into her vagina. To require "AAA" to identify the instrument or object that was inserted into
her vagina would be contrary to the fundamental tenets of due process. It would be akin to requiring "AAA" to
establish something that is not even required by law. Moreover, it might create problems later on in the application
of the law if the victim is blind or otherwise unconscious. Moreover, the prosecution satisfactorily established that
appellant accomplished the act of sexual assault through his moral ascendancy and influence over "AAA" which
substituted for violence and intimidation. Thus, there is no doubt that appellant raped "AAA" by sexual assault.
Appellant’s contentions are untenable.
The failure of "AAA" to mention that her panty was removed prior to the rape does not preclude sexual assault. We
cannot likewise give credence to the assertion of appellant that the crime of rape was negated by the medical
findings of an intact hymen or absence of lacerations in the vagina of "AAA". Hymenal rupture, vaginal laceration or
genital injury is not indispensable because the same is not an element of the crime of rape.28 "An intact hymen does
not negate a finding that the victim was raped."29 Here, the finding of reddish discoloration of the hymen of "AAA"
during her medical examination and the intense pain she felt in her vagina during and after the sexual assault
sufficiently corroborated her testimony that she was raped.
Likewise undeserving of credence is appellant’s contention that his wife merely instigated "AAA" to file the charge of
rape against him in retaliation for his having confronted her about her illicit affair with another man. This imputation
of ill motive is flimsy considering that it is unnatural for appellant’s wife to stoop so low as to subject her own
daughter to the hardships and shame concomitant with a prosecution for rape, just to assuage her hurt feelings.30 It
is also improbable for appellant’s wife to have dared encourage their daughter "AAA" to publicly expose the
dishonor of the family unless the rape was indeed committed.31
Penalty
Under Article 266-B of the RPC, the penalty for rape by sexual assault is prision mayor. However, the penalty is
increased to reclusion temporal "if the rape is committed by any of the 10 aggravating/qualifying circumstances
mentioned in this article". The Information alleged the qualifying circumstances of relationship and minority. It was
alleged that appellant is the father of "AAA". During the pre-trial conference, the parties stipulated that "AAA" is the
daughter of appellant.32 During trial, appellant admitted his filial bond with "AAA".33 "Admission in open court of
relationship has been held to be sufficient and, hence, conclusive to prove relationship with the victim."34
With respect to minority, however, the Information described "AAA" as a 7-year old daughter of appellant. While this
also became the subject of stipulation during the pre-trial conference, same is insufficient evidence of "AAA’s" age.
Her minority must be "proved conclusively and indubitably as the crime itself".35 "There must be independent
evidence proving the age of the victim, other than the testimonies of prosecution witnesses and the absence of
denial by the accused."36 Documents such as her original or duly certified birth certificate, baptismal certificate or
school records would suffice as competent evidence of her age.37 Here, there was nothing on record to prove the
minority of "AAA" other than her testimony, appellant’s absence of denial, and their pre-trial stipulation.38 The
prosecution also failed to establish that the documents referred to above were lost, destroyed, unavailable or
otherwise totally absent.39
It is settled that "when either one of the qualifying circumstances of relationship and minority is omitted or lacking,
that which is pleaded in the information and proved by the evidence may be considered as an aggravating
circumstance."40 As such, appellant’s relationship with "AAA" may be considered as an aggravating circumstance.
In view of these, the imposable penalty is reclusion temporal which ranges from twelve (12) years and one (1) day to
twenty (20) years. Applying the Indeterminate Sentence Law, the penalty next lower in degree is prision mayor
which ranges from six (6) years and one (1) day to twelve (12) years. Hence, a penalty of twelve (12) years of prison
mayor, as minimum, to twenty (20) years of reclusion temporal, as maximum, is imposed upon appellant.
Damages
In line with prevailing jurisprudence, the awards of P50,000.00 as civil indemnity, P50,000.00 as moral damages
and P25,000.00 as exemplary damages are each modified to P30,000.00.41 "AAA" is also entitled to an interest on all
the amounts of damages awarded at the legal rate of 6% per annum from the date of finality of this judgment until
fully paid.42
WHEREFORE, the December 29, 2006 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 01442 is
AFFIRMED with MODIFICATIONS. Accused-appellant Benjamin Soria y Gomez is found guilty beyond reasonable
doubt of the crime of rape by sexual assault and is sentenced to suffer the penalty of twelve (12) years of prison
mayor, as minimum, to twenty (20) years of reclusion temporal, as maximum. He is also ordered to pay "AAA" the
amounts of P30,000.00 as civil indemnity, P30,000.00 as moral damages, and P30,000.00 as exemplary damages.
"AAA" is entitled to an interest on all damages awarded at the legal rate of 6% per annum from the date of finality of
SO ORDERED.
SECOND DIVISION
G.R. No. 173523 February 19, 2014
LUCENA D. DEMAALA, Petitioner,

vs.
SANDIGANBAYAN (Third Division) and OMBUDSMAN, Respondents.
DECISION
DEL CASTILLO, J.:
Where a party was afforded the opportunity to participate in the proceedings, yet he failed to do so, he cannot be
allowed later on to claim that he was deprived of his day in court.
This Petition for Certiorari With Urgent Motion For Preliminary Injunction And Prayer For Temporary Restraining
Order1 assails the May 23, 2006 Resolution2 of the Sandiganbayan, Third Division, in Criminal Case Nos. 27208,
27210, 27212, 27214, 27216-27219, and 27223-27228, which denied petitioner's Motion. for Reconsideration of the
February 9, 2006 Resolution3 ordering her suspension pendente lite as Mayor of Narra, Palawan.
Factual Antecedents
Petitioner Lucena D. Demaala is the Municipal Mayor of Narra, Palawan, and is the accused in Criminal Case Nos.
27208, 27210, 27212, 27214, 27216-27219, and 27223-27228 for violations of Section 3(h) of Republic Act No.
30194 (RA 3019), which cases are pending before the Sandiganbayan.
On January 9, 2006, the Office of the Special Prosecutor filed before the Sandiganbayan a Motion to Suspend the
Accused Pursuant to Section 13, RA 30195 arguing that under Section 13 of RA 3019,6 petitioner’s suspension from
office was mandatory. Petitioner opposed7 the motion claiming that there is no proof that the evidence against her
was strong; that her continuance in office does not prejudice the cases against her nor pose a threat to the safety
and integrity of the evidence and records in her office; and that her re-election to office justifies the denial of
suspension.
Ruling of the Sandiganbayan
On February 9, 2006, the Sandiganbayan issued a Resolution granting the motion to suspend, thus:
WHEREFORE, PREMISES CONSIDERED, the Motion of the Prosecution is hereby GRANTED. As prayed for, this
Court hereby ORDERS the suspension pendente lite of herein accused, Lucena Diaz Demaala, from her present
position as Municipal Mayor of Narra, Palawan, and from any other public position he [sic] may now be holding. His
[sic] suspension from office shall be for a period of ninety (90) days only, to take effect upon the finality of this
Resolution.
Let the Honorable Secretary of the Department of Interior and Local Government, and the Provincial Governor of
Palawan be furnished copies of this Resolution.
Once this Resolution shall have become final and executory, the Honorable Secretary of the Department of Interior
and Local Government shall be informed accordingly for the implementation of the suspension of herein accused.
Thereafter, the Court shall be informed of the actual date of implementation of the suspension of the accused.
SO ORDERED.8
The Sandiganbayan held that preventive suspension was proper to prevent petitioner from committing further acts of
malfeasance while in office. It stated further that petitioner’s re-election to office does not necessarily prevent her
suspension, citing this Court’s ruling in Oliveros v. Judge Villaluz9 that pending prosecutions for violations of RA
3019 committed by an elective official during one term may be the basis for his suspension in a subsequent term
should he be re-elected to the same position or office. The court added that by her arraignment, petitioner is
deemed to have recognized the validity of the Informations against her; thus, the order of suspension should issue
as a matter of course.
On March 23, 2006, petitioner filed her Motion for Reconsideration.10 She argued that the motion to suspend should
have been filed earlier and not when the prosecution is about to conclude the presentation of its evidence; that the
prosecution evidence indicates that petitioner’s acts are not covered by Section 3(h) of RA 3019, and thus not
punishable under said law; that the evidence failed to show that petitioner was committing further acts of
malfeasance in office; and that suspension – while mandatory – is not necessarily automatic. Petitioner scheduled
the hearing of her Motion for Reconsideration on April 26, 2006, thus:
NOTICE OF HEARING
To: Pros. Manuel T. Soriano, Jr.

Office of the Special Prosecutor
Sandiganbayan Bldg.
Commonwealth Avenue
Quezon City
GREETINGS:
Please take notice that on Wednesday, April 26, 2006 at 1:30 o’clock P.M. or as soon as [sic] thereafter as counsels
may be heard, the undersigned will submit the foregoing Motion for the consideration and approval of the Honorable
Court.
(signed)
ZOILO C. CRUZAT11
The Ombudsman (prosecution) opposed12 petitioner’s Motion for Reconsideration.

On April 19, 2006, the prosecution filed a Manifestation with Motion to Reset the Trial Scheduled on April 26 and 27,
2006.13 It sought to reset the scheduled April 26 and 27, 2006 hearing for the continuation of the presentation of the
prosecution’s evidence to a later date. The manifestation and motion to reset trial was scheduled for hearing on April
21, 2006. It states, in part, that –
Per the January 19, 2006 Order of the Honorable Court, trial of these cases will continue on April 26 and 27, 2006,
both at 1:30 in the afternoon.
xxxx
In view of the foregoing and in order not to make the government unnecessarily pay for the expenses of the
intended witnesses who were in Palawan, the prosecution did not issue a subpoena to its next witnesses anymore.
Unfortunately, to date, the parties are yet to meet and discuss matters that would be included in the joint
stipulations, as the two (2) scheduled meetings at the Office of the Special Prosecutor between the prosecution and
the defense did not materialize. Nevertheless, the accused has not filed any manifestation to inform the Honorable
Court that the accused is no longer willing to enter into stipulations. Hence, there is a possibility that the parties will
eventually come up with a joint stipulation of facts.14 (Emphasis supplied)
On April 21, 2006, the Sandiganbayan issued an Order15 granting the prosecution’s motion to reset trial and
scheduled the continuation thereof on August 2 and 3, 2006. The Order reads, as follows:
In view of the Motion to Reset the Trial Scheduled on April 26 and 27, 2006 filed by the Prosecution and finding the
same to be meritorious, the motion is hereby granted. Thus, trial on April 26 and 27, 2006 is cancelled and reset on
August 2 and 3, 2006, both at 1:30 in the afternoon.
Notify the parties and counsels accordingly.
SO ORDERED.16
On May 23, 2006, the Sandiganbayan issued the assailed Resolution denying petitioner’s March 23, 2006 Motion
for Reconsideration, thus:
WHEREFORE, PREMISES CONSIDERED, the instant Motion for Reconsideration filed by herein accused Mayor
Lucena Diaz Demaala, is hereby DENIED for lack of merit. Our ruling in our Resolution of February 9, 2006 is
MAINTAINED.
SO ORDERED.17
In denying the motion, the Sandiganbayan held that the grounds relied upon and arguments raised therein were
mere reiterations of those contained in petitioner’s Opposition to the Motion to Suspend the Accused; that contrary
to petitioner’s submission that the motion to suspend should have been filed earlier and not when the prosecution is
about to conclude the presentation of its evidence, the suspension of an accused public officer is allowed so long as
his case remains pending with the court; that the issue of whether petitioner’s acts constitute violations of RA 3019
is better threshed out during trial; and that while it is not shown that petitioner was committing further acts of
malfeasance while in office, the presumption remains that unless she is suspended, she might intimidate the
witnesses, frustrate prosecution, or further commit acts of malfeasance.18
Feeling aggrieved, petitioner filed the instant Petition.
On August 9, 2006, the Court issued a Status Quo Order19 enjoining the implementation of the Sandiganbayan’s
February 9, 2006 Resolution.
Issue
Petitioner claims that she was denied due process when the Sandiganbayan issued its May 23, 2006 Resolution
denying her Motion for Reconsideration even before the same could be heard on the scheduled August 2 and 3,
2006 hearings.
The Petition is premised on the argument that petitioner’s Motion for Reconsideration – of the February 9, 2006
Resolution ordering her suspension from office – was originally set for hearing on April 26, 2006, but upon motion by
the prosecution, the same was reset to August 2 and 3, 2006; nonetheless, before the said date could arrive, or on
May 23, 2006, the Sandiganbayan resolved to deny her Motion for Reconsideration. Hence, she was deprived of the
opportunity to be heard on her Motion for Reconsideration on the appointed dates – August 2 and 3, 2006, thus
rendering the court’s May 23, 2006 Resolution void for having been issued with grave abuse of discretion.
In her Reply,20 petitioner adds that her counsel intentionally set the hearing of her Motion for Reconsideration on
April 26 and 27, 2006 in order to coincide with the main trial of the criminal cases; that since the court rescheduled
the April 26 and 27 hearings, she no longer bothered to go to court on April 26, 2006 as "she had no business to be
there". Petitioner further claims that she did not file any pleading seeking to reset the hearing of her Motion for
Reconsideration because the same had already been scheduled for hearing on August 2 and 3, 2006 at the initiative
of the prosecution.
Petitioner now prays that the February 9 and May 23, 2006 Resolutions of the Sandiganbayan be set aside, and that
injunctive relief be granted to enjoin her suspension from office.
Praying that the Petition be dismissed, the prosecution argues in its Comment21 that petitioner’s arguments are
misleading. It stresses that the prosecution’s Manifestation with Motion to Reset the Trial Scheduled on April 26 and
27, 2006 sought to reset the scheduled April 26 and 27, 2006 hearing for the continuation of the presentation of the
prosecution’s evidence, and not the scheduled April 26, 2006 hearing of petitioner’s Motion for Reconsideration. It
clarifies that a reading of its manifestation and motion to reset trial would reveal that what was sought to be
rescheduled was the hearing proper and not the hearing on petitioner’s Motion for Reconsideration; in the same
vein, what the Sandiganbayan granted in its April 21, 2006 Order was the rescheduling of the April 26 and 27, 2006
hearing for the continuation of the presentation of the prosecution’s evidence, and not the April 26, 2006 hearing of
petitioner’s Motion for Reconsideration. For this reason, it cannot be said that petitioner was denied due process
when the Sandiganbayan issued its assailed May 23, 2006 Resolution. 1âwphi1
The prosecution adds that petitioner should have gone to court on April 21, 2006 to attend the hearing of its
manifestation and motion to reset trial to reiterate her Motion for Reconsideration.
Next, the prosecution argues that petitioner’s Motion for Reconsideration was not denied outright; the Sadiganbayan
resolved her motion on the merits and painstakingly addressed each argument raised therein. Moreover, the
prosecution filed its written opposition to the Motion for Reconsideration, which thus joined the issues and rendered
the motion ripe for resolution. As such, petitioner was given reasonable opportunity to be heard and submit her
evidence on the motion. It cites the ruling in Batul v. Bayron22 stating that "‘to be heard’ does not only mean
presentation of testimonial evidence in court. One may also be heard through pleadings and where opportunity to be
heard through pleadings is accorded, there is no denial of due process."23
Our Ruling
The Court dismisses the Petition.
The only issue is whether petitioner was denied due process when the Sandiganbayan issued its May 23, 2006
Resolution denying the Motion for Reconsideration without conducting a hearing thereon.
Petitioner’s cause of action lies in the argument that her Motion for Reconsideration, which was originally set for
hearing on April 26, 2006, was reset to August 2 and 3, 2006 via the Sandiganbayan’s April 21, 2006 Order.
Nonetheless, before the said date could arrive, the anti-graft court supposedly precipitately issued the assailed May
23, 2006 Resolution denying her Motion for Reconsideration, thus depriving her of the opportunity to be heard.
The above premise, however, is grossly erroneous.
A reading and understanding of the April 21, 2006 Order of the Sandiganbayan indicates that what it referred to
were the two hearing dates of April 26 and 27, 2006 covering the continuation of the trial proper – the ongoing
presentation of the prosecution’s evidence – and not the single hearing date of April 26, 2006 for the determination
of petitioner’s Motion for Reconsideration. The prosecution’s manifestation and motion to reset trial itself
unmistakably specified that what was being reset was the trial proper which was scheduled on April 26 and 27, 2006
pursuant to the court’s previous January 19, 2006 Order; it had nothing at all to do with petitioner’s Motion for
Reconsideration.
If petitioner truly believed that the prosecution’s manifestation and motion to reset trial referred to the April 26, 2006
hearing of her Motion for Reconsideration, then she should have attended the scheduled April 21, 2006 hearing
thereof to reiterate her motion or object to a resetting. Her failure to attend said hearing is a strong indication that
she did not consider the manifestation and motion to reset trial as covering or pertaining to her Motion for
Reconsideration which she set for hearing on April 26, 2006.
On the other hand, petitioner’s failure to attend the scheduled April 26, 2006 hearing of her own Motion for
Reconsideration is fatal to her cause. Her excuse – that she no longer bothered to go to court on April 26, 2006
since "she had no business to be there" – is unavailing. By being absent at the April 21, 2006 hearing, petitioner did
not consider the prosecution’s manifestation and motion to reset trial as related to her pending Motion for
Reconsideration. Thus, it was incumbent upon her to have attended the hearing of her own motion on April 26,
2006. Her absence at said hearing was inexcusable, and the Sandiganbayan was therefore justified in considering
the matter submitted for resolution based on the pleadings submitted.
Consequently, there was nothing procedurally irregular in the issuance of the assailed May 23, 2006 Resolution by
the Sandiganbayan. The contention that petitioner was deprived of her day in court is plainly specious; it simply
does not follow. Where a party was afforded the opportunity to participate in the proceedings, yet he failed to do so,
he cannot be allowed later on to claim that he was deprived of his day in court. It should be said that petitioner was
accorded ample opportunity to be heard through her pleadings, such conclusion being consistent with the Court’s
ruling in Batul v. Bayron, later reiterated in De La Salle University, Inc. v. Court of Appeals,24 thus –
Where a party was afforded an opportunity to participate in the proceedings but failed to do so, he cannot complain
of deprivation of due process. Notice and hearing is the bulwark of administrative due process, the right to which is
among the primary rights that must be respected even in administrative proceedings. The 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. So long as the party is given the
opportunity to advocate her cause or defend her interest in due course, it cannot be said that there was denial of
due process.
A formal trial-type hearing is not, at all times and in all instances, essential to due process – it is enough that the
parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present
supporting evidence on which a fair decision can be based. "To be heard" does not only mean presentation of
testimonial evidence in court - one may also be heard through pleadings and where the opportunity to be heard
through pleadings is accorded, there is no denial of due process.25
WHEREFORE, the Petition is DISMISSED. The August 9, 2006 Status Quo Order is LIFTED.
SO ORDERED.
SECOND DIVISION
G.R. No. 190524 February 17, 2014

MICHAELINA RAMOS BALASBAS, Petitioner,
vs.
PATRICIA B. MONAYAO, Respondent.
DECISION
DEL CASTILLO, J.:
While the law and justice abhor all forms of abuse committed by public officers and employees whose sworn duty is
to discharge their duties with utmost responsibility, integrity, competence, accountability, and loyalty, the Court must
protect them against unsubstantiated charges that tend to adversely affect, rather than encourage, the effective
performance of their duties and functions.
Assailed in this Petition for Review on Certiorari1 are the November 28, 2008 Decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 102407 and its November 27, 2009 Resolution3 denying reconsideration thereof.
Factual Antecedents
In a May 19, 2003 letter-complaint4 filed with the Department of Social Welfare and Development (DSWD), petitioner
Atty. Michaelina Ramos Balasbas accused respondent Patricia B. Monayao – then employed by the DSWD – of
misrepresentation, fraud, dishonesty and refusal to implement an October 6, 1998 Order5 issued by the Department
of Environment and Natural Resources (DENR) in a land dispute – docketed with the DENR as H.A. NRD, 11-15-
004 (E-11-16-004) – filed sometime in 1987 by petitioner’s brother against respondent’s father.
It appears that in said case, respondent appeared in lieu of her father, who she claimed passed away. Petitioner
claimed further that despite judgment rendered in the said dispute awarding one-half of the disputed land to her
brother, and respondent’s subsequent notarized waiver of her rights to her half, the latter illegally sold the portion,
over which she had waived her rights, to her children via a 1992 deed of sale purportedly executed by her father,
which was simulated considering that as early as 1987, respondent’s father was already deceased.
In a June 24, 2003 letter-reply,6 the DSWD informed petitioner that respondent was no longer an employee thereof,
but was devolved in 1992 to the local government of the municipality of Alfonso Lista in Ifugao Province. Petitioner
was thus advised to address her complaint to the Office of the Mayor of Alfonso Lista.
Petitioner thus filed with the Mayor of Alfonso Lista a July 30, 2003 sworn letter-complaint7 against respondent. In a
September 18, 2003 reply8 to petitioner, however, Alfonso Lista Mayor Glenn D. Prudenciano refused to take action
on the complaint, citing an August 19, 2003 opinion9 of Victor P. Sibal, Director II of the Cordillera Administrative
Region office of the Civil Service Commission (CSC-CAR), which stated that petitioner’s complaint against
respondent may not be acted upon as the acts complained of were not in relation to the latter’s duties and
responsibilities as Municipal Population Officer.
Petitioner wrote an October 16, 2003 letter10 to the CSC, appealing the August 19, 2003 opinion of the CSC-CAR.
She claimed that the actions of respondent violated the civil service laws and amounted to grave misconduct and
immorality, thus:
The question is this – is it only acts related to the duties and responsibilities of a government officer that can be the
subject of an administrative case? Stated otherwise, would you have as a member of the Civil Service a person who
has engaged in misrepresentation, fraud, dishonesty and has contemptuously refused to implement an Order of the
DENR dated 6 October 1998?
I believe that nowhere in the Civil Service Law is there such a qualification. The acts complained of also amount to
grave misconduct and immorality – unless one only thinks of immoral as only referring to sex.
On the other hand – granting arguendo that there is such a limited interpretation, how can having mistresses (which
currently the government is relentlessly pursuing to rid of) fall within the ambit of a government official’s duties and
responsibilities?11
In an October 6, 2004 letter-opinion,12 the CSC’s Office for Legal Affairs (CSC-OLA) denied petitioner’s appeal and
affirmed the August 19, 2003 opinion of the CSC-CAR. The CSC-OLA held that the CSC had no jurisdiction over
petitioner’s complaint as it stemmed from a private transaction between the protagonists; petitioner’s remedy was
instead to seek execution of the DENR’s Decision in H.A. NRD, 11-15-004 (E-11-16-004).
Petitioner, in a November 11, 2004 letter,13 sought a reconsideration of the above October 6, 2004 opinion.
Petitioner argued that under Section 4 of the Revised Uniform Rules on Administrative Cases in the Civil
Service,14the jurisdiction of the CSC over public officers or employees is not limited to their acts or omissions that are
work-related; disciplinary action may be taken for their acts of dishonesty, immorality, oppression, notorious
undesirability, conviction of a crime involving moral turpitude, habitual drunkenness, or gambling. Petitioner adds
that even the lending of money at usurious rates, conducting illicit relations, and willful failure to pay just debts are
grounds for disciplinary action.15 Petitioner concluded that respondent’s misrepresentation, fraud, dishonesty and
refusal to implement the DENR’s October 6, 1998 Order relative to the 1987 DENR land dispute constitute acts
unbecoming a public official and fall within the jurisdiction of the CSC. Petitioner thus prayed that the CSC
reconsider its October 6, 2004 letter; declare respondent guilty of misrepresentation, fraud, dishonesty and refusal
to implement the DENR’s October 6, 1998 Order; and impose upon her disciplinary action and penalties in
accordance with civil service laws and regulations.
On January 14, 2008, the CSC issued Resolution No. 080059,16 which decreed as follows:
WHEREFORE, foregoing premises considered, the instant appeal is hereby DISMISSED for want of merit.
Accordingly, the opinion of the Office for Legal Affairs dated October 6, 2004 is AFFIRMED.
In dismissing petitioner’s appeal, the CSC held firm to the view that Monayao’s purported misrepresentation, fraud,
dishonesty and refusal to implement the DENR Order in H.A. NRD, 11-15-004 (E-11-16-004) had no bearing on her
official duties as a local government employee, and that petitioner’s relief was to move for the execution of the
unsatisfied DENR judgment and thus compel respondent to honor her notarized waiver of her rights to one-half
portion of the land in dispute, or proceed to court for judicial intervention. It held, thus:
After due consideration, the Commission is inclined to dismiss the present appeal.
It is unavailing for the private complainant to insist that there are disciplinary grounds that are not work-related such
that her complaint, rooted as it was on a private transaction, should not have been perfunctorily dismissed. True it is
that some of the recognized grounds for administrative disciplinary actions against government officials and
employees contemplate of private deeds. Two such examples are disgraceful and immoral conduct, and non-
payment of just debt. However, it may be noted that these personal actions give rise to administrative culpability
because they indubitably reflect on the moral fitness and integrity of the respondent public official or employee. This
means that the commission of any of the said acts betrays the moral unfitness of the respondent public officer,
which would make them amenable to disciplinary sanctions.
In the herein case, the complaint is based on Monayao’s supposed misrepresentation, fraud, dishonesty and refusal
to implement an order of the Department of Environment and Natural Resources (DENR) relating to a land dispute.
Yet, such actuation of Monayao relates to her private dealings with the private complainant, and has no bearing at
all on the performance of her official duties as a local government employee. Instead of filing an administrative
complaint, it would have been more appropriate for the private complainant to seek relief through the proper
remedial action, which is, as noted in the impugned opinion, to move for execution of the unsatisfied DENR order or
to proceed to court for possible judicial enforcement.
In CSC Resolution No. 96-5593, dated September 4, 1996, the Commission pertinently ruled in this wise:
"x x x True, the respondents are government employees, but there is no showing that the non-remittance of said
amount was committed while in the performance of their official duties x
x x Thus, said failure or omissions on the part of the respondents were done in their personal or private capacity
arising out of private transactions. It is therefore clear that the acts complained of do not constitute an administrative
offense or offenses within the jurisdiction of the Commission. At any rate, the dispute between the herein
complainants and the officers of said association, subject of this complaint, should be better resolved before a
competent court."
More importantly, the Commission observes that the complaint is fatally defective. It contains mere conclusion of
law, not concrete allegations of facts.17
In a Petition for Review18 filed with the CA, petitioner questioned CSC Resolution No. 080059 and prayed that the
CSC be ordered to assume jurisdiction over her complaint against respondent.
On November 28, 2008, the CA issued the assailed Decision which contained the following decretal portion:
WHEREFORE, premises considered, the present petition is DISMISSED for lack of merit.
SO ORDERED.19
The CA held that none of the circumstances mentioned in Section 46,20 Chapter 7, Book V, of Executive Order No.
292 (EO 292), or the Administrative Code of 1987, is present in petitioner’s case, and that her main complaint
against respondent pertains to the latter’s refusal to abide by the DENR judgment relative to the one-half portion of
the property in dispute, which is not connected with or related to her position or performance of her functions as a
public official. The appellate court added that while it is true that disciplinary action may be imposed for acts or
omissions not connected with a public officer or employee’s official functions or responsibilities, such as dishonesty
or immorality, the act complained of – even if true – does not reflect on the moral fitness and integrity of the
respondent which may affect her right to continue in office. Finally, the CA acknowledged that petitioner’s
accusations against respondent were unsubstantiated. On this point, however, the appellate court did not elaborate.
Petitioner filed a Motion for Reconsideration,21 but the CA denied the same via its November 27, 2009 Resolution.
Hence, petitioner instituted the present Petition.
Issue
Petitioner contends that the CA committed the following error:
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT SUSTAINED THE DECISION OF THE
CIVIL SERVICE COMMISSION IN FINDING THAT THE ACTS AND OMISSIONS OF RESPONDENT, ARISING
OUT OF HER PRIVATE TRANSACTIONS, DO NOT CONSTITUTE ADMINISTRATIVE OFFENSES WHICH THE
SAID COMMISSION COULD TAKE COGNIZANCE OF AND DO NOT REFLECT ON HER MORAL FITNESS AND
INTEGRITY AS A PUBLIC SERVANT.22
Praying that the assailed CA dispositions be set aside and that the CSC be directed to take cognizance of her
complaint against respondent, petitioner maintains in her Petition and Reply23 that while respondent’s dishonest acts
and misrepresentations were committed in relation to a land dispute arising from her private dealings, they cast
serious doubt as to her fitness to continue in the public service. Specifically, petitioner insists that while respondent
claims that her father died in 1987, the latter was able to transfer – in 1992 – the land in dispute to respondent’s
children, which thus renders respondent guilty of dishonesty and misrepresentation. Moreover, respondent’s
defiance of the DENR decision by orchestrating the 1992 simulated sale demonstrates her disregard for rules and
orders of duly constituted government authority, which is anathema to her position as a public servant.
Petitioner adds that dishonesty is a serious offense, indeed so grave that it is punishable by dismissal for the first
offense under Section 23, Rule XIV of the Rules Implementing Book V of EO 292. And, contrary to the
pronouncements of the CSC and CA, dishonesty which justifies dismissal from the service need not be committed in
the course of the performance of duty by the public officer or employee.24
Petitioner further asserts that, contrary to the pronouncements of the CA, her charges against respondent are fully
substantiated and covered by sufficient attachments. She cites her July 30, 2003 sworn letter-complaint filed with
the office of the Mayor of Alfonso Lista, which she claims was "complete with enclosures and attachments,
evidencing the allegations"25 against respondent.
Finally, petitioner points out that public office is a public trust; a person aspiring for public office must observe
honesty, "candor, and faithful compliance with the law."26 Dishonesty remains the same whether it is committed in
relation to the public official’s duties or in the course of his private dealings: it reflects on his "character and exposes
the moral decay which virtually destroys his honor, virtue and integrity."27
In seeking the denial of the instant Petition, respondent in her Comment28 tersely counters with a reiteration and
citation of the CSC and CA pronouncements that her complained actuations relate to her private dealings and have
no bearing on her official duties and functions; that petitioner’s remedy is to move for the execution of the unsatisfied
DENR decision or proceed to court for judicial enforcement; that the alleged acts do not reflect on her moral fitness
and integrity, nor do they affect her right to continue in office; and finally, that petitioner’s accusations remain
unsubstantiated.
Our Ruling
Dishonesty is defined as the concealment or distortion of truth in a matter of fact relevant to one’s office or
connected with the performance of his duty. It implies a disposition to lie, cheat, deceive, or defraud;
untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in principle; and lack of fairness and
straightforwardness.
On the other hand, misconduct is a transgression of some established or definite rule of action, is a forbidden act, is
a dereliction of duty, is willful in character, and implies wrongful intent and not mere error in judgment. More
particularly, it is an unlawful behavior by the public officer. x x x29
Without a doubt, respondent’s supposed dishonest acts and misrepresentations committed in relation to a land
dispute arising from her private dealings cast doubt on her fitness to discharge her responsibilities as a public
official. If it is true that respondent caused the execution of a forged or falsified deed of sale in 1992 in order to
transfer the disputed portion of the property to her children, then she committed a dishonest act even as she is
enjoined to adhere at all times to law, morality, and decency in her private and professional life. "[D]ishonesty, in
order to warrant dismissal, need not be committed in the course of the performance of duty" by the public officer, for
it "inevitably reflects on the fitness of the officer or employee to continue in office and the discipline and morale of
the service."30
Indeed, at the very least, the acts complained of constitute conduct prejudicial to the best interest of the service, an
administrative offense which need not be related to respondent’s official functions.
x x x As long as the questioned conduct tarnished the image and integrity of his/her public office, the corresponding
penalty may be meted on the erring public officer or employee. The Code of Conduct and Ethical Standards for
Public Officials and Employees (Republic Act No. 6713) enunciates, inter alia, the State policy of promoting a high
standard of ethics and utmost responsibility in the public service. Section 4(c) of the Code commands that "[public
officials and employees] shall at all times respect the rights of others, and shall refrain from doing acts contrary to
law, good morals, good customs, public policy, public order, public safety and public interest. x x x"31
However, petitioner’s accusations do not appear to hold water. From an examination of all her letters, pleadings,
and other submissions – from her letter-complaint with the DSWD, to her sworn letter-complaint with the office of the
Alfonso Lista Mayor, to her appeal letter to the CSC, to her letter-Motion for Reconsideration with the CSC, and
finally her CA Petition for Review – it is evident that she offered nothing more than bare imputations against the
respondent. Though she claims that respondent falsified a 1992 deed of sale whereby the disputed portion was
transferred to her children, the deed of sale was never shown; a copy thereof was never attached to petitioner’s
complaints and other papers or pleadings. And if it is true that respondent’s children were able to secure title to the
disputed portion in their name through such falsified deed of sale, then petitioner could have simply attached a copy
of the new title issued in their name. But she did not.
Petitioner is a lawyer; she should know that as the complainant in the administrative case, upon her lies the burden
of proof to establish her cause of action against the respondent. All that is required is substantial evidence, yet she
could produce none; the allegations in her complaint are not duly supported by necessary documents that would
demonstrate the justness of her claims. While technicalities may be dispensed with in administrative proceedings,
"this does not mean that the rules on proving allegations are entirely dispensed with. Bare allegations are not
enough; these must be supported by substantial evidence at the very least."32
Thus, in the eyes of the law, respondent committed as yet no visible wrong. The CSC and the CA may not be
faulted for deciding the way they did. From her numerous complaints alone, it can be seen that she had no cause of
action against the respondent, for her accusations were not supported by the required documentary evidence that
should have been readily available to her, given that it consists of public documents which may be inspected and
reproduced by permission from the government offices having custody thereof.
The Court therefore sees no reason to disturb the findings of the CSC and the CA. Their findings of fact bind the
Court unless there is a showing of grave abuse of discretion, or that they were arrived at arbitrarily or in disregard of
the evidence on record. Moreover, their conclusion - to the effect that what remains to be done is to cause the
execution of the DENR Order in H.A. NRD, 11-15-004 (E-11-16-004) - is correct, and this may be achieved in the
same administrative case or by filing a proper case in court.
While the law and justice abhor all forms of abuse committed by public officers and employees whose sworn duty is
to discharge their duties with utmost responsibility, integrity, competence, accountability, and loyalty, the Court must
protect them against unsubstantiated charges that tend to adversely affect, rather than encourage, the effective
performance of their duties and functions. While –
x x x We do not deny the citizen's right to denounce recreant public officials if their incompetence or lack of integrity
or qualification may adversely affect the public service, but We certainly frown upon the practice of some misguided
citizens to subvert the noble ends for which administrative discipline is designed which is to purge the public service
of undesirable officials.33
WHEREFORE, the Petition is DENIED. The assailed November 28, 2008 Decision and the November 27, 2009
Resolution of the Court of Appeals in CA-G.R. SP No. 102407 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 171590, February 12, 2014
BIGNAY EX–IM PHILIPPINES, INC., Petitioner, v. UNION BANK OF THE PHILIPPINES,Respondent.
[G.R. No. 171598]
UNION BANK OF THE PHILIPPINES, Petitioner, v. BIGNAY EX–IM PHILIPPINES, INC., Respondent.
DECISION
DEL CASTILLO, J.:
The gross negligence of the seller in defending its title to the property subject matter of the sale – thereby contravening the
express undertaking under the deed of sale to protect its title against the claims of third persons resulting in the buyer’s
eviction from the property – amounts to bad faith, and the buyer is entitled to the remedies afforded under Article 1555 of
the Civil Code.
Before us are consolidated Petitions for Review on Certiorari1 assailing the August 25, 2005 Decision2 of the Court of Appeals
(CA) in CA–G.R. CV No. 67788 as well as its February 10, 2006 Resolution3 denying the parties’ respective motions for
reconsideration.
Factual Antecedents
In 1984, Alfonso de Leon (Alfonso) mortgaged in favor of Union Bank of the Philippines (Union Bank) real property situated
at Esteban Abada, Loyola Heights, Quezon City, which was registered in his and his wife Rosario’s name and covered by
Transfer Certificate of Title (TCT) No. 286130 (TCT 286130).
The property was foreclosed and sold at auction to Union Bank. After the redemption period expired, the bank consolidated
its ownership, whereupon TCT 362405 was issued in its name in 1987.
In 1988, Rosario filed against Alfonso and Union Bank, Civil Case No. Q–52702 for annulment of the 1984 mortgage,
claiming that Alfonso mortgaged the property without her consent, and for reconveyance.
In a September 6, 1989 Letter–Proposal,4 Bignay Ex–Im Philippines, Inc. (Bignay), through its President, Milagros Ong Siy
(Siy), offered to purchase the property. The written offer stated, among others, that –
The property is the subject of a pending litigation between Rosario de Leon and Union Bank for nullification of the foreclosure
before the Regional Trial Court of Quezon City. Should this offer be approved by your management, we suggest that instead
of the usual conditional sale, a deed of absolute sale be executed to document the transaction in our favor subject to a
mortgage in favor of the bank to secure the balance.
This documentation is intended to isolate the property from any lis pendens that the former owner may annotate on the title
and to allow immediate reconstitution thereof since the original Torrens title was burned in 1988 when the City Hall housing
the Register of Deeds of Quezon City was gutted by fire.5 ChanRobles Virtualawl ibra ry
On December 20, 1989, a Deed of Absolute Sale6 was executed by and between Union Bank and Bignay whereby the
property was conveyed to Bignay for P4 million. The deed of sale was executed by the parties through Bignay’s Siy and Union
Bank’s Senior Vice President Anthony Robles (Robles). One of the terms of the deed of sale is quoted below: c hanRoble svirtual Lawlib ra ry
Section 1. The VENDEE hereby recognizes that the Parcel/s of Land with improvements thereon is acquired through
foreclosure proceedings and agrees to buy the Parcel/s of Land with improvement[s] thereon in its present state and
condition. The VENDOR therefore does not make any x x x representations or warranty with respect to the Parcel/s of Land
but that it will defend its title to the Parcel/s of Land with improvement[s] thereon against the claims of any person
whomsoever.7 ChanRobles Vi rtualaw lib rary
On December 27, 1989, Bignay mortgaged the property to Union Bank, presumably to secure a loan obtained from the
latter.
On December 12, 1991, a Decision8 was rendered in Civil Case No. Q–52702, decreeing as follows: chanRob lesvi rtua lLawl ibra ry
WHEREFORE, premises above considered, finding that defendant Alfonso de Leon, Jr. had alone executed the mortgage (Exh.
7) on their conjugal property with T.C.T. No. 286130 (Exh. L) upon a forged signature (Exh. M–1) of his wife plaintiff Rosario
T. de Leon, the Court hereby declares NULL and VOID the following documents: cha nrob lesvi rtua llawli bra ry
Said Mortgage Contract dated April 11, 1984 (Exh. 7) executed by and between defendants Alfonso de Leon, Jr. alone and
Union Bank of the Philippines;
Sheriff’s Sale dated June 12, 1985 (Exh. F);
T.C.T. No. 362405 (Exh. O) issued in the name of defendant Union Bank on June 10, 1987 which replaced the said T.C.T. No.
286130;
Sale and mortgage by and between Union Bank and Bignay Ex–Im Phil. Inc. on December 27, 1989 over the subject conjugal
property as annotated on T.C.T. No. 362405 (Exh. O).
Further, the Court hereby declares plaintiff Rosario T. de Leon the owner still of the undivided ONE HALF (1/2) of the subject
property covered by T.C.T. No. 286130.
The order dated February 2, 1988 granting a writ of possession in favor of Union Bank is hereby SET ASIDE and QUASHED.
Defendant Alfonso de Leon, Jr. is hereby ordered to pay his co–defendant Union Bank of the Philippines the sum of his P1M
loan with interest from the time the same was extended to him which is hereby charged against his other undivided share of
ONE HALF (½) of the subject property with T.C.T. No. 286130.
No damages is [sic], however, adjudicated against defendant Union Bank of the Philippines there being no substantial
evidence that it is in complicity with defendant Alfonso de Leon, Jr. in the presentation of the forged signature of his wife
plaintiff on the Special Power of Attorney (Exh. M).
Without cost, except for the professional fee, if any, for the examination of the forged signature (Exh. M–1) which shall be
paid by defendant Alfonso de Leon, Jr.
Union Bank appealed the above Decision with the CA. It likewise sought a new trial of the case, which the trial court denied.
The CA appeal was dismissed for failure to file appellant’s brief; the ensuing Petition for Review with this Court was similarly
denied for late filing and payment of legal fees.10
Union Bank next filed with the CA an action to annul the trial court’s December 12, 1991 judgment.11 In a September 9,
1993 Resolution, however, the CA again dismissed the Petition12 for failure to comply with Supreme Court Circular No. 28–
91.13 The bank’s Motion for Reconsideration was once more denied.14
This time, Bignay filed a Petition for annulment of the December 12, 1991 Decision, docketed as CA–G.R. SP No. 33901. In a
July 15, 1994 Decision,15 the CA dismissed the Petition. Bignay’s resultant Petition for Certiorari with this Court suffered the
same fate.16
Meanwhile, as a result of the December 12, 1991 Decision in Civil Case No. Q–52702, Bignay was evicted from the property;
by then, it had demolished the existing structure on the lot and begun construction of a new building.
On March 21, 1994, Bignay filed Civil Case No. 94–1129 for breach of warranty against eviction under Articles 1547 and
1548 of the Civil Code, with damages, against Union Bank and Robles. The case was assigned to Branch 141 of the Makati
Regional Trial Court (RTC). Bignay alleged in its Complaint17 that at the time of the sale, the title to the property was lost due
to fire at the Register of Deeds; that at the time of the sale, Union Bank represented that there were no liens or
encumbrances over the property other than those annotated on the title, and that a reconstitution of the lost title would be
made; that on these assurances, Bignay began and completed construction of a building on the property; that it turned out
that the property was the subject of a case by Rosario, and Bignay began to receive copies of court orders and pleadings
relative to the case; that it issued a demand to Union Bank for the latter to make good on its warranties; that despite such
demands, it appeared that Bignay was in jeopardy of losing the property as a result of Union Bank’s lack of candor and bad
faith in not disclosing the pending case. Bignay prayed to be awarded the following: c hanroblesvi rtual lawlib rary
P 54,000,000.00 as actual damages;
P 2,000,000.00 as exemplary damages;
P 1,000,000.00 by way of attorney’s fees; and
Costs of suit.
In a March 10, 1995 Order18 of the trial court, Robles was dropped as party defendant upon agreement of the parties and in
view of Union Bank’s admission and confirmation that it
had authorized all of Robles’s acts relative to the sale.
Union Bank interposed a Motion to Dismiss19 grounded on lack of or failure to state a cause of action, claiming that it made
no warranties in favor of Bignay when it sold the property to the latter on December 20, 1989. The trial court deferred the
resolution of the motion on finding that the ground relied upon did not appear to be indubitable. Union Bank thus filed its
Answer Ad Cautelam,20 where it alleged that Bignay was not an innocent purchaser for value, knowing the condition of the
property as evidenced by Siy’s September 6, 1989 letter–proposal to purchase the same. It interposed a counterclaim as
well, grounded on two promissory notes signed by Siy in favor of the bank – 1) Promissory Note No. 90–1446 dated
December 20, 1990 for the amount of P1.5 million payable on demand with annual interest of 33%, and 2) Promissory Note
No. 91–0286 dated February 26, 1991 for the amount of P2 million payable on demand with annual interest of 30% – which
resulted in outstanding liabilities, inclusive of interest and penalties, in the total amount of more than P10.4 million as of
December 20, 1996.
During trial, Siy testified that she was a client of Union Bank, and that she was a regular buyer of some of the bank’s
acquired assets. She admitted that she maintained a close business relationship with Robles, who would identify cheap bank
properties for her and then facilitate or assist her in the acquisition thereof. To do this, she claimed that she signed papers in
blank and left them with Robles, who would then use the same in preparing the necessary documents, such as the supposed
September 6, 1989 letter–proposal, which Siy claimed she knew nothing about.21
Siy further testified that for his services, Robles was given a 3% commission each time she obtained a loan from Union Bank.
Moreover, she claimed that she gifted Robles with shares of stock in one of her corporations, International General Auto Parts
Corporation (IGAPC), and made him an incorporator and director thereof.22
Finally, Siy testified that the existing structure on the subject property was demolished and a new one was constructed at a
cost of P20 million. From the new structure, Bignay earned monthly rental income of P60,000.00, until the lessee was evicted
on account of the execution of the Decision in Civil Case No. Q–52702.23
On the other hand, Robles – testifying for Union Bank – denied that he prepared the September 6, 1989 letter–proposal. He
added that Siy was apprised of the then pending Civil Case No. Q–52702. He also admitted that Siy gave him shares of stock
in IGAPC and made him an incorporator and director thereof.24
Evidence on Union Bank’s counterclaim was likewise received by the trial court.
On March 21, 2000, the trial court rendered its Decision25 in Civil Case No. 94–1129, which decreed thus: chanRob lesvi rtual Lawl ibra ry
WHEREFORE, decision is hereby rendered ordering the defendant to pay plaintiff the sum of Four Million ( P4,000,000.00)
Pesos representing the cost of the land and Twenty Million ( P20,000,000.00) Pesos representing the value of the building
constructed on the subject land, and the costs of this suit.
The counterclaim interposed by defendant is hereby dismissed without prejudice.
The trial court found that Union Bank’s Senior Vice President, Robles, maintained a secret alliance and relationship of trust
with Bignay’s Siy, whereby Robles would look out for desirable properties from the bank’s asset inventory, recommend them
to Siy, then facilitate the negotiation, sale and documentation for her. In return, he would receive a 3% commission from
Siy, or some other benefit; in fact, Siy made him an incorporator and director of one of her corporations, IGAPC. The trial
court believed Siy’s claim that she signed papers in blank and left them with Robles in order to facilitate the negotiation and
purchase of bank properties which they both considered to be cheap and viable. In this connection, the trial court concluded
that it was Robles – and not Siy – who prepared the September 6, 1989 letter–proposal on a piece of paper signed in blank
by Siy, and that even though the pending Civil Case No. Q–52702 was mentioned in the letter–proposal, Siy in fact had no
knowledge thereof. This is proved by the fact that she proceeded to construct a costly building on the property; if Siy knew
of the pending Civil Case No. Q–52702, it is highly doubtful that she would do so.
The trial court thus declared that Union Bank, through Robles, acted in bad faith in selling the subject property to Bignay; for
this reason, the stipulation in the December 20, 1989 deed of sale limiting Union Bank’s liability in case of eviction cannot
apply, because under Article 1553 of the Civil Code, “[a]ny stipulation exempting the vendor from the obligation to answer
for eviction shall be void, if he acted in bad faith.” Moreover, it held that in its handling of Civil Case No. Q–52702, the bank
was guilty of gross negligence amounting to bad faith, which thus contravened its undertaking in the deed of sale to “defend
its title to the Parcel/s of Land with improvement thereon against the claims of any person whatsoever.”
In resolving the controversy, the trial court applied Article 1555 of the Civil Code, which provides thus:chanRob lesvi rtua lLawl ibra ry
Art. 1555. When the warranty has been agreed upon or nothing has been stipulated on this point, in case eviction occurs, the
vendee shall have the right to demand of the vendor:
(1) The return of the value which the thing sold had at the time of the eviction, be it greater or less than the price of the
sale;
(2) The income or fruits, if he has been ordered to deliver them to the party who won the suit against him;
(3) The costs of the suit which caused the eviction, and, in a proper case, those of the suit brought against the vendor for the
warranty;
(4) The expenses of the contract, if the vendee has paid them;
(5) The damages and interests, and ornamental expenses, if the sale was made in bad faith.
Thus, it held that Bignay was entitled to the return of the value of the property ( P4 million), as well as the cost of the
building erected thereon ( P20 million), since Union Bank acted in bad faith. At the same time, the trial court held that the
bank’s counterclaim was not at all connected with Bignay’s Complaint, which makes it a permissive counterclaim for which
the docket fees should accordingly be paid. Since the bank did not pay the docket fees, the trial court held that it did not
acquire jurisdiction over its counterclaim; thus, it dismissed the same.
Union Bank took the trial court’s March 21, 2000 Decision to the CA on appeal. On August 25, 2005, the CA issued the
assailed Decision, decreeing as follows: chanRoble svirtual Lawlib ra ry
WHEREFORE, the instant Appeal is PARTLY GRANTED. Judgment is hereby rendered ordering defendant–appellant to pay
plaintiff–appellee the sum of P4,000,000.00 representing the cost of the land and P20,000,000.00 representing the value of
the building constructed on the subject land.
On the Counterclaim, judgment is rendered ordering plaintiff–appellee to pay defendant–appellant the principal amount of
P1,500,000.00 under Promissory Note No. 90–1446 dated December 18, 1990, plus the stipulated interests and stipulated
penalty charges from date of maturity of the loan or from June 6, 1991 until its full payment and also to pay the principal
amount of P2,000,000.00 under Promissory Note No. 90–0286 dated February 25, 1991, plus the stipulated interests and
stipulated penalty charges from date of maturity of the loan or from August 26, 1991 until full payment thereof.
Applying Articles 1548 and 1549 of the Civil Code,28 the CA held that Union Bank is liable pursuant to its commitment under
the December 20, 1989 deed of sale to defend the title to the property against the claims of third parties. It shared the trial
court’s opinion that the bank was guilty of negligence in the handling and prosecution of Civil Case No. Q–52702, for which
reason it should be made answerable, since it lost its title to the whole property when it could have protected its right to
Alfonso’s share therein considering that the Decision in Civil Case No. Q–52702 merely awarded Rosario’s conjugal share. In
other words, the CA intimated that if Union Bank exercised prudence, it could have maintained at least its rights and title to
Alfonso’s one–half share in the property, and the trial court’s Decision completely nullifying the Alfonso–Union Bank
mortgage, the bank’s new title TCT 362405, and the Union Bank–Bignay sale could have been avoided.
The CA added that the declaration contained in the September 6, 1989 letter–proposal to the effect that Siy knew about the
pending Civil Case No. Q–52702 cannot bind Bignay because the proposal was supposedly prepared and signed by Siy in her
personal capacity, and not for and in behalf of Bignay. It further affirmed the trial court’s view that it was Robles – and not
Siy – who prepared the said letter–proposal on a piece of paper which she signed in blank and left with Robles to facilitate
her transactions with Union Bank.
Regarding the bank’s counterclaim, the CA held that Union Bank timely paid the docket fees therefor – amounting to
P32,940.00 – at the time it filed its Answer Ad Cautelam on November 4, 1994, as shown by Official Receipt Nos. 4272579
and 4271965 to such effect and the rubberstamped mark on the face of the answer itself. It added that since the trial court
received the bank’s evidence on the counterclaim during trial, it should have made a ruling thereon.
Bignay filed its Motion for Partial Reconsideration29 questioning the appellate court’s ruling on Union Bank’s counterclaim. On
the other hand, Union Bank in its Motion for Reconsideration30 took exception to the CA’s application of Articles 1548 and
1549 of the Civil Code, as well as its finding that the bank was negligent in the handling and prosecution of Civil Case No. Q–
52702.
On February 10, 2006, the CA issued the second assailed Resolution denying the parties’ respective motions for
reconsideration.
Thus, the present Petitions were filed. G.R. No. 171590 was initiated by Bignay, while G.R. No. 171598 was filed by Union
Bank. In a June 21, 2006 Resolution31 of the Court, both Petitions were ordered consolidated.
Issues
By Bignay as petitioner in G.R. No. 171590
IN A PERMISSIVE COUNTERCLAIM, WHEN SHOULD THE DOCKET FEES BE PAID TO ENABLE THE TRIAL COURT TO ACQUIRE
JURISDICTION OVER THE CASE?
IN THE EVENT OF NON–PAYMENT OF DOCKET FEES FOR PERMISSIVE COUNTERCLAIMS, CAN THE COURT DISMISS THE SAID
COUNTERCLAIMS?32
By Union Bank as petitioner in G.R. No. 171598

The portion of the [D]ecision of the Honorable Court of Appeals dated August 25, 2005 ordering petitioner to pay private
respondent the total amount of P24.0 million should be set aside for it has altogether ignored: c hanRoble svirtual Lawlib ra ry
THE TESTIMONY OF ROBLES;
THAT THE LETTER–PROPOSAL DATED SEPTEMBER 6, 1989 WAS SIGNED BY SIY IN BEHALF OF (BIGNAY);
THE FACT THAT THE APPLICATION OF ARTS. 1548 AND 1549 OF THE CIVIL CODE WAS PATENTLY ERRONEOUS. 33
G.R. No. 171590. As petitioner in G.R. No. 171590, Bignay registers its doubts as to whether Union Bank indeed paid the
docket fees on its permissive counterclaim, arguing that if the bank indeed paid the docket fees, the trial court would have so
held in its March 21, 2000 Decision; instead, it specifically declared therein that the docket fees on the counterclaim
remained unpaid at that point in time. In other words, Bignay appears to insinuate that there was an irregularity surrounding
the bank’s alleged payment of the docket fees on its counterclaim. It adds that since Union Bank is guilty of negligence and
bad faith in transacting with Bignay, it should be penalized through the proper dismissal of its counterclaim; the Court should
instead require Union Bank to prosecute its claims in a separate action.
In the alternative, Bignay claims that the amount of P1,039,457.33 should be deducted from its adjudged liabilities to Union
Bank, as it has been proved during trial that it paid such amount to the bank, as shown by receipts duly marked and offered
in evidence as Exhibits “H” to “H–6.”
Bignay thus prays in its Petition that the assailed dispositions of the CA be modified to the extent that Union Bank’s
counterclaim should be denied and dismissed.
In its Comment34 praying that the CA’s ruling on its counterclaim be affirmed, Union Bank insists that it timely paid the
docket fees on its counterclaim, arguing that the official receipts proving payment as well as the rubber stamp–mark on the
face of its answer may not be overturned by Bignay’s baseless suspicions, claims and insinuations not supported by
controverting evidence or proof. It adds that, contrary to Bignay’s assertion, a separate case for the prosecution of its
counterclaim is unnecessary since the same may sufficiently be tried in Civil Case No. 94–1129 precisely as a permissive
counterclaim; and by allowing its permissive counterclaim, multiplicity of suits is avoided.
In a Reply35 to the bank’s Comment, Bignay among others vehemently insists that at the time of the rendition of the trial
court’s judgment in Civil Case No. 94–1129, Union Bank had not yet paid the docket fees on its counterclaim; the bank’s
claim that it paid the docket fees when it filed its Answer Ad Cautelam is absolutely questionable. If indeed the bank paid the
docket fees, then it should have questioned the trial court’s dismissal of its counterclaim in a motion for reconsideration and
attached the receipts showing its payment of the fees; yet it did not. Besides, if indeed the fact of payment of docket fees
was stamped on the face of the bank’s Answer Ad Cautelam when it filed the same, the trial court should have noticed it, or
at least its attention would have been directed to the fact; but it was not. And if indeed the docket fees were paid as early as
1994, it is incredible how Union Bank never informed the trial court of its payment, even after the adverse Decision in the
case was rendered. Bignay adds that in a September 12, 2005 letter36 to the Clerk of Court of the Makati City RTC, its
counsel inquired into the circumstances surrounding the sudden appearance of official receipts – copies of which were
attached to the letter – indicating that Union Bank paid the docket fees on its permissive counterclaim, when it appears that
no such payment was in fact made; up to now, however, it has not received any reply from the said office.
G.R. No. 171598. In its Petition in G.R. No. 171598, Union Bank insists that the September 6, 1989 letter–proposal
effectively limited its liability for eviction since from said letter it is seen that Bignay knew beforehand of the pendency of
Civil Case No. Q–52702. It insists that under the December 20, 1989 deed of sale, it did not make any representations or
warranty with respect to the property; thus, the application of Articles 1548 and 1549 of the Civil Code by the CA was
erroneous. Thus, the bank seeks a partial reversal of the CA’s disposition – particularly the portion of the Decision which
holds it liable to pay Bignay the respective sums of P4 million for the cost of the land, and P20 million for the cost of the
building.
In its Comment,37 Bignay claims that in urging the Court to consider the testimony of Robles and Siy’s declaration in the
September 6, 1989 letter–proposal, Union Bank is raising questions of fact in its Petition which this Court may not resolve. It
likewise reiterates its argument relating to the bank’s counterclaim; only this time, Bignay claims that the official receipts
evidencing the bank’s supposed payment of the docket fees were falsified.
Our Ruling
The Court finds for Bignay.
Indeed, this Court is convinced – from an examination of the evidence and by the concurring opinions of the courts below –
that Bignay purchased the property without knowledge of the pending Civil Case No. Q–52702. Union Bank is therefore
answerable for its express undertaking under the December 20, 1989 deed of sale to “defend its title to the Parcel/s of Land
with improvement thereon against the claims of any person whatsoever.” By this warranty, Union Bank represented to
Bignay that it had title to the property, and by assuming the obligation to defend such title, it promised to do so at least in
good faith and with sufficient prudence, if not to the best of its abilities.
The record reveals, however, that Union Bank was grossly negligent in the handling and prosecution of Civil Case No. Q–
52702. Its appeal of the December 12, 1991 Decision in said case was dismissed by the CA for failure to file the required
appellant’s brief. Next, the ensuing Petition for Review on Certiorari filed with this Court was likewise denied due to late filing
and payment of legal fees. Finally, the bank sought the annulment of the December 12, 1991 judgment, yet again, the CA
dismissed the petition for its failure to comply with Supreme Court Circular No. 28–91. As a result, the December 12, 1991
Decision became final and executory, and Bignay was evicted from the property. Such negligence in the handling of the case
is far from coincidental; it is decidedly glaring, and amounts to bad faith. “[N]egligence may be occasionally so gross as to
amount to malice [or bad faith].”38 Indeed, in culpa contractual or breach of contract, gross negligence of a party amounting
to bad faith is a ground for the recovery of damages by the injured party.39
Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor,
the vendee is deprived of the whole or of a part of the thing purchased.40 In case eviction occurs, the vendee shall have the
right to demand of the vendor, among others, the return of the value which the thing sold had at the time of the eviction, be
it greater or less than the price of the sale; the expenses of the contract, if the vendee has paid them; and the damages and
interests, and ornamental expenses, if the sale was made in bad faith.41 There appears to be no dispute as to the value of
the building constructed on the property by Bignay; the only issue raised by Union Bank in these Petitions is the propriety of
the award of damages, and the amount thereof is not in issue. The award in favor of Bignay of P4 million, or the
consideration or cost of the property, and P20 million – the value of the building it erected thereon – is no longer in issue and
is thus in order.
However, the Court disagrees with the CA on the issue of Union Bank’s counterclaim. Bignay correctly observes that if the
bank indeed paid the docket fees therefor, the trial court would have so held in its March 21, 2000 Decision; yet in its
judgment, the trial court specifically declared that the docket fees remained unpaid at the time of its writing, thus –
Anent the counterclaims interposed by defendant for the collection of certain sum of money adverted earlier hereof [sic], this
Court could not exercise jurisdiction over the same as defendant did not pay the docket fees therefor. Although the
counterclaims were denominated as compulsory in the answer, the matters therein alleged were not connected with the
plaintiff’s complaint. The counterclaims could stand independently from the plaintiff’s complaint hence they are a [sic]
permissive counterclaims. During the pre–trial, this Court had already ruled that the counterclaims were permissive yet the
records showed that defendant had not paid the docket fees. This Court therefore has not acquired jurisdiction over said
case.42
ChanRoblesVirt ualawli bra ry
And if it is true that the bank paid the docket fees on its counterclaim as early as in 1994, it would have vigorously insisted
on such fact after being apprised of the trial court’s March 21, 2000 Decision. It is indeed surprising that the supposed
payment was never raised by the bank in a timely motion for reconsideration, considering that the trial court dismissed its
counterclaim; if there is any opportune time to direct the court’s attention to such payment and cause the counterclaim to be
reinstated, it was at that point and no other. All it had to do was prove payment by presenting to the court the official
receipts or any other acceptable documentary evidence, and thus secure the proper reversal of the ruling on its counterclaim.
Still, nothing was heard from the bank on the issue, until it filed its brief with the CA on appeal. Indeed, “whatever is
repugnant to the standards of human knowledge, observation and experience becomes incredible and must lie outside
judicial cognizance.”43
More than the above, this Court finds true and credible the trial court’s express declaration that no docket fees have been
paid on the bank’s counterclaim; the trial court’s pronouncement enjoys the presumption of regularity. Indeed, the sudden
appearance of the receipts supposedly evidencing payment of the docket fees is highly questionable and irregular, and
deserves to be thoroughly investigated; the actuations of the bank relative thereto go against the common experience of
mankind, if they are not entirely anomalous.
1. The Petition in G.R. No. 171590 is GRANTED. The August 25, 2005 Decision and February 10, 2006 Resolution of the
Court of Appeals in CA–G.R. CV No. 67788 are MODIFIED, in that Union Bank of the Philippines’s counterclaim is
ordered DISMISSED.
2. The Petition in G.R. No. 171598 is DENIED. ChanRoblesVi rtua lawlib rary
SO ORDERED.
SECOND DIVISION
G.R. No. 190621 February 10, 2014

vs.
GLENN SALVADOR y BAL VERDE, and DORY ANN PARCON y DEL ROSARIO, Accused,
GLENN SALVADOR y BALVERDE, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
In a buy-bust operation, the failure to conduct a physical inventory and to photograph the items seized from the
accused will not render his arrest illegal or the items confiscated from him inadmissible in evidence as long as the
integrity and evidentiary value of the said items have been preserved.1
Factual Antecedents
For review is the Decision2 dated September 24, 2009 of the Court of Appeals (CA) in CA-G.R. CR H.C. No. 03230
that affirmed in toto the January 15, 2008 Decision3 of the Regional Trial Court (RTC), Branch 82, Quezon City, in
Criminal Case Nos. Q-03-120799-800. The said RTC Decision found. Glenn Salvador y Balverde (appellant) guilty
beyond reasonable doubt of violation of Section 5 (illegal sale), and accused Dory Ann Parcon y Del Rosario
(Parcon) guilty beyond reasonable doubt of violation of Section 11 (illegal possession), both of Article II, Republic
Act No. 9165 (RA9165), otherwise known as the Comprehensive Dangerous Drugs Act of 2002.
The Information4 for violation of Section 5, Article II of RA 9165 filed against appellant in Criminal Case No. Q-03-
120799 has the following accusatory portion:
That on or about the 3rd day of September, 2003 in Quezon City, Philippines, the said accused, not being
authorized by law to sell, dispense, deliver, transport or distribute any dangerous drug, did, then and there, willfully
and unlawfully sell, dispense, deliver, transport, distribute or act as broker in the said transaction, one (1) plastic
sachet of white crystalline substance containing zero point zero four (0.04) gram of Methylamphetamine
Hydrochloride a dangerous drug.
CONTRARY TO LAW.5
While the pertinent portion of the Information6 for violation of Section 11 of Article II, RA 9165 filed against Parcon in
Criminal Case No. Q-03-120800 is as follows:
That on or about the 3rd day of September, 2003 in Quezon City, Philippines, the said accused, not being
authorized by law to possess or use any dangerous drug, did then and there willfully, unlawfully and knowingly have
in his/her possession and control one (1) plastic sachet of white crystalline substance containing zero point zero four
(0.04) gram of Methylamphetamine Hydrochloride a dangerous drug.
CONTRARY TO LAW.7
Upon motion of the prosecution,8 the cases were consolidated. On November 4, 2003, appellant and Parcon were
arraigned. They entered separate pleas of ‘not guilty’.9
During the pre-trial conference, appellant admitted the following facts which the prosecution offered for stipulation:
x x x [T]hat [Police Inspector Leonard T. Arban (P/Insp. Arban)] is a Forensic Chemist of the PNP; that he received a
letter-request for Laboratory Examination for certain specimen which was marked as Exhibit "A"; that together with
the said request is a brown envelope marked as Exhibit "B"; that said brown envelope contained a plastic sachet
marked as Exhibit "B-1" and thereafter he conducted the examination of the said specimen and submitted a report
marked as Exhibit "C"; the findings thereon that the specimen was positive for Methylamphetamine Hydrochloride
was marked as Exhibit "C-1" and the signature of the said police officer was marked as Exhibit "C-2". Thereafter,
said police officer turned over the said evidence to the Evidence Custodian and retrieved the same for purposes of
the hearing today.10
Trial ensued. Parcon failed to attend the scheduled hearings, hence, she was tried in absentia.11
The prosecution presented PO2 Sofjan Soriano (PO2 Soriano) to testify on the entrapment operation that resulted in
the arrest of appellant and Parcon. From his testimony,12 the following facts emerged:
While PO2 Soriano was on duty in Police Station 2, Baler Street, Quezon City on September 2, 2003, a confidential
informant (CI) arrived at around 9:00 a.m. and reported that a certain alias Bumski was engaged in the illicit sale of
dangerous drugs in Barangay Pag-asa, Quezon City. PO2 Soriano immediately relayed this information to Police
Chief Inspector Joseph De Vera (P/C Insp. De Vera). A surveillance operation conducted the same day on alias
Bumski, who turned out to be the appellant, confirmed the report. Thus, a police team was formed to conduct a buy-
bust operation. PO2 Soriano was designated as poseur-buyer while PO2 Richard Vecida, PO1 Alexander Pancho,
PO1 Alvin Pineda (PO1 Pineda) and P/C Insp. De Vera would serve as his backup.
At around 2:45 p.m. of September 3, 2003, the team arrived at Road 10, Barangay Pag-asa, Quezon City. PO2
Soriano and the CI proceeded to appellant’s house while the rest of the buy-bust team positioned themselves within
viewing distance. The CI introduced PO2 Soriano to appellant as a drug dependent who wanted to purchase
₱200.00 worth of shabu. During their conversation, Parcon arrived and asked appellant for shabu. Appellant gave
her a small heat-sealed plastic sachet that she placed in her coin purse. Thereafter, PO2 Soriano handed to
appellant the buy-bust money consisting of two 100-peso bills and the latter, in turn, gave him a heat-sealed plastic
sachet containing white crystalline substance. PO2 Soriano then immediately arrested appellant and recovered from
his right hand pocket the buy bust money. At this juncture, PO2 Soriano’s teammates rushed to the scene. PO1
Pineda arrested Parcon and recovered from her a plastic sachet also containing white crystalline substance.
Appellant and Parcon were then taken to the Baler Police Station. The items recovered during the buy-bust
operation were marked by PO2 Soriano as "SJ-03" and "AP-03" and turned over to the designated investigator, PO1
Vicente Calatay (PO1 Calatay). PO1 Calatay then prepared a letter-request for laboratory examination, which,
together with the confiscated specimen, was brought by PO2 Soriano to the PNP Crime Laboratory.
The prosecution intended to present PO1 Calatay and PO1 Pineda as witnesses, but their testimonies were likewise
dispensed with after the defense agreed to stipulate on the following facts:
PO1 Calatay
[T]hat he was the police investigator assigned to investigate these cases; that in connection with the investigation
that he conducted, he took the Joint Affidavit of Arrest of PO2 Richard Vecida, PO2 Sofjan Soriano, PO1 Alvin
Pineda, and PO1Alexander Pancho marked as Exhibits "F" and "F-1"; that the specimen[s] consisting of two (2)
plastic sachets marked as Exhibits "B-1" and "B-2" were turned over to him by the arresting officers; that in
connection therewith, he prepared the request for laboratory examination marked as Exhibit "A" and received a copy
of the Chemistry Report, the original of which was earlier marked as Exhibit "C"; that the buy-bust money consisting
of two (2) pieces of Php100.00 bill marked as Exhibits "D" and "E" were likewise turned over to him by the arresting
officer; that he thereafter prepared a letter referral to the Office of the City Prosecutor of Quezon City marked as
Exhibits "G" and "G-1".13
PO1 Pineda
[T]hat he was part of the buy-bust team which conducted a buy[-]bust operation on September 3, 2003 at about 2:45
a.m. at Road 10, Pag-asa, Quezon City; that he acted as back-up to PO2 Sofjan Soriano, the poseur buyer in the
said operation; that he was with PO2 [Richard] Vecida and PO1 Alexander Pancho during said operation; that after
the consummation of the transaction between PO2 Sofjan Soriano and Glenn Salvador, he assisted in the arrest of
accused Doryann Parcon; that upon [body] search of accused Parcon, he recovered from the latter a plastic sachet
containing white crystalline substance; that said plastic sachet was marked as Exhibit "B-2".14
In his testimony,15 appellant claimed that at about 11:00 p.m. of September 2, 2003, he was parking his tricycle
outside his residence at 135 Road 10, Brgy. Pag-asa, Quezon City when a patrol car suddenly stopped in front of
his house. Three policemen alighted, aimed their guns at him, and forced him to board their vehicle. Already inside
were two men in handcuffs sitting on the floor. The police car then proceeded to Police Station 2 in Baler, Quezon
City, where he and the two other men were taken to a room and frisked by policemen who demanded ₱20,000.00
from each of them. They were told to call their relatives to inform them of their arrest for engaging in a pot session.
When appellant refused to oblige, PO2 Soriano said to him: "matigas ka, hindi ka marunong makisama dapat sayo
ikulong." He was thereafter detained and no longer saw the two men he mentioned. Two days later, he was
presented to the Prosecutor’s Office for inquest.
Appellant accused the police officers of falsehood but could not file a case against them since his parents were in
the Unites States of America and he did not know anyone else who could help him. He denied knowing Parcon and
the arresting officers and claimed that he saw Parcon for the first time during the inquest and the arresting officers
when they arrested him.
The RTC held that the evidence adduced by the prosecution established beyond reasonable doubt the guilt of
appellant and Parcon for the crimes charged. It did not find impressive appellant’s claim of extortion by the police
officers and instead upheld the buy-bust operation which it found to have been carried out with due regard to
constitutional and legal safeguards. It ruled that absent proof of evil motive on the part of the police, the presumption
of regularity which runs in their favor stands. Thus, the dispositive portion of the RTC’s Decision:
WHEREFORE, premises considered, judgment is hereby rendered finding accused GLENN SALVADOR y
BALVERDE guilty beyond reasonable doubt of a violation of Section 5, Article II of R.A. No. 9165 charged in
Criminal Case No. Q-03-120799. Accordingly, he is hereby sentenced to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine in the amount of Five Hundred Thousand (₱500,000.00) PESOS.
On the other hand, judgment is likewise rendered in Criminal Case No. Q-03-120800 finding accused DORY ANN
PARCON y DEL ROSARIO guilty beyond reasonable doubt of a violation of Section 11, Article II of the same Act.
Accordingly, she is hereby sentenced to suffer the indeterminate penalty of imprisonment of TWELVE (12) YEARS
and ONE (1) DAY as MINIMUM to FOURTEEN (14) YEARS as MAXIMUM and to pay a fine in the amount of
THREE HUNDRED THOUSAND (₱300,000.00) PESOS.
SO ORDERED.16
Appellant filed a Notice of Appeal.17 In his Brief,18 he imputed to the RTC the following errors:
THE TRIAL COURT SERIOUSLY ERRED IN DECLARING THE GUILT OF THE ACCUSED-APPELLANT DESPITE
THE NON-COMPLIANCE WITH THE REQUIREMENTS FOR THE PROPER CUSTODY OF SEIZED
DANGEROUS DRUGS UNDER R.A. No. 9165.
II
THE TRIAL COURT GRAVELY ERRED IN GIVING FULL WEIGHT AND CREDENCE TO THE PROSECUTION’S
EVIDENCE NOTWITHSTANDING THE FAILURE OF THE APPREHENDING TEAM TO PROVE ITS INTEGRITY.
III
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT BASED ONLY ON PO2
SOFJAN SORIANO’S TESTIMONY.19
Aside from the prosecution’s failure to prove the elements constituting the crime of illegal sale of shabu, appellant
asserted that the apprehending officers failed to immediately conduct a physical inventory of the seized items and
photograph the same as mandated by Section 21 of the Implementing Rules of RA 9165; that the chain of custody
was broken since PO2 Soriano could not determine with certainty whether the plastic sachet allegedly seized from
him was the same specimen subjected to laboratory examination; that the prosecution was unable to substantiate its
claim that the two 100-peso bills were the same money used in purchasing shabu since the said bills were neither
dusted with fluorescent powder nor was he subjected to fingerprint examination; that the failure to coordinate the
buy-bust operation with the Philippine Drug Enforcement Agency (PDEA) was prejudicial to his substantive right;
and, that PO2 Soriano and the buy-bust team did not accord him due process by failing to apprise him of his rights
after he was arrested.
The People of the Philippines, on the other hand, through the Office of the Solicitor General (OSG) asserted in its
Brief20 that the Decision of the RTC must be affirmed since the guilt of appellant was established beyond reasonable
doubt; that the prosecution proved all the elements of the illegal sale of drugs; that the testimonies of the police
officers who conducted the buy-bust operation and their positive identification of appellant as the seller of the shabu
prevail over the latter’s denial; that the chain of custody of the illegal drug seized from appellant was sufficiently
established; that the failure to use fluorescent powder in the marked money does not result in a failure of the buy-
bust operation since the same is not a prerequisite to such operation; that the failure of the law enforcers to conduct
a physical inventory or to photograph the seized items in accordance with Section 21, Article II of RA 9165 is not
fatal; that the failure of the buy-bust team to coordinate with the PDEA does not invalidate appellant’s arrest; that
PO2 Soriano’s failure to recall the markings on the specimen shows that he was not coached as a witness; that
appellant’s defenses of denial and frame-up are unconvincing; and that the failure to apprise appellant of his
constitutional rights at the time of his arrest is not fatal since such rights apply only against extrajudicial confessions.
In its Decision, the CA affirmed the findings of the RTC. Anent the defects in the chain of custody alleged by
appellant, the said court ruled that the evidence proved beyond reasonable doubt that the illegal drugs sold by
appellant to PO2 Soriano was taken to the police station and marked therein and then forwarded to the crime
laboratory where it was found positive for shabu; the marked money used in the buy-bust operation was the same
money introduced in evidence; and that the failure of the arresting team to faithfully observe the requirements of
conducting physical inventory and coordinating the buy-bust operation with PDEA are not fatal since the integrity
and evidentiary value of the confiscated items were preserved. Thus, the dispositive portion of the CA’s Decision,
viz:
WHEREFORE, in consideration of the foregoing premises, the instant appeal is perforce dismissed. Accordingly, the
assailed decision dated January 15, 2008 insofar as the accused-appellant Glenn Salvador Y Balverde is affirmed in
toto.
SO ORDERED.21
Appellant filed a Notice of Appeal.22
On February 8, 2010, the parties were directed to file their supplemental briefs.23 The OSG opted to adopt the brief it
submitted before the CA as its appeal brief while appellant filed a Supplemental Brief 24 which, however, contains
practically the same arguments he advanced before the CA. Again, aside from questioning the finding of guilt
beyond reasonable doubt against him, appellant questions the arresting officers’ alleged failure to comply with the
chain of custody rule.
Our Ruling

All the elements for the prosecution of
illegal sale of shabu were sufficiently
established in this case.
In a successful prosecution for illegal sale of dangerous drugs, like shabu, the following elements must be
established: "(1) the identity of the buyer and the seller, the object, and the consideration; and (2) the delivery of the
thing sold and the payment therefor. x x x What is material in a prosecution for illegal sale of dangerous drugs is the
proof that the transaction or sale actually took place, coupled with the presentation in court of the corpus delicti"25 or
the illicit drug in evidence. "[T]he commission of the offense of illegal sale of dangerous drugs x x x merely requires
the consummation of the selling transaction, which happens the moment the exchange of money and drugs
between the buyer and the seller takes place."26
In this case, the prosecution successfully established all the elements of illegal sale of shabu. The testimony of PO2
Soriano reveals that an entrapment operation was organized and conducted after they confirmed through a
surveillance operation the information that appellant is engaged in drug peddling activities. Designated as a poseur-
buyer, PO2 Soriano, together with the CI, approached appellant outside his residence. After having been introduced
by the CI to appellant as a drug user, PO2 Soriano asked appellant if he could purchase ₱200.00 worth of shabu.
PO2 Soriano handed to appellant the marked money consisting of two ₱100 bills and the latter, in turn, gave him a
plastic sachet of shabu. PO2 Soriano then arrested appellant and recovered the buy-bust money from the latter.
Immediately thereafter his back-up who were monitoring the transaction from viewing distance arrived. Forensic
examination subsequently confirmed that the contents of the sachets bought from appellant and recovered from
Parcon were indeed shabu.
Prosecutions for illegal drugs depend largely on the credibility of the police officers who conducted the buy-bust
operation. Their narration of the incident, "buttressed by the presumption that they have regularly performed their
duties in the absence of convincing proof to the contrary, must be given weight."27 Here, the CA affirmed the RTC’s
ruling that the testimonies and facts stipulated upon were consistent with each other as well as with the physical
evidence. Thus, there is no justification to disturb the findings of the RTC, as sustained by the CA, on the matter.
The defenses of denial and frame-up

are unavailing.
The Court cannot convince itself to reverse the finding of facts of the lower courts on the basis of appellant’s self-
serving allegations of denial and extortion/frame-up.
Denial cannot prevail against the positive testimony of a prosecution witness. "A defense of denial which is
unsupported and unsubstantiated by clear and convincing evidence becomes negative and self-serving, deserving
no weight in law, and cannot be given greater evidentiary value over convincing, straightforward and probable
testimony on affirmative matters."28
Appellant cannot likewise avail of the defense of frame-up which "is viewed with disfavor since, like alibi, it can
easily be concocted and is a common ploy in most prosecutions for violations of the Dangerous Drugs Law."29 To
substantiate this defense, the evidence must be clear and convincing and should show that the buy-bust team was
inspired by improper motive or was not properly performing its duty.30 Here, there is no evidence that there was ill
motive on the part of the buy-bust team. In fact, appellant himself admitted that he did not know the police officers
prior to his arrest. There could therefore be no bad blood between him and the said police officers. Moreover, there
was no proof that the arresting officers improperly performed their duty in arresting appellant and Parcon.
Non-compliance with Section 21,

Article II of Republic Act No. 9165 is
not fatal.
In arguing for his acquittal, appellant heavily relies on the failure of the buy-bust team to immediately photograph
and conduct a physical inventory of the seized items in his presence. In this regard, Section 21(1), Art. II of RA 9165
provides:
Equipment. – The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous
equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner:
of the inventory and be given a copy thereof;
However, failure to strictly comply with the above procedure will not render an arrest illegal or the seized items
inadmissible in evidence. Substantial compliance is allowed as provided for in Section 21(a) of the Implementing
Rules and Regulations of RA 9165.31 This provision reads:
of the inventory and be given a copy thereof: Provided that the physical inventory and photograph shall be
the apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
seizures of and custody over said items. (Emphasis supplied).
The failure of the prosecution to show that the police officers conducted the required physical inventory and
photographed the objects confiscated does not ipso facto result in the unlawful arrest of the accused or render
inadmissible in evidence the items seized. This is due to the proviso added in the implementing rules stating that it
must still be shown that there exists justifiable grounds and proof that the integrity and evidentiary value of the
evidence have not been preserved.32 "What is crucial is that the integrity and evidentiary value of the seized items
are preserved for they will be used in the determination of the guilt or innocence of the accused."33
The links in the chain of custody must be established.

"The integrity and evidentiary value of seized items are properly preserved for as long as the chain of custody of the
same are duly established."34 "‘Chain of Custody’ means the duly recorded authorized movements and custody of
seized drugs or controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each stage,
from the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in court.
Such record of movements and custody of seized item shall include the identity and signature of the person who
had temporary custody of the seized item, the date and time when such transfer of custody was made in the course
of safekeeping and use in court as evidence, and the final disposition."35
There are links that must be established in the chain of custody in a buy-bust situation, namely: "first, the seizure
and marking, if practicable, of the illegal drug recovered from the accused by the apprehending officer; second, the
turnover of the illegal drug seized by the apprehending officer to the investigating officer; third, the turnover by the
investigating officer of the illegal drug to the forensic chemist for laboratory examination; and, fourth, the turnover
and submission of the marked illegal drug seized from the forensic chemist to the court."36
In this case, the prosecution established clearly the integrity and evidentiary value of the confiscated shabu. There is
no evidence that PO2 Soriano lost possession and control of the seized shabu from the time it was recovered from
the appellant until its turnover to the police station. He marked the seized item immediately upon arrival at the police
station. He turned it over to PO1 Calatay, the investigating officer, who prepared the letter request for the laboratory
examination of the contents of the plastic sachets. These facts were admitted by the appellant.37
On the same day, PO2 Soriano personally brought the letter request and specimens to the PNP Crime Laboratory
where they were received by Forensic Chemist P/Insp. Arban who conducted the examination on the specimens
submitted. During the pre-trial conference, appellant admitted the purpose for which P/Insp. Arban’s testimony was
being offered.38 The marked sachet of shabu and the marked money used in purchasing the same were both
presented in evidence.
Appellant’s contention that the marking of the seized sachets of shabu should have been made in his presence
while at the scene of the crime instead of in the police station fails to impress. It is clear from the earlier cited Sec.
21(a) of the Implementing Rules and Regulations of RA 9165 that in a buy-bust situation, the marking of the
dangerous drug may be done in the presence of the violator in the nearest police station or the nearest office of the
apprehending team. Appellant should not confuse buy-bust situation from search and seizure conducted by virtue of
a court-issued warrant. It is in the latter case that physical inventory (which includes the marking) is made at the
place where the search warrant is served. Nonetheless, "non-compliance with [the] requirements under justifiable
grounds, as long as the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over said items."39
Appellant’s claim that the testimony of PO2 Soriano does not deserve credence due to his failure to identify and/or
recall the markings he made on the subject specimen also fails to convince. His failure to immediately recall the
markings on the specimens only show that he is an uncoached witness.40 "Such momentary lapse in memory does
not detract from the credibility of his testimony as to the essential details of the incident."41 It must also be considered
that aside from the fact that police officers handle numerous cases daily, he testified three years after appellant’s
arrest. It is therefore understandable that PO2 Soriano could no longer easily remember all the details of the
incident.
Lastly, appellant’s argument that the entrapment operation is fatally flawed for failure of the buy-bust team to
coordinate with the PDEA deserves scant consideration. "[C]oordination with PDEA, while perhaps ideal, is not an
indispensable element of a proper buy-bust operation;"42 it is not invalidated by mere non-coordination with the
PDEA.43
Penalty
All told, there is no reason to disturb the finding of the RTC, as affirmed by the CA, that appellant is guilty beyond
and a fine ranging from ₱500,000.00 to ₱10 million. However, with the enactment of RA 9346,44 only life
imprisonment and fine shall be imposed.45 Thus, the penalty imposed by the RTC and affirmed by the CA is proper.
WHEREFORE, the appeal is DISMISSED. The Decision of the Court of Appeals that affirmed in toto the Decision of
the Regional Trial Court of Quezon City, Branch 82, insofar as the conviction of Glenn Salvador y Balverde for
violation of Section 5, Article II of Republic Act No. 9165, as amended by Republic Act No. 9346, and the penalty of
life imprisonment and payment of fine of ₱500,000.00 imposed upon him are concerned, is AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 195525 February 5, 2014

vs.
WILFREDO GUNDA alias FRED, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
On appeal is the March 30, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CEB CR-HC No. 00397 which
affirmed with modification the May 20, 2005 Decision2 of the Regional Trial Court (RTC) of Borongan, Eastern
Samar, Branch 2, finding appellant Wilfredo Gunda alias Fred (appellant) guilty beyond reasonable doubt of the
crime of murder.
Factual Antecedents
At about 4:00 o'clock in the afternoon of May 25, 1997, the victim, Eladio Globio, Sr., and his son, Eladio Jr., were
walking along a trail at Sitio Candulungon, Barangay Cabay, Balangkayan, Eastern Samar. Suddenly, when Eladio
Jr. was about 10 meters ahead of his father, the latter was waylaid by appellant and his unidentified companions.
The John Does held the victim's arms whereupon appellant stabbed him several times. Fearing for his life, Eladio Jr.
fled. The unidentified assailants pursued him. Fortunately, he was able to outrun them and was able to reach their
house. In the morning of the following day, Eladio Jr. went to the house of his sister and informed her of the death of
their father. They then reported the incident to the police authorities who eventually arrested the appellant. The body
of the victim was recovered and post-mortem examinations revealed that he suffered multiple stab wounds which
caused his death.
Aside from Eladio Jr., Teofilo Ambal, Jr. (Ambal) who is a brother-in-law of the appellant, also witnessed the crime.
In the afternoon of May 25, 1997, while Ambal was at his farm gathering feeds for his pigs, he saw appellant who
was armed with a wooden pole position himself at the back of the victim and strike the latter’s head with the wood.
The companions of appellant then held the victim’s arms whereupon appellant drew a bolo locally known as depang
from his waist and stabbed the victim several times. Fearing for his life, Ambal likewise left the crime scene.
On July 31, 1997, an Information3 was filed charging appellant and the John Does with the crime of murder. The
accusatory portion of the Information reads:
That on May 25, 1997, at about 4:00 o’clock in the afternoon at Sitio Candulungon, Barangay Cabay, Balangkayan,
Eastern Samar, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused
conspiring, confederating and helping one another, with intent to kill and with evident premeditation and treachery,
and without justifiable cause, did then and there wilfully, unlawfully and feloniously attack, assault, stab and wound
Eladio Globio, Sr., with the use of a sharp bladed weapon (Depang) which the accused provided themselves for the
purpose, thereby inflicting injuries upon the latter, which injuries caused the death of the victim, to the damage and
prejudice of the heirs of the victim.
CONTRARY TO LAW, with aggravating circumstances that the crime committed in an uninhabited place and the
superior strength [sic].4
Arraigned on September 10, 1997, appellant pleaded not guilty to the charge.5 The other accused who have not
been identified remained at large.
Appellant denied the charge against him. He claimed that in the afternoon of May 25, 1997, he was at Barangay
Camada gathering and cleaning rattan poles.
On May 20, 2005, the RTC of Borongan, Eastern Samar, Branch 2, rendered its Decision6 finding appellant guilty as
charged. The dispositive portion of the Decision reads:
WHEREFORE, finding accused Wilfredo Gunda guilty beyond reasonable doubt of the crime of murder, he is
sentenced to suffer the penalty of DEATH; and to pay the heirs of the victim the sum of ₱50,000.00 as civil
indemnity, another sum of ₱50,000.00 as moral damages; and another sum of ₱25,000.00 as exemplary damages.
SO ORDERED.7
The trial court disregarded the denial of the appellant. On the other hand, it lent full credence to the testimonies of
Eladio Jr. and Ambal who both positively identified appellant as the assailant. The RTC noted that their testimonies
coincided with the postmortem findings of Dr. Samuel Baldono that the victim suffered multiple stab wounds which
caused his death. The RTC likewise brushed aside the alibi of appellant. It noted that although he claimed that he
was in Barangay Camada at the time of the incident, appellant failed to prove that it was physically impossible for
him to be present at Barangay Cabay where the crime took place. Appellant even admitted that the distance
between the two barangays could be traversed in an hour or even less. The RTC also found that appellant
conspired with the John Does in committing the crime. It also noted that treachery attended the commission of the
crime because the victim was unarmed and totally unaware of the impending attack. The attack was sudden thus
depriving the victim of any opportunity to escape or defend himself.
In imposing the death penalty, the RTC considered treachery and conspiracy as qualifying circumstances.
On March 30, 2010, the CA rendered its Decision, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the appeal is DENIED. The Decision dated May 20, 2005 of the Regional Trial
Court (RTC), 8th Judicial Region, Branch 2, Borongan, Eastern Samar, is AFFIRMED with MODIFICATION that the
lesser penalty of Reclusion Perpetua instead of Death be imposed against appellant.
SO ORDERED.8
The CA affirmed the factual findings of the trial court that indeed, it was appellant, in conspiracy with the other John
Does, who killed the victim. The CA also agreed with the findings of the trial court that the killing was done in a
treacherous manner. However, the CA noted that although the trial court properly appreciated treachery and
conspiracy to have attended the commission of the crime, the presence of both would not warrant the imposition of
the death penalty. It ratiocinated that -
Treachery in the present case is a qualifying, not a generic aggravating circumstance. Its presence served to
characterize the killing as murder; it cannot at the same time be considered as a generic aggravating circumstance
to warrant the imposition of the maximum penalty. Since treachery qualified the commission of the crime to murder,
this circumstance could no longer be appreciated anew as a generic aggravating circumstance to warrant the
imposition of the death penalty. Furthermore, although there was conspiracy in this case, it is neither a qualifying
circumstance [nor] a generic aggravating circumstance to warrant the imposition of the supreme penalty of death.
The penalty for the crime of murder is reclusion perpetua to death. The two penalties being both indivisible, and
there being neither mitigating nor aggravating circumstances in the commission of the deed, the lesser penalty of
reclusion perpetua should be applied pursuant to the second paragraph of the Revised Penal Code.9
Aggrieved, appellant filed this appeal10 to which the CA gave due course in its Resolution11 of December 1, 2010.
On March 21, 2011, we required the parties to file their respective supplemental briefs.12 However, both parties
opted not to file their briefs anymore considering that their arguments had been amply discussed in the briefs that
they filed before the CA.13
Our Ruling
We dismiss the appeal.
Based on the above narrations, we find no cogent reason to depart from the findings of the trial court as affirmed by
the CA, that appellant is guilty beyond reasonable doubt of the crime of murder. Two prosecution witnesses
positively identified him as the person who waylaid the victim, and with the help of his conspirators, stabbed the
victim several times. According to the postmortem findings, the victim suffered 12 stab wounds which caused his
death. There is also no doubt in our mind that the attack on the victim was attended by treachery. The victim was
unarmed and had no inkling of the impending attack on his person. In fact, he was just on his way home together
with his son Eladio Jr. The victim was attacked by appellant from behind with a blow to his head with a wooden pole.
His cohorts then held the victim’s arms rendering him helpless and immobile. In such position, there is no
opportunity for the victim to escape or even offer a feeble resistance. Appellant then delivered the coup de grâce by
stabbing the victim multiple times. Undoubtedly, treachery qualified the killing to murder. "There is treachery when
the offender commits [a crime] against the person, employing means, methods or forms in the execution thereof
which tend directly and specially to insure its execution, without risk to himself arising from the defense which the
offended party might make."14 As regards conspiracy, the CA correctly ruled that it is not a circumstance which would
aggravate or qualify the crime.
Under Article 248 of the Revised Penal Code, the penalty for murder is reclusion perpetua to death. There being no
1âwphi1
other aggravating circumstance other than the qualifying circumstance of treachery, the CA correctly held that the
proper imposable penalty is reclusion perpetua, the lower of the two indivisible penalties. "It must be emphasized,
however, that [appellant is] not eligible for parole pursuant to Section 3 of Republic Act No. 9346 which states that
‘persons convicted of offenses punished with reclusion perpetua, or whose sentence will be reduced to reclusion
perpetua by reason of this Act, shall not be eligible for parole under Act No. 4180, otherwise known as the
Indeterminate Sentence Law, as amended’."15
As regards the damages, the amount of civil indemnity must be increased to ₱75,000.00 in line with prevailing
jurisprudence.16 Exemplary damages must likewise be increased to ₱30,000.00.17 Moral damages in the amount of
₱50,000.00, however, was correctly awarded by the trial court and the CA.18 Moreover, we note that the trial court
and the CA did not award actual damages. In lieu thereof, we award temperate damages in the amount of
₱25,000.00 "as it cannot be denied that the heirs of the [victim] suffered pecuniary loss although the exact amount
was not proved."19 "This award is adjudicated so that a right which has been violated may be recognized or
vindicated, and not for the purpose of indemnification."20 In addition, all damages awarded shall earn interest at the
rate of 6% per annum from date of finality of this judgment until fully paid.21
WHEREFORE, the appeal is DISMISSED. The March 30, 2010 Decision of the Court of Appeals in CA-G.R. CEB
CR-HC No. 00397 which affirmed with modification the May 20, 2005 Decision of the Regional Trial Court of
Borongan, Eastern Samar, Branch 2, finding appellant Wilfredo Gunda alias Fred guilty beyond reasonable doubt of
the crime of murder is AFFIRMED with MODIFICATIONS. As modified, appellant is sentenced to suffer the penalty
of reclusion perpetua without eligibility for parole and is ordered to pay the heirs of the victim the amounts of
₱75,000.00 as civil indemnity, PS0,000.00 as moral damages, ₱30,000.00 as exemplary damages, and ₱25,000.00
as temperate damages. Interest on all damages awarded is imposed at the rate of 6% per annum from date of
finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 185145 February 5, 2014

SPOUSES VICENTE AFULUGENCIA and LETICIA AFULUGENCIA, Petitioners,
vs.
METROPOLITAN BANK & TRUST CO. and EMMANUEL L. ORTEGA, Clerk of Court, Regional Trial Court and
Ex-Officio Sheriff, Province of Bulacan, Respondents.
DECISION
DEL CASTILLO, J.:
Section 6,1 Rule 25 of the Rules of Court (Rules) provides that "a party not served with written interrogatories may
not be compelled by the adverse party to give testimony in open court, or to give a deposition pending appeal." The
provision seeks to prevent fishing expeditions and needless delays. Its goal is to maintain order and facilitate the
conduct of trial.
Assailed in this Petition for Review on Certiorari2 are the April 15, 2008 Decision3 of the Court of Appeals (CA) in CA-
G.R. SP No. 99535 which dismissed petitioners' Petition for Certiorari for lack of merit and its October 2, 2008
Resolution4 denying petitioners' Motion for Reconsideration.5
Factual Antecedents
Petitioners, spouses Vicente and Leticia Afulugencia, filed a Complaint6 for nullification of mortgage, foreclosure,
auction sale, certificate of sale and other documents, with damages, against respondents Metropolitan Bank & Trust
Co. (Metrobank) and Emmanuel L. Ortega (Ortega) before the Regional Trial Court (RTC) of Malolos City, where it
was docketed as Civil Case No. 336-M-2004 and assigned to Branch 7.
Metrobank is a domestic banking corporation existing under Philippine laws, while Ortega is the Clerk of Court and
Ex-Officio Sheriff of the Malolos RTC.
After the filing of the parties’ pleadings and with the conclusion of pre-trial, petitioners filed a Motion for Issuance of
Subpoena Duces Tecum Ad Testificandum7 to require Metrobank’s officers8 to appear and testify as the petitioners’
initial witnesses during the August 31, 2006 hearing for the presentation of their evidence-in-chief, and to bring the
documents relative to their loan with Metrobank, as well as those covering the extrajudicial foreclosure and sale of
petitioners’ 200-square meter land in Meycauayan, Bulacan covered by Transfer Certificate of Title No. 20411 (M).
The Motion contained a notice of hearing written as follows:
NOTICE
The Branch Clerk of Court

Regional Trial Court
Branch 7, Malolos, Bulacan
Greetings:
Please submit the foregoing motion for the consideration and approval of the Hon. Court immediately upon receipt
hereof.
(signed)
Vicente C. Angeles9
Metrobank filed an Opposition10 arguing that for lack of a proper notice of hearing, the Motion must be denied; that
being a litigated motion, the failure of petitioners to set a date and time for the hearing renders the Motion ineffective
and pro forma; that pursuant to Sections 1 and 611 of Rule 25 of the Rules, Metrobank’s officers – who are
considered adverse parties – may not be compelled to appear and testify in court for the petitioners since they were
not initially served with written interrogatories; that petitioners have not shown the materiality and relevance of the
documents sought to be produced in court; and that petitioners were merely fishing for evidence.
Petitioners submitted a Reply12 to Metrobank’s Opposition, stating that the lack of a proper notice of hearing was
cured by the filing of Metrobank’s Opposition; that applying the principle of liberality, the defect may be ignored; that
leave of court is not necessary for the taking of Metrobank’s officers’ depositions; that for their case, the issuance of
a subpoena is not unreasonable and oppressive, but instead favorable to Metrobank, since it will present the
testimony of these officers just the same during the presentation of its own evidence; that the documents sought to
be produced are relevant and will prove whether petitioners have paid their obligations to Metrobank in full, and will
settle the issue relative to the validity or invalidity of the foreclosure proceedings; and that the Rules do not prohibit a
party from presenting the adverse party as its own witness.
On October 19, 2006, the trial court issued an Order13 denying petitioners’ Motion for Issuance of Subpoena Duces
Tecum Ad Testificandum, thus:
The motion lacks merit.
As pointed out by the defendant bank in its opposition, the motion under consideration is a mere scrap of paper by
reason of its failure to comply with the requirements for a valid notice of hearing as specified in Sections 4 and 5 of
Rule 15 of the Revised Rules of Court. Moreover, the defendant bank and its officers are adverse parties who
cannot be summoned to testify unless written interrogatories are first served upon them, as provided in Sections 1
and 6, Rule 25 of the Revised Rules of Court.
In view of the foregoing, and for lack of merit, the motion under consideration is hereby DENIED.
SO ORDERED.14
Petitioners filed a Motion for Reconsideration15 pleading for leniency in the application of the Rules and claiming that
the defective notice was cured by the filing of Metrobank’s Opposition, which they claim is tantamount to notice.
They further argued that Metrobank’s officers – who are the subject of the subpoena – are not party-defendants, and
thus do not comprise the adverse party; they are individuals separate and distinct from Metrobank, the defendant
corporation being sued in the case.
In an Opposition16 to the Motion for Reconsideration, Metrobank insisted on the procedural defect of improper notice
of hearing, arguing that the rule relative to motions and the requirement of a valid notice of hearing are mandatory
and must be strictly observed. It added that the same rigid treatment must be accorded to Rule 25, in that none of its
officers may be summoned to testify for petitioners unless written interrogatories are first served upon them. Finally,
it said that since a corporation may act only through its officers and employees, they are to be considered as
adverse parties in a case against the corporation itself.
In another Order17 dated April 17, 2007, the trial court denied petitioners’ Motion for Reconsideration. The trial court
held, thus:
Even if the motion is given consideration by relaxing Sections 4 and 5, Rule 15 of the Rules of Court, no such laxity
could be accorded to Sections 1 and 6 of Rule 25 of the Revised Rules of Court which require prior service of
written interrogatories to adverse parties before any material and relevant facts may be elicited from them more so if
the party is a private corporation who could be represented by its officers as in this case. In other words, as the
persons sought to be subpoenaed by the plaintiffs-movants are officers of the defendant bank, they are in effect the
very persons who represent the interest of the latter and necessarily fall within the coverage of Sections 1 and 6,
Rule 25 of the Revised Rules of Court.
In view of the foregoing, the motion for reconsideration is hereby denied.
SO ORDERED.18

Petitioners filed a Petition for Certiorari19 with the CA asserting this time that their Motion for Issuance of Subpoena
Duces Tecum Ad Testificandum is not a litigated motion; it does not seek relief, but aims for the issuance of a mere
process. For these reasons, the Motion need not be heard. They likewise insisted on liberality, and the disposition of
the case on its merits and not on mere technicalities.20 They added that Rule 2121 of the Rules requires prior notice
and hearing only with respect to the taking of depositions; since their Motion sought to require Metrobank’s officers
to appear and testify in court and not to obtain their depositions, the requirement of notice and hearing may be
dispensed with. Finally, petitioners claimed that the Rules – particularly Section 10,22 Rule 132 – do not prohibit a
party from presenting the adverse party as its own witness.
On April 15, 2008, the CA issued the questioned Decision, which contained the following decretal portion:
WHEREFORE, the petition is DISMISSED for lack of merit. The assailed orders dated October 19, 2006 and April
17, 2007 in Civil Case No. 336-M-2004 issued by the RTC, Branch 7, Malolos City, Bulacan, are AFFIRMED. Costs
against petitioners.
SO ORDERED.23
The CA held that the trial court did not commit grave abuse of discretion in issuing the assailed Orders; petitioners’
Motion is a litigated motion, especially as it seeks to require the adverse party, Metrobank’s officers, to appear and
testify in court as petitioners’ witnesses. It held that a proper notice of hearing, addressed to the parties and
specifying the date and time of the hearing, was required, consistent with Sections 4 and 5,24 Rule 15 of the Rules.
The CA held further that the trial court did not err in denying petitioners’ Motion to secure a subpoena duces
tecum/ad testificandum, ratiocinating that Rule 25 is quite clear in providing that the consequence of a party’s failure
to serve written interrogatories upon the opposing party is that the latter may not be compelled by the former to
testify in court or to render a deposition pending appeal. By failing to serve written interrogatories upon Metrobank,
petitioners foreclosed their right to present the bank’s officers as their witnesses.
The CA declared that the justification for the rule laid down in Section 6 is that by failing to seize the opportunity to
inquire upon the facts through means available under the Rules, petitioners should not be allowed to later on burden
Metrobank with court hearings or other processes. Thus, it held:
x x x Where a party unjustifiedly refuses to elicit facts material and relevant to his case by addressing written
interrogatories to the adverse party to elicit those facts, the latter may not thereafter be compelled to testify thereon
in court or give a deposition pending appeal. The justification for this is that the party in need of said facts having
foregone the opportunity to inquire into the same from the other party through means available to him, he should not
thereafter be permitted to unduly burden the latter with courtroom appearances or other cumbersome processes.
The sanction adopted by the Rules is not one of compulsion in the sense that the party is being directly compelled to
avail of the discovery mechanics, but one of negation by depriving him of evidentiary sources which would otherwise
have been accessible to him.25
Petitioners filed their Motion for Reconsideration,26 which the CA denied in its assailed October 2, 2008 Resolution.
Issues
Petitioners now raise the following issues for resolution:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERRORS IN REQUIRING NOTICE AND HEARING
(SECS. 4 AND 5, RULE 15, RULES OF COURT) FOR A MERE MOTION FOR SUBPOENA OF RESPONDENT
BANK’S OFFICERS WHEN SUCH REQUIREMENTS APPLY ONLY TO DEPOSITION UNDER SEC. 6, RULE 25,
RULES OF COURT.
II
THE COURT OF APPEALS COMMITTED (REVERSIBLE) ERROR IN HOLDING THAT THE PETITIONERS MUST
FIRST SERVE WRITTEN INTERROGATORIES TO RESPONDENT BANK’S OFFICERS BEFORE THEY CAN BE
SUBPOENAED.27
Praying that the assailed CA dispositions be set aside and that the Court allow the issuance of the subpoena duces
tecum/ad testificandum, petitioners assert that the questioned Motion is not a litigated motion, since it seeks not a
relief, but the issuance of process. They insist that a motion which is subject to notice and hearing under Sections 4
and 5 of Rule 15 is an application for relief other than a pleading; since no relief is sought but just the process of
subpoena, the hearing and notice requirements may be done away with. They cite the case of Adorio v. Hon.
Bersamin,28 which held that –
Requests by a party for the issuance of subpoenas do not require notice to other parties to the action. No violation
1âwphi 1
of due process results by such lack of notice since the other parties would have ample opportunity to examine the
witnesses and documents subpoenaed once they are presented in court.29
Petitioners add that the Rules should have been liberally construed in their favor, and that Metrobank’s filing of its
Opposition be considered to have cured whatever defect the Motion suffered from.
Petitioners likewise persist in the view that Metrobank’s officers – the subject of the Motion – do not comprise the
adverse party covered by the rule; they insist that these bank officers are mere employees of the bank who may be
called to testify for them.
Metrobank essentially argues in its Comment30 that the subject Motion for the issuance of a subpoena duces
tecum/ad testificandum is a litigated motion, especially as it is directed toward its officers, whose testimony and
documentary evidence would affect it as the adverse party in the civil case. Thus, the lack of a proper notice of
hearing renders it useless and a mere scrap of paper. It adds that being its officers, the persons sought to be called
to the stand are themselves adverse parties who may not be compelled to testify in the absence of prior written
interrogatories; they are not ordinary witnesses whose presence in court may be required by petitioners at any time
and for any reason.
Finally, Metrobank insists on the correctness of the CA Decision, adding that since petitioners failed up to this time
to pay the witnesses’ fees and kilometrage as required by the Rules,31 the issuance of a subpoena should be denied.
Our Ruling
On the procedural issue, it is quite clear that Metrobank was notified of the Motion for Issuance of Subpoena Duces
Tecum Ad Testificandum; in fact, it filed a timely Opposition thereto. The technical defect of lack of notice of hearing
was thus cured by the filing of the Opposition.32
Nonetheless, contrary to petitioners’ submission, the case of Adorio cannot apply squarely to this case. In Adorio,
the request for subpoena duces tecum was sought against bank officials who were not parties to the criminal case
for violation of Batas Pambansa Blg. 22. The situation is different here, as officers of the adverse party Metrobank
are being compelled to testify as the calling party’s main witnesses; likewise, they are tasked to bring with them
documents which shall comprise the petitioners’ principal evidence. This is not without significant consequences that
affect the interests of the adverse party, as will be shown below.
As a rule, in civil cases, the procedure of calling the adverse party to the witness stand is not allowed, unless written
interrogatories are first served upon the latter. This is embodied in Section 6, Rule 25 of the Rules, which provides –
Sec. 6. Effect of failure to serve written interrogatories.

Unless thereafter allowed by the court for good cause shown and to prevent a failure of justice, a party not served
with written interrogatories may not be compelled by the adverse party to give testimony in open court, or to give a
deposition pending appeal.
One of the purposes of the above rule is to prevent fishing expeditions and needless delays; it is there to maintain
order and facilitate the conduct of trial. It will be presumed that a party who does not serve written interrogatories on
the adverse party beforehand will most likely be unable to elicit facts useful to its case if it later opts to call the
adverse party to the witness stand as its witness. Instead, the process could be treated as a fishing expedition or an
attempt at delaying the proceedings; it produces no significant result that a prior written interrogatories might bring.
Besides, since the calling party is deemed bound by the adverse party’s testimony,33 compelling the adverse party to
take the witness stand may result in the calling party damaging its own case. Otherwise stated, if a party cannot
elicit facts or information useful to its case through the facility of written interrogatories or other mode of discovery,
then the calling of the adverse party to the witness stand could only serve to weaken its own case as a result of the
calling party’s being bound by the adverse party’s testimony, which may only be worthless and instead detrimental
to the calling party’s cause.
Another reason for the rule is that by requiring prior written interrogatories, the court may limit the inquiry to what is
relevant, and thus prevent the calling party from straying or harassing the adverse party when it takes the latter to
the stand.
Thus, the rule not only protects the adverse party from unwarranted surprises or harassment; it likewise prevents
the calling party from conducting a fishing expedition or bungling its own case. Using its own judgment and
discretion, the court can hold its own in resolving a dispute, and need not bear witness to the parties perpetrating
unfair court practices such as fishing for evidence, badgering, or altogether ruining their own cases. Ultimately, such
unnecessary processes can only constitute a waste of the court’s precious time, if not pointless entertainment.
In the present case, petitioners seek to call Metrobank’s officers to the witness stand as their initial and main
witnesses, and to present documents in Metrobank’s possession as part of their principal documentary evidence.
This is improper. Petitioners may not be allowed, at the incipient phase of the presentation of their evidence-in-chief
at that, to present Metrobank’s officers – who are considered adverse parties as well, based on the principle that
corporations act only through their officers and duly authorized agents34 – as their main witnesses; nor may they be
allowed to gain access to Metrobank’s documentary evidence for the purpose of making it their own. This is
tantamount to building their whole case from the evidence of their opponent. The burden of proof and evidence falls
on petitioners, not on Metrobank; if petitioners cannot prove their claim using their own evidence, then the adverse
party Metrobank may not be pressured to hang itself from its own defense.
It is true that under the Rules, a party may, for good cause shown and to prevent a failure of justice, be compelled to
give testimony in court by the adverse party who has not served written interrogatories. But what petitioners seek
goes against the very principles of justice and fair play; they would want that Metrobank provide the very evidence
with which to prosecute and build their case from the start. This they may not be allowed to do.
Finally, the Court may not turn a blind eye to the possible consequences of such a move by petitioners. As one of
their causes of action in their Complaint, petitioners claim that they were not furnished with specific documents
relative to their loan agreement with Metrobank at the time they obtained the loan and while it was outstanding. If
Metrobank were to willingly provide petitioners with these documents even before petitioners can present evidence
to show that indeed they were never furnished the same, any inferences generated from this would certainly not be
useful for Metrobank. One may be that by providing petitioners with these documents, Metrobank would be
admitting that indeed, it did not furnish petitioners with these documents prior to the signing of the loan agreement,
and while the loan was outstanding, in violation of the law.
With the view taken of the case, the Court finds it unnecessary to further address the other issues raised by the
parties, which are irrelevant and would not materially alter the conclusions arrived at.
WHEREFORE, the Petition is DENIED. The assailed April 15, 2008 Decision and October 2, 2008 Resolution of the
SO ORDERED.
SECOND DIVISION
G.R. No. 191215 February 3, 2014
THENAMARIS PHILIPPINES, INC. (Formerly INTERMARE MARITIME AGENCIES, INC.)/ OCEANIC

NAVIGATION LTD. and NICANOR B. ALTARES, Petitioners,
vs.
COURT OF APPEALS and AMANDA C. MENDIGORIN (In behalf of her deceased husband GUILLERMO
MENDIGORIN), Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Certiorari filed under Rule 65 of the Rules of Court assails the Resolution 1 dated November 20,
2009 of the Court of Appeals (CA) in CA-G.R. SP No. 110808 for allegedly having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction. The CA, through the said Resolution, entertained private
respondent's Petition for Certiorari2 despite having been filed 15 days late and allowed her to correct the technical
infirmities therein. Also assailed is the CA's February 10, 2010 Resolution3 denying petitioners' Motion for
Reconsideration with Prayer to Dismiss4 and giving private respondent another chance to cure the remaining
deficiencies of the petition.
Factual Antecedents
This case stemmed from a complaint for death benefits, unpaid salaries, sickness allowance, refund of medical
expenses, damages and attorney’s fees filed by Amanda C. Mendigorin (private respondent) against petitioner
Thenamaris Philippines, Inc., formerly Intermare Maritime Agencies, Inc./Oceanic Navigation Ltd., (Thenamaris),
represented by its general manager, Capt. Nicanor B. Altares (petitioner), filed with the Labor Arbiter (LA). Private
respondent is the widow of seafarer Guillermo M. Mendigorin (Guillermo) who was employed by Thenamaris for 27
years as an oiler and eventually, as second engineer in the latter’s vessels. Guillermo was diagnosed with and died
of colon cancer during the term of the employment contract between him and Thenamaris.
Ultimately, the LA promulgated his Decision5 dated January 29, 2008 in favor of private respondent. Thus:
WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the complainant [herein private
respondent] and finding respondents [herein petitioners] liable to pay jointly and severally: (a) death benefits
amounting to US $50,000.00 at its peso equivalent at the time of actual payment; (b) reimbursement of medical
expenses amounting to ₱102,759.74; [(c)] moral and exemplary damages amounting to ₱100,000.00 and
₱50,000.00 respectively; and (d) attorney’s fees in the [amount of] ten percent (10%) of the total monetary award.
All other claims are DENIED.6
On appeal, the NLRC reversed7 the LA’s Decision.
Private respondent moved for reconsideration.8 In a Resolution9 dated June 29, 2009, however, her motion was
denied for lack of merit.
Private respondent, through counsel, received the June 29, 2009 Resolution of the NLRC on July 8, 2009. Sixty-two
days thereafter, or on September 8, 2009, she filed a Motion for Extension of Time to File Petition for
Certiorari10before the CA. Private respondent alleged that she had until September 7, 2009 (as September 6, 2009,
the actual last day for filing, fell on a Sunday) within which to file a petition for certiorari. However, as her counsel
was then saddled and occupied with equally important cases, it would be impossible for him to file the petition on
time, especially since the case involves voluminous documents necessary in the preparation thereof. Accordingly,
private respondent asked for an extension of 15 days from September 7, 2009, or until September 22, 2009, within
which to file the petition.
On September 22, 2009, private respondent filed her Petition for Certiorari11 before the CA.
Action of the Court of Appeals
In a Resolution12 dated November 20, 2009, the CA noted that private respondent’s Petition for Certiorari was filed
15 days late and suffers from procedural infirmities. Nonetheless, in the interest of substantial justice, the CA
entertained the petition and directed private respondent to cure the technical flaws in her petition. Thus:
The Court, in the interest of justice, resolved to NOTE the petition for certiorari filed on September 22, 2009, albeit
the same was filed fifteen (15) days late.
A perusal of the instant petition reveals the following procedural infirmities, namely:
(1) The attached Verification/Certification of Non-Forum Shopping does not conform with the requirements under
Section 12, Rule II of the 2004 Rules of Notarial Practice, as a Community Tax Certificate is no longer considered
competent evidence of an affiant’s identity; and
(2) Except for the copy of the Motion for Reconsideration filed with the National Labor Relations Commission, no
other copies of pertinent and relevant pleadings/documents are attached therewith, such as petitioner’s Complaint,
respondent’s Memorandum of Appeal, petitioner’s Opposition to Respondent’s Appeal, if any, all of which may aid
this Court in judiciously resolving the issues raised in the petition.
ACCORDINGLY, this Court, in line with the rule that cases should be determined on the merits, after full opportunity
to all parties for ventilation of their causes and defenses have been given, rather than on technicality or some
procedural imperfections, resolved to DIRECT petitioner to submit anew a Verification/Certification of Non-Forum
Shopping which complies with the requirements of the rules, and clear and legible copies of the aforementioned
pleadings/documents, within ten (10) days from receipt of notice hereof.
SO ORDERED.13 (Emphasis in the original)
Petitioners filed a Motion for Reconsideration with Prayer to Dismiss,14 strongly opposing private respondent’s
Motion for Extension to File Petition for Certiorari for being an absolutely prohibited pleading. Citing Laguna Metts
Corporation v. Court of Appeals,15 petitioners argued that A.M. No. 07-7-12-SC16 effectively rendered the 60-day
period for filing a petition for certiorari non-extendible after it deleted portions of Rule 65 pertaining to extension of
time to file petition. Thus, as the rule now stands, petitions for certiorari must be filed strictly within 60 days from
notice of judgment or from the order denying a motion for reconsideration.17
Petitioners also contended that even assuming that an extension is still allowable, private respondent’s motion for
extension is nevertheless a useless piece of paper as it was filed beyond the 60-day period for filing a petition for
certiorari.
Lastly, petitioners asserted that as private respondent’s motion for extension is a prohibited pleading, as well as one
filed outside of the reglementary period, then private respondent’s Petition for Certiorari is a mere scrap of paper
with no remedial value whatsoever. Consequently, the Decision of the NLRC has become final and executory and is
beyond the ambit of judicial review.
In the meantime, private respondent submitted her Compliance18 with the CA’s Resolution of November 20, 2009.
Nevertheless, she still failed to attach thereto copies of her Complaint filed before the LA and Memorandum filed
with the NLRC.
In a Resolution19 dated February 10, 2010, the CA denied petitioners’ motion and, instead, gave private respondent
one last opportunity to fully comply with its November 20, 2009 Resolution by submitting clear and legible copies of
the still lacking pleadings within five days from notice thereof.
Thus, the present Petition for Certiorari.
Entry of Judgment20 was already issued by the NLRC on August 13, 2009. Per NLRC Rules, the June 29, 2009
Resolution became final and executory on July 18, 2009 and was recorded in the Book of Entries of Judgment.
Issues
1. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR

EXCESS OF JURISDICTION WHEN IT NOTED THE PETITION FOR CERTIORARI FILED BY THE PRIVATE
RESPONDENT INSTEAD OF DISMISSING IT OUTRIGHT FOR HAVING BEEN FILED BEYOND THE
MANDATORY AND JURISDICTIONAL 60-DAY PERIOD REQUIRED BY SECTION 4, RULE 65 OF THE RULES
OF COURT, AS AMENDED BY A.M. NO. 07-7-12-SC.
2. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF DISCRETION WHEN, IN NOTING THE
VERY LATE PETITION FILED BY THE PRIVATE RESPONDENT, IT GROSSLY IGNORED THIS HONORABLE
COURT’S VERY RECENT RULING IN LAGUNA METTS CORPORATION v. COURT OF APPEALS, ARIES C.
CAALAM AND GERALDINE ESGUERRA (G.R. NO. 185220, JULY 27, 2009), WHICH DISALLOWED ANY
MOTIONS FOR EXTENSION OF TIME TO FILE A PETITION FOR CERTIORARI UNDER RULE
65.21 (Underscoring and emphasis in the original)
Our Ruling
There is merit in the petition.
In Republic v. St. Vincent de Paul Colleges, Inc.22 we had the occasion to settle the seeming conflict on various
jurisprudence touching upon the issue of whether the period for filing a petition for certiorari may be extended. In
said case we stated that the general rule, as laid down in Laguna Metts Corporation v. Court of Appeals,23 is that a
petition for certiorari must be filed strictly within 60 days from notice of judgment or from the order denying a motion
for reconsideration. This is in accordance with the amendment introduced by A.M. No. 07-7-12-SC24 where no
provision for the filing of a motion for extension to file a petition for certiorari exists, unlike in the original Section 4 of
Rule 6525 which allowed the filing of such a motion but only for compelling reason and in no case exceeding 15
days.26 Under exceptional cases, however, and as held in Domdom v. Third and Fifth Divisions of the
Sandiganbayan,27 the 60-day period may be extended subject to the court’s sound discretion. In Domdom, we stated
that the deletion of the provisions in Rule 65 pertaining to extension of time did not make the filing of such pleading
absolutely prohibited. "If such were the intention, the deleted portion could just have simply been reworded to state
that ‘no extension of time to file the petition shall be granted.’ Absent such a prohibition, motions for extension are
allowed, subject to the court’s sound discretion."28
Then in Labao v. Flores,29 we laid down some of the exceptions to the strict application of the 60-day period rule,
thus:
[T]here are recognized exceptions to their strict observance, such as: (1) most persuasive and weighty reasons; (2)
to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3)
good faith of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the
existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to
the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review
sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident,
mistake or excusable negligence without appellant’s fault; (10) peculiar legal and equitable circumstances attendant
to each case; (11) in the name of substantial justice and fair play; (12) importance of the issues involved; and (13)
exercise of sound discretion by the judge guided by all the attendant circumstances. Thus, there should be an effort
1âwphi 1
on the part of the party invoking liberality to advance a reasonable or meritorious explanation for his/her failure to
comply with the rules.
In this case, counting 60 days from her counsel’s receipt of the June 29, 2009 NLRC Resolution on July 8, 2009,
private respondent had until September 7, 2009 to file her petition or a motion for extension, as September 6, 2009,
the last day for filing such pleading, fell on a Sunday. However, the motion was filed only on September 8, 2009.30 It
is a fundamental rule of remedial law that a motion for extension of time must be filed before the expiration of the
period sought to be extended; otherwise, the same is of no effect since there would no longer be any period to
extend, and the assailed judgment or order will have become final and executory.31
Additionally, as cited earlier in Labao, there should be an effort on the part of the litigant invoking liberality to
satisfactorily explain why he or she was unable to abide by the rules.32 Here, the reason offered for availing of the
motion for extension is the heavy workload of private respondent’s counsel, which is hardly a compelling or
meritorious reason as enunciated in Labao. Time and again, we have held that the excuse of "heavy workload is
relative and often self-serving. Standing alone, it is not a sufficient reason to deviate from the 60-day rule."33
Thus, private respondent’s motion for extension should have been denied outright.
Notably, the CA’s November 20, 2009 Resolution refrained from ruling on the timeliness of private respondent’s
motion for extension. Instead, it directly ruled on the Petition for Certiorari as seen by its statement "[t]he Court x x x
resolved to NOTE the petition for certiorari x x x, albeit the same was filed fifteen (15) days late." To our mind, the
foregoing pronouncement is an indirect acknowledgment on the part of the CA that the motion for extension was
indeed filed late. Yet it opted to still entertain and "note" the Petition for Certiorari, justifying its action as being "in the
interest of justice."
We do not approve of the CA’s ruling on the matter because, as the motion for extension should have been denied
outright, it necessarily follows that the Petition for Certiorari is, in the words of petitioners, a "mere scrap of paper
with no remedial value whatsoever."
In Negros Slashers, Inc. v. Teng,34 which likewise dealt with the late filing of a petition for certiorari, we recognized
that although procedural rules ought to be strictly enforced by courts in order to impart stability in the legal system,
we have, nonetheless, relaxed the rigid application of the rules of procedure in several cases to afford the parties
the opportunity to fully ventilate their cases on the merits. This is because the ends of justice would be better served
if the parties were given the chance to argue their causes and defenses. We are likewise constantly reminded that
the general objective of procedure is to facilitate the application of justice to the opposing claims of the competing
parties and always be guided by the principle that procedure must not hinder but, rather, promote the administration
of justice. Concomitant thereto:
Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to
reconcile both the need to speedily put an end to litigation and the parties’ right to due process. In numerous cases,
this Court has allowed liberal construction of the rules when to do so would serve the demands of substantial justice
and equity. x x x35
Here, even assuming that the late filing of the petition would merit relaxation of the rules, the CA’s resolution would
have only been acceptable had private respondent shown respect for the rules by submitting a petition for certiorari
which is sufficient in form. In contrast, what private respondent filed was a petition plagued by several infirmities.
Worse, when the CA allowed petitioner to cure the deficiencies, she failed to fully comply such that she had to be
given, albeit undeservingly, one last chance to submit the still lacking copies of the pertinent pleadings required of
her by the CA.
More importantly, the CA should have dismissed the petition outright in view of the fact that the June 29, 2009
Resolution of the NLRC denying private respondent’s Motion for Reconsideration had already become final and
executory as of July 18, 2009.36 Thus, it has no jurisdiction to entertain the petition, except to order its dismissal. In
Labao, we held that:
The NLRC’s resolution became final ten (10) days after counsel’s receipt, and the respondent’s failure to file the
petition within the required (60)-day period rendered it impervious to any attack through a Rule 65 petition for
certiorari. Thus, no court can exercise jurisdiction to review the resolution.
Needless to stress, a decision that has acquired finality becomes immutable and unalterable and may no longer be
modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law and
whether it will be made by the court that rendered it or by the highest court of the land. All the issues between the
parties are deemed resolved and laid to rest once a judgment becomes final and executory; execution of the
decision proceeds as a matter of right as vested rights are acquired by the winning party. Just as a losing party has
the right to appeal within the prescribed period, the winning party has the correlative right to enjoy the finality of the
decision on the case. After all, a denial of a petition for being time-barred is tantamount to a decision on the merits.
Otherwise, there will be no end to litigation, and this will set to naught the main role of courts of justice to assist in
the enforcement of the rule of law and the maintenance of peace and order by settling justiciable controversies with
finality.37
In sum, the CA committed grave abuse of discretion when it extended underserved and unwarranted liberality to
private respondent. "There is grave abuse of discretion when there is an evasion of a positive duty or a virtual
refusal to perform a duty enjoined by law or to act in contemplation of law as when the judgment rendered is not
based on law and evidence but on caprice, whim and despotism xx x."38 Such is present here as shown by the CA's
obstinate refusal to dismiss the case despite the late filing of the motion for extension and the flimsy excuse for the
extension sought, the late filing of the petition and the numerous infirmities attending the same, and private
respondent's continued defiance of its directive. These circumstances serve to highlight private respondent's
propensity to disregard the very rules that the courts, the litigants and the lawyers are duty-bound to follow.
WHEREFORE, the petition is hereby GRANTED. The assailed Court of Appeals Resolutions dated November 20,
2009 and February 10, 2010 are REVERSED and SET ASIDE for having been issued with grave abuse of discretion
amounting to lack or excess of jurisdiction. The Petition for Certiorari filed by private respondent Amanda C.
Mendigorim in CA-G.R. SP No. 110808 is DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 196435 January 29, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee

vs.
JOEL CRISOSTOMO y MALLIAR,1 Accused-Appellant.
DECISION
DEL CASTILLO, J.:
"[T]he trial court's evaluation of the credibility of the witnesses is entitled to he highest respect absent a showing that
it overlooked, misunderstood or misapplied some facts or circumstances of weight and substance that would affect
the result of the case."2
On appeal is the October 22, 2010 Decision3 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 03832 which
affirmed with modification the July 3, 2008 Decision4 of the Regional Trial Court (RTC) of Antipolo City, Branch 73
finding appellant Joel Crisostomo y Malliar guilty beyond reasonable doubt of two counts of rape by sexual assault
and one count of statutory rape.
In three separate Informations,5 appellant was charged with rape committed as follows:
Criminal Case No. 99-16235 (Rape by Sexual Assault)
That, on or about the 8th day of April, 1999, in the City of Antipolo, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, with lewd designs, did then and there commit an act of sexual assault
by using a lighted cigarette as an instrument or object and [inserting] the same into the genital orifice of "AAA,"6 a
minor who is six (6) years of age, thereby causing the labia majora of the vagina of said minor to suffer a third
degree burn, against her will and consent.
Contrary to law.
Criminal Case No. 99-16236 (Rape by Sexual Assault)

Honorable Court, the above-named accused, with lewd designs, did then and there commit an act of sexual assault
by using a lighted cigarette as an instrument or object and [inserting] the same into the anal orifice of "AAA", a minor
who is six (6) years of age, thereby causing the perianal region of the said anal orifice of said minor to suffer a third
degree burn, against her will and consent.
Contrary to law.
Criminal Case No. 99-16237 (Statutory Rape)
Honorable Court, the above-named accused, with lewd designs and by means of force, violence and intimidation,
did, then and there willfully, unlawfully and feloniously have carnal knowledge [of] "AAA", a minor who is six (6)
years of age; that on the same occasion that the Accused raped said minor, the accused did, then and there burn
her buttocks by the use of a lighted cigarette, against her will and consent.
Contrary to law.
When arraigned on January 9, 2001, appellant pleaded not guilty.7 Pre-trial conference was terminated upon
agreement of the parties. Trial on the merits ensued.
Factual Antecedents
The facts as summarized by the RTC, are as follows:
The victim in these cases[,] "AAA[,]" testified that at noon time of April 8, 1999, she was x x x playing x x x with her
playmates whereupon she wandered by the house of accused which x x x was just below their house. "AAA"
clarified during her cross-examination that there was a vulcanizing shop owned by her father located in their house x
x x and where accused was employed. While "AAA" was at the house of accused, she claimed that her genitals and
buttocks were burned with a lighted cigarette by the said accused. "AAA" testified further that her clothes were taken
off by the same accused who also took his clothes off after which he allegedly placed himself on top of her, inserted
his penis and proceeded to have illicit carnal knowledge [of] the then six (6) year old girl. (TSN May 29, 2001, pp. 5-
9; TSN Aug. 7, 2001, pp. 10-12.)
"BBB," father of "AAA," presented in court his daughter’s birth certificate (Exhibit "B") which stated that she was born
on April 4, 1993 (TSN Sept. 25, 2001, p. 4). On the other hand, Dr. Emmanuel Reyes the Medico-Legal Officer who
examined "AAA" identified his Medico-Legal Report (Exhibit "M") and testified that the victim indeed had two (2) third
degree burns in the perianal region. Dr. Reyes testified that it was possible that the said burns were caused by a
lighted cigarette stick being forced on the victim’s skin. Moreover, Dr. Reyes confirmed that there was a loss of
virginity on the part of the victim and that the same could have been done 24 hours from the time of his examination
which was also on April 8, 1999. (TSN Nov. 7, 2001 pp. 11-17)
"CCC" [aunt of "AAA"] testified that x x x she x x x assisted the mother of "AAA" in bringing the victim to the Pasig
General Hospital and thereafter to Camp Crame where a doctor also examined "AAA" and confirmed that the latter
was indeed a victim of rape. "CCC" testified that they then proceeded to the Women’s [D]esk to file the instant
complaint against the accused. (TSN August 5, 2003 pp. 4-8)
On the other hand, accused denied the allegation of rape against him. Accused presented his brother-in-law Rogelio
Oletin who testified that he was tending the store located at the house of accused when the latter supposedly
arrived from work at 10:00 [a.m.] of April 8, 1999 and slept until 5:00 [p.m.] of the same day. According to Rogelio
that is the usual routine of accused as the latter worked in the night shift schedule as vulcanizer in the vulcanizing
shop owned by the victim’s father. (TSN February 3, 2006 pp. 6-8)
When accused testified on November 17, 2006, he essentially confirmed the testimony of his brother-in-law that it
was impossible for him to have raped "AAA" on the date and time stated in the information as his night shift work
schedule just would not permit such an incident to occur. Accused added that he knew of no reason why the family
of the private complainant would pin the crime against him. (TSN Nov. 17, 2006 pp. 9-11 & 14)
In an effort to explain the burn marks on the delicate parts of "AAA’s" body, the defense presented a supposed
playmate of "AAA" in the person of Mary Pabuayan. According to Mary, she was then 7 years old when she and two
other playmates together with "AAA" and Joel "Liit" the son of accused were burning worms near a santol tree in
their neighborhood on a Good Friday in the year 1999. This Joel "Liit" supposedly lighted a straw which
inadvertently burned the anal portion of "AAA’s" body. Mary’s exact words were to the effect that "napatakan ang
puwit ni "AAA"."8
On July 3, 2008, the RTC rendered its Decision finding appellant guilty of three counts of rape, viz:
WHEREFORE, premises considered, accused Joel Crisostomo y Malliar is found GUILTY of all offenses stated in
the three (3) Criminal Informations and is hereby sentenced to the following:
a) In Criminal Information # 99-16235 and Criminal Information # 99-16236, accused is to suffer the Indeterminate
Penalty of imprisonment of ten (10) years and one (1) day of Prision Mayor as minimum to seventeen (17) years,
four (4) months and one (1) day of Reclusion Temporal as maximum and is ordered to pay the victim "AAA" civil
indemnity of ₱30,000.00, moral damages of ₱30,000.00 and exemplary damages of ₱15,000.00 for each of the two
Criminal Informations.
b) In Criminal Information # 99-16237, accused is to suffer the penalty of Reclusion Perpetua and is ordered to pay
the victim civil indemnity of ₱75,000.00, moral damages of ₱50,000.00 and exemplary damages of ₱30,000.00 with
cost [of] suit for all Criminal Informations.
SO ORDERED.9
Aggrieved, appellant filed a Notice of Appeal10 which was given due course by the trial court in its Order11 dated
February 2, 2009.
In his Brief filed before the CA, appellant raised the following assignment of error:
THE COURT A QUO GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY FOR THE CRIME OF
RAPE (ARTICLE 266-A PAR. 1 AND ART. 267-B, PAR. 7 IN RELATION TO R.A. NO. 7610) DESPITE THE
PROSECUTION’S FAILURE TO PROVE HIS GUILT BEYOND REASONABLE DOUBT. 12
Appellant claimed that the trial court gravely erred when it lent full credence to the testimonies of the prosecution
witnesses. In particular, appellant insisted that the trial court erred in finding "AAA’s" testimony credible considering
1awp++i 1
that she was unsure whether a match, rod or a cigarette stick, was used in burning her private parts.13 Appellant
argued that "AAA" never showed signs of shock, distress, or anxiety despite her alleged traumatic
experience.14Appellant also alleged that "CCC’s" testimony should be disregarded as she was not even present
when the rape incidents happened.15 He opined that "CCC" influenced her niece, "AAA," to file the suit against him
which bespoke of ill-motive on her part. Appellant concluded that these "inconsistencies and contradictions" are
enough to set aside the verdict of conviction imposed upon by the RTC.16
However, the CA gave short shrift to appellant’s arguments. The CA rendered its Decision disposing as follows:
ACCORDINGLY, the instant appeal is DISMISSED. The assailed July 3, 2008 Decision is hereby AFFIRMED with
MODIFICATION as to the penalties imposed, and to be read thus:
"1. For Criminal Case Nos. 99-16235 and 99-16236, Joel Crisostomo is hereby sentenced to suffer the
indeterminate penalty of imprisonment ranging from ten17 (8) years and one (1) day of Prision Mayor, as minimum, to
seventeen (17) years and four (4) months of Reclusion Temporal, as maximum, and ordered to pay AAA Thirty
Thousand pesos (₱30,000.00) as civil indemnity, Thirty Thousand pesos (₱30,000.00) as moral damages, and
Fifteen Thousand pesos (₱15,000.00) as exemplary damages, all for each count of rape by sexual assault; and
(2) For Criminal Case No. 99-16237, Joel Crisostomo is hereby sentenced to suffer the penalty of Reclusion
Perpetua without eligibility of parole, and ordered to pay AAA Seventy-Five Thousand pesos (₱75,000.00) as civil
indemnity, Fifty Thousand pesos (₱50,000.00) as moral damages, and Thirty Thousand pesos (₱30,000.00) as
exemplary damages, and all the costs of suit."
SO ORDERED.18
Hence, this appeal19 which the CA gave due course in its Resolution20 of January 6, 2011. In a Resolution21 dated
June 15, 2011, this Court required the parties to file their respective supplemental briefs. In its Manifestation and
Motion,22 the Office of the Solicitor General (OSG) informed this Court that it will no longer file a Supplemental Brief
because it had already exhaustively discussed and refuted all the arguments of the appellant in its brief filed before
the CA. Appellant likewise filed a Manifestation In Lieu of Supplemental Brief 23 praying that the case be deemed
submitted for decision based on the pleadings submitted.
Our Ruling
The RTC, as affirmed by the CA, correctly found appellant guilty of two counts of rape by sexual assault and one
count of rape by sexual intercourse. Article 266-A of the Revised Penal Code (RPC) provides:
ART. 266-A. Rape, When and How Committed. - Rape is committed –
c. By means of fraudulent machinations or grave abuse of authority;
d. When the offended party is under twelve (12) years of age or is demented, even though none of the
circumstances mentioned above should be present;
2. By any person who, under any of the circumstances mentioned in paragraph 1 hereof, shall commit an act of
sexual assault by inserting his penis into another person’s mouth or anal orifice, or any instrument or object, into the
genital or anal orifice of another person. (Emphases supplied)
When the offended party is under 12 years of age, the crime committed is "termed statutory rape as it departs from
the usual modes of committing rape. What the law punishes is carnal knowledge of a woman below 12 years of age.
Thus, the only subject of inquiry is the age of the woman and whether carnal knowledge took place. The law
presumes that the victim does not and cannot have a will of her own on account of her tender years."24 In this case,
the prosecution satisfactorily established all the elements of statutory rape. "AAA" testified that on April 8, 1999,
appellant took off her clothes and made her lie down. Appellant also removed his clothes, placed himself on top of
"AAA," inserted his penis into her vagina, and proceeded to have carnal knowledge of her. At the time of the rape,
"AAA" was only six years of age. Her birth certificate showed that she was born on April 4, 1993. "AAA’s" testimony
was corroborated by Dr. Emmanuel Reyes who found "AAA" to have fresh and bleeding hymenal lacerations.
Likewise, the prosecution proved beyond reasonable doubt appellant’s guilt for two counts of rape by sexual
assault. Records show that appellant inserted a lit cigarette stick into "AAA’s" genital orifice causing her labia
1âwphi 1
majora to suffer a 3rd degree burn. Appellant likewise inserted a lit cigarette stick into "AAA’s" anal orifice causing
3rd degree burns in her perianal region.
We agree with the CA that "AAA’s" "uncertainty" on whether it was a match, rod or a cigarette stick that was inserted
into her private parts, did not lessen her credibility. Such "uncertainty" is so inconsequential and does not diminish
the fact that an instrument or object was inserted into her private parts. This is the essence of rape by sexual
assault. "[T]he gravamen of the crime of rape by sexual assault x x x is the insertion of the penis into another
person’s mouth or anal orifice, or any instrument or object, into another person’s genital or anal orifice."25 In any
event, "inconsistencies in a rape victim’s testimony do not impair her credibility, especially if the inconsistencies
refer to trivial matters that do not alter the essential fact of the commission of rape."26 We also held in People v.
Piosang27that –
"[t]estimonies of child-victims are normally given full weight and credit, since when a girl, particularly if she is a
minor, says that she has been raped, she says in effect all that is necessary to show that rape has in fact been
committed. When the offended party is of tender age and immature, courts are inclined to give credit to her account
of what transpired, considering not only her relative vulnerability but also the shame to which she would be exposed
if the matter to which she testified is not true. Youth and immaturity are generally badges of truth and sincerity.
Considering her tender age, AAA could not have invented a horrible story. x x x "
Moreover, appellant’s argument that "AAA" did not manifest any stress or anxiety considering her traumatic
experience is purely speculative and bereft of any legal basis. Besides, it is settled that people react differently when
confronted with a startling experience. There is no standard behavioral response when one is confronted with a
traumatic experience. Some may show signs of stress; but others may act nonchalantly. Nevertheless, "AAA’s"
reaction does not in any way prove the innocence of appellant. As correctly pointed out by the OSG, regardless of
"AAA’s" reactions, it did not diminish the fact that she was raped by appellant or that a crime was committed.28
We also agree with the CA that "CCC’s" efforts to hale appellant to the court should not be equated with ill-motive
on her part. On the contrary, we find "CCC’s" efforts to seek justice for her niece who was raped more in accord with
the norms of society. At any rate, even if we disregard "CCC’s" testimony, appellant’s conviction would still stand.
We agree with the observation of the OSG that "CCC’s" "testimony actually had no great impact on the case. In
truth, her testimony [was] composed mainly of the fact that she was the one who accompanied the mother of "AAA"
in bringing "AAA" to the Pasig General Hospital and thereafter to Camp Crame and later on to the Women’s desk."29
On the other hand, appellant’s alibi and denial are weak defenses especially when weighed against "AAA’s" positive
identification of him as the malefactor. Appellant did not even attempt to show that it was physically impossible for
him to be at the crime scene at the time of its commission. In fact, he admitted that he lived just four houses away
from the house of "AAA". His denial is also unsubstantiated hence the same is self-serving and deserves no
consideration or weight. The RTC properly disregarded the testimony of Rogelio Oletin (Oletin), appellant’s brother-
in-law, who claimed that appellant was at his house at the time of the incident. As appellant already admitted, his
house is near the house of "AAA" hence there was no physical impossibility for him to be present at the crime
scene. Also, the RTC observed that Oletin’s testimony did not "prove beneficial to the defense. Suffice it to state that
the private prosecutor correctly noted that the said witness was always smiling and laughing when answering
questions propounded to him as if making a mockery of the proceedings which his own brother-in-law was facing."30
Pursuant to Article 266-B of the RPC, the penalty for statutory rape (Criminal Case No. 99-16237) is death when the
victim is a child below seven years old. There is no dispute that at the time the rape was committed on April 8, 1999,
"AAA" was only six years old, having been born on April 4, 1993. However, pursuant to Republic Act No. 9346,31 the
penalty of reclusion perpetua shall be imposed on the appellant but without eligibility for parole.32 The CA thus
correctly imposed the said penalty on appellant.
On the other hand, rape by sexual assault committed against a child below seven years old is punishable by
reclusion temporal.33 Applying the Indeterminate Sentence Law, and there being no other aggravating or mitigating
circumstance, the proper imposable penalty shall be prision mayor34 as minimum, to reclusion temporal,35 as
maximum. The CA thus correctly imposed the penalty of eight (8) years and one (1) day ofprision mayor, as
minimum, to seventeen (17) years and four (4) months of reclusion temporal, as maximum, for each count of sexual
assault.
As regards damages, the CA correctly awarded the amounts of ₱75,000.00 as civil indemnity and ₱30,000.00 as
exemplary damages in Criminal Case No. 99-16237 (statutory rape). However, the award of moral damages must
be increased to ₱75,000.00 in line with prevailing jurisprudence.36 As regards Criminal Case No. 99-16235 and
Criminal Case No. 99-16236 (rape by sexual assault), the CA likewise properly awarded the amounts of ₱30,000.00
as civil indemnity and ₱30,000.00 as moral damages, for each count. However, the award of exemplary damages
for each count of rape by sexual assault must be increased to ₱30,000.00 in line with prevailing jurisprudence.37 In
addition, all damages awarded shall earn interest at the rate of 6% per annum from date of finality of judgment until
fully paid.
WHEREFORE, the appeal is DISMISSED. The October 22, 2010 Decision of the Court of Appeals in CA-G.R. CR-
H.C. No. 03832 which affirmed with modification the July 3, 2008 Decision of the Regional Trial Court of Antipolo
City, Branch 73 finding appellant Joel Crisostomo y Malliar guilty beyond reasonable doubt of two counts of rape by
sexual assault and one count of statutory rape is AFFIRMED with MODIFICATIONS that the award of moral
damages in Criminal Case No. 99-16237 (statutory rape) is increased to ₱75,000.00 and the award of exemplary
damages in Criminal Case No. 99-16235 and Criminal Case No. 99-16236 (rape by sexual assault) is increased to
₱30,000.00 for each count. In addition, interest is imposed on all damages awarded at the rate of 6% per annum
from date of finality of judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 191189 January 29, 2014
MANLAR RICE MILL, INC., Petitioner,

vs.
LOURDES L. DEYTO, doing business under the trade name "J.D. Grains Center" and JENNELITA DEYTO
ANG, a.k.a. "JANET ANG," Respondents.
DECISION
DEL CASTILLO, J.:
As a general rule, a contract affects only the parties to it, and cannot be enforced by or against a person who is not
a party thereto.
This Petition for Review on Certiorari1 seeks to set aside the October 30, 2009 Decision2 of the Court of Appeals
(CA) in CA-G.R. CV No. 91239, entitled "Maniar Rice Mill, Inc., Plaintiff-Appellee, versus Lourdes L. Deyto, doing
business under the trade name JD Grains Center, Defendant-Appellant," as well as its February 9, 2010
Resolution3denying reconsideration of the assailed judgment.
Factual Antecedents
Petitioner Maniar Rice Mill, Inc. (Maniar), organized and existing under Philippine laws, is engaged in the business
of rice milling and selling of grains. Respondent Lourdes L. Deyto (Deyto) does business under the trade name "JD
Grains Center" and is likewise engaged in the business of milling and selling of grains. Respondent Jennelita Deyto
Ang or Janet Ang (Ang) is Deyto’s daughter and, prior to her alleged absconding, operated her own rice trading
business through her own store, "Janet Commercial Store".4
It appears that in October 2000, Ang entered into a rice supply contract with Manlar, with the former purchasing rice
from the latter amounting to ₱3,843,220.00. The transaction was covered by nine postdated checks issued by Ang
from her personal bank/checking account with Chinabank,5 to wit:
Check Number Date Amount (PhP)
146514 October 19, 2000 P 204,660.00
146552 October 20, 2000 472,200.00

146739 October 27, 2000 327,600.00
146626 October 26, 2000 212,460.00

1466276 October 27, 2000 565,600.00
146740 October 30, 2000 515,000.00
146628 October 31, 2000 358,500.00
146630 November 4, 2000 593,600.00
146555 November 6, 2000 593,600.00

TOTAL P 3,843,220.00
Upon presentment, the first two checks were dishonored for having been drawn against insufficient funds; the
remaining seven checks were dishonored for being drawn against a closed account. Manlar made oral and written
demands upon both Deyto and Ang, which went unheeded.7 It appears that during the time demand was being
made upon Deyto, she informed Manlar, through its Sales Manager Pablo Pua (Pua), that Ang could not be
located.8
On November 24, 2000,9 Manlar filed a Complaint10 for sum of money against Deyto and Ang before the Regional
Trial Court (RTC) of Quezon City. The case was docketed as Civil Case No. Q-00-42527 and assigned to Branch
215. The Complaint essentially sought to hold Deyto and Ang solidarily liable on the rice supply contract. Manlar
prayed for actual damages in the total amount of ₱3,843,220.00, with interest; ₱300,000.00 attorney’s fees, with
charges for appearance fees; and attachment bond and attachment expenses.
Deyto filed her Answer with Compulsory Counterclaim,11 claiming that she did not contract with Manlar or any of its
representatives regarding the purchase and delivery of rice; that JD Grains Center was solely owned by her, and
Ang had no participation therein, whether as employee, consultant, agent or other capacity; that JD Grains Center
was engaged in rice milling and not in the buying and selling of rice; and that one of her customers was her
daughter Ang, who was engaged in the buying and selling of rice under the trade name "Janet Commercial Store."
Deyto prayed among others that the Complaint be dismissed.
For her part, Ang failed to file an Answer despite summons by publication; for this reason, she was declared in
default.
On June 7, 2001, Manlar submitted to the trial court a notarized minutes of a special meeting of its board of
directors12 dated November 8, 2000, indicating that Pua was authorized to file and prosecute the Complaint in Civil
Case No. Q-00-42527.
In a July 31, 2001 Resolution,13 the trial court resolved to deny Deyto’s special/affirmative defenses contained in her
Answer. Regarding her objection to Pua’s authority to prosecute the case for lack of the proper board resolution to
such effect, the trial court held that the issue had been rendered moot by Manlar’s submission on June 7, 2001 of
the notarized board resolution.
During trial, Manlar presented its lone witness, Pua, who testified that he knew Deyto and Ang since 1995; that Ang
was the Operations Manager of JD Grains Center; that they (Deyto and Ang) bought rice from Manlar on "cash on
delivery" basis from 1995 up to 2000; that since 2000, they increased the volume of their purchases and requested
that they pay Manlar by postdated checks on a weekly basis, to which Manlar acceded; that Manlar agreed to this
arrangement because Deyto induced Pua to deliver rice on the assurance that Deyto had extensive assets, financial
capacity and a thriving business, and Deyto provided Pua with copies of JD Grains Center’s certificate of
registration, business permit, business card, and certificates of title covering property belonging to Deyto; that when
rice deliveries were made by Manlar, Deyto was not around; that it was solely Ang who issued the subject checks
and delivered them to Pua or Manlar; that initially, they (Deyto and Ang) faithfully complied with the arrangement;
that later on, they defaulted in their payments thus resulting in the dishonor of the subject nine checks previously
issued to Manlar; that by then, Manlar had delivered rice to them totaling ₱3,843,220.00; that he went to the
residence of Deyto at No. 93 Bulusan Street, La Loma, Quezon City on five occasions to demand payment from
Deyto; and that he likewise went to Ang’s residence at No. 4 Sabucoy14 Street, San Francisco del Monte, Quezon
City to demand payment.15
On cross-examination, Pua testified that no rice deliveries were in fact made by Manlar at Deyto’s Bulusan Street
residence; that Deyto guaranteed Ang’s checks, although the guarantee was made verbally; that although he
ordered Manlar’s drivers to deliver rice at Deyto’s residence at Bulusan Street, the deliveries would actually end up
at Ang’s Sabucoy residence.16
On the other hand, the defense presented three witnesses: Deyto, her son Jose D. Ang, and Homer Petallano
(Petallano), Chinabank del Monte branch Operations Head. Deyto testified that she did not know Pua; that Pua was
a liar and that she did not enter into a contract with him for the purchase and delivery of rice; that she did not receive
at any time any rice delivery from Manlar; that while she had a house at No. 93 Bulusan Street, La Loma, Quezon
City, she actually resided in Santiago City, Isabela; that she met Pua for the first time when the latter went to her La
Loma residence sometime in November or December 2000 looking for Ang, and claiming that Ang was indebted to
Manlar; that she had nothing to do with the obligations of Ang incurred for rice deliveries made to her or JD Grains
Center, as Ang was not connected with JD Grains Center, and it was her son, Jose D. Ang, who managed and ran
the business; that all the checks issued to Manlar were drawn by Ang from her own bank account, as a
businessperson in her own right and with her own business and receipts; that as of 2000, Ang was the proprietress
of Jane Commercial with address at No. 49 Corumi Street, Masambong, San Francisco del Monte, Quezon City,
and not at No. 93 Bulusan Street, La Loma, Quezon City; that the last time she saw Ang was in June 2000, during
the blessing of Ang’s Sabucoy residence; that she was not on talking terms with her daughter as early as June 2000
on account of Ang’s activities and involvements; that one of Ang’s children was living with her after the child was
recovered from a kidnapping perpetrated by Ang’s best friend; that Ang’s other child lived with the child’s father; and
that Ang’s whereabouts could not be ascertained.17
Jose D. Ang, on the other hand, testified that he is Deyto’s son; that from the start, JD Grains Center has been
under his supervision and control as Manager and Deyto had no participation in the actual operation thereof; that JD
Grains Center was registered in the name of Deyto for convenience, to avoid jealousy or intrigue among his siblings,
and because they used Deyto’s properties as collateral to borrow money for the business; that Ang was originally an
agent of JD Grains Center, but was removed in 1997 for failure to remit her collections.18
Finally, Petallano testified that he was the Operations Head of Chinabank del Monte branch and that Ang is the sole
owner and depositor of the account from which the subject checks were drawn.19
Ruling of the Trial Court
On November 22, 2007, a Decision20 was rendered by the trial court in Civil Case No. Q-00-42527, the dispositive
portion of which reads, as follows:
WHEREFORE, premises considered, judgment is hereby rendered finding the defendants liable to the plaintiff jointly
and severally and ordering them as follows:
1. To pay plaintiff actual damages in the sum of ₱3,843,200.0021 plus interest [thereon] at 6% per annum reckoned
from the time of demand up to the time of payment thereof;
2. To pay plaintiff attorney’s fees in the sum of ₱200,000.00 plus ₱2,500.00 as per appearance fee; and
3. To pay the costs of this suit.
SO ORDERED.22
Essentially, the trial court believed Pua’s declarations that both Deyto and Ang personally transacted with him in
purchasing rice from Manlar for JD Grains Center – with Ang paying for the deliveries with her personal checks and
his testimony that both Deyto and Ang received Manlar’s rice deliveries. For these reasons, the trial court ruled that
both defendants should be held solidarily liable for the unpaid and outstanding Manlar account.
Deyto went up to the CA on appeal, assailing the Decision of the trial court and claiming that there was no evidence
to show her participation in the transactions between Manlar and Ang, or that rice deliveries were even made to her;
that she had no legal obligation to pay Manlar what Ang owed the latter in her personal capacity; that the evidence
proved that Ang had overpaid Manlar; that the Complaint in Civil Case No. Q-00-42527 was defective for lack of the
required board resolution authorizing Pua to sign the Complaint, verification, and certification against forum
shopping on behalf of Manlar; and that the trial court erred in not awarding damages in her favor.
On October 30, 2009, the CA issued the assailed Decision, which held thus:
WHEREFORE, premises considered, the assailed Decision dated November 22, 2007 in Civil Case No. Q-00-42527
of the Regional Trial Court, Branch 215, Quezon City is REVERSED and SET ASIDE, and a new one entered,
DISMISSING the complaint for lack of merit.
SO ORDERED.23
The CA held that in the absence of a board resolution from Manlar authorizing Pua to sign the verification and
certification against forum shopping, the Complaint in Civil Case No. Q-00-42527 should have been dismissed; the
subsequent submission on June 7, 2001 – or six months after the filing of the case – of the notarized minutes of a
special meeting of Manlar’s board of directors cannot have the effect of curing or amending the defective Complaint,
as Revised Supreme Court Circular No. 28-9124 enjoins strict compliance. Substantial compliance does not suffice.
The CA added that the trial court’s Decision overlooked, misapprehended, and failed to appreciate important facts
and circumstances of the case. Specifically, it held that Manlar failed to present documentary evidence to prove
deliveries of rice to Deyto, yet the trial court sweepingly concluded that she took actual delivery of Manlar’s rice.
Likewise, Pua’s declaration that Manlar delivered rice to Deyto at her La Loma residence was not based on personal
knowledge or experience, but on Manlar’s drivers’ supposed accounts of events. Because these drivers were not
called to testify on such fact or claim, the CA held that Pua’s testimony regarding Deyto’s alleged acceptance of rice
deliveries from Manlar was hearsay.
The appellate court conceded that if Ang indeed contracted with Manlar, she did so on her own; the evidence failed
to indicate that Deyto had any participation in the supposed transactions between her daughter and Manlar. The
record reveals that Deyto and Ang owned separate milling and grains businesses: JD Grains Center and Janet
Commercial Store. If Ang did business with Manlar, it is likely that she did so on her own or in her personal capacity,
and not for and in behalf of Deyto’s JD Grains Center. Besides, the subject checks were drawn against Ang’s
personal bank account, therefore Ang, not Deyto is bound to make good on the dishonored checks.
Thus, the CA concluded that there is no legal basis to hold Deyto solidarily liable with Ang for what the latter may
owe Manlar.
Manlar moved for reconsideration, but in its February 9, 2010 Resolution, the CA stood its ground. Hence, Manlar
took the present recourse.
Issues
Manlar raises the following issues in its Petition:
1. THE COURT OF APPEALS COMMITTED CLEAR REVERSIBLE ERROR WHEN IT SET ASIDE THE
JUDGMENT OF THE TRIAL COURT BY SWEEPINGLY AND BASELESSLY CONCLUDING THAT THE
VERIFICATION AND CERTIFICATE AGAINST FORUM SHOPPING IN THE COMPLAINT WERE ALLEGEDLY
"DEFECTIVE" IN THAT PABLO PUA, THE SALES MANAGER, WAS SUPPOSEDLY "NOT AUTHORIZED" TO
SIGN THE VERIFICATION AND CERTIFICATE OF NON-FORUM SHOPPING FOR MANLAR RICE MILL, INC.
2. THE CONCLUSION OF THE COURT OF APPEALS THAT THE ALL-ENCOMPASSING PHRASE IN THE
BOARD RESOLUTION THAT "MR. PABLO PUA IS AUTHORIZED TO SIGN ANY DOCUMENT, PAPERS, FOR
AND IN BEHALF OF THE COMPANY, AND TO REPRESENT THE COMPANY IN ANY SUCH CASE OR CASES"
IS ALLEGEDLY "NOT SUFFICIENT" AUTHORITY FOR PABLO PUA TO SIGN THE VERIFICATION AND
CERTIFICATE AGAINST FORUM SHOPPING IS GROSSLY ERRONEOUS AND MANIFESTLY MISTAKEN
BECAUSE IT IS DIRECTLY NEGATED AND DISPROVED BY THE EXPRESS TERMS OF HIS AUTHORITY.
3. FURTHER, THE SERIOUS AND GLARING ERROR OF THE COURT OF APPEALS IN CONCLUDING THAT
PABLO PUA WAS ALLEGEDLY NOT AUTHORIZED TO SIGN THE VERIFICATION AND CERTIFICATE OF NON-
FORUM SHOPPING HAD BEEN PREVIOUSLY RAISED AND SQUARELY RESOLVED BY THE TRIAL COURT
AND ITS RESOLUTION ON THIS ISSUE HAD LONG BECOME FINAL AND EXECUTORY WITHOUT LOURDES
L. DEYTO TAKING ANY APPELLATE REMEDY.
4. THE COURT OF APPEALS ALSO COMMITTED REVERSIBLE ERROR IN SAYING THAT "THERE WAS NO
DOCUMENTARY EVIDENCE TO PROVE ACTUAL DELIVERIES OF RICE" AS BASIS FOR THE DISMISSAL OF
THE CASE BECAUSE THIS IS MANIFESTLY MISTAKEN AND NEGATED BY THE RECORDS SINCE
RESPONDENTS (MOTHER AND DAUGHTER) ISSUED NINE (9) POSTDATED CHECKS TO PETITIONER THRU
PABLO PUA IN THE TOTAL AMOUNT OF ₱3,843,2[2]0.00 IN PAYMENT OF THE RICE DELIVERED TO THEM.
5. THE CONTRACTS OF SALE OF RICE WERE PERFECTED BY THE DELIVERY OF RICE TO RESPONDENTS
MOTHER AND DAUGHTER AND THEIR ISSUANCE OF NINE (9) POSTDATED CHECKS (₱3,843,220.00) AS
PAYMENT THEREOF BY RESPONDENTS, BUT THAT THE NINE (9) POSTDATED CHECKS OF
RESPONDENTS WERE LATER DISHONORED.
6. THE SWEEPING STATEMENT OF THE COURT OF APPEALS THAT ALLEGEDLY "THE PARTICIPATION OF
APPELLANT (LOURDES L. DEYTO) TO WHATEVER BUSINESS TRANSACTIONS HER DAUGHTER (CO-
RESPONDENT JENNELITA DEYTO ANG) HAD WITH MANLAR RICE MILL INC. WAS NOT DULY PROVEN" IS
NOT ONLY A PURE SPECULATION BUT IS SQUARELY NEGATED AND DISPROVED BY THE
OVERWHELMING EVIDENCE OF THE CONSPIRACY AND COLLABORATIVE EFFORTS OF BOTH MOTHER
AND DAUGHTER IN KNOWINGLY DEFRAUDING PETITIONER.25
In its Petition and Reply,26 Manlar insists that the CA’s findings and conclusions are not supported by the evidence
on record. On the procedural issue, it reiterates the trial court’s pronouncement that its subsequent submission – on
June 7, 2001, or six months after the filing of Civil Case No. Q-00-42527 – of the notarized minutes of a special
meeting of its board of directors authorizing Pua to file and prosecute Civil Case No. Q-00-42527, effectively cured
the defective Complaint, or rendered the issue of lack of proper authority moot and academic, and should not result
in the dismissal of the case. Because Deyto did not question this ruling through the proper petition or appeal, it
should stand; besides, the trial court’s disposition on the matter is sound and just.
Next, Manlar disputes the CA ruling that Manlar failed to present documentary evidence to prove deliveries of rice to
Deyto, apart from that delivered to Ang in her personal capacity. It points to "compelling and convincing evidence"
that both Deyto and Ang induced it to deliver rice to them, and that both of them issued the subject postdated
checks. It claims that it was Deyto who delivered the checks to Pua at his office in Manila; that Deyto induced Pua to
deliver rice to respondents on the assurance that Deyto had extensive assets, financial capacity and a thriving
business; and that Deyto provided Pua with copies of JD Grains Center’s certificate of registration, business permit,
business card, and certificates of title covering property belonging to Deyto.
Manlar adds that Deyto disposed of some of her personal properties – specifically delivery/cargo trucks – in fraud of
her creditors, including Manlar. It is also argued that the fact that Deyto was in possession of Ang’s negotiated
checks proved that both of them connived to defraud Manlar by using the said checks to convince and induce Pua
to contract with them.
Manlar goes on to argue that Ang and another of Deyto’s children, Judith Ang Yu (Judith), were charged and the
latter convicted of estafa for defrauding another rice trader, a certain Sergio Casaclang, of ₱3,800,000.00 –
attaching a certified true copy of the Decision of Branch 215 of the RTC of Quezon City in Criminal Case No. Q-01-
105698, indicating that Judith was sentenced to three months of arresto mayor and to pay a fine and indemnity.
Next, Manlar argues that it is not necessary to further show proof of deliveries of rice to Deyto and Ang in order to
prove the existence of their obligation; the issuance of the subject postdated checks as payment established the
obligation.
Manlar thus prays that the Court annul and set aside the assailed CA dispositions and thus reinstate the trial court’s
November 22, 2007 Decision finding Deyto liable under the rice supply contract.
Praying that the Petition be denied, respondent Deyto in her Comment27 essentially argues that petitioner Manlar’s
claims are "products of pure imagination", having no factual and legal basis, and that Manlar’s impleading her is
simply a desperate strategy or attempt to recover its losses from her, considering that Ang can no longer be located.
Furthermore, Deyto claims that Manlar’s alleged rice deliveries are not covered by sufficient documentary evidence,
and while it may appear that Ang had transacted with Manlar, she did so in her sole capacity; thus, Deyto may not
be held liable under a transaction in which she took no part.
Deyto adds that Pua’s basis for claiming that deliveries were made at her Bulusan Street residence is unfounded,
considering that it springs from hearsay, or on the mere affirmation of Manlar’s drivers – who were not presented in
court to testify on such fact. Pua himself had no personal knowledge of such fact, and thus could not be believed in
testifying that rice was indeed delivered to Deyto at her Bulusan Street residence. She argues further that overall,
Pua – Manlar’s lone witness – proved to be an unreliable witness, constantly changing his testimony when the
inconsistencies of his previous declarations were called out.
Finally, Deyto reiterates the CA ruling that Manlar’s Complaint in Civil Case No. Q-00-42527 was defective for lack
of the required board resolution authorizing Pua to sign the verification and certification against forum shopping,
characterizing the belated submission of the required resolution six months later as a mere afterthought.
Our Ruling
It is a basic rule in evidence that he who alleges must prove his case or claim by the degree of evidence required.
x x x Ei incumbit probatio qui dicit, non qui negat. This Court has consistently applied the ancient rule that "if the
plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner the facts
upon which he bases his claim, the defendant is under no obligation to prove his exception or defense."28
In civil cases, the quantum of proof required is preponderance of evidence, which connotes "that evidence that is of
greater weight or is more convincing than that which is in opposition to it. It does not mean absolute truth; rather, it
means that the testimony of one side is more believable than that of the other side, and that the probability of truth is
on one side than on the other."29
The CA is correct in concluding that there is no legal basis to hold Deyto solidarily liable with Ang for what the latter
may owe Manlar. The evidence does not support Manlar’s view that both Deyto and Ang contracted with Manlar for
the delivery of rice on credit; quite the contrary, the preponderance of evidence indicates that it was Ang alone who
entered into the rice supply agreement with Manlar. Pua’s own direct testimony indicated that whenever rice
deliveries were made by Manlar, Deyto was not around; that it was solely Ang who issued the subject checks and
delivered them to Pua or Manlar. On cross-examination, he testified that no rice deliveries were in fact made by
Manlar at Deyto’s Bulusan Street residence; that although Deyto guaranteed Ang’s checks, this guarantee was
made verbally; and that while he ordered Manlar’s drivers to deliver rice at Deyto’s residence at Bulusan Street, the
deliveries would actually end up at Ang’s Sabucoy residence.
The documentary evidence, on the other hand, shows that the subject checks were issued from a bank account in
Chinabank del Monte branch belonging to Ang alone. They did not emanate from an account that belonged to both
Ang and Deyto. This is supported by no less than the testimony of Chinabank del Monte branch Operations Head
Petallano.1âwphi1
The evidence on record further indicates that Deyto was an old lady who owned vast tracts of land in Isabela
province, and other properties in Metro Manila; that she is a reputable businessperson in Isabela; that Ang originally
worked for JD Grains Center, but was removed in 1997 for failure to remit collections; that as early as June 2000, or
prior to the alleged transaction with Manlar, Ang and Deyto were no longer on good terms as a result of Ang’s
activities; that Deyto took custody of one of Ang’s children, who was previously recovered from a kidnapping
perpetrated by no less than Ang’s best friend; and that Ang appears to have abandoned her own family and could
no longer be located. This shows not only what kind of person Ang is; it likewise indicates the improbability of
Deyto’s involvement in Ang’s activities, noting her age, condition, reputation, and the extent of her business
activities and holdings.
This Court cannot believe Manlar’s claims that Deyto induced Pua to transact with her and Ang by providing him
with copies of JD Grains Center’s certificate of registration, business permit, business card, and certificates of title
covering property belonging to Deyto to show her creditworthiness, extensive assets, financial capacity and a
thriving business. The documents presented by Manlar during trial – copies of JD Grains Center’s certificate of
registration, business permit, and certificates of title covering Deyto’s landholdings – are public documents which
Manlar could readily obtain from appropriate government agencies; it is improbable that Deyto provided Manlar with
copies of these documents in order to induce the latter to contract with her. Considering that both Manlar and Deyto
were in the same line of business in the same province, it may be said that Manlar knew Deyto all along without the
latter having to supply it with actual proof of her creditworthiness.
The allegations that Deyto guaranteed Ang’s checks and that she consented to be held solidarily liable with Ang
under the latter’s rice supply contract with Manlar are hardly credible. Pua in fact admitted that this was not in
writing, just a verbal assurance. But this will not suffice. "Well-entrenched is the rule that solidary obligation cannot
lightly be inferred. There is a solidary liability only when the obligation expressly so states, when the law so provides
or when the nature of the obligation so requires."30
What this Court sees is an attempt to implicate Deyto in a transaction between Manlar and Ang so that the former
may recover its losses, since it could no longer recover them from Ang as a result of her absconding; this conclusion
is indeed consistent with what the totality of the evidence on record appears to show. This, however, may not be
allowed. As a general rule, a contract affects only the parties to it, and cannot be enforced by or against a person
who is not a party thereto. "It is a basic principle in law that contracts can bind only the parties who had entered into
it; it cannot favor or prejudice a third person."31 Under Article 1311 of the Civil Code, contracts take effect only
between the parties, their assigns and heirs. Thus, Manlar may sue Ang, but not Deyto, who the Court finds to be
not a party to the rice supply contract.
Having decided the case in the foregoing manner, the Court finds no need to resolve the other issues raised by the
parties.
WHEREFORE, the Petition is DENIED. The assailed dispositions of the Court of Appeals are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 178184 January 29, 2014
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P. FRANCISCO and WILLIAM HOW, Petitioners,
vs.
WILFREDO GALVEZ, JOEL SALES, CRISTITO GRUTA, DANILO ARGUELLES, RENATO BATAYOLA,
PATRICIO FRESMILLO,* JOVY NOBLE, EMILIO DOMINICO, BENNY NILMAO, and JOSE
AUSTRAL,Respondents.
DECISION
DEL CASTILLO, J.:
The employer has broader discretion in dismissing managerial employees on the ground of loss of trust and
confidence than those occupying ordinary ranks. While plain accusations are not sufficient to justify the dismissal of
rank and file employees, the mere existence of a basis for believing that managerial employees have breached the
trust reposed on them by their employer would suffice to justify their dismissal.1
Before us is a Petition for Review on Certiorari2 assailing the September 12, 2006 Decision3 of the Court of Appeals
(CA) in CA-G.R. SP No. 82379, which annulled the September 10, 2003 Decision4 and January 14, 2004
Resolution5 of the National Labor Relations Commission (NLRC), thereby reinstating the August 30, 2001
Decision6of the Labor Arbiter for having attained finality as a result of petitioners’ failure to post the correct amount of
bond in their appeal before the NLRC. Likewise assailed is the May 23, 2007 Resolution7 of the CA which denied
petitioners’ Motion for Reconsideration.8
Factual Antecedents
Petitioner Grand Asian Shipping Lines, Inc. (GASLI) is a domestic corporation engaged in transporting liquified
petroleum gas (LPG) from Petron Corporation’s refinery in Limay, Bataan to Petron’s Plant in Ugong, Pasig and
Petron’s Depot in Rosario, Cavite. Petitioners William How and Eduardo Francisco are its President and General
Manager, respectively. Respondents, on the other hand, are crewmembers of one of GASLI’s vessels, M/T Dorothy
Uno, with the following designations: Wilfredo Galvez (Galvez) as Captain; Joel Sales (Sales) as Chief Mate; Cristito
Gruta (Gruta) as Chief Engineer; Danilo Arguelles (Arguelles) as Radio Operator; Renato Batayola (Batayola),
Patricio Fresmillo (Fresmillo) and Jovy Noble (Noble) as Able Seamen; Emilio Dominico (Dominico) and Benny
Nilmao (Nilmao) as Oilers; and Jose Austral (Austral) as 2nd Engineer.
Sometime in January 2000, one of the vessel’s Oilers, Richard Abis (Abis), reported to GASLI’s Office and Crewing
Manager, Elsa Montegrico (Montegrico), an alleged illegal activity being committed by respondents aboard the
vessel. Abis revealed that after about four to five voyages a week, a substantial volume of fuel oil is unconsumed
and stored in the vessel’s fuel tanks. However, Gruta would misdeclare it as consumed fuel in the Engineer’s
Voyage Reports. Then, the saved fuel oil is siphoned and sold to other vessels out at sea usually at nighttime.
Respondents would then divide among themselves the proceeds of the sale. Abis added that he was hesitant at first
to report respondents’ illegal activities for fear for his life.
An investigation on the alleged pilferage was conducted. After audit and examination of the Engineer’s Voyage
Reports, GASLI’s Internal Auditor, Roger de la Rama (De la Rama), issued a Certification of Overstatement of Fuel
Oil Consumption9 for M/T Dorothy Uno stating that for the period June 30, 1999 to February 15, 2000 fuel oil
consumption was overstated by 6,954.3 liters amounting to ₱74,737.86.10
On February 11, 2000, a formal complaint11 for qualified theft was filed with the Criminal Investigation and Detection
Group (CIDG) at Camp Crame against respondents, with Montegrico’s Complaint-Affidavit12 attached. On February
14, 2000, Abis submitted his Sinumpaang Salaysay,13 attesting to the facts surrounding respondents’ pilferage of
fuel oil while on board the vessel, which he alleged started in August of 1999. On March 22, 2000, GASLI’s Port
Captain, Genaro Bernabe (Bernabe), and De la Rama submitted a Complaint-Joint Affidavit,14 stating that in Gruta’s
Engineer’s Voyage Reports, particularly for the period June 30, 1999 to February 15, 2000, he overstated the
number of hours the vessel’s main and auxiliary engines, as well as its generators, were used resulting in the
exaggerated fuel consumption. They also stated that according to independent surveyor Jade Sea-Land Inspection
Services, the normal diesel fuel consumption of M/T Dorothy Uno for Petron Ugong–Bataan Refinery–Petron Ugong
route averaged 1,021 liters only. Thus, comparing this with the declared amount of fuel consumed by the vessel
when manned by the respondents, Bernabe and De la Rama concluded that the pilferage was considerable.15 In her
Supplementary Complaint Affidavit,16 Montegrico implicated respondents except Sales, in the illegal activity.
Bernabe, in his Reply-Affidavit,17 further detailed their analysis of the voyage reports vis-a-vis the report of Jade Sea-
Land Inspection Services to strengthen the accusations.
In their Joint Counter-Affidavit18 and Joint Rejoinder-Affidavit,19 respondents denied the charge. They alleged that the
complaint was based on conflicting and erroneous computation/estimates of fuel consumption; that the complaint
was fabricated as borne out by its failure to specify the exact time the alleged pilferage took place; that the
allegations that the pilferage has been going on since August 1999 and that Austral and Sales acted as lookouts are
not true because both embarked on the vessel only on December 28, 1999 and January of 2000, respectively; that
four other officers who were on board the vessel much longer than Austral and Sales were not included in the
charge; and, that the complaint was intended as a mere leverage.
In a letter20 dated April 14, 2000, the CIDG referred the case to the Office of the City Prosecutor of Manila, which,
after finding a prima facie case, filed the corresponding Information for Qualified Theft21 dated August 18, 2000 with
the Regional Trial Court (RTC) of Manila.
Meanwhile, GASLI placed respondents under preventive suspension. After conducting administrative hearings,
petitioners decided to terminate respondents from employment. Respondents (except Sales) were thus served with
notices22 informing them of their termination for serious misconduct, willful breach of trust, and commission of a
crime or offense against their employer.
It appears that several other employees and crewmembers of GASLI’s two other vessels were likewise suspended
and terminated from employment. Nine seafarers of M/T Deborah Uno were charged and terminated for
insubordination, defying orders and refusal to take responsibility of cargo products/fuel.23 For vessel M/T Coral Song,
two crewmembers were dismissed for serious act of sabotage and grave insubordination.24 Proceedings before the
Labor Arbiter Respondents and the other dismissed crewmembers of M/T Deborah Uno and M/T Coral Song
(complainants) filed with the NLRC separate complaints25 for illegal suspension and dismissal, underpayment/non-
payment of salaries/wages, overtime pay, premium pay for holiday and rest day, holiday pay, service incentive leave
pay, hazard pay, tax refunds and indemnities for damages and attorney’s fees against petitioners. The complaints,
docketed as NLRC NCR Case Nos. 00-04-02026-00, 00-04-02062-00, 00-05-02620-00 and 00-07-03769-00, were
consolidated.1âw phi 1
On August 30, 2001, the Labor Arbiter rendered a Decision26 finding the dismissal of all 21 complainants illegal. As
regards the dismissal of herein respondents, the Labor Arbiter ruled that the filing of a criminal case for qualified
theft against them did not justify their termination from employment. The Labor Arbiter found it abstruse that the
specific date and time the alleged pilferage took place were not specified and that some crewmembers who boarded
the vessel during the same period the alleged pilferage transpired were not included in the charge. With regard to
the other complainants, petitioners likewise failed to prove the legality of their dismissal.
The Labor Arbiter ordered petitioners to reinstate complainants with full backwages and to pay their money claims
for unpaid salary, overtime pay, premium pay for holidays and rest days, holiday and service incentive leave pay, as
indicated in the Computation of Money Claims. Complainants were likewise awarded damages due to the attending
bad faith in effecting their termination, double indemnity prescribed by Republic Act (RA) No. 818827 in view of
violation of the Minimum Wage Law, as well as 10% attorney’s fee. With respect to the claim for tax refund, the
same was referred to the Bureau of Internal Revenue, while the claim for hazard pay was dismissed for lack of
basis. The Labor Arbiter modified and recomputed the money claims of respondents, as follows:
1. WILFREDO GALVEZ – (Dismissed in Mar. 2000)

Backwages from Mar. 2000 to
May 2001 (₱8,658.74 x 14 mos.) ---------- P 121,225.16
13th Month Pay for the period ---------- 8,658.94

Unpaid Salary from Feb 16 to 29, 2000 ---------- 3,985.38
Non-payment of Premium Pay for Holiday;

Restday and Non-payment of Holiday Pay;
(limited to 3 years’ only = ₱7,372.90 x 3 yrs.) ---------- 22,188.70
Non-payment of (5 days) Service Incentive

Leave Pay (for every year of service, but
Limited to 3 years only): = ₱1,423.35 x 3 yrs.) ---------- P 4,270.05
Actual Moral Exemplary & Compensatory
Damages ---------- P 100,000.00
(₱260,258.23)
Ten (10%) Percent Attorney’s Fees P 26,025.82
TOTAL P 286,284.05
2. JOEL SALES – (Dismissed in Mar. 2000)

Backwages from Mar. 2000 to May 2001 -P
(₱8,274.14 x 14 mos.) ---------- 115,840.76
13th Month Pay for the period& ---------- 8,274.34
Actual, Moral, Exemplary &

Compensatory Damages ---------- P 100,000.00
(₱224,115.10)

TOTAL P 246,526.61
3. CRISTITO G. GRUTA – (Dismissed in Mar. 2000)
Backwages from Mar. 200[0] to May 2001
(₱8,274.14 x 14 mos.) ---------- P 115,840.76
Non-payment of Premium Pay for Holiday; Restday and

Non-payment of Holiday Pay: (₱7,045.57 x 2 yrs.) 14,091.51
Non-payment of (5 days) Service Incentive Leave Pay

(for every year of service = ₱1,360.15 x 2 yrs.) ---------- 2,720.30
(₱240,926.91)
Ten (10%) Percent Attorney’s Fees ---------- P 24,092.69
TOTAL P 265,019.60
4. DANILO ARGUELLES – (Dismissed in Feb. 2000)
Backwages from Mar. 2000 to May 2001
(₱7,340.62 x 15 mos.) ---------- [P]110,109.30
Unpaid Salary from Feb. 16 to 29, 2000

(₱225.00 x 14 days) ---------- 3,150.00
Underpayment/Non-payment of Salary/Wages:
A. From April 98 to Nov. 98 (7 mos.)
Minimum Wage – ₱198 x 391.5 [/] 12 = P 6,459.75
Actual Basic Wage for the period 4,320.00

Difference P 2,139.75
x 7 mos.
P 14,978.25
Double Indemnity prescribed by Rep. Act 8188, Sec. 4 P 29,956.50

B. From Dec. 98 to Mar. 2000 (16 mos.)
Minimum Wage – ₱225 391.5 [/] 12 = P 7,340.62

x 16 mos.
P 17,609.92
Underpayment/Non-payment of Overtime Pay:
A. From Apr. 98 to Nov. 98 (7 mos.)
30% of Minimum Wage –
(₱6,459.75 x 30%) P 1,937.92
30% of Salary Actually Paid –
(₱4,320.00 x 30%) 1,872.00

Difference P 641.92
x 7 mos.
P 4,493.44 P 4,493.44
B. From Dec. 98 to Mar. 2000 (16 mos.)

30% of Minimum Wage –
(₱7,340.62 x 30%) 2,202.18

1,872.00
(₱6,240.00 x 30%)
P 330.18
x 16 mos.
Difference
P 5,282.88 P 5,282.88
Non-payment of Premium Pay for Holiday; Restday and P 11,655.00
Non-payment of Holiday Pay (₱5,872.50 x 2 yrs.)

Non-payment of (5 days) Service Incentive Leave Pay
(for every year of service/but limited to 2 yrs. only): 2,250.00
= P 1,125.00 x 2 yrs.
Actual, Moral, Exemplary & P 100,000.00

Compensatory Damages
(₱309,457.58)

TOTAL P 340,403.33
5. RENATO BATAYOLA
6. PATRICIO FRESNILLO
7. JOVY NOBLE
8. EMILIO DOMINICO
9. BENNY NILMAO – (All dismissed in Feb. 2001)
(₱7,340.62 x 15 mos.) P 110,109.30

(₱225.00 x 14 days) 3,150.00
Underpayment/Non-payment of Salary/Wages:
A. From Apr. 97 to Jan. 98 ([9] mos.)

Minimum Wage – ₱185 x 391.5 [/] 12 = P 6,035.62
x 9 mos.
P 17,436.42
B. From Feb. 98 to Nov. 98 (10 mos.)

Minimum Wage – ₱198 x 391.5 [/] 12 = P 6,459.75
x 10 mos.
P 23,615.10

C. From Dec. 98 to Mar. 2000 (16 mos.)
Minimum Wage – ₱225 x 391.5 [/] 12 = 7,340.62

x 16 mos.
P 21,098.00

Underpayment/Non-payment of Overtime Pay:
A. From Apr. 97 to Jan. 98 (9 mos.)
30% Minimum Wage –
(₱6,035.62 x 30%) P 1,810.68

(₱4,098.24 x 30%) 1,226.77
Difference P 583.91
x 9 mos.
P 5,255.19 - P 5,255.19
B. From Feb. 98 to Nov. 98 (10 mos.)

30% Minimum Wage –
(₱6,459.75 x 30%) P 1,937.92

1,226.72
(₱4,098.24 x 30%)
Difference P 711.15
x 10 mos.
P 7,111.70 - P 7,111.70
C. From Dec. 98 to Mar. 2000 (16 mos.)
30% Minimum Wage – P 2,202.18
(₱7,340.62 x 30%)
30% of Salary Actually Paid – P 1,806.75
(₱6,022.50 x 30%)
x 16 mos.
Difference
P 6,326.97 - P 6,326.97
Non-Payment of Premium Pay for Holiday & Restday; and

Non-Payment of Holiday Pay: (₱5,827.50 x 3 yrs.) P 17,482.50
Non-Payment of (5 days) Service Incentive Leave Pay

(for every year of service/but limited to 3 years only)
= ₱1,125.00 x 3 yrs.) 3,375.00
Compensatory Damages ---------- 100,000.00
(₱384,450.12)
P 38, 445.01
Ten (10%) Percent Attorney’s Fees
₱2,114,475.00)
(Total for 5 above-named Complainants
10. JOSE AUSTRAL – (Dismissed in Feb. 2000)
(₱8,900.00 x 15 mos.) P 133.500.00
13th Month Pay for the period 8,900.00

(₱8,900.00 x 12 mos. / 365 days = (₱292.60 x 14 days) 4,096.40
Actual, [M]oral, Exemplary &

(₱246,496.40)

TOTAL P 271, 146.04 28
The dispositive portion of the Labor Arbiter’s Decision reads:

WHEREFORE, premises all considered, judgment is hereby rendered finding the dismissal of all 21 complainants
herein as illegal and ordering respondents Grand Asian Shipping Lines, Inc., Eduardo P. Franscisco and William
How to pay, jointly and severally, each complainant the amounts, as follows, to wit:
A) 1. Wilfredo Galvez P 286,284.05
2. Joel Sales 246,526.61

3. Cristito G. Gruta 265,019.60
4. Danilo Arguelles 340,403.33
5. Renato Batayola 422,895.13

6. Patricio Fresnillo 422,895.13
7. Jovy Noble 422,895.13
8. Emilio Dominico 422,895.13

9. Benny Nilmao 422,895.13
10. Jose Austral 271,146.04
11. Nobelito Rivas 281,900.13
12. Elias Facto 259,471.41
13. Jeremias Bonlagua 316,683.53

14. Rannie Canon 391,816.70
15. Fernando Malia 411,355.45
16. Calixto Flores 411,355.45

17. Necito Llanzana 411,355.45
18. Ramie Barrido 411,355.45

19. Albert Faulan 265,982.28
20. Magno Tosalem 419,352.79
21. Rolando Dela Guardia 419,352.79

(Grand Total) P 7,104,483.84
B) The awards of ₱100,000.00 each, as indemnity for damages and ten percent (10%) of the total amount,
as attorney’s fees, are included in the above-individual amount so awarded.
C) Respondents should immediately reinstate all the complainants to their former position without loss of
seniority [sic] and other benefits; and to pay them full backwages up to the time of their actual reinstatement.
All other claims of complainants, not included in the above awards, are hereby ordered dismissed for lack of merit.
SO ORDERED.29
Petitioners filed a Notice of Appeal With A Very Urgent Motion to Reduce Bond30 before the NLRC and posted a
cash bond in the amount of ₱500,000.00.
In a Supplemental Motion to Reduce Bond,31 petitioners cited economic depression, legality of the employees’
termination, compliance with labor standards, and wage increases as grounds for the reduction of appeal bond.
The NLRC issued an Order32 dated February 20, 2002 denying petitioners’ motion to reduce bond and directing
them to post an additional bond in the amount of ₱4,084,736.70 in cash or surety within an unextendible period of
10 days; otherwise, their appeal would be dismissed. Petitioners failed to comply with the Order. Thus, on February
3, 2003, complainants moved for the dismissal of the appeal since petitioners had thus far posted only ₱1.5 million
supersedeas bond and ₱500,000.00 cash bond, short of the amount required by the NLRC.33
In a Decision34 dated September 10, 2003, the NLRC, despite its earlier Order denying petitioners’ motion for the
reduction of bond, reduced the amount of appeal bond to ₱1.5 million and gave due course to petitioners’ appeal. It
also found the appeal meritorious and ruled that petitioners presented sufficient evidence to show just causes for
terminating complainants’ employment and compliance with due process. Accordingly, complainants’ dismissal was
valid, with the exception of Sales. The NLRC adjudged petitioners to have illegally dismissed Sales as there was
absence of any record that the latter received any notice of suspension, administrative hearing, or termination.
The NLRC struck down the monetary awards given by the Labor Arbiter, which, it ruled, were based merely on the
computations unilaterally prepared by the complainants. It also ruled that Galvez, a ship captain, is considered a
managerial employee not entitled to premium pay for holiday and rest day, holiday pay and service incentive leave
pay. As for the other complainants, the award for premium pay, holiday pay, rest day pay and overtime pay had no
factual basis because no proof was adduced to show that work was performed on a given holiday or rest day or
beyond the eight hours normal work time. Even then, the NLRC opined that these claims had already been given
since complainants’ salaries were paid on a 365-day basis. Likewise, service incentive leave pay, awards for
damages and double indemnity were deleted. Further, the NLRC sustained respondents’ contention that it is the
Secretary of Labor or the Regional Director who has jurisdiction to impose the penalty of double indemnity for
violations of the Minimum Wage Laws and not the Labor Arbiter. The NLRC disposed of the case as follows:
WHEREFORE, premises considered, the assailed Decision is hereby reversed as to all complainants but modified
with respect to Joel Sales.
Respondents are adjudged not guilty of illegal dismissal with respect to all complainants except complainant Joel
Sales. With the exception of Joel Sales, all the monetary awards to all complainants are deleted from the decision. 1âwphi1
Respondents are ordered to pay, jointly and severally complainant Joel Sales his backwages in the amount of
₱124,115.10 as computed in the assailed decision plus ten (10%) thereof as attorney’s fees.
We also sustain the order to reinstate him to his former position without loss of seniority rights and other benefits
and to pay him backwages up to the time of his actual reinstatement.
SO ORDERED.35
Complainants filed Motions for Reconsideration while petitioners filed a Motion for Partial Reconsideration. In a
Resolution36 dated January 14, 2004, the NLRC reconsidered its ruling with respect to Sales, absolving petitioners
from the charge of illegally dismissing him as Sales was neither placed under preventive suspension nor terminated
from the service. The NLRC upheld petitioners’ claim that it was Sales who abandoned his work by failing to report
back for re-assignment. The dispositive portion of the Resolution reads:
WHEREFORE, premises considered, the Motions for Reconsideration filed by complainants are denied for lack of
merit. The Motion for Partial Reconsideration filed by respondents is granted. The assailed decision is reconsidered
in that Respondents are likewise adjudged not guilty of illegal dismissal with respect to complainant Joel Sales. The
monetary awards in favor of complainant Joel Sales as well as the reinstatement order are hereby deleted from the
Decision.
SO ORDERED.37

Respondents, excluding the other complainants, filed a Petition for Certiorari38 with the CA, attributing grave abuse
of discretion on the part of the NLRC in entertaining the appeal despite the insufficiency of petitioners’ appeal bond.
Respondents also assailed the NLRC’s ruling upholding the validity of their dismissal. They posited that the charge
of pilferage is not supported by clear, convincing and concrete evidence. In fact, the RTC, Branch 15 of Manila
already rendered a Decision39 on December 19, 2003 acquitting them of the crime of qualified theft lodged by the
petitioners. Respondents further prayed for the reinstatement of the Labor Arbiter’s monetary awards in their favor.
In a Decision40 dated September 12, 2006, the CA set aside the NLRC’s Decision and Resolution. It held that the
NLRC’s act of entertaining the appeal is a jurisdictional error since petitioners’ failure to post additional bond
rendered the Labor Arbiter’s Decision final, executory and immutable. The CA, nonetheless, proceeded to discuss
the merits of the case insofar as the illegal dismissal charge is concerned. The CA conformed with the Labor
Arbiter’s ruling that petitioners’ evidence was inadequate to support the charge of pilferage and justify respondents’
termination. The CA ruled that Sales was also illegally dismissed, stating that Sales’ active participation in the labor
case against petitioners belies the theory that he was not terminated from employment. The dispositive portion of
the CA Decision reads:
WHEREFORE, the petition is GRANTED and the assailed September 10, 2003 Decision and January 14, 2003
Resolution are, accordingly, ANNULLED and SET ASIDE. In lieu thereof, the Labor Arbiter’s August 30, 2001
Decision is ordered REINSTATED.
SO ORDERED.41
Petitioners filed a Motion for Reconsideration,42 questioning the CA in finding that respondents were illegally
dismissed, in reinstating the monetary awards granted by the Labor Arbiter without passing upon the merits of these
money claims and in ascribing grave abuse of discretion on the part of the NLRC in taking cognizance of the appeal
before it.
On May 23, 2007, the CA issued a Resolution43 denying petitioners’ Motion for Reconsideration. Hence, the instant
Petition.
Issues
Petitioners assign the following errors:
I.
THE HONORABLE COURT OF APPEALS RULED CONTRARY TO APPLICABLE JURISPRUDENCE WHEN IT

CONCLUDED THAT RESPONDENTS WERE ILLEGALLY DISMISSED.
A. THIS HONORABLE COURT OF APPEAL[S] OF APPEALS [sic] DISREGARDED THE FACT THAT THE
OFFICE OF THE CITY PROSECUTOR OF MANILA DETERMINED THAT THERE WAS A PRIMA FACIE
CASE FOR QUALIFIED THEFT AGAINST PETITIONERS, CONTRARY TO DECISIONS THIS MOST
HONORABLE COURT OF APPEAL[S] HAS HELD WHERE SIMILAR FINDINGS OF THE INVESTIGATING
PUBLIC PROSECUTOR HAD BEEN CONSIDERED SUBSTANTIAL EVIDENCE TO JUSTIFY
TERMINATION OF EMPLOYMENT BASED ON LOSS OF TRUST AND CONFIDENCE.
B. THIS HONORABLE COURT OF APPEAL[S] GRIEVOUSLY ERRED IN DISCREDITING PRIVATE

RESPONDENTS’ EVIDENCE ONE BY ONE WHEN, TAKEN TOGETHER, SUCH EVIDENCE PROVIDED
ADEQUATE BASIS FOR THE DISMISSAL OF PETITIONERS IN ACCORDANCE WITH RELEVANT
SUPREME COURT OF APPEAL [sic] DECISIONS.
C. IN SUM, PETITIONERS WERE NOT ILLEGALLY DISMISSED SINCE THE SUBSTANTIVE AND
PROCEDURAL REQUIREMENTS FOR THE TERMINATION OF THEIR EMPLOYMENT WERE
SATISFIED IN THIS CASE.
D. THIS HONORABLE COURT OF APPEAL[S] GRIEVOUSLY ERRED IN RULING THAT PETITIONER

JOEL SALES WAS ILLEGALLY DISMISSED.
II.
THE HONORABLE COURT OF APPEALS RULED CONTRARY TO APPLICABLE JURISPRUDENCE WHEN IT

CONCLUDED THAT PETITIONERS WERE NOT ABLE TO VALIDLY PERFECT [THEIR] APPEAL OF THE LABOR
ARBITER’S DECISION.44
Petitioners claim that the NLRC properly took cognizance of their appeal and properly granted their motion for
reduction of the appeal bond, explaining that strict implementation of the rules may be relaxed in certain cases so as
to avoid a miscarriage of justice. Petitioners also claim that there was adequate basis to render respondents’
dismissal from service valid, as correctly ruled by the NLRC.
Our Ruling
The assailed CA Decision must be vacated and set aside.
There was substantial compliance with
the rules on appeal bonds.
In order to perfect an appeal from the Decision of the Labor Arbiter granting monetary award, the Labor Code
requires the posting of a bond, either in cash or surety bond, in an amount equivalent to the monetary award. Article
223 of the Labor Code provides:
ART. 223. Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or
orders. x x x
xxxx
In case of a judgment involving a monetary award, an appeal by the employer [may] be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment appealed from.
Nonetheless, we have consistently held that rules should not be applied in a very rigid and strict sense.45 This is
especially true in labor cases wherein the substantial merits of the case must accordingly be decided upon to serve
the interest of justice.46 When there has been substantial compliance, relaxation of the Rules is warranted.47
In Mendoza v. HMS Credit Corporation,48 we held that the posting of an appeal bond in the amount of ₱650,000.00
instead of ₱1,025,081.82 award stated in the Decision of the Labor Arbiter is substantial compliance with the
requirement under Article 223. Likewise, in Pasig Cylinder Mfg. Corp. v. Rollo,49 we ruled that the filing of a reduced
appeal bond of ₱100,000.00 is not fatal in an appeal from the labor arbiter’s ruling awarding ₱3,132,335.57 to the
dismissed employees. In Rosewood Processing, Inc. v. National Labor Relations Commission,50 we allowed the filing
of a reduced bond of ₱50,000.00, accompanied with a motion, in an appeal from the Labor Arbiter’s award of
₱789,154.39.
In the case at bench, petitioners appealed from the Decision of the Labor Arbiter awarding to crewmembers the
amount of ₱7,104,483.84 by filing a Notice of Appeal with a Very Urgent Motion to Reduce Bond and posting a cash
bond in the amount of ₱500,000.00 and a supersedeas bond in the amount of ₱1.5 million. We find this to be in
substantial compliance with Article 223 of the Labor Code. It is true that the NLRC initially denied the request for
reduction of the appeal bond. However, it eventually allowed its reduction and entertained petitioners’ appeal. We
disagree with the CA in holding that the NLRC acted with grave abuse of discretion as the granting of a motion to
reduce appeal bond lies within the sound discretion of the NLRC upon showing of the reasonableness of the bond
tendered and the merits of the grounds relied upon.51 Hence, the NLRC did not err or commit grave abuse of
discretion in taking cognizance of petitioners’ appeal before it.
Galvez and Gruta were validly dismissed

on the ground of loss of trust and
confidence; there were no valid grounds
for the dismissal of Arguelles, Batayola,
Fresnillo, Noble, Dominico, Nilmao and
Austral.
We do not, however, agree with the findings of the NLRC that all respondents were dismissed for just causes. In
termination disputes, the burden of proving that the dismissal is for a just or valid cause rests on the employers.
Failure on their part to discharge such burden will render the dismissal illegal.52
As specified in the termination notice, respondents were dismissed on the grounds of (i) serious misconduct,
particularly in engaging in pilferage while navigating at sea, (ii) willful breach of the trust reposed by the company,
and (iii) commission of a crime or offense against their employer. Petitioners claim that based on the sworn
statement of Abis, joint affidavit of Bernabe and De la Rama, letter of petitioner Francisco requesting assistance
from the CIDG, formal complaint sheet, complaint and supplementary complaint affidavit of Montegrico, CIDG’s
letter referring respondents’ case to the Office of the City Prosecutor of Manila, resolution of the City Prosecutor
finding a prima facie case of qualified theft, and the Information for qualified theft, there is a reasonable ground to
believe that respondents were responsible for the pilferage of diesel fuel oil at M/T Dorothy Uno, which renders them
unworthy of the trust and confidence reposed on them.
After examination of the evidence presented, however, we find that petitioners failed to substantiate adequately the
charges of pilferage against respondents. "[T]he quantum of proof which the employer must discharge is substantial
evidence. x x x Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise."53
Here, the mere filing of a formal charge, to our mind, does not automatically make the dismissal valid. Evidence
submitted to support the charge should be evaluated to see if the degree of proof is met to justify respondents’
termination. The affidavit executed by Montegrico simply contained the accusations of Abis that respondents
committed pilferage, which allegations remain uncorroborated. "Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for dismissing employees."54 The other bits of evidence
were also inadequate to support the charge of pilferage. The findings made by GASLI’s port captain and internal
auditor and the resulting certification executed by De la Rama merely showed an overstatement of fuel consumption
as revealed in the Engineer’s Voyage Reports. The report of Jade Sea Land Inspection Services only declares the
actual usage and amount of fuel consumed for a particular voyage. There are no other sufficient evidence to show
that respondents participated in the commission of a serious misconduct or an offense against their employer.
As for the second ground for respondents’ termination, which is loss of trust and confidence, distinction should be
made between managerial and rank and file employees. "[W]ith respect to rank-and-file personnel, loss of trust and
confidence, as ground for valid dismissal, requires proof of involvement in the alleged events x x x [while for]
managerial employees, the mere existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal."55
In the case before us, Galvez, as the ship captain, is considered a managerial employee since his duties involve the
governance, care and management of the vessel.56 Gruta, as chief engineer, is also a managerial employee for he is
tasked to take complete charge of the technical operations of the vessel.57 As captain and as chief engineer, Galvez
and Gruta perform functions vested with authority to execute management policies and thereby hold positions of
responsibility over the activities in the vessel. Indeed, their position requires the full trust and confidence of their
employer for they are entrusted with the custody, handling and care of company property and exercise authority
over it.
Thus, we find that there is some basis for the loss of confidence reposed on Galvez and Gruta. The certification
issued by De la Rama stated that there is an overstatement of fuel consumption. Notably, while respondents made
self-serving allegations that the computation made therein is erroneous, they never questioned the competence of
De la Rama to make such certification. Neither did they question the authenticity and validity of the certification.
Thus, the fact that there was an overstatement of fuel consumption and that there was loss of a considerable
amount of diesel fuel oil remained unrefuted. Their failure to account for this loss of company property betrays the
trust reposed and expected of them. They had violated petitioners’ trust and for which their dismissal is justified on
the ground of breach of confidence.
As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, proof of involvement in the loss of the
vessel’s fuel as well as their participation in the alleged theft is required for they are ordinary rank and file
employees. And as discussed above, no substantial evidence exists in the records that would establish their
participation in the offense charged. This renders their dismissal illegal, thus, entitling them to reinstatement plus full
backwages, inclusive of allowances and other benefits, computed from the time of their dismissal up to the time of
actual reinstatement.
No evidence of Sales’ dismissal from employment.
The rule that the employer bears the burden of proof in illegal dismissal cases finds no application when the
employer denies having dismissed the employee.58 The employee must first establish by substantial evidence the
fact of dismissal59 before shifting to the employer the burden of proving the validity of such dismissal.
We give credence to petitioners’ claim that Sales was not dismissed from employment. Unlike the other
respondents, we find no evidence in the records to show that Sales was preventively suspended, that he was
summoned and subjected to any administrative hearing and that he was given termination notice. From the records,
it appears Sales was not among those preventively suspended on February 26, 2000. To bolster this fact,
petitioners presented the Payroll Journal Register for the period March 1-15, 200060 showing that Sales was still
included in the payroll and was not among those who were charged with an offense to warrant suspension. In fact,
Sales’ signature in the Semi-Monthly Attendance Report for February 26, 2000 to March 10, 200061 proves that he
continued to work as Chief Mate for the vessel M/T Dorothy Uno along with a new set of crewmembers. It is likewise
worth noting that in the Supplemental Complaint Affidavit of Montegrico, Sales was not included in the list of those
employees who were accused of having knowledge of the alleged pilferage. This only shows that he was never
subjected to any accusation or investigation as a prelude to termination. Hence, it would be pointless to determine
the legality or illegality of his dismissal because, in the first place, he was not dismissed from employment.
Respondents are not entitled to their

money claims except 13th month pay for
the period of their illegal dismissal,
unpaid salaries, salary differentials,
double indemnity for violation of the
Minimum Wage Law and attorney’s fees.
As for the money claims of respondents, we note that petitioners did not bring this issue before us or assign it as
error in this Petition. It was raised by the petitioners only in their Memorandum of Appeal filed with the NLRC and in
their Motion for Reconsideration of the CA’s Decision reinstating the Labor Arbiter’s award. Nonetheless, in order to
arrive at a complete adjudication of the case and avoid piecemeal dispensation of justice, we deem it necessary to
resolve the validity of respondents’ money claims and to discuss the propriety of the Labor Arbiter’s award.
Galvez and Gruta, as managerial employees, are not entitled to their claims for holiday pay, service incentive leave
pay and premium pay for holiday and restday. Article 82 of the Labor Code specifically excludes managerial
employees from the coverage of the law regarding conditions of employment which include hours of work, weekly
rest periods, holidays, service incentive leaves and service charges.62
As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, we cannot sustain the argument that
they are classified as field personnel under Article 82 of the Labor Code who are likewise excluded. Article 82
defines field personnel as referring to "non-agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty." They are those who perform functions which "cannot be effectively monitored
by the employer or his representative."63 Here, respondents, during the entire course of their voyage, remain on
board the vessel. They are not field personnel inasmuch as they were constantly supervised and under the effective
control of the petitioners through the vessel’s ship captain.
Nevertheless, we cannot grant them their claims for holiday pay, premium pay for holiday and restday, overtime pay
and service incentive leave pay. Respondents do not dispute petitioners’ assertion that in computing respondents’
salaries, petitioners use 365 days as divisor. In fact, this was the same divisor respondents used in computing their
money claims against petitioners. Hence, they are paid all the days of the month, which already include the benefits
they claim.64 As for overtime pay and premium pay for holidays and restdays, no evidence was presented to prove
that they rendered work in excess of the regular eight working hours a day or worked during holidays and restdays.
In the absence of such proof, there could be no basis to award these benefits.65
For the claim of service incentive leave pay, respondents did not specify what year they were not paid such benefit.
In addition, records show that they were paid their vacation leave benefits.66 Thus, in accordance with Article 95 of
the Labor Code,67 respondents can no longer claim service incentive leave pay.
On the other hand, for failure to effectively refute the awards for 13th month pay for the period that respondents
were illegally dismissed, unpaid salaries and salary differentials,68 we affirm the grant thereof as computed by the
Labor Arbiter. Petitioners’ evidence which consist of a mere tabulation69 of the amount of actual benefits paid and
given to respondents is self-serving as it does not bear the signatures of the employees to prove that they had
actually received the amounts stated therein.
Next, we come to the legitimacy of the Labor Arbiter’s authority to impose the penalty of double indemnity for
violations of the Minimum Wage Law. Petitioners argue that the authority to issue compliance orders in relation to
underpayment of wages is vested exclusively on the Secretary of Labor or the Regional Director and that the Labor
Arbiter has no jurisdiction thereover. They cite Section 12 of RA 6727,70 as amended by RA 8188, which provides:
Sec. 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of
the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a
fine [of] not less than Twenty-five thousand pesos (₱25,000) nor more than One hundred thousand pesos
(₱100,000) or imprisonment of not less than two (2) years nor more than four (4) years or both such fine and
imprisonment at the discretion of the court: Provided, That any person convicted under this Act shall not be entitled
to the benefits provided for under the Probation Law.
The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the
employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability under this
Act.
If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of
imprisonment shall be imposed upon the entity’s responsible officers including but not limited to, the president, vice
president, chief executive officer, general manager, managing director or partner.
Petitioners’ contention is untenable. First, there is no provision in RA 6727 or RA 8188 which precludes the Labor
Arbiter from imposing the penalty of double indemnity against employers. Second, Article 217 of the Labor Code
gives the Labor Arbiter jurisdiction over cases of termination disputes and those cases accompanied with a claim for
reinstatement. Thus, in Bay Haven, Inc. v. Abuan71 the Court held that an allegation of illegal dismissal deprives the
Secretary of Labor of jurisdiction over claims to enforce compliance with labor standards law. This was also
1âwphi1
pronounced in People’s Broadcasting Service (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor
and Employment,72 wherein we stated that the Secretary of Labor has no jurisdiction in cases where employer-
employee relationship has been terminated. We thus sustain the Labor Arbiter’s award of double indemnity.
We also sustain the award of attorney’s fees since respondents were compelled to file a complaint for the recovery
of wages and were forced to litigate and incur expenses.73
The Labor Arbiter’s grant of actual/compensatory, moral and exemplary damages in the amount of ₱100,000.00 is,
however, incorrect. In order to recover actual or compensatory damages, it must be capable of proof and must be
necessarily proved with a reasonable degree of certainty.74 While moral damages is given to a dismissed employee
when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy. Exemplary damages, on the other hand, is given if the
dismissal is effected in a wanton, oppressive or malevolent manner.75 Here, the Labor Arbiter erred in awarding the
damages by lumping actual, moral and exemplary damages. Said damages rest on different jural foundations and,
hence, must be independently identified and justified.76 Also, there are no competent evidence of actual expenses
incurred that would justify the award of actual damages. Lastly, respondents were terminated after being accused of
the charge of pilferage of the vessel’s fuel oil after examination of the report made by the vessel’s chief engineer
which showed a considerable amount of fuel lost. Although the dismissal of Arguelles, Batayola, Fresnillo, Noble,
Dominico, Nilmao and Austral is illegal, based on the circumstances surrounding their dismissal, petitioners could
not have been motivated by bad faith in deciding to terminate their services.
Lastly, this Court exculpates petitioners Francisco and How from being jointly and severally liable with GASLI for the
illegal dismissal and payment of money claims of herein respondents. In order to hold them liable, it must first be
shown by competent proof that they have acted with malice and bad faith in directing the corporate affairs.77 For
want of such proof, Francisco and How should not be held liable for the corporate obligations of GASLI.
WHEREFORE, the Court of Appeals’ Decision dated September 12, 2006 and the Resolution dated May 23, 2007 in
CA-G.R. SP No. 82379 are ANNULLED and SET ASIDE. Respondents Wilfredo Galvez and Cristito Gruta are
hereby DECLARED dismissed from employment for just cause while respondent Joel Sales was not dismissed from
employment. Respondents Danilo
Arguelles, Renato Batayola, Patricio Fresmillo, Jovy Noble, Emilio Dominico, Benny Nilmao, and Jose Austral are
DECLARED to have been illegally dismissed; hence, petitioners are ordered to reinstate them to their former
position or its equivalent without loss of seniority rights and to pay them full backwages, inclusive of allowances and
other benefits, computed from the time of dismissal up to the time of actual reinstatement, as well as 13th month
pay for the period of their illegal dismissal.
Petitioner Grand Asian Shipping Lines, Inc. is also ordered to pay respondents Wilfredo Galvez, Danilo Arguelles,
Renato Batayola, Patricio Fresnillo, Jovy Noble, Emilio Dominico, Benny Nilmao and Jose Austral unpaid salaries
from February 16 to 29, 2000, as computed by the Labor Arbiter; and to pay respondents Danilo Arguelles, Renato
Batayola, Patricio Fresmillo, Jovy Noble, Emilio Dominico and Benny Nilmao salary differentials plus double
indemnity, as computed by the Labor Arbiter. Ten percent (10%) of the monetary award should be added as and by
way of attorney’s fees. Interest at the rate of six percent (6%) per annum shall be imposed on all monetary awards
from date of finality of this Decision until full payment pursuant to Nacar v. Gallery Frames.78
Petitioners Eduardo P. Francisco and William How are absolved from the liability adjudged against petitioner Grand
Asian Shipping Lines, Inc.
SO ORDERED.
SECOND DIVISION
G.R. No. 194612 January 27, 2014

vs.
FLORO MANIGO y MACALUA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
"[R]ape is generally unwitnessed and oftentimes, the victim is left to testify for herself Thus, in resolving rape cases,
the victim's credibility becomes the primordial consideration. If a victim's testimony is straightforward, convincing and
consistent with human nature and the normal course of things, unflawed by any material or significant inconsistency,
it passes the test of credibility and the accused may be convicted solely on the basis thereof"1
This is an appeal from the Decision2 dated July 21, 2010 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
00652-MIN, affirming with modification the October 21, 2007 Decision3 of the Regional Trial Court (RTC), Branch 2,
Tagum City, in Criminal Case No. 13954. The RTC found appellant Floro Manigo y Macalua (appellant) guilty
beyond reasonable doubt of the crime of rape under Article 266-A in relation to Article 266-B of the Revised Penal
Code, as amended by Republic Act (RA) No. 8353, otherwise known as "The Anti-Rape Law of 1997." The trial
court sentenced him to suffer the penalty of reclusion perpetua and to pay the victim civil indemnity.
The Charge
On October 15, 2004, an Amended Information4 for rape was filed with the RTC against appellant which contained
the following accusations:
The undersigned accuses FLORO MANIGO y MACALUA alias JUN of the crime of Rape under Article 266-A, par. 1
in relation to the 2nd par. of Article 266-B of the Revised Penal Code as amended by Republic Act No. 8353 in
relation to Republic Act [N]o. 8369, committed as follows:
That on or about April 16, 2004, in the City of Tagum, Province of Davao del Norte, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, armed with a knife, through force or intimidation,
willfully, unlawfully and feloniously had carnal knowledge of "AAA,"5 a 13-year old minor, against her will.
CONTRARY TO LAW.
During his arraignment on November 17, 2004, appellant with the assistance of counsel entered a plea of not guilty
to the charge. After the termination of the pre-trial conference, trial ensued.
At noontime on April 16, 2004, "AAA," then 13 years of age being born on February 1, 1991,6 and her classmate
"BBB" were outside the compound of Magugpo Pilot Elementary School waiting for a ride home after their summer
remedial classes. Momentarily, a tricycle arrived which the two boarded. They told the driver, herein appellant, to
bring them first to Purok Macasero where "BBB" resides. After "BBB" alighted, the tricycle took a different route
prompting "AAA" to ask why. Appellant replied that he would just have the gas tank filled. But instead of going to the
gas station, appellant proceeded to a banana plantation and when again asked by "AAA," answered that he was
going to take his lunch. When they stopped, appellant alighted and urinated nearby. He then positioned himself
beside "AAA" who was still inside the tricycle and told the latter to undress. "AAA" pleaded for appellant not to harm
her as she still has younger siblings but the same was unheeded. While pointing a knife on "AAA," appellant took off
her panties and his own clothes. "AAA" noticed a tattoo on appellant’s right upper hand. After warning "AAA" not to
make any movement, appellant forced his penis inside her vagina and made a pumping motion. Once satiated,
appellant told "AAA" to dress up. They then left the place and when they reached Makulay Restaurant, appellant
gave "AAA" ₱40.00 pesos and allowed her to go home.
The following day, "AAA" disclosed her ordeal to her mother. Together, they went to the Davao Regional Hospital
where she was subjected to physical examination that revealed a laceration on her hymen consistent with her claim
of sexual abuse.7 Dr. Suzette A. Perez (Dr. Perez) also found that "AAA" had abrasion which means that there was
scratch or swelling or redness on the posterior portion of her vagina. Thereafter, "AAA" and her mother reported the
matter to the Tagum City Police Station.
In his defense, appellant raised denial and alibi. According to him, he could not have raped "AAA" since on the day
of the alleged incident, he was at their home in Uraya Subdivision, Mankilam, Tagum City, Davao del Norte. He is
also happily married to Lyn, a teacher, and is not a tricycle driver but engaged in a lucrative business of money
lending. In fact, the first time he saw "AAA" was when he was made to stand in a police line-up with several
detainees for identification.
The RTC accorded full faith and credence to the testimony of "AAA" on how the incident happened and her positive
identification of the appellant. It rejected appellant’s defense of denial. Thus, the dispositive portion of its Decision,
viz:
WHEREFORE, the Court finds the accused guilty beyond reasonable doubt of the crime of Rape under Article 266-
A, Par. 1 in relation to the 2nd par. of Article 266-B of the Revised Penal Code, as amended by Republic Act No.
8353, in [r]elation to Republic Act No. 8369 and hereby sentences him to suffer the penalty of reclusion perpetua.
He is likewise ordered to pay the victim the sum of ₱100,000.00 as civil indemnity.
SO ORDERED.8
On appeal, the CA affirmed with modification the Decision of the RTC. While it sustained the findings relative to the
credibility of "AAA" and her out-of-court identification of appellant, the said court, however, modified the award of
damages. The decretal portion of the CA Decision reads:
WHEREFORE, the October 21, 2007 Decision of the Regional Trial Court, Branch 2 of Tagum City, Davao del Norte
in Criminal Case No. 13954 is hereby AFFIRMED WITH MODIFICATION. Accused-appellant Floro Manigo y
Macalua is found GUILTY beyond reasonable doubt of Rape under Article 266-A of the Revised Penal Code and is
sentenced to suffer the penalty of reclusion perpetua. He is further ORDERED to pay AAA ₱75,000.00 as civil
indemnity ex-delicto, ₱75,000.00 as Moral Damages, and ₱25,000.00 as exemplary damages.
SO ORDERED.9
Undeterred, appellant is now before this Court for final review of his conviction. In our esolution10 of January 19,
2011, we required the parties to file their respective supplemental briefs if they so desire within 30 days from notice.
Per their respective manifestations,11 both parties opted to adopt the briefs they filed before the CA.
Issue
The pivotal issue in this case hinges on the credibility of "AAA," thus our effort to scrutinize her testimony.
Our Ruling
The appeal is bereft of merit.
"AAA’s" testimony deserves full faith and credence.
Appellant points to several flaws in "AAA’s" testimony, to wit: (1) she did not make a particular description of the
tricycle used at the time of the commission of the crime; (2) her description of appellant’s physical features during
the trial is different from what she stated in her affidavit; and, (3) "AAA’s" out-of-court identification of appellant is
doubtful.
Appellant’s contentions basically relate to the trial court’s appreciation of the evidence adduced by the prosecution
and its factual findings based thereon.
"The legal aphorism is that factual findings of the trial court, its calibration of the testimonies of the witnesses, and its
assessment of their probative weight are given great respect if not conclusive effect, unless it ignored,
misconstrued, misunderstood, or misinterpreted cogent facts and circumstances of substance which, if considered,
would alter the outcome of the case."12 A careful scrutiny of the records reveals that the case at bench is not an
exception.
Like the lower courts, we find the narration of "AAA" to be candid, frank and straightforward. There is nothing
1âwphi 1
therein that appears to be unnatural or illogical. Moreover, "AAA’s" claim of rape is supported by the medical
findings of Dr. Perez, another prosecution witness. "Where a victim’s testimony is corroborated by the physical
findings of penetration, there is sufficient basis for concluding that sexual intercourse did take place. A rape victim’s
account is sufficient to support a conviction for rape if it is straightforward, candid and corroborated by the medical
findings of the examining physician, as in the present case."13
Also, "[c]ourts usually give greater weight to the testimony of a girl who is a victim of sexual assault, especially a
minor, as in this case, because no woman would be willing to undergo a public trial and put up with the shame,
humiliation and dishonor of exposing her own degradation were it not to condemn an injustice and have the offender
apprehended and punished."14
Insofar as the alleged inconsistency between "AAA’s" statements in her affidavit and testimony in open court is
concerned, it has often been noted by this Court that if there is an inconsistency between the affidavit and the
testimony of a witness, the latter should be given more weight since affidavits being taken ex-parte are usually
incomplete and inaccurate.15 Besides, the inconsistency respecting the physical appearance of appellant has no
bearing on the principal question of whether appellant had carnal knowledge of the victim. Neither the failure of
"AAA" to describe the tricycle will dent her credibility. Suffice it to say that these matters are not so material in the
prosecution of the crime.
In yet another attempt to undermine the credibility of "AAA," appellant asserts that his out-of-court identification as
the culprit is doubtful. He avers that "AAA" knew beforehand that she was being called to the police station precisely
to identify her rapist.
In Vidar v. People,16 the Court laid down the following:
In ascertaining whether an out-of-court identification is positive or derivative, the Court has adopted the totality of
circumstances test wherein the following factors are taken into consideration: (1) the witness’s opportunity to view
the criminal at the time of the crime; (2) the witness’s degree of attention at that time; (3) the accuracy of any prior
description given by the witness; (4) the level of certainty demonstrated by the witness at the identification; (5) the
length of time between the crime and the identification; and (6) the suggestiveness of the identification procedure.17
Guided by the above, we find "AAA’s" out-of-court identification of appellant not tainted with any irregularity. As aptly
argued by the appellee in its brief:
All six (6) factors were substantially satisfied in the present case[:] (1) the victim had more than sufficient time to
observe the rapist; (2) the victim’s attention was focused on appellant to whom she even pleaded not to hurt her
since she still had younger siblings; (3) except for appellant’s complexion and hair, the victim gave prior descriptions
of appellant which became the source of the cartographic sketch; (4) she immediately pointed to appellant as her
rapist from among several men inside the prison cell; (5) the crime was committed on April 16, 2004 and appellant
was identified by the victim a few days thereafter, or on April 20, 2004; (6) suggestiveness was non-existent. Even
before she was requested to visit the police station, she was already able to describe to the police officers the
physical features of her assailant which was made the basis for the cartographic sketch. Noticeably, nobody helped
her in identifying the appellant. Verily, the totality of the circumstances in this case shows that her identification of
appellant was spontaneous and independent.18
It must also be stressed that "AAA" positively identified appellant in court as her assailant. In People v. Rivera,19 it
was ruled that "even assuming arguendo that the out-of-court identification was defective, the defect was cured by
the subsequent positive identification in court for the ‘inadmissibility of a police line-up identification x x x should not
necessarily foreclose the admissibility of an independent in-court identification.’"
In view of the foregoing, the Court concludes that "AAA’s" testimony was correctly given full faith and credence by
the lower courts.
Defense of Denial and Alibi Correctly Rejected.
The defenses of denial and alibi proffered by appellant were correctly rejected by the courts below in view of
"AAA’s" positive testimony and unflawed identification of appellant as the culprit. Alibi and denial are inherently weak
defenses and "must be brushed aside when the prosecution has sufficiently and positively ascertained the identity of
the accused."20 And as often stressed, positive testimony prevails over negative testimony.21 Also, for his defense of
alibi to prosper, appellant must prove not only that he was somewhere else when the crime was committed but he
must also satisfactorily establish that it was physically impossible for him to be at the crime scene at the time of its
commission. Appellant miserably failed in this regard.
All told, the Court sustains appellant’s conviction for the crime of rape.
The Penalty
Under Article 266-B of the Revised Penal Code, the penalty of reclusion perpetua to death shall be imposed
whenever the crime of rape is committed through the use of a deadly weapon or by two or more persons. It was
sufficiently alleged in the Information and established during trial that appellant used a knife, a deadly weapon, in
the commission of rape. Since no other circumstance, whether aggravating or mitigating, attended the commission
of the crime, the lesser of the two indivisible penalties which is reclusion perpetua shall be imposed pursuant to
Article 6322 of the same Code. Consequently, the Court sustains the penalty of reclusion perpetua imposed by the
CA. "It must be emphasized, however, that [appellant] shall not be eligible for parole pursuant to Section 3 of
Republic Act No. 9346 which states that ‘persons convicted of offenses punished with reclusion perpetua, or whose
sentence will be reduced by reclusion perpetua by reason of this Act, shall not be eligible for parole under Act No.
4180, otherwise known as the Indeterminate Sentence Law, as amended’."23
The Civil Indemnities
As to the award of damages, the Court sees a need for some modification in line with recent jurisprudence. Thus,
"considering that the penalty imposable is reclusion perpetua, the award of ₱75,000.00 by the CA as civil indemnity
must be reduced to ₱50,000.00."24 "The award of civil indemnity to the rape victim is mandatory upon the finding that
rape took place."25 Also the award of ₱75,000.00 as moral damages should be reduced to ₱50,000.00.26 Moral
damages are automatically granted to the rape victim without presentation of further proof other than the
commission of the crime.27 With respect to exemplary damages, we increase the same from ₱25,000.00 to
₱30,000.00 in line with prevailing jurisprudence.28 Exemplary damages should be awarded by reason of the
established presence of the qualifying circumstance of use of deadly weapon.29
In addition, interest at the rate of 6% per annum shall be imposed on all damages awarded from the date of finality
of this judgment until fully paid likewise pursuant to prevailing jurisprudence.30
WHEREFORE, the Decision dated July 21, 2010 of the Court of Appeals in CA-G.R. CR-H.C. No. 00652-MIN is
AFFIRMED with MODIFICATIONS. Appellant Floro Manigo y Macalua is found GUILTY beyond reasonable doubt of
RAPE and is sentenced to suffer the penalty of reclusion perpetua without eligibility for parole and ordered to pay
the victim "AAA" ₱50,000.00 as civil indemnity, ₱50,000.00 as moral damages and ₱30,000.00 as exemplary
damages. The award of damages shall earn legal interest at the rate of 6o/o per annum from date of finality of this
SO ORDERED.
SECOND DIVISION
G.R. No. 180972 January 20, 2014
JONAS MICHAEL R. GARZA, Petitioner,

vs.
COCA-COLA BOTILERS PHILIPPINES, INC. and CHRISTINE BANAL/CALIXTO MANAIG, Respondents.
DECISION
DEL CASTILLO, J.:
Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal justifications to dismiss
an employee. "The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof."1
This Petition for Review on Certiorari2 seeks a review and setting aside of the September 26, 2007 Decision3 and the
November 16, 2007 Resolution4 of the Court of Appeals (CA) in CA-G.R. SP Nos. 97915 and 97916.
Factual Antecedents
Respondent Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a manufacturer of soft drink products, employing
salesman and account specialists to sell these products to customers and outlets.
Petitioner Jonas Michael R. Garza (petitioner) became a regular employee of CCBPI on December 16, 1997,
designated as its Salesman in Iriga City. In 2001, he was promoted to the position of Dealer Development
Coordinator and assigned at Tabaco City. During his stint therein, he was likewise designated as Acting District
Sales Supervisor.
In 2003, due to changes in CCBPI’s structure and operating systems, the position of Dealer Development
Coordinator was abolished, and petitioner was designated as Account Specialist and assigned to the CCBPI Naga
City Plant and at Iriga City. For his services, petitioner received a monthly salary of ₱29,350.00, exclusive of
commissions and allowances. Prior to his dismissal from CCBPI, petitioner was an employee of good standing with
an unblemished record.
As Account Specialist, petitioner was tasked mainly with booking customers’ orders and collecting on their
accounts;5 petitioner merely books customers’ orders, but does not deliver the product to them; the independent
dealer makes the delivery.6 In effect, petitioner performed the functions of a CCBPI salesman, except that he
operates in concentrated or dense areas.7
As a matter of company policy, CCBPI Account Specialists/Salesmen are obliged to remit all cash sales and credit
cash collections to the company office on the same day that payments are received in cash or check from
customers, dealers and outlets.8 Thus, before allowing the Account Specialists/Salesmen to work the following day,
the CCBPI Cashier shall first issue a clearance which is given to the company security guard stating whether they
incurred shortages or have not remitted collections. If so, the Account Specialist/Salesman concerned is not allowed
to leave the company premises unless his shortages are settled.9 Moreover, shortages are recovered against the
monthly salary of the concerned employee.10
Petitioner received an October 30, 2003 memorandum11 from his immediate supervisor, George C. Macatangay
(Macatangay), directing him to explain alleged past unliquidated collections and cash shortages, thus:
You are directed to explain within twenty four (24) hours upon receiving this x x x for your shortages for past
unliquidated reports and cash shortages.
For your strict compliance.
(signed)
GEORGE C. MACATANGAY
DSS-District 4512
On April 23, 2004, petitioner received another memorandum13 of even date from Macatangay directing him –
x x x to explain in writing within twenty four hours from receipt hereof why you should not be charged [with] violation
of Rule 005-85 SEC. 10 of CCBPI EMPLOYEES’ CODE OF DISCIPLINARY RULES AND REGULATIONS
specifically… misappropriation or embezzlement of Company funds, withholding of Company fund[s], unauthorized
retrieval of empties by converting the same to cash for personal use, unremitted or short remittance of collection,
non-issuance or mis-issuance of invoices.14
Petitioner sought verbal clarification from Macatangay, claiming that the memorandum did not specify the acts and
transactions covered by the charge, and said that he could not submit a written explanation unless the charges
against him are specified.
Instead of furnishing details, Macatangay issued to petitioner another memorandum15 dated April 26, 2004, which
was for all intents and purposes identical to the April 23, 2004 memorandum. This time, petitioner confronted
Macatangay and reiterated his request for a detailed account of his alleged violations, but the latter told him not to
worry about the memorandum because it was just a scheme adopted by local CCBPI management to cover up
problems in the Naga City Plant.16
On May 6, 2004, Macatangay issued another memorandum17 to petitioner, informing him that he had been placed
under preventive suspension for 30 days effective May 12, 2004, and directing him to attend a formal investigation
to be conducted on May 11, 2004 at the Naga City Plant. Macatangay personally handed the said memorandum to
petitioner at the Mother Seton Hospital where the latter’s wife had just given birth. Petitioner sought a rescheduling
of the investigation, as he had to attend to his wife and the hospital obligations, and to have time to prepare for the
investigation.18 Significantly, the memorandum included the following paragraph:
Postponement will not be allowed unless prior notice thereof is made at least two (2) days before the scheduled
investigation. Total postponement shall not exceed two (2) times [sic].19
Instead of rescheduling the investigation as requested, CCBPI through its Territory Sales Manager, Joselito
Seradilla (Seradilla) sent a Notice of Termination20 dated June 14, 2004, thus:
Reference is [made to] the administrative investigation conducted on you by Management relative to your alleged
violation of Section 10, Rule 005-85 of our Company’s Employee’s Code of Disciplinary Rules and Regulation[s].
After carefully evaluating the records of the investigation and other pertinent documents, indeed you have
misappropriated, embezzled or fail [sic] to remit company funds amounting to Php105,653.00.
In view of this, it is with much regret to [sic] inform you that your services are hereby terminated effective upon your
receipt of this memo, in accordance with our Employee’s Code of Disciplinary Rules and Regulations and pertinent
provisions of Article 282 of the Labor Code.
At the same time, formal demand is being made to [pay]/restitute to the Company the amount of One Hundred Five
Thousand Six Hundred and Fifty Three Pesos (Php105,653.00) within five (5) days from the receipt hereof. Failure
to do so shall constrain us to file necessary charges against you to protect the interest of the Company.
(signed)
Joselito G. Seradilla
TSM T4 SLA21
After petitioner received the above termination notice on June 15, 2004, he sought permission from the CCBPI
Finance Department to review CCBPI financial records in order to be apprised of the basis for the finding that he
misappropriated company funds, but his request was denied.22 He was also denied access to the plant.23
At around 6:30 in the morning of June 15,24 2004, Macatangay visited petitioner at his residence and told him that he
was being summoned to the CCBPI office by Area Sales Manager Dodie Peniera (ASM Peniera). At the CCBPI
Human Resource Department office, where Peniera, Seradilla, Macatangay, and Human Resource Manager,
Christine Banal (Banal), were present, Peniera ordered Macatangay to assist petitioner in reconciling the latter’s
accounts. At the same time, Banal directed petitioner to receive two Notices of Investigation apparently issued on
different dates, and affix his signature on the "received" portion thereof, which he did.25
However, the agreed reconciliation of petitioner’s accounts did not materialize, as Macatangay became
uncooperative and CCBPI denied him access to its records.26
On August 19, 2004, petitioner filed a Complaint for illegal dismissal against respondents CCBPI, Banal and CCBPI
Naga City Plant Logistics Head Calixto Manaig with the Naga City Sub-Regional Arbitration Branch No. V of the
National Labor Relations Commission (NLRC), which was docketed as Case No. SUB-RAB V 05-08-0022-A-04.
Petitioner prayed for reinstatement, backwages, ₱100,000.00 moral damages, ₱100,000.00 exemplary damages,
and 10% attorney’s fees.27
In their Position Paper28 and Rejoinder to Complainant’s Supplemental Position Paper,29 respondents for the first time
specified in detail the alleged violations of petitioner. They claimed that petitioner was guilty of misappropriation of
cash/check collections, kiting of checks, and delayed remittances covering the following customer accounts:
1av vphi1
1. Alice Asanza - P 8,160.00
2. Kathryn Serrano/New Ongto Expressmart (Supermart) - 10,645.00

3. Ceguera Bakeshop - 2,558.00
4. Marlene Yu - 21,826.00
5. Ofelia Ong - 5,100.00
6. Beatriz Orolfo - 312.00

7. Henry Botor - 8,920.00
8. Noe Sabularse - 16,090.00
9. MCM Fastfood - 1,260.00

10. Leon Trinidad - 15,186.00
TOTAL P 90,057.00
Respondents alleged that misappropriation/embezzlement is a violation of CCBPI’s November 18, 2002 Inter-Office
Memorandum30 which defined misappropriation, non-remittance or delayed remittance of cash/check collections and
specified outright dismissal as punishment for the first offense. They claimed that petitioner’s total unremitted
collections amounted to ₱105,653.00 and for this reason, his dismissal was necessary and proper. They added that
due to petitioner’s failure to attend the scheduled May 11, 2004 investigation, CCBPI was compelled to terminate his
services, after which the proper notice was given the Department of Labor and Employment (DOLE). Finally, they
contended that since petitioner was dismissed for just cause, he was not entitled to reinstatement, backwages,
damages, and attorney’s fees.
CCBPI relied mainly on the strength of an audit conducted by its Territory Finance Head, Ronaldo D. Surara
(Surara), which concluded that petitioner failed to remit cash and credit collections covering the above accounts.31
In his Position Paper,32 Supplemental Position Paper,33 and Reply to Respondents’ Rejoinder to Complainant’s
Position Paper,34 petitioner claimed essentially that (1) his dismissal was without just cause, and (2) he was denied
due process during the proceedings leading to his dismissal. Relative to his claim of dismissal without just cause,
petitioner contended that:
1. The charges against him are false; he was not guilty of embezzlement. All his transactions as Account
Specialist are duly accounted for, all cash sales were remitted to CCBPI and all check payments were
remitted and credited to CCBPI’s account. Nor did he delay the remittance of these cash and check
payments, nor used them in kiting operations for his personal benefit;
2. With regard to cash collections covering the Henry Botor and Noe Sabularse accounts, CCBPI policies
and procedures make it impossible for Salesmen/Account Specialists to commit embezzlement. Each
working day, they are required to account for their sales/collections and obtain clearance from the company
cashier before they are allowed to leave company premises at the end of their shift and report for work the
next day; in case of a shortage, the concerned employee is not allowed to leave the company premises until
he settles the shortage. In addition, shortages are deducted against the employee’s salaries. The fact that
he continued to report for work up to June 2004 without any adverse action from CCBPI proved that the
irregularities attributed to him – which CCBPI claims were committed against his April and May 2003
accounts – were manufactured and untrue;
3. With respect to the Alice Asanza (Asanza) account, CCBPI’s claim that he failed to remit the customer’s
payment is belied by the customer herself, who admitted in her sworn statement35 that during a meeting with
CCBPI auditors, she made a mistake in affirming that a delivery of CCBPI products worth ₱8,160.00 was
made on January 30, 2004 and that the same was paid for in cash. She admitted that after consulting her
records, delivery of said ₱8,160.00 worth of CCBPI products was in fact made on October 15, 2003, and
that up to now the same remained unpaid. She admitted that she was confused by the CCBPI records which
were shown to her, which indicated "Date of Invoice 01-30-04"; thus she mistakenly assumed that a delivery
of ₱8,160.00 worth of CCBPI products was indeed made on such date, and that the same was paid for by
her, when in fact no such transaction took place;
4. Contrary to CCBPI’s claim, all the concerned CCBPI customers, through their submitted affidavits and
certifications,36 belied claims that petitioner embezzled their cash or check payments;
5. He could not have committed "kiting" of CCBPI’s checks, as CCBPI claims, for the simple reason that
these checks were made payable to CCBPI specifically, and were not issued in his name. Thus, even for
CCBPI products paid for in advance through checks ("payment upon order" or "PUO" accounts), there is no
opportunity for embezzlement because the checks are made out to CCBPI;37
6. On the claim of delayed remittances of check payments pertaining to the Leon Trinidad and MCM
Fastfood accounts, petitioner claims that although it appears that the checks were issued or dated in the
name of CCBPI days earlier, or upon the booking of orders by the petitioner, delivery of its products by the
dealer was made days later. Naturally, the checks would only be released by the customers to the petitioner
upon/after delivery of products by the dealer; which means that although it would appear that the checks
were issued/dated by customers earlier – upon the booking of the customers’ orders – they were
delivered/handed over to petitioner only upon/after completion of delivery, which come days after the checks
were issued/dated. CCBPI operates through private independent dealers over whom/which petitioner has no
control, which means that after petitioner books an order, prompt delivery by the dealer is not guaranteed,
and actual delivery could be made days later;38
7. With regard to transactions with Kathryn Serrano (Serrano) of New Ongto Supermart, what CCBPI claims
was a different transaction covering an alleged unremitted amount of ₱10,645.00 was already paid for by
Serrano in check issued to CCBPI, and the amount has been debited from her account.39 CCBPI made a
mistake in its records, which showed that Serrano paid by check for her order of CCBPI products worth
₱10,645.00, but which account was recorded by it as a different sale transaction of ₱10,615.00. These two
transactions are but one and the same; in fact, CCBPI itself claims in its Rejoinder to Complainant’s Position
Paper that Serrano’s check for ₱10,645.00 was used to pay the ₱10,615.00 transaction, which only proves
that the ₱10,615.00 transaction was an erroneous entry;
8. With respect to the Marlene Yu, Beatriz Orolfo, Ofelia Ong, and Ceguera Bakeshop accounts, their own
sworn statements and certifications will show that all their check payments were issued in the name of
CCBPI, not the petitioner. And all the amounts covered by these checks have been duly debited from their
accounts.40
In conclusion, petitioner argued that the evidence showed that he did not commit the alleged embezzlement; that
CCBPI failed to prove just cause for his dismissal; and that the charges against him were contrived and the
evidence self-serving.
As for his contention that he was denied due process during the proceedings leading to his dismissal, petitioner
claimed that he was not provided ample opportunity to be heard. The April 23, 2004 written charge against him did
not specify the particular transactions and acts which formed the basis for the accusations against him, for which
reason he was unable to prepare the required written explanation. He verbally informed Macatangay of this
predicament, but instead of acceding to his lawful request, the latter issued the April 26, 2004 memorandum which
was identical to that issued on April 23. Petitioner argued that he could not be considered to have ignored the
written charge against him. Nor may it be said that he waived his right to an investigation, as the evidence showed
that he sought a rescheduling of the May 11, 2004 hearing for valid reasons – his wife had just given birth; he had to
attend to her and their newborn child, as well as take care of their financial obligations to the hospital. CCBPI’s
failure and refusal to grant a postponement of the investigation was thus unreasonable and violative of his rights.
Petitioner added that he waited in vain for CCBPI to furnish him the proper detailed charges and accusations
against him; instead, CCBPI issued the June 14, 2004 Notice of Termination. And immediately after receiving the
said notice, he was called by ASM Peniera to his office where he was ostensibly told that he could have access to
company records in order to reconcile his accounts, but which never materialized as thereafter he was in fact
prohibited from entering the company premises and denied access to the records.
On March 28, 2005, the Labor Arbiter issued a Decision,41 the decretal portion of which states:
WHEREFORE, finding merit on [sic] the causes of action set forth by the complainant, judgment is hereby rendered
declaring his termination or dismissal from employment by the respondents as ILLEGAL and thereby ORDERING x
x x the following:
A. To reinstate the complainant within ten (10) days upon receipt of this Decision to his former position
without loss of seniority rights and other privileges, and to submit compliance thereto within the same period.
B. To pay backwages, inclusive of allowances and other benefits or his [sic] monetary equivalent, computed
from the date of his respective dismissal up to the time of his actual reinstatement, whether physically or on
payroll, which as of the date of this decision amounted to ₱282,625.00 computed from June 14, 2004 to this
date of decision, at the rate of ₱29,750.00 per month.
C. To pay Attorney’s Fees corresponding to 10% of the total amount of ₱282,625.00 due to the complainant
which is equivalent to the sum of ₱28,262.50.
Other than the above, all other claims are hereby ordered DISMISSED for lack of merit.
SO ORDERED.42
The Labor Arbiter held that CCBPI failed to adduce in evidence the particular provision in the CCBPI Employee’s
Code of Disciplinary Rules and Regulations which forms the basis of its accusations against petitioner. He added
that the accusation that petitioner embezzled company funds totaling ₱105,653.00 was couched in general terms;
the particulars thereof were not stated with sufficient clarity. Moreover, the alleged violations were not clearly made
known to petitioner, such that he could not properly refute them. And instead of allowing a postponement of the
investigation as requested by petitioner, he was summarily dismissed.
The Labor Arbiter further held that CCBPI violated the notice and hearing requirements, in serving upon petitioner a
first notice which failed to correctly and fully inform him of the charges against him; for unreasonably denying him an
opportunity to be heard during the investigation; and for issuing a second notice of termination that did not contain
clear and sufficient reasons for his dismissal.
The Labor Arbiter however denied petitioner’s prayer for moral and exemplary damages, stating that CCBPI and its
co-respondents do not appear to be guilty of bad faith, malice or fraud, nor did they act in a manner contrary to
morals, good customs or public policy. However, petitioner was awarded attorney’s fees, as he was compelled to
litigate and thus secure the services of counsel to protect his interest.
Respondents appealed to the NLRC.43 Meanwhile, in May 2005, while the NLRC appeal was pending, petitioner was
reinstated pursuant to Art. 223 of the Labor Code.44 He was designated as Route Salesman, and was assigned
tasks relative to booking and delivery of CCBPI products, and collection of accounts. In fact, he was awarded a
Certificate of Achievement for exemplary sales performance.45
On July 31, 2006, the NLRC issued its Decision46 which decreed as follows:
WHEREFORE, as modified, respondents-appellants are ordered to pay complainant-appellee Jonas Michael R.

Garza his full backwages, inclusive of allowances and other benefits or their monetary equivalent, to be computed
from the time of his illegal dismissal up to the promulgation of this Decision in the amount of Php760,583.53,
separation pay of one (1) month for his every year of service computed from the time of his employment up to the
promulgation of this Decision in the amount of Php267,750.00 and, ten percent (10%) attorney’s fees of the total
monetary award.
SO ORDERED.47
In affirming the Labor Arbiter’s finding of illegal dismissal, the NLRC held that CCBPI failed to adduce sufficient
evidence of petitioner’s alleged embezzlement; quite the contrary, the latter’s evidence showed that no
embezzlement took place, as all check payments he received were credited to CCBPI’s account. With regard to
cash payments, the NLRC held that CCBPI’s documentary evidence consisting of delivery and payment receipts,
other than showing the fact of delivery of products to customers and payment made by them, do not prove
embezzlement on the part of petitioner.
The NLRC likewise held that in dismissing petitioner, CCBPI failed to comply with the twin requirements of notice
and hearing. The first two memorandum-notices of April 23 and April 26, 2004 requiring an explanation from
petitioner did not indicate the particular transactions covered by the charges against him, despite clarification sought
by him. The May 6, 2004 memorandum of suspension and investigation, on the other hand, merely reiterated the
charges against petitioner, and did not state the basis for the investigation.
Finally, the NLRC reversed the Labor Arbiter’s order of reinstatement, finding that relations between the petitioner
and CCBPI have been strained.
Petitioner and respondents filed their respective motions for reconsideration,48 which were denied in an October 27,
2006 Resolution.49 Both thus went up to the CA on certiorari, with petitioner raising only the issue of reinstatement.
In the meantime, petitioner received a January 16, 2007 Memorandum informing him that effective January 17,
2007, petitioner may no longer report for work on account of the NLRC’s October 27, 2006 Resolution.
The CA consolidated the two petitions. On September 26, 2007, it issued the assailed Decision, the dispositive
portion of which reads, as follows:
WHEREFORE, premises considered, the assailed Decision dated July 31, 2006 and the Resolution dated October
27, 2006 of the NLRC, Second Division in NLRC CA No. 044656-05 NLRC-SUB-RAB V Case No. 05-08-00122-04
are REVERSED AND SET ASIDE. Petitioner CCBPI is hereby ORDERED to pay Jonas Michael R. Garza the
amount of ₱30,000.00 as nominal damages for non-compliance with statutory due process.
SO ORDERED.50
The CA ruled that petitioner’s dismissal was proper. It paid particular attention to the Asanza account, saying that
CCBPI’s evidence showed that petitioner was guilty of non-remittance of Asanza’s ₱8,160.00 cash payment which
appears to have been made on January 30, 2004 on an October 15, 2003 delivery. The payment is evidenced by
Official Receipt No. 30320351 issued by petitioner to Asanza on January 30, 2004, and a January 31, 2004 Route
Header Form52 where petitioner specifically indicated that Asanza no longer had payables to CCBPI. The CA held
that from this, CCBPI was able to prove that petitioner was guilty of non-remittance of the ₱8,160.00 collected from
Asanza.
With regard to the manner in which petitioner was dismissed, the CA conceded that the procedure observed by
CCBPI was defective, but since the dismissal was for just cause, the lack of due process did not nullify the
dismissal, but merely entitled petitioner to an award of nominal damages.
Petitioner filed a Motion for Reconsideration, but in the second assailed November 16, 2007 Resolution, the CA
denied the same.
Issues
In this Petition,53 the following issues are raised:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION DESPITE CLEAR AND CONVINCING EVIDENCE THAT
PETITIONER WAS ILLEGALLY DISMISSED;
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT MODIFYING THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION WITH [REGARD] TO THE ORDER OF THE HONORABLE
COMMISSION FOR PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT;
THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO AWARD DAMAGES AND ATTORNEY’S
FEES TO THE PETITIONER.54
Petitioner prays for the reinstatement of the Labor Arbiter’s Decision, with an additional prayer for the award of
moral and exemplary damages. He argues that he is innocent of the charges against him, pointing to the fact that all
cash and check payments were remitted to CCBPI or credited to the latter’s account. He insists that CCBPI’s
evidence consisting of the affidavit of its Territory Finance Head, Surara, is self-serving and without basis. Petitioner
directs the Court’s attention to the fact that company policies make it impossible for him to embezzle cash and
check payments made to him by CCBPI customers, and his evidence consisting of customers’ affidavits and
certifications prove that all payments are made in the name of and for the account of CCBPI.
With regard to the Asanza account, petitioner claims that the CA erred in finding him guilty of failure to remit the
₱8,160.00 cash payment made by Asanza, contending that Asanza herself admitted under oath that no payment
has in fact been made; that his issuance of Official Receipt No. 303203 was conditioned on Asanza issuing a
postdated check later on, which she failed to do; that Asanza’s account, as indicated in the receipts and invoices, is
precisely an RCS account, or "Regular Charge Sale", which means that deliveries to her are on a credit – not cash –
basis; that the January 31, 2004 Route Header Form which indicated that Asanza no longer had payables to CCBPI
refers to deliveries made specifically on January 30, 2004, and did not include or refer to the October 15, 2003
transaction, which to date remains unpaid.
Finally, petitioner contends that he should be reinstated to his former position, and awarded moral and exemplary
damages, as well as attorney’s fees.
Respondents, apart from echoing the pronouncements of the CA, flatly submit that the Petition involves purely
questions of fact revolving around CCBPI customers, who confirmed in their affidavits55 that their cash payments
were not remitted by petitioner to CCBPI.
Our Ruling
There is no issue on the manner by which petitioner was dismissed. Since respondents did not appeal the
unanimous findings of the Labor Arbiter, NLRC and the CA in this regard, their pronouncements on the issue are
deemed final and executory.
The only issue that needs to be resolved, therefore, is whether there is just cause for petitioner’s dismissal. The sole
basis for the CA’s ruling that petitioner was validly dismissed is that he failed to remit a cash collection of ₱8,160.00
from one of its customers, Asanza. What seems to have escaped the appellate court’s notice is that in order to be
able to come to such a conclusion, an important issue concerning CCBPI policies and procedures must first be
tackled.
One of CCBPI’s policies requires that, on a daily basis, CCBPI Salesmen/ Account Specialists must account for their
sales/collections and obtain clearance from the company Cashier before they are allowed to leave company
premises at the end of their shift and report for work the next day. If there is a shortage/failure to account, the
concerned Salesmen/Account Specialist is not allowed to leave the company premises until he settles the same. In
addition, shortages are deducted from the employee’s salaries. Petitioner made repeated reiterations of this
company policy all throughout the proceedings, and not once did respondents deny or dispute its existence and
implementation. In fact, respondents confirmed existence of this policy when they stated in their Position Paper,56that
"[a]s a matter of policy, salesmen in respondent’s company are obliged to remit all cash sales and credit cash
collections to the company office on the same day that said payments are made by various customers, dealers and
outlets."57
It is altogether reasonable to suppose that this policy actually exists, because undeniably, such policy insured a fool-
proof system of accountability within CCBPI, where shortages are immediately detected, presumably through the
reconciliation of daily orders and deliveries to customers with the daily collections of CCBPI’s salesmen, and
simultaneously accounted for. With such a policy, no transaction is left unnoticed, and erring salesmen are
instantaneously made to account for their shortages before they can even leave the premises and come back to
work the following day.
Within the context of said policy, it can be said that since petitioner continued to work for CCBPI until June 2004,
this should necessarily mean that he was clear of daily cash and check accountabilities, including those transactions
covered by the charges against him. If not, the company cashier would not have issued the required clearance and
petitioner would have been required to settle these shortages as soon as they were incurred. Indeed, he would not
have been allowed to leave company premises until they were settled in accordance with company policy. And he
would not have been allowed to report for work the following day.
"Where facts are in evidence affording legitimate inferences going to establish the ultimate fact that the evidence is
designed to prove, and the party to be affected by the proof, with an opportunity to do so, fails to deny or explain
them, they may well be taken as admitted with all the effect of the inferences afforded."58 If CCBPI expects to
proceed with its case against petitioner, it should have negated this policy, for its existence and application are
inextricably tied to CCBPI’s accusations against petitioner. In the first place, as petitioner’s employer, upon it lay the
burden of proving by convincing evidence that he was dismissed for cause.59 If petitioner continued to work until
June 2004, this meant that he committed no infraction, going by this company policy; it could also mean that any
infraction or shortage/non-remittance incurred by petitioner has been duly settled. Respondents’ decision to ignore
this issue generates the belief that petitioner is telling the truth, and that the alleged infractions are fabricated, or
have been forgiven. Coupled with Macatangay’s statement – which remains equally unrefuted – that the charges
against petitioner are a scheme by local CCBPI management to cover up problems in the Naga City Plant, the
conclusion is indeed telling that petitioner is being wrongfully made to account.
The irregularity attributed to petitioner with regard to the Asanza account should fail as well. To be sure, Asanza
herself confirmed that she did not make any payment in cash or check of ₱8,160.00 covering the October 15, 2003
delivery for which petitioner is being held to account. This being the case, petitioner could not be charged with
embezzlement/failure to remit for the simple reason that as regards such October 15, 2003 delivery, there was
nothing to embezzle or remit because no payment thereon has as yet been made by the customer Asanza. It may
appear from Official Receipt No. 303203 issued to Asanza that the October 15 delivery of products to her has been
paid; but as admitted by her, she has not paid for the said delivered products. The reason for petitioner’s issuance of
said official receipt to Asanza is the latter’s concurrent promise that she would immediately issue the check covering
the said amount, which she nevertheless failed to do.
Although petitioner may be faulted for this act – issuing an official receipt without receiving the corresponding
payment – he could not be accused of embezzlement or failure to remit as defined and punished under CCBPI’s
November 18, 2002 Inter-Office Memorandum, because he received no cash or check from Asanza. Without
receiving anything from her, there was nothing for petitioner to embezzle or remit, and thus CCBPI had no basis to
charge him for violation of the November 18, 2002 Inter-Office Memorandum which punished embezzlement and
failure/delay in remitting collections.
The Court likewise finds convincing petitioner’s arguments that it was impossible for him to embezzle/not remit the
other customers’ cash and check payments, not only because of the existence of the abovementioned policy, but
likewise due to the sworn avowals of these customers that all their check payments have been issued in CCBPI’s
name and have been duly debited from their accounts. Certainly, petitioner could not have encashed check
payments because they were issued in the name of CCBPI; for the same reason, he could not have engaged in
kiting operations. Quite certainly, he would have easily been found out.
Regarding the claim that petitioner delayed the remittance of check payments covering PUO accounts, the Court
finds petitioner’s explanation to be satisfactory. Suffice it to state that in selling its products, CCBPI, like other
manufacturers, operates through independent dealer-businessmen, whose delivery schedules are beyond CCBPI’s
control. Thus, if a CCBPI salesman places a customer’s order with the independent dealer, this does not mean that
the latter would immediately deliver the product; it could do so later. Meanwhile, the customer would write and date
his/her check to coincide with the date of the order, expecting that delivery would be made the very same day. But
actual delivery could be made days later; naturally, the customer would release the check – which is dated days
earlier – to the CCBPI salesmen (including petitioner) only after the delivery is completed. As correctly argued by
petitioner, this constitutes a cogent explanation for his apparent late remittance of PUO or "date of order=date of
check" checks.
In a bid to further pin down petitioner, respondents rely heavily on CCBPI customers’ affidavits60 which state that
their cash payments were not remitted by petitioner to CCBPI. How these customers came to the knowledge and
conclusion that petitioner did not remit their cash payments to CCBPI is beyond the Court. If there should be actual
knowledge of petitioner’s embezzlement, it could only come from respondents; it is not for the CCBPI customers to
prove, for the benefit of respondents, that petitioner embezzled their cash payments. They have gained no
knowledge superior to that of respondents regarding this fact, and offhand are not adequately equipped with the
means to come to such a conclusion. Thus, for respondents to even present their sworn statements to such effect is
truly beyond comprehension.
As earlier stated, the burden is on the employer to prove that the termination was for valid cause. Unsubstantiated
1âwphi 1
accusations or baseless conclusions of the employer are insufficient legal justifications to dismiss an employee.
"The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof."61
It may also be said that CCBPI’s subsequent award of a Certificate of Achievement to petitioner for his exemplary
sales performance, while the NLRC appeal was pending, constitutes recognition of petitioner’s abilities and
accomplishments in CCBPI. It indicates that he is a responsible, trustworthy and hardworking employee of CCBPI. It
constitutes adequate proof weighing in his favor.
Having thus seen that petitioner is innocent of the charges leveled against him, the Court must order his
reinstatement. As a matter of course, the NLRC and CA pronouncements inconsistent with this declaration are
necessarily rendered null and void. However, no moral and exemplary damages are forthcoming. Petitioner’s failure
to appeal the Labor Arbiter’s ruling denying his claims for these damages rendered such pronouncement final and
executory; he may no longer obtain a modification or reversal of the Decision on the issue. A party who did not
appeal from the decision cannot seek any relief other than what is provided in the judgment appealed from.62
Finally, consistent with the Court’s pronouncement in Nacar v. Gallery Frames,63 the awards herein are subject to
interest at the rate of six percent (6%) per annum, to be computed from the finality of the Decision in this case until
the total award is fully paid.
WHEREFORE, the Petition is GRANTED. The September 26, 2007 Decision and November 16, 2007 Resolution of
the Court of Appeals in CA-G.R. SP Nos. 97915 and 97916 are ANNULLED and SET ASIDE. The July 31, 2006
Decision of the National Labor Relations Commission is REINSTATED, with the modification that petitioner Jonas
Michael R. Garza is ORDERED reinstated to his former position as Account Specialist or its equivalent, without loss
of seniority, rank, emolument and privileges, and with full backwages from the date of his illegal dismissal up to his
actual reinstatement.
In addition, the awards in petitioner’s favor shall earn interest at the rate of six percent (6%) per annum on
outstanding balance from finality of this Decision until full payment thereof.
The computation division of the NLRC-SUB-RAB-Branch No. V is hereby ORDERED to immediately update and
compute the awards as herein granted, excluding therefrom the period during which petitioner was actually
reinstated and compensated, after which respondent Coca-Cola Bottlers Philippines, Inc. is ORDERED to
immediately pay the petitioner Jonas Michael R. Garza these amounts
SO ORDERED.
SECOND DIVISION
G.R. No. 192371 January 15, 2014
LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
EMMANUEL OÑATE, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the December 18, 2009 Decision2 of the Court of Appeals (CA) in CA-
G.R. CV No. 89346, which affirmed with modification the May 31, 2006 Decision3 of the Regional Trial Court (RTC),
Branch 141 Makati City. The RTC dismissed the Complaint4 for Sum of Money, which petitioner Land Bank of the
Philippines (Land Bank) filed against respondent Emmanuel C. Oñate (Oñate), and ordered Land Bank to return the
amount of ₱1,471,416.52 it unilaterally debited from his accounts. On separate appeals by both parties, the CA
affirmed the RTC Decision with modification that Land Bank was further ordered to pay Oñate the sums of
₱60,663,488.11 and US$3,210,222.85 representing the undocumented withdrawals and drawings from his trust
accounts with 12% per annum interest compounded annually from June 21, 1991 until fully paid.
Also assailed is the CA’s May 27, 2010 Resolution5 denying Land Bank’s Motion for Reconsideration.6
Factual Antecedents
Land Bank is a government financial institution created under Republic Act No. 3844.7 From 1978 to 1980, Oñate
opened and maintained seven trust accounts with Land Bank, more particularly described as follows:
Trust Account No. Date Opened Beginning Balance

01-014 09.07.78 ₱250,000.008
01-017 11.16.78 1,312,896.009
01-024 02.23.79 900,000.0010
01-075 10.08.79 500,000.0011
01-082 10.25.79 200,001.0012
01-089 03.18.80 43.9813
01-125 03.13.80 188,161.0014
Each trust account was covered by an Investment Management Account (IMA) with Full Discretion15 and has a
corresponding passbook where deposits and withdrawals were recorded. Pertinent portions common to the IMAs
read:
You [Land Bank] are appointed as my agent with full powers and discretion, subject only to the following provisions:
1. You are authorized to hold, invest and reinvest the Fund and keep the same invested, in your sole
discretion, without distinction between principal and income, in any assets which you deem advisable,
without being restricted to those of the character authorized for fiduciaries under any present or future law.
2. You shall have full power and authority:
(a) to treat all the Fund as one aggregate amount for purposes of investment, and to deposit all or
any part thereof with a reputable bank including your own commercial banking department;
(b) to pay all costs, expenses and charges incurred in connection with the administration,
preservation, maintenance and protection of the Fund and to charge the same to the Fund;
(c) to vote in person or by proxy on any stocks, bonds or other securities held by you, for my/our
account;
(d) to borrow money for the Fund (from your banking department or from others) with or without
giving securities from the Fund;
(e) to cause any asset of the Fund to be issued, held or registered in your name or in the name of
your nominee, or in such form that title will pass by delivery, provided your records shall indicate the
true ownership of such assets;
(f) to hold the Fund in cash and to invest the same in fixed income placements traded and sold by
your own Money Market Division; and
(g) to sign all documents pertinent to the transaction which you will make in behalf of this Account.
3. All actions taken by you hereunder shall be for my account and risk. Except for willful default or gross
misconduct, you shall not be liable for any loss or depreciation in the value of the assets of the Fund arising
from any cause whatsoever.
4. You shall maintain accurate records of all investments, receipts, disbursements and other transactions of
the Account. Records relating thereto shall be open at all reasonable times to inspection and audit by me
either personally or through duly authorized representatives. Statements consisting of a balance sheet,
portfolio analysis, statement of income and expenses, and summary of investment changes are to be sent to
me/us quarterly.
I/We shall approve such accounting by delivering in writing to you a statement to that effect or by
failure to express objection to such accounting in writing delivered to you within thirty (30) days from
my receipt of the accounting.
Upon your receipt of a written approval of the accounting, or upon the passage of said period of time
within which objections may be filed, without written objections having been delivered to you, such
accounting shall be deemed to be approved, and you shall be released and discharged as to all
items, matters and things set forth in such accounting as if such accounting had been settled and
allowed by a decree of a court of competent jurisdiction, in an action or proceeding in which you and
I were parties.16 (Emphasis supplied)
In a letter17 dated October 8, 1981, however, Land Bank demanded from Oñate the return of ₱4
million it claimed to have been inadvertently deposited to Trust Account No. 01-125 as his additional
funds but actually represents the total amount of the checks issued to Land Bank by its corporate
borrowers as payment for their pre-terminated loans. Oñate refused. To settle the matter, a meeting
was held, but the parties failed to reach an agreement. Since then, the issue of "miscrediting"
remained unsettled. Then on June 21, 1991, Land Bank unilaterally applied the outstanding balance
in all of Oñate’s trust accounts against his resulting indebtedness by reason of the "miscrediting" of
funds. Although it exhausted the funds in all of Oñate’s trust accounts, Land Bank was able to debit
the amount of ₱1,528,583.48 only.18
To recoup the remaining balance of Oñate’s indebtedness, Land Bank filed a Complaint19 for Sum of
Money seeking to recover the amount of ₱8,222,687.8920 plus interest at the legal rate of 12% per
annum computed from May 15, 1992 until fully paid. Pertinent portions of Land Bank’s Complaint
reads:
5. By virtue of the Deeds of Revocable Trust executed on January 9, 198921 [sic] and February 5, 198922 [sic]
by Philippine Virginia Tobacco Administration (PVTA) and Philippine Virginia Tobacco Board (PVTB),
LANDBANK likewise became a Trustee of certain funds belonging to PVTA and PVTB.
6. As authorized under the [Deeds] of Revocable Trust, on October 10, 1980, LANDBANK invested ₱4
Million of the trust accounts of PVTA and PVTB, through a direct lending scheme to the following
companies:
(a) Republic Telephone Company, Inc. (RETELCO), under Promissory Note No. 1145 dated October
10, 1980, for ₱1,021,250.00 with maturity date on November 24, 1980, subject to automatic roll-over
up to October 10, 1981 at 17% interest per annum.
(b) Philippine Blooming Mills Company, Inc. (PBM), under Promissory Note (unnumbered) dated
October 10, 1980, for ₱1,021,250.00, with maturity date on November 24, 1980, subject to automatic
roll-over up to October 10, 1981, at 17% interest per annum;
(c) Cheng Ban Yek (CBY), under Promissory Note (unnumbered) dated October 10, 1980, for
₱1,023,138.89, with maturity date on November 28, 1980, subject to automatic roll-over up to
October 10, 1981, at 17% interest per annum;
(d) Philippine Tobacco Filters Corporation (PHILTOFIL), under Promissory Note (unnumbered)
dated October 10, 1980, for ₱1,021,250.00, with maturity date on November 24, 1980, subject to
automatic roll-over up to October 10, 1981, at 17% interest per annum.
xxxx
7. Pursuant to such direct loan transactions granted to the aforementioned companies, LANDBANK issued
four (4) cashier’s checks for ₱1 Million each payable to RETELCO, PBM, CBY, and PHILTOFIL x x x
8. On or about November 24 and 28, 1980, the aforesaid borrowers (RETELCO, PBM, CBY, AND
PHILTOFIL), pre-terminated their corresponding loans and paid their respective obligations in the form of
checks payable to LANDBANK and delivered by [Oñate’s] representative, Mr. Eduardo Polonio.
9. When the checks were delivered, [Oñate] fraudulently misrepresented to LANDBANK that they were
[Oñate’s] additional capital contribution to his personal trust account. On the basis of this misrepresentation,
LANDBANK credited the payments made by the aforementioned corporate borrowers to [Oñate’s] Trust
Account No. 01-125.
10. After the payments were credited to his personal trust account, Oñate proceeded to withdraw the same,
to the damage and prejudice of LANDBANK as the owner thereof.23
In his Answer (With Compulsory Counterclaim),24 Oñate asserted that the setoff was without legal and factual bases.
He specifically denied any knowledge or involvement in the transaction between Land Bank and its clients Philippine
Virginia Tobacco Administration (PVTA) and Philippine Virginia Tobacco Board (PVTB). He also denied that he
made fraudulent misrepresentation to induce the bank to deposit to his Trust Account No. 01-125 as his additional
capital the payments allegedly tendered by the bank’s corporate borrowers. He maintained that all the funds in his
accounts came from legitimate sources and that he was totally unaware of and had nothing to do with the alleged
"miscrediting." While Oñate admitted having received the October 8, 1981 demand letter, he argued that he did not
acquiesce thereto and, in fact, disputed the same during a meeting with an officer of Land Bank. He also refuted
Land Bank’s claim that it formally demanded for the return of the disputed amount as the September 3, 1991
letter25 it alluded to is not a demand letter. It was sent in response to his counsel’s letter requesting for an accounting
of his trust accounts.
By way of compulsory counterclaim, Oñate pointed out that per Balance Sheets26 as of June 30, 1982 the funds in
his trust accounts already totaled ₱35,555,464.78. And as of January 1993, the accumulated balance of his
accounts reached ₱229,222,160.25 and $3,472,683.94 computed as follows:
With interest at the rate of eighteen percent (18%) compounded every ninety (90) days from the third quarter of
1982 to January, 1993, the trustor’s equity of ₱35,555,464.78 has earned interest in the amount of
₱193,666,695.47. Adding the trustor’s equity to the aforesaid accrued interest thereon, [Oñate’s] peso deposits [in]
his trust accounts with plaintiff bank have an accumulated balance of ₱229,222,160.25 as of January 1993 .
But that is not all. [Oñate’s] dollar deposits to Trust Account No. 01-014 (which is for an "Undisclosed Principal")
from the period July-September, 1980 alone, already amounted to $1,690,943.78. x x x
With interest at the rate of six percent (6%) compounded every ninety (90) days from the first quarter of 1981, the
said dollar deposits have earned interest of $1,781,740.16 up to January, 1993. Thus, [Oñate’s] dollar deposits [in]
Trust Account No. 01-014 have an aggregate balance of $3,472,683.94 as of January 1993.27
Hence, even if the amount of ₱8,222,687.89 as of May 15, 1992 is deducted from the outstanding balance of his
trust accounts as of January 1993, the bank still owes him ₱220,999,472.36 on top of his dollar deposits amounting
to $3,472,683.94.
Oñate prayed that a judgment be issued dismissing the Complaint and ordering Land Bank to pay him:
i) The sum of ₱220,999,472.36, representing the outstanding balance on the peso deposits [of Oñate’s]
various trust accounts as of January 1993, with interest thereon from said date at the rate of eighteen
percent (18%) compounded every ninety (90) days, until the said amount is fully paid;
ii) The sum of $3,472,683.94, representing the aggregate balance as of January 1993 on [Oñate’s] dollar
deposits [in] Trust Account No. 01-014, with interest thereon from said date at the rate of six percent (6%)
compounded every ninety (90) days, until the said amount is fully paid;
iii) The sum of ₱100,000,000.00 as and by way of moral damages;
iv) The sum of ₱50,000,000.00 as and by way of exemplary damages; and
v) The sum of ₱15,000,000.00, or 20% of all sums collected, whichever is higher, as and for attorney's fees,
the further sum of ₱3,000.00 as appearance fee for each hearing attended, and such other sums that may
be proved during the trial as litigation expenses.28
Upon Oñate’s motion, the RTC issued an Order29 dated May 27, 1994, creating a Board of Commissioners (the
Board) for the purpose of examining the records of Oñate’s seven trust accounts, as well as to determine the total
amount of deposits, withdrawals, funds invested, earnings, and expenses incurred. It was composed of Atty.
Engracio M. Escasinas, the Clerk of Court of the RTC of Makati City, as the Chairman; and, Atty. Ma. Cristina C.
Malab and Ms. Adeliza M. Jaranilla representing Land Bank and Oñate, respectively, as members.
Initially, the Board submitted three reports.30 But for clarity, the trial court ordered31 the Board to reconvene and to
submit a consolidated report furnishing copies of the same to both parties, who were given 10 days from receipt
thereof to file their respective comments thereto. The Board complied and on August 16, 2004 submitted its
consolidated report.32 As summarized by the RTC, the said consolidated report revealed that there were
undocumented and over withdrawals and drawings33 from Oñate’s trust accounts:
Thus, the Commissioners’ Report showed that the total amount of drawings and withdrawals from each account
without withdrawal slips are as follows:
In Trust Account No. 01-014, there was a total withdrawals [sic] without withdrawal slips but reflected in the
passbook in the amount of ₱45,103,297.33 and this account showed a negative balance of ₱40,367,342.34. On the
dollar deposit under the same trust account, there was a total [withdrawal] without withdrawal slips but reflected in
the passbook in the amount of $3,210,222.85.
In Trust Account No. 01-017, there was a total withdrawal without withdrawal slips in the amount of ₱2,682,088.58
and there was an over withdrawal of ₱11,738,470.53 and $30,000.00.
In Trust Account No. 01-024, there was a total withdrawal without withdrawal slips of ₱900,000.00 and over
withdrawal of ₱13,310,328.01.
In Trust Account No. 01-075, there was a total withdrawal of ₱500,000.00 without withdrawal slips and there was a
negative balance of ₱33,342,132.64 and $286,399.34 on the dollar account.
In Trust Account No. 01-082, the total amount of withdrawal without withdrawal slips but reflected in the passbook
was ₱1,782,741.86 and there was an over withdrawal of ₱14,031.63.
but the report indicated that there was a negative balance of ₱1,296,441.92.
and there was a negative balance of ₱58,327,459.23.34
On even date, the Board also submitted a Manifestation35 informing the RTC that its findings as to the outstanding
balance of each trust account may not be accurate considering that it was not given ample opportunity to collate and
sort out the documents related to each trust account and that there may have been double take up of accounts
since the documents previously reviewed may have been considered again in subsequent reports.
In his Comment,36 Oñate asserted that the undocumented withdrawals mentioned in the consolidated report should
not be considered as cash outflows. Rather, they should be treated as unauthorized transactions and the amounts
subject thereof must be credited back to his accounts.
Land Bank did not file any comment or objection to the Board’s consolidated comment.
During the pre-trial conference, the parties agreed that they would submit the case for decision based on the reports
of the Board after they have submitted their respective memoranda. They also stipulated on the following issues for
resolution of the RTC:
1. Whether x x x Oñate could claim on Trust Account Nos. 01-014 and 01-017 which were opened for an
undisclosed principal;
2. Whether x x x the undocumented withdrawals and drawings are considered valid and regular and,
conversely, if in the negative, whether x x x such amounts shall be credited [back] to the accounts.37
In his Memorandum38 filed on July 12, 2005, Oñate reiterated that Land Bank should be held liable for the
undocumented withdrawals and drawings. For its part, Land Bank posited, inter alia, that Trust Account Nos. 01-014
and 01-017 should be excluded from the computation of Oñate’s counterclaim considering his allegation that said
accounts are owned by an undisclosed principal whom/which he failed to join as indispensable party. Land Bank
further theorized that Oñate must answer for the negative balances as revealed by the Board’s reports.39
Thereafter, the case was submitted for decision.
On May 31, 2006, the RTC rendered a Decision40 dismissing Land Bank’s Complaint for its failure to establish that
the amount of ₱4,086,888.89 allegedly "miscredited" to Oñate’s Trust Account No. 01-125 actually came from the
investments of PVTA and PVTB. Hence, the RTC ordered Land Bank to restore the total amount of ₱1,471,416.52
which the bank unilaterally debited from Oñate’s five trust accounts.41
With regard to Oñate’s counterclaim for the recovery of ₱220,999,472.36, as well as the alleged US$3,472,683.94
balance of his dollar deposits in Trust Account No. 01-014, the RTC ruled that under the IMAs, Land Bank had the
authority to withdraw funds (as in fact it was at all times in possession of the passbooks) from Oñate’s accounts
even without a letter of instruction or withdrawal slip coming from Oñate. It thus gave weight to the entries in the
passbooks since the same were made in the ordinary course of business. The RTC also ruled that Oñate is deemed
to have approved the entries in the statements of account that were sent to him as he never interposed any
objection thereto within the period given him to do so.
Anent Land Bank’s claim for the negative balances, the RTC likewise denied the same for Land Bank never sought
them in its Complaint. Moreover, being the manager of the funds and keeper of the records, the RTC held that Land
Bank should not have allowed further withdrawals if there were no more funds.
The RTC likewise debunked Land Bank’s argument that Oñate’s counterclaim with respect to Trust Account Nos.
01-014 and 01-017 should be dismissed for his failure to join his undisclosed principal. According to the RTC, Land
Bank should have earlier invoked such defense when it filed its answer to the counterclaim. Also, if it is true that said
accounts are not owned by Oñate, then the bank had no right to apply the funds in said accounts as payment for the
alleged personal indebtedness of Oñate.
The dispositive portion of the RTC’s Decision reads:
WHEREFORE, in view of all the foregoing, decision is hereby rendered dismissing the complaint and ordering [Land
Bank] to pay [Oñate] the total amount of ₱1,471,416.52 representing the total amount of funds debited from the five
(5) trust accounts of the defendant with legal rate of interest of 12% per annum, compounded yearly, effective on 21
June 1991 until fully paid.
SO ORDERED.42
Land Bank filed a Motion for Reconsideration.43 In an Order44 dated July 11, 2006, however, the RTC denied the
same.
Both parties appealed to the CA.
In its December 18, 2009 Decision,45 the CA denied Land Bank’s appeal and granted that of Oñate. The CA affirmed
the RTC’s ruling that Land Bank failed to establish the source of the funds it claimed to have been erroneously
credited to Oñate’s account. With respect to Oñate’s appeal, the CA agreed that he is entitled to the unaccounted
withdrawals which, as found by the Board, stood at ₱60,663,488.11 and $3,210,222.85.46 The CA’s ruling is
anchored on the bank’s failure to observe Sections X401 and X425 of the Bangko Sentral ng Pilipinas Manual of
Regulation for Banks (MORB) requiring it to give full disclosure of the services it offered and conduct its dealings
with transparency, as well as to render reports that would sufficiently apprise its clients of the significant
developments in the administration of their accounts. Aside from allowing undocumented withdrawals, the CA
likewise noted that Land Bank failed to keep an accurate record and render an accounting of Oñate’s accounts. For
the CA, the entries in the passbooks are not sufficient because they do not specify where the funds withdrawn from
Oñate’s accounts were invested.
The dispositive portion of the CA’s Decision reads:
WHEREFORE, the appeal of plaintiff-appellant Land Bank is DENIED.
The appeal of defendant-appellant Emmanuel Oñate is hereby partially GRANTED. Accordingly, the May 31, 2006
Decision of the Regional Trial Court, Branch 141, Makati City is hereby MODIFIED in that, in addition to the previous
grant of ₱1,471,416.52 representing the total amount of funds debited from defendant-appellant Oñate’s trust
accounts, plaintiff-appellant Land Bank is hereby ordered to pay defendant-appellant Oñate the sum of
₱60,663,488.11 and $3,210,222.85 representing the undocumented withdrawals it debited from the latter’s trust
account with interest at the rate of 12% per annum, compounded yearly from June 21, 1991 until fully paid.
SO ORDERED.47
Land Bank filed a Motion for Reconsideration.48 In a Resolution49 dated May 27, 2010, however, the CA denied its
motion. Hence, Land Bank filed the instant Petition for Review on
Certiorari based on the following issues:
Issues
1. WHETHER X X X THE ENTRIES IN THE PASSBOOK ISSUED BY LBP IN OÑATE’S TRUST ACCOUNT
(EXPRESS TRUST) COVERED BY AN INVESTMENT MANAGEMENT AGREEMENT (IMA) WITH FULL
DISCRETION ARE SUFFICIENT TO MEET THE "RULE ON PRESUMPTION OF REGULARITY OF
ENTRIES IN THE COURSE OF BUSINESS" PROVIDED FOR UNDER SECTION 43, RULE 130 OF THE
RULES OF COURT.
2. WHETHER X X X OÑATE IS ENTITLED TO CLAIM FOR ₱1,471,416.52 WHICH IS NOT PLEADED AS

COUNTERCLAIM IN HIS ANSWER PURSUANT TO SECTION 2, RULE 9 OF THE RULES OF COURT.
3. WHETHER X X X OÑATE IS ENTITLED TO THE AWARD OF ₱60,663,488.11 AND $3,210,222.85

REPRESENTING THE ALLEGED UNDOCUMENTED WITHDRAWALS DEBITED FROM HIS TRUST
ACCOUNTS ON THE GROUND OF LBP’S ALLEGED FAILURE TO MEET THE STANDARDS SET FORTH
UNDER THE 2008 MANUAL ON REGULATIONS FOR BANKS (MORB) ISSUED BY BSP.
4. WHETHER X X X OÑATE MAY SUE [ON] TRUST ACCOUNT NOS. 01-014 AND 01-017 OPENED FOR
AN UNDISCLOSED PRINCIPAL WITHOUT JOINING HIS UNDISCLOSED PRINCIPAL.
5. WHETHER X X X THE AWARD OF INTEREST TO OÑATE AT THE RATE OF TWELVE PERCENT

(12%) PER ANNUM, COMPOUNDED YEARLY FROM JUNE 21, 1991 UNTIL FULLY PAID, IS VIOLATIVE
OF ARTICLE 1959 OF THE CIVIL CODE.50
Land Bank’s Arguments
Land Bank disputes the ruling of both lower courts that it failed to prove the fact of "miscrediting" the amount of
₱4,086,888.89 to Oñate’s Trust Account No. 01-125 as the deposit slips pertaining thereto were not presented.
Land Bank maintains that in trust accounts the passbooks are always in the bank’s possession so that it can record
the cash inflows and outflows even without the corresponding deposit or withdrawal slips. Citing Section 43, Rule
130 of the Rules of Court, it asserts that the entries in the passbooks must be accepted as proof of the regularity of
the transactions reflected in the trust accounts, including the "miscrediting" of ₱4,086,888.89, for they were made in
the regular course of business. In addition, said entries are supported by demand letters dated October 8,
198151 and September 3, 1991,52 as well as a Statement of Account53 as of May 15, 1992. Land Bank avers that
Oñate never questioned the statements of account and the reports it presented to him and, hence, he is deemed to
have approved all of them.
Land Bank also imputes error on the lower courts in ordering the restoration of the amount of ₱1,471,416.52 it
debited from Oñate’s five trust accounts because he never sought it in his Answer.
Petitioner bank vigorously argues that Oñate is not entitled to the undocumented withdrawals amounting to
₱60,663,488.11 and $3,210,222.85. According to Land Bank, in holding it liable for the said amounts, the CA
erroneously relied on the 2008 MORB which was not yet in existence at the time the transactions subject of this
case were made or even at the time when Land Bank filed its Complaint. In any case, Land Bank insists that it made
proper accounting and apprised Oñate of the status of his investments in accordance with the terms of the IMAs. In
its demand letter54 dated September 3, 1991 Land Bank made a full disclosure that the total outstanding balance of
all the trust accounts amounted to ₱1,471,416.52, but that the same was setoff to recoup the "miscredited" funds. It
faults Oñate for not interposing any objection as his silence constitutes as his approval after 30 days from receipt
thereof. Land Bank asseverates that Oñate could have also inspected and audited the records of his accounts at
any reasonable time. But he never did.
Land Bank likewise faults the CA in treating the undocumented withdrawals as unauthorized transactions as the
Board’s reports do not state anything to that effect. It claims that the CA’s reliance on the consolidated report in
awarding the extremely huge amounts of ₱60,663,488.11 and $3,210,222.85 is a grievous mistake because the
Board itself already manifested that said report "may not be accurate." Consequently too, Land Bank asserts that
the reports of the Board cannot prevail over the entries in the passbooks which were made in the regular course of
business.
Land Bank further states that as computed by the Board, the amount of negative balances in Oñate’s accounts
reached ₱131,747,487.02 and $818,674.71.55 It thus proposes that if the CA awarded to Oñate the undocumented
withdrawals on the basis of the Board’s reports, then it should have also awarded to Land Bank said negative
balances or over withdrawals as reflected in the same reports. After all, Oñate admitted in his Answer that all
withdrawals from his trust accounts were done in the ordinary course of business.
Furthermore, Land Bank claims that it argued before the CA that Oñate cannot sue on Trust Account Nos. 01-014
and 01-017. While Oñate alleged that said accounts were opened for an undisclosed principal, he did not, however,
join as an indispensable party said principal in violation of Section 3, Rule 3 of the Rules of Court.56 Unfortunately,
the CA sidestepped the issue and proceeded to grant Oñate the unaccounted withdrawals from said accounts in the
aggregate amounts of ₱47,785,385.91 and $3,210,222.85. Following Quilatan v. Heirs of Lorenzo Quilatan,57 Land
Bank insists that this case should be remanded to the trial court even if the issue of failure to implead an
indispensable party was raised for the first time in a Motion for Reconsideration of the trial court’s Decision.
Finally, Land Bank questions the ruling of the CA imposing 12% per annum rate of interest. It contends that trust
accounts are in the nature of "Express Trust" and not in the nature of a regular deposit account where a debtor-
creditor relationship exists between the bank and its depositor. It was not indebted to Oñate but merely held and
managed his funds. There being no loan or forbearance of money involved, in the absence of stipulation, the
applicable rate of interest is only 6% per annum. Land Bank claims that the CA further erred when it compounded
the 12% interest even in the absence of any such stipulation.
Oñate’s Arguments
In opposing the Petition, Oñate argues that the issues raised by Land Bank involve factual matters not proper in a
petition for review on certiorari. He posits that the Petition does not fall under any of the exceptions where this Court
could review factual issues.
As to Land Bank’s allegation that he cannot claim the funds without divulging and impleading as an indispensable
party his undisclosed principal, Oñate points out that in his Answer (With Compulsory Counterclaim) he alleged that
Trust Account Nos. 01-014 and 01-017 were opened for an "undisclosed principal." Yet Land Bank did not
controvert his allegation. It is, therefore, too late in the day for Land Bank to invoke non-joinder of principal as an
indispensable party. Besides, when he executed the IMAs, he was acting for himself and on behalf of an
undisclosed principal. Hence, he could claim and recover the amounts owing not only to himself but also to his
undisclosed principal.
Oñate likewise asserts that Land Bank, as uniformly found by both lower courts, failed to prove by preponderance of
evidence the fact of "miscrediting." As to the demand letters adverted to by Land Bank, Oñate asserts that the lower
courts did not consider the same because they were not formally offered. Land Bank also failed to present
competent and sufficient evidence that he admitted his indebtedness on account of the "miscrediting" of funds.
Since Land Bank failed to prove the fact of "miscrediting" it had no right to debit any amount from his accounts and
must restore whatever funds it had debited therefrom. Oñate also denies having failed to seek the return of the
funds debited from his account.
Oñate further claims that in 1982 his peso trust accounts had a total balance of ₱35,555,464.78 while the dollar trust
accounts had a balance of US$1,690,943.78. Since then, however, he never received any report or update
regarding his accounts until the bank sent him financial reports dated June 30, 1991 indicating that the balances of
his trust accounts had been unilaterally setoff. According to Oñate, Land Bank’s failure to keep an accurate record
of his accounts and to make proper accounting violate several circulars of the Central Bank.58 Hence, it is only
proper to require the bank to return the undocumented withdrawals which, as found by the Board, amount to
₱60,663,488.11 and $3,210,222.82. In addition, Oñate points out Land Bank’s failure to keep an accurate record of
his accounts as shown by the huge amounts of unsupported withdrawals and drawings which constitutes willful
default if not gross misconduct in violation of the IMAs which, in turn, makes the bank liable for its actions.
Anent Land Bank’s invocation that the entries in the passbook made in the ordinary course of business are
presumed correct and regular, Oñate argues that such presumption does not relieve the trustee, Land Bank in this
case, from presenting evidence that the undocumented withdrawals and drawings were authorized. In any case, the
presumption invoked by Land Bank does not lie as one of its elements – that the entrant must be deceased or
unable to testify – is lacking. Land Bank cannot also excuse itself for failing to regularly submit to him accounting
reports as, anyway, he was free to inspect the records at any reasonable day. Oñate emphasizes that it is the duty
of the bank to keep him updated with significant developments in his accounts.
In refutation of Land Bank’s claim to negative balances and over withdrawals, Oñate posits that the bank cannot
benefit from its own negligence in mismanaging the trust accounts.
Lastly, Oñate defends the CA’s grant of 12% per annum rate of interest as under BSP Circular No. 416, said rate
shall be applied in cases where money is transferred from one person to another and the obligation to return the
same or a portion thereof is adjudged. In any event, Land Bank is estopped from disputing said rate for Land Bank
itself applied the same 12% per annum rate of interest when it sought to recover the amount allegedly "miscredited"
to his account. As to the compounding of interest, Oñate claims that the parties intended that interest income shall
be capitalized and shall form part of the principal.
Our Ruling
We deny the Petition.
The issues raised are factual and do not

involve questions of law.
From the very start the issues involved in this case are factual – the very reason why the RTC created a Board of
Commissioners to assist it in examining the records pertaining to Oñate’s accounts and determine the respective
cash inflows and outflows in said accounts. Thereafter, the parties agreed to submit the case based on the Board’s
reports. And when the controversy reached the CA, the appellate court basically conducted an "assiduous
assessment of the evidentiary records."59 No question of law was ever raised for determination of the lower courts.
Now, Land Bank practically beseeches us to assess the probative weight of the documentary evidence on record to
resolve the same basic issues of (i) whether Land Bank "miscredited" ₱4,086,888.89 to Trust Account No. 01-125
and (ii) "whether x x x the undocumented withdrawals and drawings are considered valid and regular and,
conversely, if in the negative, whether x x x such amounts shall be credited to the accounts."60
These issues could be resolved by consulting the evidence extant on records, such as the IMAs, the passbooks, the
letters of instructions, withdrawal and deposit slips, statements of account, and the Board’s reports. Land Bank’s
heavy reliance on Section 43, Rule 130 of the Rules of Court61 also attests to the factual nature of the issues
involved in this case. "Well-settled is the rule that in petitions for review on certiorari under Rule 45, only questions
of law can be raised."62 In Velayo-Fong v. Spouses Velayo,63 we defined a question of law as distinguished from a
question of fact:
A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or falsity of the alleged facts.
For a question to be one of law, the same must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on
the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the
question posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the appellation given
to such question by the party raising the same; rather, it is whether the appellate court can determine the issue
raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise, it is a question
of fact. (Italics supplied)
While there are recognized exceptions64 to this rule, none exists in this case.
Anent Land Bank’s contention that the determination of whether the CA erred in retroactively applying the 2008
MORB poses a legal question, the same deserves scant consideration. True, the CA included in its ratio decidendi a
discussion on the 2008 MORB to give emphasis to the duties of banks to keep an accurate record and regularly
apprise their clients of the status of their accounts. But the issue of whether Land Bank failed to comply with those
duties can be resolved even without the MORB as the same duties are also imposed on Land Bank by the IMAs, the
contract that primarily governs the parties in this case. "As a general rule, a contract is the law between the parties.
Thus, ‘from the moment the contract is perfected, the parties are bound not only to the fulfilment of what has been
expressly stipulated but also to all consequences which, according to their nature, may be in keeping with good
faith, usage and law.’ Also, ‘the stipulations of the contract being the law between the parties, courts have no
alternative but to enforce them as they were agreed [upon] and written’ x x x."65
Based on the factual milieu of this case even without touching on the MORB, we found that Land Bank still failed to
perform its bounden duties to keep accurate records and render regular accounting. We also found no cogent
reason to disturb the other factual findings of the CA.
Land Bank failed to prove that the
"miscredited" funds came from the
proceeds of the pre-terminated loans of
its corporate borrowers.
Land Bank argues that the entries in the passbooks were made in the regular course of business and should be
accepted as prima facie evidence of the facts stated therein. But before entries made in the course of business may
qualify under the exception to the hearsay rule and given weight, the party offering them must establish that: (1) the
person who made those entries is dead, outside the country, or unable to testify; (2) the entries were made at, or
near the time of the transaction to which they refer; (3) the entrant was in a position to know the facts stated therein;
(4) the entries were made in the professional capacity or in the course of duty of the entrant; and, (5) the entries
were made in the ordinary or regular course of business or duty.66
Here, Land Bank has neither identified the persons who made the entries in the passbooks nor established that they
are already dead or unable to testify as required by Section 43,67 Rule 130 of the Rules of Court. Also, and as
correctly opined by the CA, "[w]hile the deposit entries in the bank’s passbook enjoy a certain degree of
presumption of regularity x x x," the same do "not indicate or explain the source of the funds being deposited or
withdrawn from an individual account."68 They are mere prima facie proof of what are stated therein – the dates of
the transactions, the amounts deposited or withdrawn, and the outstanding balances. They do not establish that the
total amount of ₱4,086,888.89 deposited in Oñate’s Trust Account No. 01-125 in November 1980 came from the
proceeds of the pre-terminated loans of Land Bank’s corporate borrowers. It would be too presumptuous to
immediately conclude that said amount came from the checks paid to Land Bank by its corporate borrowers just
because the maturity dates of the loans coincided with the dates said total amount was deposited. There must be
proof showing an unbroken link between the proceeds of the pre-terminated loans and the amount allegedly
"miscredited" to Oñate’s Trust Account No. 01-125. As a bank and custodian of records, Land Bank could have
easily produced documents showing that its borrowers pre-terminated their loans, the checks they issued as
payment for such loans, and the deposit slips used in depositing those checks. But it did not.
Land Bank did not also bother to explain how Oñate or his representative, Eduardo Polonio (Polonio), obtained
possession of the checks when, according to it, the corporate borrowers issued the checks in its name as payment
for their loans.69 Under paragraph 8 of its Complaint, Land Bank alleged that its corporate borrowers "paid their
respective obligations in the form of checks payable to LANDBANK x x x".70 If it is true, then why were the checks
credited to Oñate’s account? Unless subsequently endorsed to Oñate, said checks can only be deposited in the
account of the payee appearing therein. We cannot thus lend credence to Land Bank’s excuse that the proximate
cause of the alleged "miscrediting" was the fraudulent representation of Polonio, for assuming that the latter indeed
employed fraudulent machinations, with the degree of prudence expected of banks, Land Bank and its tellers could
have easily detected that Oñate was not the intended payee. In Traders Royal Bank v. Radio Philippines Network,
Inc.,71 we held that petitioner bank was remiss in its duty and obligation for accepting and paying a check to a person
other than the payee appearing on the face of the check sans valid endorsement. Consequently, it was made liable
for its own negligence and in disregarding established banking rules and procedures.
We are also groping in the dark as to the number of checks allegedly deposited by Polonio to Oñate’s Trust Account
No. 01-125. According to Land Bank, the entire amount of ₱4,086,888.89 represents the proceeds of the pre-
terminated loans of four of its clients, namely, RETELCO, PBM, CBY and PHILTOFIL. But it could only point to two
entries made on two separate dates in the passbook as reproduced below:
Date WITHDRAWAL DEPOSIT BALANCE

xxx xxx ₱250,704.60
24NOV80 159,000.00 409,704.60
24NOV80 3,063,750.00CK 3,473,454.60
24NOV80 42,000.00 3,431,454.60
25NOV80 275,923.75 CK 3,707,378.35
25NOV 80 1,235,962.00 2,471,416.35
26NOV80 193,800.00 CK 2,665,216.35
26NOV80 250,000.00 CK 2,915,216.35
2,915,216.35
26NOV80 2,915,216.35
321,188.38 CK 3,236,404.73
26NOV80 1,373,167.00 1,863,237.73
27NOV80 1,021,250.00 CK 2,884,487.73
28NOV80 70,833.33 CK 2,955,321.06
27NOV80 919,300.00 2,036,021.06
28NOV80 1,023,138.89 CK 3,059,159.9572
Were there only two checks issued as payment for the separate loans of these four different entities? These
hanging questions only confirm the correctness of the lower courts’ uniform conclusion that Land Bank failed to
prove that the amount allegedly "miscredited" to Oñate’s account came from the proceeds of the pre-terminated
loans of its clients. It is worth emphasizing that in civil cases, the party making the allegations has the burden of
proving them by preponderance of evidence. Mere allegation is not sufficient.73
As a consequence of its failure to prove

the source of the claimed "miscredited"
funds, Land Bank had no right to debit
the total amount of ₱1,471,416.52 and
must, therefore, restore the same.
In view of the above, Land Bank’s argument that the lower courts erred in ordering the return of the amount of
₱1,471,416.52 it debited from Oñate’s five trust accounts since he did not seek such relief in his Answer as a
counterclaim, falls flat on its face. The order to restore the debited amount is consistent with the lower courts’ ruling
that Land Bank failed to prove that the amount of ₱4,086,888.89 was "miscredited" to Oñate’s account and, hence,
it had no right to seek reimbursement or debit any amount from his accounts in payment therefor.
Without such right, Land Bank should return the amount of ₱1,471,416.52 it debited from Oñate’s accounts in its
attempt to recoup what it allegedly lost due to "miscrediting." Moreover, contrary to Land Bank’s assertion, Oñate
contested the bank’s application of the balance of his trust accounts in payment for the allegedly "miscredited"
amount in his Answer (With Compulsory Counterclaim) for being "without any factual and legal [bases]."74
Land Bank was remiss in performing

its duties under the IMAs and as a
banking institution.
The contractual relation between Land Bank and Oñate in this case is primarily governed by the IMAs. Paragraph 4
thereof expressly imposed on Land Bank the duty to maintain accurate records of all his investments, receipts,
disbursements and other transactions relating to his accounts. It also obliged Land Bank to provide Oñate with
quarterly balance sheets, statements of income and expenses, summary of investments, etc. Thus:
4. You shall maintain accurate records of all investments, receipts, disbursements and other transactions of the
Account. Records relating thereto shall be open at all reasonable times to inspection and audit by me either
personally or through duly authorized representatives.
Statements consisting of a balance sheet, portfolio analysis, statement of income and expenses, and summary of
investment changes are to be sent to me/us quarterly.
I/We shall approve such accounting by delivering in writing to you a statement to that effect or by failure to express
objections to such accounting in writing delivered to you within thirty (30) days from my receipt of the accounting.
Upon your receipt of a written approval of the accounting, or upon the passage of said period of time within which
objections may be filed, without written objections having been delivered to you, such accounting shall be deemed
to be approved, and you shall be released and discharged as to all items, matters and things set forth in such
accounting as if such accounting had been settled and allowed by a decree of a court of competent jurisdiction, in
an action or proceeding in which you and I were parties.75 (Emphasis supplied)
These are the obligations of Land Bank which it should have faithfully complied with in good faith.76 Unfortunately,
Land Bank failed in its contractual duties to maintain accurate records of all investments and to regularly furnish
Oñate with financial statements relating to his accounts. Had Land Bank kept an accurate record there would have
been no need for the creation of a Board of Commissioners or at least the latter’s work would have been a lot easier
and more accurate. But because of Land Bank’s inefficient record keeping, the Board performed the tedious task of
trying to reconcile messy and incomplete records. The lackadaisical attitude of Land Bank in keeping an updated
record of Oñate’s accounts is aggravated by its reluctance to accord the Board full and unrestricted access to the
records when it was conducting a review of the accounts upon the orders of the trial court. Thus, in its
Manifestation77 dated August 16, 2004, the Board informed the trial court that its report pertaining to outstanding
balances may not be accurate because "the documents were then in the custody of Land Bank and the documents
to be reviewed by the Board at a designated hearing depended on what was released by the then handling lawyer of
Land Bank." They were "not given the opportunity to collate/sort-out the documents related to each trust
account"78and "the folders being reviewed contained documents related to different trust accounts."79 As a result,
"[t]here may have been double take up of accounts since the documents previously reviewed may have been
repeatedly considered in the reports."80
For its failure to faithfully comply with

its obligations under the IMAs and for
having agreed to submit the case on the
basis of the reports of the Board of
Commissioners, the latter’s findings are
binding on Land Bank.
Because of Land Bank’s failure to keep an updated and accurate record of Oñate’s account, it would have been
difficult, if not impossible, to determine with some degree of accuracy the outstanding balances in Oñate’s accounts.
Indeed, the creation of a Board of Commissioners was a significant development in this case as it facilitated the
examination of the records and helped in the determination of the balances in each of Oñate’s accounts. In a span
of four years, the Board held 60 meetings and scoured the voluminous and scattered records of subject accounts. In
the course thereof, it found several undocumented withdrawals and over withdrawals. Thereafter, the Board
submitted its consolidated report, to which Land Bank did not file its comment despite having been given the
opportunity to do so. It did not question the result of the examinations conducted by the Board, particularly the
Board’s computation of the outstanding balance in each account, the existence of undocumented and over
withdrawals, and how often the bank sent Oñate statements of account. In fact, during the pre-trial conference, Land
Bank agreed to submit the case based on the reports of the Board.
Consequently, we found no cogent reason to deviate from the same course taken by the CA – give weight to the
consolidated report of the Board and treat it as competent and sufficient evidence of what are stated therein. After
all, the dearth of evidentiary documents that could have shed light on the alleged unintended crediting and
unexplained withdrawals was brought about by Land Bank’s failure to maintain accurate records as required by the
IMAs. In Simex International (Manila), Inc. v. Court of Appeals,81 we elucidated on the nature of banking business
and the responsibility of banks:
The banking system is an indispensable institution in the modern world and plays a vital role in the economic life of
every civilized nation. Whether as mere passive entities for the safekeeping and saving of money or as active
instruments of business and commerce, banks have become an ubiquitous presence among the people, who have
come to regard them with respect and even gratitude and, most of all, confidence. Thus, even the humble wage-
earner has not hesitated to entrust his life’s savings to the bank of his choice, knowing that they will be safe in its
custody and will even earn some interest for him. The ordinary person, with equal faith, usually maintains a modest
checking account for security and convenience in the settling of his monthly bills and the payment of ordinary
expenses. As for business entities like the petitioner, the bank is a trusted and active associate that can help in the
running of their affairs, not only in the form of loans when needed but more often in the conduct of their day-to-day
transactions like the issuance or encashment of checks.
In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account
consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down
to the last centavo and as promptly as possible. This has to be done if the account is to reflect at any given time the
amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to
whomever he directs. x x x
The point is that as a business affected with public interest and because of the nature of its functions, the bank is
under obligations to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary
nature of their relationship. x x x (Emphasis supplied)
As to the conceded inaccuracies in the reports, we cannot allow Land Bank to benefit therefrom. Time and again,
we have cautioned banks to spare no effort in ensuring the integrity of the records of its clients.82 And in Philippine
National Bank v. Court of Appeals,83 we held that "as between parties where negligence is imputable to one and not
to the other, the former must perforce bear the consequences of its neglect." In this case, the Board could have
submitted a more accurate report had Land Bank faithfully complied with its duty of maintaining a complete and
accurate record of Oñate’s accounts. But the Board could not find and present the corresponding slips for the
withdrawals reflected in the passbooks. In addition, and as earlier mentioned, Land Bank was less than cooperative
when the Board was examining the records of Oñate’s accounts. It did not give the Board enough leeway to go over
the records systematically or in orderly fashion. Hence, we cannot allow Land Bank to benefit from possible
inaccuracies in the reports.
Neither does Oñate’s failure to exercise his rights to inspect the records and audit his accounts excuse the bank
from sending the required notices, for under the IMAs it behooved upon Land Bank to keep him fully informed of the
status of his investments by sending him regular reports and statements. Oñate’s failure to inspect the record of his
accounts should neither be construed as his waiver to be furnished with updates on his accounts nor authority for
the bank to make undocumented withdrawals. As aptly opined by the CA:
x x x The least that Land Bank could have done was to keep a detailed quarterly report on [its] file. In this case,
Land Bank did away with this procedure that made [its] records a complete mess of voluminous and meaningless
records of numerous folders containing more than 7,600 leaves/pages and some 90 passbooks, with 1,355
leaves/pages of entries, corresponding to the seven (7) Trust Accounts.
The passbook entries alone are insufficient compliance with Land Bank’s duty to keep "accurate records of all
investments, receipts, disbursements and other transactions of the Account." These passbooks do not inform what
investments were made on the funds withdrawn. Moreover, these passbook entries do not show if the amounts
purported to have been invested were indeed received by the concerned entity, facility, or borrower. From these
entries alone, Oñate would have no way of knowing where his money went.84
But Land Bank next postulates that if Oñate is entitled to the undocumented withdrawals on the basis of the reports
of the Board, then it should also be entitled to the negative balances or over withdrawals as reflected in the same
reports.
We cannot agree for a number of reasons. First, as earlier discussed, Land Bank is guilty of negligence while Oñate
(at least insofar as over withdrawals are concerned) is not. Had Land Bank maintained an accurate record, it would
have readily detected and prevented over withdrawals. But without any qualms, Land Bank asks for the negative
balances, unmindful that such claim is actually detrimental to its cause because it amounts to an admission that it
allowed over withdrawals. As aptly observed by the CA:
Corollarily, the Court cannot allow Land Bank to recover the negative balances from Oñate’s trust accounts.
Examining the Commissioners’ Report, the Court notes that the funds of Oñate’s trust accounts became seriously
depleted due to the unaccounted withdrawals that Land Bank charged against his accounts. At any rate, those
negative balances on Oñate’s accounts show Land Bank’s inefficient performance in managing his trust accounts.
Reasonable bank practice and prudence [dictate] that Land Bank should not have authorized the withdrawal of
various sums from Oñate’s accounts if it would result to overwithdrawals. x x x85
Second, Land Bank never prayed for the recovery of the negative balances in its Complaint.
It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess of what is being sought by
the party. x x x Due process considerations require that judgments must conform to and be supported by the
pleadings and evidence presented in court. In Development Bank of the Philippines v. Teston,86 this Court
expounded that:
Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of
relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with
respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must
provide the measure of recovery is to prevent surprise to the defendant.87
Last, during the pre-trial conference, the issue of the validity of undocumented withdrawals was properly put into
issue. The parties also agreed, as a collateral issue, that should it appear that the bank was not authorized to make
the undocumented withdrawals, the next issue for consideration would be whether the amount subject thereof
should be credited back to Oñate’s accounts.88 The case of negative balances as alluded to by Land Bank, however,
is different. It was never put into issue during the pre-trial conference. In Caltex (Philippines), Inc. v. Court of
Appeals,89 we held that "to obviate the element of surprise, parties are expected to disclose at a pre-trial conference
all issues of law and fact which they intend to raise at the trial, except such as may involve privileged or impeaching
matters. The determination of issues at a pre-trial conference bars the consideration of other questions on appeal."
Land Bank interposed its claim to the negative balances for the first time only when it filed its Memorandum with the
RTC.
Land Bank knew from the start and

admitted during trial that Trust
Account Nos. 01-014 and 01-017 do not
belong to Oñate; hence, it should not
have debited any amount therefrom to
compensate for the alleged personal
indebtedness of Oñate.
Land Bank claims that Oñate cannot sue on Trust Account Nos. 01-014 and 01-017 without joining as an
indispensable party his undisclosed principal.
But if anyone in this case is guilty of failing to join an indispensable party, it is Land Bank that first committed a
violation. The IMAs covering Trust Account Nos. 01-014 and 01-017 attached as Annexes "A"90 and
"B,"91respectively, of Land Bank’s Complaint clearly state that Oñate signed the same "FOR: UNDISCLOSED
PRINCIPAL." As party to the said IMAs, Land Bank knew and ought not to forget that Oñate is merely an agent and
not the owner of the funds in said accounts. Yet Land Bank garnished the total amount of ₱792,595.25 from Trust
Account Nos. 01-014 and 01-017 to answer for the alleged personal indebtedness of Oñate. Worse, when Land
Bank filed its Complaint for Sum of Money, it did not implead said undisclosed principal or inform the trial court
thereof. Now that Oñate is seeking the restoration of the amounts debited and withdrawn without withdrawal slips
from said accounts, Land Bank is invoking the defense of failure to implead an indispensable party. We cannot allow
Land Bank to do this. As aptly observed by the trial court:
Under the circumstances obtaining, it is highly unfair, unjust and iniquitous, to dismiss the suit with respect to the
two Trust Accounts after [Land Bank] had garnished the balances of said accounts to pay the alleged indebtedness
of [Oñate] allegedly incurred by the erroneous crediting of ₱4 million to x x x Trust Account No. 01-125 which does
not appear to be owned by an undisclosed principal. Trust Account No. 01-125 is [Oñate’s] personal trust account
with plaintiff. Stated differently, [Land Bank] having now recognized and admitted that Trust Account Nos. 01-014
and 01-017 were not owned by [Oñate], it has perforce no right, nay unlawful for it, to apply the funds in said
accounts to pay the alleged indebtedness of [Oñate’s] personal account. Equity and justice so demand that the
funds be restored to Trust Account Nos. 01-014 and 01-017.92
Oñate protested the contents of the

statements of account at the earliest
opportunity.
As to Land Bank’s insistence that Oñate is deemed to have accepted the contents of the statements of account for
his failure to manifest his objection thereto within 30 days from receipt thereof, it should be recalled that from the
time the alleged "miscrediting" occurred in November 1980, the first communication coming from Land Bank was its
letter dated October 8, 1981.93 This, however, was the subject of a failed negotiation between the parties. Besides,
said letter can hardly be considered as an statement that would apprise Oñate of the status of his investments. It is
not "a balance sheet, portfolio analysis, statement of income and expenses or a summary of investment changes"
as contemplated in paragraph 4 of the IMAs. It is a demand letter seeking the return of the alleged "miscredited"
amount. The same goes true with Land Bank’s letter dated September 3, 1991. As can be readily seen from its
opening paragraph, said letter is in response to Oñate’s "demand" for information regarding the offsetting,94 which
Oñate protested and is now one of the issues involved in this case. In fine, it cannot be said that Oñate approved
and adopted the outstanding balances in his accounts for his failure to object to the contents of those letters within
the 30-day period allotted to him under the IMAs.
From what is available on the voluminous records of this case and as borne out by the Board’s consolidated report
dated August 16, 2004, the statements which Land Bank sent to Oñate are only the following:
Based on the Annexes95 attached to Oñate’s Answer (With Compulsory Counterclaim)
ITF No. Balance Sheet Total Liabilities and

As of Trustor’s Equity
01-014 June 30, 1982 ₱1,909,349.80
01-017 June 30, 1982 6,003,616.35
01-089 June 30, 1982 551,267.24
01-082 June 30, 1982 1,915.28
01-075 June 30, 1982 12,113,262.95
01-125 June 30, 1982 13,595,271.16
01-024 June 30, 1982 1,131,854.20
Based on the Consolidated Report
ITF No. Report Details Last Date Balances

of Report
01-024 Schedule of Money Market Placement 03.31.82 ₱453,140.69
01-075 Statement of Income and Expenses 03.31.90 0.00
Balance Sheet 03.31.90 1,207,501.69
01-014 Schedule of Money Market Placement 06.30.91 14,767.20
Statement of Income and Expenses 06.31.91 3,267.19
Balance Sheet 06.31.91 20,673.58
01-017 Schedule of Investment 06.30.91 38,502.06
Balance Sheet 06.30.91 39,659.56
01-082 Statement of Income and Expenses 06.30.91 59.75
Balance Sheet 06.30.91 70.28
01-125 Schedule of Investment 06.30.91 44,055.72
Balance Sheet 06.30.91 60,920.42
The patent wide gap between the time Land Bank furnished Oñate with Balance Sheets as of June 30, 1982 and the
date it sent him an Statement of Income and Expenses, as well as a Balance Sheet, on March 31, 1990 is a clear
and gross violation of the IMAs requiring it to furnish him with balance sheet, portfolio analysis, statement of income
and expenses and the like, quarterly. As to the reports dated June 30, 1991 and letters subsequent thereto, it should
be noted that during those times Oñate had already interposed his objections to the outstanding balances of his
accounts.96
The proper rate of legal interest.
Land Bank’s argument that the lower courts erred in imposing 12% per annum rate of interest is likewise devoid of
merit. The unilateral offsetting of funds without legal justification and the undocumented withdrawals are tantamount
to forbearance of money. In the analogous case of Estores v. Supangan,97 we held that "[the] unwarranted
withholding of the money which rightfully pertains to [another] amounts to forbearance of money which can be
considered as an involuntary loan." Following Eastern Shipping Lines, Inc. v. Court of Appeals,98 therefore, the
applicable rate of interest in this case is 12% per annum. Besides, Land Bank is estopped from assailing the award
of 12% per annum rate of interest. In its Complaint, Land Bank arrived at ₱8,222,687.89 as the outstanding
indebtedness of Oñate by using the same 12% per annum rate of interest. It was only after the lower courts
rendered unfavorable decisions that Land Bank started to insist that the applicable rate of interest is 6% per annum.
Of equal importance is the determination of when the said 12% per annum rate of interest should commence. Recall
1âwphi1
that both the RTC and the CA reckoned the running of the 12% per annum rate of interest from June 21, 1991, or
the day Land Bank unilaterally applied the outstanding balance in all of Oñate’s trust accounts, until fully paid. The
compounding of interest, on the other hand, was based on the provision of the IMAs granting Land Bank "to hold,
invest and reinvest the Fund and keep the same invested, in your sole discretion, without distinction between
principal and income."
While we find sufficient basis for the compounding of interest, we find it necessary however to modify the
commencement date. In Eastern Shipping,99 it was observed that the commencement of when the legal interest
should start to run varies depending on the factual circumstances obtaining in each case.100 As a rule of thumb, it
was suggested that "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 made101 (at which time the quantification of damages may be deemed to have been
reasonably ascertained)."102
In the case at bench, while Oñate protested the setting off, no proof was presented that he formally demanded for
the return of the amount so debited prior to the filing of the Complaint. Quite understandably so because at that time
he could not determine with some degree of certainty the outstanding balances of his accounts as Land Bank
neglected on its duty to keep him updated on the status of his accounts. Land Bank even undertook to furnish him
with "the exact computation"103 of what remains in his accounts after the set off. But this never happened until Land
Bank initiated the Complaint on September 7, 1992. Oñate, on the other hand, filed his Answer (With Compulsory
Counterclaim) on May 26, 1993. In other words, we cannot reckon the running of the interest prior to the filing of the
Complaint or Oñate’s Counterclaim as no demand prior thereto was made. Neither could the interest commence to
run at the time of filing of any of aforesaid pleadings (as to constitute judicial demand) since the undocumented
withdrawals in the sums of ₱60,663,488.11 and US$3,210,222.85, as well as the amount actually debited from all of
Oñate’s accounts, were determined only after the Board submitted its consolidated report on August 16, 2004 or
more than 10 years after Land Bank and Oñate filed their Complaint and Answer, respectively. Note too that while
Oñate sought to recover the amount of undocumented withdrawals before the RTC,104 the same was denied in the
latter’s May 31, 2006 Decision. The RTC granted Oñate only the total amount of funds debited from his trust
accounts. It was only when the CA rendered its December 18, 2009 Decision that Oñate was awarded the
undocumented withdrawals. Hence, we find it just and proper to reckon the running of the interest of 12% per
annum, compounded yearly, for the debited amount and undocumented withdrawals on different dates. The debited
amount of ₱1,471,416.52, shall earn interest beginning May 31, 2006 or the day the RTC rendered its Decision
granting said amount to Oñate. As to the undocumented withdrawals of ₱60,663,488.11 and US 3,210,222.85, the
legal rate of interest should start to run the day the CA promulgated its Decision on December 18, 2009.
During the pendency of this case, however, the Monetary Board issued Resolution No. 796 dated May 16, 2013,
stating that in the absence of express stipulation between the parties, the rate of interest in loan or forbearance of
any money, goods or credits and the rate allowed in judgments shall be 6% per annum. Said Resolution is
embodied in Bangko Sentral ng Pilipinas Circular No. 799, Series of2013, which took effect on July 1, 2013. Hence,
the 12% annual interest mentioned above shall apply only up to June 30, 2013. Thereafter, or starting July 1, 2013,
the applicable rate of interest for both the debited amount and undocumented withdrawals shall be 6% per annum
compounded annually, until fully paid.
WHEREFORE, the Petition is hereby DENIED and the December 18, 2009 Decision of the Court of Appeals in CA-
G.R. CV No. 89346 is AFFIRMED with modification in that the interest of 12% per annum compounded annually, for
the debited amount of ₱1,471,416.52 shall commence to run on May 31, 2006, while the same rate of interest shall
apply to the undocumented withdrawals in the amounts of ₱60,663,488.11 and US 3,210,222.85 starting December
18 2009. Beginning July 1, 2013, however, the applicable rate of interest on all amounts awarded shall earn interest
at the rate of 6% per annum compounded yearly, until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 183918 January 15, 2014
FRANCISCO LIM, Petitioner,

vs.
EQUITABLE PCI BANK, now known as the BANCO DE ORO UNIBANK, INC.,* Respondent.
DECISION
DEL CASTILLO, J.:
The basic rule is that he who alleges must prove his case.
This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the July 30, 2008 Decision2 of the
Court of Appeals CA) in CA-G.R. CV No. 85139.
Factual Antecedents
On November 17, 1988, petitioner Francisco Lim (petitioner) executed an Irrevocable Special Power of Attorney3 in
favor of his brother, Franco Lim (Franco), authorizing the latter to mortgage his share in the property covered by by
Transfer Certificate of Title (TCT) No. 57176,4 which they co-owned.5
On February 9, 1989, Banco De Oro Savings and Mortgage Bank released a loan in the amount of ₱8.5 million by
virtue of the said Irrevocable Special Power of Attorney, which was entered in the Register of Deeds of San Juan,
Metro Manila.6
On December 28, 1992, the loan was fully paid by Franco.7
On June 14, 1996, petitioner, Franco, and their mother Victoria Yao Lim (Victoria) obtained from respondent
Equitable PCI Bank (respondent; formerly Equitable Banking Corporation) a loan in the amount of ₱30 million in
favor of Sun Paper Products, Inc. To secure the loan, petitioner and Franco executed in favor of respondent a Real
Estate Mortgage8 over the same property.9
However, when the loan was not paid, respondent foreclosed the mortgaged property.10
On September 29, 1999, TCT No. 947011 and Tax Declaration No. 96-3180712 were issued in the name of
respondent.13
Thereafter, a Writ of Possession14 in favor of respondent was issued by the Regional Trial Court (RTC) of Pasig City,
Branch 158, in LRC Case No. R-5818.
On January 11, 2001, petitioner filed before the RTC of Pasig a Motion for the Issuance of Temporary Restraining
Order (TRO)15 and a Complaint16 for Cancellation of Special Power of Attorney, Mortgage Contract, Certificate of
Sale, TCT No. 9470, and Tax Declaration No. 96-31807, with Damages and Issuance of Preliminary Mandatory
Injunction, docketed as Civil Case No. 68214 and raffled to Branch 267, against respondent, Franco, and Victoria.
Petitioner alleged that he did not authorize Franco to mortgage the subject property to respondent and that his
signatures in the Real Estate Mortgage and the Surety Agreement17 were forged.
On January 19, 2001, the RTC issued an Order18 granting petitioner’s Motion for the issuance of a TRO to prevent
respondent from enforcing the Writ of Possession. Thus:
WHEREFORE, considering that grave and irreparable injury will result on [petitioner] before the application of
injunctive relief can be heard on notice and pursuant to Section 4, Rule 58 of the 1997 Rules of Civil Procedure, as
amended, let a Temporary Restraining Order (TRO) be issued upon posting by [petitioner] of a bond executed to the
party enjoined ([respondent] Equitable PCI Bank) in the amount of ONE HUNDRED THOUSAND PESOS
(₱100,000.00) bond to be approved by the Court, to the effect that [petitioner] will pay to such party all damages
which [respondent and] defendants may sustain by reason of the TRO if the Court should finally decide that the
[petitioner] is not really entitled thereto. Consequently, [respondent and] defendants, their agents, officers,
representatives and all persons acting on their behalf, are restrained from further executing the Notice of
Compliance and/or Writ of Possession.
SO ORDERED.19
Respondent, for its part, filed an Answer Cum Motion to Dismiss20 contending that the trial court has no jurisdiction to
issue a TRO or a preliminary injunction enjoining the implementation of the Writ of Possession issued by a co-equal
court.21 Respondent also argued that it is not privy to the execution of the Irrevocable Special Power of
Attorney22 and that since there is no allegation that the foreclosure was defective or void, there is no reason to
cancel TCT No. 9470 and Tax Declaration No. 96-31807.23
On April 19, 2001, the RTC issued an Order24 granting petitioner’s application for injunctive relief, to wit:
WHEREFORE, considering that based from testimonial and documentary evidence, there is sufficient reason to
believe that grave and irreparable injury will result on [petitioner] before the main case can be heard on notice and
pursuant to Section 4, Rule 58 of the 1997 Rules of Civil Procedure, as amended, let a writ of preliminary injunction
be issued upon posting by [petitioner] of a bond executed to the party enjoined ([respondent] Equitable PCI Bank) in
the amount of THREE MILLION PESOS (Php3,000,000.00) bond to be approved by the Court, to the effect that
[petitioner] will pay to such party all damages which [respondent and] defendants may sustain by reason of the said
writ if the Court should finally decide that the [petitioner] is not really entitled thereto. Consequently, [respondent
and] defendants, their agents, officers, representatives and all persons acting on their behalf, are restrained from
further executing the Notice of Compliance and/or Writ of Possession.
SO ORDERED.25
Franco and Victoria, however, did not participate in the proceedings.26
On April 4, 2005, the RTC rendered a Decision27 in favor of petitioner. It ruled that petitioner was able to prove by
preponderance of evidence that he did not participate in the execution of the mortgage contract giving rise to the
presumption that his signature was forged.28 The dispositive portion of the Decision reads:
WHEREFORE, IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor of

[petitioner] Francisco Lim and against the [respondent] Equitable PCI Bank, Franco Lim and Victoria Yao Lim.
Accordingly, the Real Estate Mortgage Contract dated 14 June 1996 covered by Transfer Certificate of Title No.
57176; the Certificate of Sale dated 23 December 1997 covering the same title; TCT No. 9470 in the name of
[respondent] Bank; and Tax Declaration No. 96-31807 issued in the name of the [respondent] Bank are hereby
declared null and void and of no force and effect.
The writ of preliminary injunction which was issued by the Court as per Order dated 19 April 2001 is hereby made
permanent.
SO ORDERED.29
On appeal, the CA reversed the RTC Decision. It ruled that petitioner’s mere allegation that his signature in the
mortgage contract was forged is not sufficient to overcome the presumption of regularity of the notarized
document.30 Thus, the CA disposed of the case in this wise:
WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The assailed Decision of the
Regional Trial Court is SET ASIDE. The complaint filed by [petitioner] Francisco Lim against [respondent] Equitable
PCI Banking Corporation is DISMISSED for lack of merit.
SO ORDERED.31
Issues
Hence, this recourse by petitioner raising the following questions:
Did the [CA] err when it held that no evidence was presented to support Petitioner’s claim that his signature was
forged?
Corollary to the issue above, is the presentation of expert evidence indispensable in order that forgery may be
sufficiently proven in this case?
Did the [CA] err when it set aside the Decision rendered by the Trial Court on 04 April 2005 and forthwith dismissed
the complaint filed by Francisco Lim against Equitable PCI Banking Corporation for lack of merit?
Did Respondent Bank exercise the diligence required of it in the subject mortgage transaction; if it did not, did
Respondent Bank’s failure violate the rights of Petitioner?32
In a nutshell, the issues boil down to whether petitioner was able to prove that his signature was forged.
Petitioner contends that his signature in the mortgage contract was forged as he was not in the Philippines at the
time of its execution.33 He posits that the presentation of expert witnesses is not required to prove forgery as the
court may make its own determination based on the evidence presented.34 He claims that respondent was negligent
in approving the loan and in accepting the subject property as security for the loan.35 He also blames respondent for
not conducting a more in-depth inquiry before approving the loan since it was a "take-out" from a
mortgage36constituted in favor of Planters Development Bank.37 Lastly, he insists that respondent should have been
alerted by the fact that the mortgage contract was executed without the consent of his wife.38
Respondent, on the other hand, echoes the ruling of the CA that petitioner’s mere denial is not enough to prove that
his signature was forged.39 Respondent points out that there was, in fact, no attempt on petitioner’s part to compare
the alleged forged signature with any of his genuine signatures.40 Also, no evidence was presented to show that
respondent did not exercise due diligence when it approved the loan and accepted the mortgage.41 More important,
petitioner cannot feign ignorance of the execution and existence of the mortgage because he even communicated
with respondent to settle the loan and, when the property was foreclosed, to repurchase the same.42 Hence,
petitioner is estopped from assailing the validity of the mortgage contract.43
Our Ruling
Petitioner failed to prove that his signature was forged.
Allegations of forgery, like all other allegations, must be proved by clear, positive, and convincing evidence by the
party alleging it.44 It should not be presumed45 but must be established by comparing the alleged forged signature
with the genuine signatures.46 Although handwriting experts are often offered as witnesses, they are not
indispensable because judges must exercise independent judgment in determining the authenticity or genuineness
of the signatures in question.47
In this case, the alleged forged signature was not compared with the genuine signatures of petitioner as no sample
signatures were submitted. What petitioner submitted was another mortgage contract48 executed in favor of Planters
Development Bank, which he claims was also forged by his brother. But except for this, no other evidence was
submitted by petitioner to prove his allegation of forgery. His allegation that he was in the US at the time of the
execution of the mortgage contract is also not sufficient proof that his signature was forged.
Petitioner failed to prove negligence on the part of respondent.
Likewise without merit is petitioner’s allegation of negligence on the part of respondent.
Before entering into a mortgage contract, banks are expected to exercise due diligence.49 However, in this case, no
evidence was presented to show that respondent did not exercise due diligence or that it was negligent in accepting
the mortgage.50 That petitioner was erroneously described as single and a Filipino citizen in the mortgage contract,
when in fact he is married and an American citizen, cannot be attributed to respondent considering that the title of
the mortgaged property was registered under "FRANCISCO LIM and FRANCO LIM, both Filipino citizens, of legal
age, single."
The nature of the property was never raised as an issue.
The absence of his wife’s signature on the mortgage contract also has no bearing in this case.
We are not unaware that all property of the marriage is presumed to be conjugal, unless it is shown that it is owned
exclusively by the husband or the wife;51 that this presumption is not overcome by the fact that the property is
registered in the name of the husband or the wife alone;52 and that the consent of both spouses is required before a
conjugal property may be mortgaged.53 However, we find it iniquitous to apply the foregoing presumption especially
since the nature of the mortgaged property was never raised as an issue before the RTC, the CA, and even before
this Court. In fact, petitioner never alleged in his Complaint that the said property was conjugal in nature. Hence,
respondent had no opportunity to rebut the said presumption.
Worth mentioning, in passing, is the ruling in Philippine National Bank v. Court of Appeals54 to wit:
The well-known rule in this jurisdiction is that a person dealing with a registered land has a right to rely upon the
face of the torrens certificate of title and to dispense with the need of inquiring further, except when the party
concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make
such inquiry.
A torrens title concludes all controversy over ownership of the land covered by a final [decree] of registration. Once
the title is registered the owner may rest assured without the necessity of stepping into the portals of the court or
sitting in the mirador de su casa to avoid the possibility of losing his land.
Article 160 of the Civil Code provides as follows:
"Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife."
The presumption applies to property acquired during the lifetime of the husband and wife. In this case, it appears on
the face of the title that the properties were acquired by Donata Montemayor when she was already a widow. When
the property is registered in the name of a spouse only and there is no showing as to when the property was
acquired by said spouse, this is an indication that the property belongs exclusively to said spouse. And this
presumption under Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse and
the rights of innocent third parties are involved.
The PNB had a reason to rely on what appears on the certificates of title of the properties mortgaged. For all legal
purposes, the PNB is a mortgagee in good faith for at the time the mortgages covering said properties were
constituted the PNB was not aware to any flaw of the title of the mortgagor. (Emphasis supplied)
Petitioner’s allegation of forgery is belied by the evidence.
Moreover, petitioner’s subsequent actions belie his allegation of forgery. Before the expiration of the redemption
1âw phi 1
period, petitioner sent respondent a letter55 signifying his intention to reacquire the said property. He even visited the
bank to discuss the matter.56 Clearly, his acts contradict his claim of forgery, which appears to be an afterthought
and a last-ditch effort to recover the said property.
All told, we find no error on the part of the CA in upholding the validity of the mortgage contract.57
WHEREFORE, the Petition is hereby DENIED. The July 30 2008 Decision of the Court of Appeals in CA-G.R. CV
No. 85139 is hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 176043 January 15, 2014
SPOUSES BERNADETTE and RODULFO VILBAR, Petitioners,

vs.
ANGELITO L. OPINION, Respondent.
DECISION
DEL CASTILLO, J.:
"Registration is the operative act which gives validity to the transfer or creates a lien upon the land."1 Before this
Court is a Petition for Review on Certiorari2 of the May 26, 2006 Decision3 of the Court of Appeals (CA) in CA-G.R.
CV No. 84409 which affirmed the January 31, 2005 Decision4 of the Regional Trial Court (RTC), Branch 255, Las
Piñas City in Civil Case No. 98-0302, an accion reinvindicatoria case filed by respondent Angelito L Opinion
(Opinion) against petitioner-spouses Bernadette and Rodulfo Vilbar (spouses Vilbar) and others.
Also assailed is the CA' s December 22, 2006 Resolution5 which denied spouses Vilbar's Motion for
Reconsideration.6
Factual Antecedents
Spouses Vilbar claimed that on July 10, 1979, they and Dulos Realty and Development Corporation (Dulos Realty),
entered into a Contract to Sell7 involving a 108-square meter lot designated as Lot 20-B located in Airmen’s Village,
Las Piñas City and covered by Transfer Certificate of Title (TCT) No. S-39849 for ₱19,440.00. Lot 20-A which is
also covered and embraced by the same certificate of title is the subject of another Contract to Sell between Elena
Guingon (Elena) and Dulos Realty. Sometime in August 1979, spouses Vilbar took possession of Lot 20-B in the
concept of owners and exercised acts of ownership thereon with the permission of Dulos Realty after making some
advance payment.8
Upon full payment of the purchase price for Lot 20, or on June 1, 1981, Dulos Realty executed a duly notarized
Deed of Absolute Sale9 in favor of spouses Vilbar and their co-purchaser Elena. Dulos Realty also surrendered and
delivered the owner’s duplicate copy of TCT No. S-39849 covering Lot 20 to the buyers and new owners of the
property. However, spouses Vilbar and Elena were not able to register and transfer the title in their names because
Dulos Realty allegedly failed to have the lot formally subdivided despite its commitment to do so, until its President,
Juan B. Dulos (Juan), died without the subdivision being accomplished.10
Spouses Vilbar and Dulos Realty also executed a Contract to Sell11 dated July 10, 1979 covering Lot 21, Block 4 of
Airmen’s Village, with an area of 216 square meters and covered by TCT No. S-39850 amounting to ₱128,880.00.
To pay for the balance of the purchase price amounting to ₱99,216.00, spouses Vilbar obtained a housing loan from
the Development Bank of the Philippines (DBP) secured by a real estate mortgage12 over the said lot. Dulos Realty
facilitated the approval of the loan, the proceeds of which were immediately paid to it as full payment of the
purchase price.13
In 1991, the spouses Vilbar were able to pay the loan in full and DBP issued the requisite Cancellation of
Mortgage14 on March 25, 1991. Thereafter, DBP surrendered TCT No. 36777 / T-17725-A issued by the Registry of
Deeds of Pasay City in the name of Bernadette Vilbar to the spouses Vilbar.15 The spouses Vilbar have been in
actual, open and peaceful possession of Lot 21 and occupy the same as absolute owners since 1981.
In contrast, Opinion claimed that he legally acquired Lots 20 and 21 through extra-judicial foreclosure of mortgage
constituted over the said properties by Otilio Gorospe, Sr. and Otilio "Lito" Gorospe, Jr. (Gorospes) in his favor.
Opinion alleged that on January 12, 1995, the Gorospes borrowed ₱440,000.00 and, to secure the loan, executed a
Deed of Real Estate Mortgage16 over the subject lots covered by TCT Nos. T-44796 (Lot 21)17 and T-44797 (Lot
20).18 The Gorospes defaulted, prompting Opinion to file a Petition for Extra-Judicial Foreclosure of Real Estate
Mortgage19 dated October 17, 1995 with the Office of the Notary Public of Las Piñas City. Subsequently, the subject
properties were sold at a public auction where Opinion emerged as the highest bidder. A Certificate of Sale20 was
issued in his favor on December 18, 1995 and subsequently annotated on the TCTs of the properties. The
Gorospes failed to redeem the properties within the reglementary period resulting in the eventual cancellation of
their titles. Thus, TCT No. T-59010 (Lot 21)21 and TCT No. T-59011 (Lot 20)22 in the name of Opinion were issued on
January 22, 1997 by the Registry of Deeds of Las Piñas City.
On February 13, 1997, Opinion filed a Petition for Issuance of a Writ of Possession23 against the Gorospes with the
RTC of Las Piñas City, Branch 253, docketed as LRC Case No. LP-162. Branch 253 initially issued a Writ of
Possession and spouses Vilbar and Elena were served with a notice to vacate the premises. However, the writ was
quashed when spouses Vilbar filed an urgent motion for the quashal of the writ and presented their title to Lot 21,
while Elena presented the Deed of Absolute Sale executed by Dulos Realty covering Lot 20. Consequently, Opinion
filed a Complaint for Accion Reinvindicatoria with Damages24 docketed as Civil Case No. 98-0302 and raffled to
Branch 255 of the RTC of Las Piñas City for him to be declared as the lawful owner and possessor of the subject
properties and for his titles to be declared as authentic. He likewise prayed for the cancellation of the titles of
spouses Vilbar and Elena.25
During trial, spouses Vilbar presented the Absolute Deed of Sale26 executed by Dulos Realty in their favor and the
owner’s duplicate copy of TCT No. S-3984927 covering Lot 20. With respect to Lot 21, spouses Vilbar presented the
real estate mortgage28 they executed in favor of DBP; the official receipts29 issued by DBP showing that they had
paid the amortizations for the housing loan; the Cancellation of Mortgage30 issued by DBP as proof that they have
fully paid the loan; tax declarations31 and receipts32 to show that the property’s tax declaration under the name of
Dulos Realty had been cancelled and a new one had been issued in their name in 1987 and that they have been
paying the real property taxes on the property since 1980. The spouses Vilbar also presented TCT No. 36777/T-
17725-A33 issued by the Registry of Deeds of Pasay City on May 22, 1981, as proof of their ownership of Lot 21.
Opinion, on the other hand, justified the legality of his claim over the properties by tacking his rights on the rights
passed on to him by the Gorospes. He traced his rights over the properties by claiming that Gorospe, Sr. was the
former chairman of the Board of Directors and Chief Executive Officer (CEO) of Dulos Realty. He was offered
substantial benefits and privileges by Dulos Realty as compensation for the positions he held, including a residential
house and lot in Airmen’s Village, Las Piñas City valued at ₱180,000.00 and various allowances. However, Dulos
Realty was not able to give to Gorospe, Sr. the promised allowances despite repeated demands. Thus, Gorospe, Sr.
was constrained to file a Complaint for Sum of Money, Specific Performance and Damages34 dated May 12, 1981
with the then Court of First Instance (CFI) of Manila. Subsequently, Juan signed a compromise agreement and
based thereon the trial court rendered a Decision35 dated April 1, 1982 ordering Dulos Realty to pay Gorospe, Sr. the
total amount of ₱578,000.00. A Writ of Execution and Alias Writ of Execution were issued by the trial court in its
Orders36 dated May 7, 1982 and September 30, 1983, respectively. Dulos Realty filed several cases challenging the
validity of the compromise agreement and seeking to nullify the writs of execution, as well as the consequent levy
and public auction sale of its properties.37 One of the cases it filed was Civil Case No. 88-280038 seeking the
nullification, cancellation and reconveyance of title on the ground, among others, that during the auction sale its
properties were undervalued. All of its efforts, however, proved futile. Meanwhile, real properties of Dulos Realty
were levied on October 31, 1984, which included Lots 20 and 21 covered by TCT Nos. S-39849 and S-39850,
respectively.39 The disputed properties were eventually sold at public auction on June 24, 1985 where Gorospe, Sr.
emerged as the highest bidder.40 On June 2, 1987, the Registry of Deeds of Pasay City issued TCT Nos. 117331
(Lot 20)41 and 117330 (Lot 21)42 in the name of Gorospe, Sr. and his wife. Upon the death of Gorospe, Sr.’s wife, the
Gorospes transferred the titles in their names resulting in the issuance of TCT Nos. T-44797 (Lot 20)43 and T-44796
(Lot 21)44 by the Registry of Deeds of Las Piñas City.
During the course of the trial, Opinion likewise stated under oath that prior to the execution of the real estate
mortgage between him and the Gorospes, he was given copies of the titles to the properties which he verified with
the Registry of Deeds to be authentic45 and that he inspected the subject properties and learned that there were
occupants.46 Opinion stated that he was informed by the Gorospes that the occupants, spouses Vilbar and Elena,
were mere tenants renting from them.47 Opinion admitted that he neither talked to the occupants nor made any
inquiries as to the nature of their occupation over the subject properties;48 he did not inquire further to determine
whether there was a pending controversy;49 and, that he merely relied on the statements of Gorospe, Sr. regarding
the tenancy of the occupants without having been shown any contract of lease, proof of rental payments, or even an
electric bill statement.50
It was only after his Writ of Possession was quashed when he learned that spouses Vilbar and Elena are also
claiming ownership over the properties, prompting him to make a more thorough investigation.51 Opinion stated that
despite the discovery of the adverse claims over the properties mortgaged to him, he did not ask Gorospe, Sr. why
there are other claimants to the subject properties.52 When asked about what he learned after investigating said
claims, he declared that the titles of the spouses Vilbar are spurious because they contain discrepancies with the
originals on file with the Registry of Deeds. According to Opinion, spouses Vilbar’s titles do not have entries
indicating the titles from which they were derived.53 To bolster his claim, Opinion also presented a 2nd
Indorsement54 dated May 11, 1988 issued by the Registry of Deeds of Pasay City which states that TCT No. 36777
of the spouses Vilbar is presumed to be not validly issued.55 Upon clarification, however, Opinion admitted that he
made no further follow-up with the Registry of Deeds to determine the final outcome of the investigation on the title
of the spouses Vilbar.56
On January 31, 2005, the trial court rendered its Decision57 in favor of Opinion declaring that he lawfully acquired the
disputed properties and that his titles are valid, the sources of which having been duly established.58 The dispositive
portion of the Decision reads:
WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of plaintiff Angelito L. Opinion, and
against defendants Sps. Bernadette and Rodulfo Vilbar, including defendants Otilio Gorospe, Sr., Otilio Gorospe, Jr.
and Elena Guingon, ordering the said defendants to immediately turn over possession of Lots 20 and 21, both of
Block 4, located at Airmen’s Village, Las Piñas City, to the herein plaintiff being the registered owner thereof per
TCT Nos. T-59010 and T-59011 issued in his name.
Likewise, the above defendants are hereby directed to pay to the herein plaintiff the sum of ₱100,00.00 as and by
way of attorney’s fees, including the cost of suit.
SO ORDERED.59
The trial court, in ruling for Opinion, ratiocinated that there was no doubt that Opinion’s predecessors-in-interest
likewise acquired title to the properties through lawful means.60 Titles originally in the name of Dulos Realty were
cancelled after implementation and execution of the April 1, 1982 Decision of the CFI in favor of Gorospe, Sr. and
new titles were issued in his name.61 The trial court noted that when a new title for Lot 21 was issued in the name of
Gorospe, Sr. on June 2, 1987, there was no indication that the title of Dulos Realty was already cancelled by
Bernadette Vilbar’s TCT No. 36777 purporting to have been issued on May 22, 1981.62 As to Lot 20, the trial court
noted that the supposed Deed of Absolute Sale dated June 1, 1981 in favor of defendants Bernadette Vilbar and
Guingon was not annotated on TCT No. 39849. Thus, when this was cancelled by the subsequent titles, the
property was not subject to any lien or encumbrance whatsoever pertaining to said purported Deed of Absolute
Sale.63 The trial court also opined that the efforts of Dulos Realty to question and annul the earlier rulings of the then
Intermediate Appellate Court and Supreme Court did not prosper thereby strengthening the validity of the title of the
Gorospes.64 Further, the trial court found the mortgage in favor of Opinion, and the subsequent extrajudicial
foreclosure thereof to be in order.65
As to spouses Vilbars’ evidence, the trial court found their title to Lot 21 questionable as there was no showing that it
came from TCT No. 39850 issued in the name of Dulos Realty.66 The Contract to Sell of the spouses Vilbar can
hardly serve as basis for the transfer of Lot 21 in their favor. Besides, the same was not even annotated on the title
of Dulos Realty.67 The trial court also found the issuance of TCT No. 36777 questionable because there was no
proof that the purchase price was already paid considering that only a Contract to Sell was available. As a result,
spouses Vilbar only had an inchoate right over the property.68 The trial court went on to state:
Definitely, defendants Sps. Vilbar cannot readily claim that they acquired Lot 21 in good faith and for value. Based
on the documents they presented, they cannot assert ignorance or allege that they were not aware that the
purchase price for Lot 21, including any interest they may have in Lot 20, has not been duly settled at the time TCT
No. 36777 for Lot 21 was issued in their favor or even when the Deed of Absolute Sale dated 01 June 1981 for Lot
20 was executed.
The payments supposedly made by the defendants Sps. Vilbar to the DBP only establishes the fact that they have
not complied with what they obligated themselves with insofar as the above contracts to sell are concerned. More
importantly, there is nothing in the records which would show that these contracts have been superseded by another
deed to justify the transfer, among others, of TCT No. 39850 registered in the name of the defendant Dulos Realty
to the defendants Sps. Vilbar, or the execution of a deed of sale involving Lot 20 covered by TCT No. 39849.
Needless to state, the fact that a mortgage contract was allegedly entered into by the defendants Sps. Vilbar with
the DBP does not, by itself, result in a conclusive presumption that they have a valid title to Lot 21. Instead, this
begs more questions than answers since the said mortgage was entered into on 21 May 1981, or a day after TCT
No. 36777 was issued in favor of the defendants Sps. Vilbar. Added to this, the herein defendants failed to establish
the basis for the issuance of their said title even when their contracts to sell indicate that the purchase price for Lot
21 would be paid on installments over a long period of time.
As to the tax declarations and real property tax payments made by the defendants Sps. Vilbar for Lot 21 the same
are of no moment. It has been held that tax declarations are not conclusive proofs of ownership, let alone of the
private character of the land – at best, they are merely ‘indicia of a claim of ownership.’ (Seville v. National
Development Company, 351 SCRA 112) However, and with the plaintiff presenting convincing evidence of the basis
and validity of his acquisition of the subject lots, such "indicia" in favor of the defendants Sps. Vilbar had been
effectively impugned or refuted.
Moreso, the possession of the alleged original owner’s copy of TCT No. 39849 for Lot 20 by the defendants Sps.
Vilbar or the execution of a deed of sale in favor of defendants Bernadette Vilbar and Guingon over the same cannot
ripen into ownership thereof. It must be stressed that no subsequent title was issued in favor of the said defendants
even when they have the above documents with them. On the other hand, the plaintiff eventually secured a title over
Lot 20 after consolidating his ownership with respect thereto.
The fact that the defendants Sps. Vilbar are in possession of the subject lots cannot persuade the Court to rule in
their favor. This is more settled insofar as Lot 20 is concerned. Having a valid title thereto, the claim of the plaintiff
cannot just be ignored. It is a fundamental principle in land registration that a certificate of title serves as evidence of
an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. (Vda.
De Retuerto vs. Barz, 372 SCRA 712)69
Further, the trial court gave much credence to the 2nd Indorsement dated May 11, 1988 from the Registry of Deeds
of Pasay City which provided that TCT No. 36777 is presumed not to be validly issued considering that no
inscription exists at the back of the original title (TCT No. S-39850) showing that a Deed of Sale between Dulos
Realty and spouses Vilbar had been registered. The discrepancy in the entries, or lack of it, in the TCTs in the
custody of the spouses Vilbar and the Registry of Deeds of Las Piñas City70 also tilted the balance against the said
spouses.
Aggrieved, the spouses Vilbar appealed to the CA on February 22, 2005.71

On May 26, 2006, the CA promulgated its Decision72 affirming the Decision of the RTC. The CA agreed with the trial
court’s ruling that Opinion validly acquired title over Lots 20 and 21 through a valid mortgage, extrajudicial
foreclosure, and eventual consolidation proceedings instituted over the said properties.73 The CA went on to state
that there was no doubt as to the validity of the title of Opinion’s predecessors-in-interest, the Gorospes, because
the same was affirmed by the Supreme Court in a case involving the said properties.74 In contrast, spouses Vilbar’s
TCT No. 36777 does not state the title from which it was derived.75 Spouses Vilbar’s title becomes even more
dubious in light of the aforementioned 2nd Indorsement issued by the Registry of Deeds of Pasay City, which they
failed to refute.76 The CA further stated that acquisitive prescription will not set in because spouses Vilbar lacked the
prerequisite just title, while the tax declaration is not a conclusive evidence of ownership.77 As to Lot 20, the CA
ratiocinated that the spouses Vilbar never registered the property in their names despite the lapse of several years,
while Opinion was able to register the same property in his name. Being the registered owner, Opinion’s title thus
takes precedence over the unregistered claim of ownership of spouses Vilbar.78
Lastly, the CA opined that it is the registration that binds the whole world and that mere possession of the properties
in question cannot defeat the right of Opinion as registered owner of the property. Since the sale claimed by the
spouses Vilbar was never registered, it cannot bind Opinion.79
The spouses Vilbar moved for reconsideration of the CA Decision which was denied in a Resolution dated
December 22, 2006. Hence, this Petition.
Issues
A.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE RESPONDENT
ANGELITO OPINION HAS A BETTER TITLE AND/OR HAS PREFERENCE OVER THE SUBJECT PROPERTIES
IDENTIFIED AS LOTS 20 AND 21.
B.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT OVERLOOKED THE FACT THAT OTILIO GOROSPE,
AS STOCKHOLDER AND CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF DULOS REALTY
AND RESPONDENT OPINION’S PREDECESSOR-IN-INTEREST, ACTED IN BAD FAITH WHEN HE LEVIED ON
EXECUTION AND WHEN HE PURCHASED IN AN AUCTION SALE THE TWO LOTS SUBJECT OF THE
INSTANT CASE ALREADY SOLD AND DELIVERED TO THE PETITIONERS BY DULOS REALTY.
C.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT OVERLOOKED THE FACT THAT X X X
RESPONDENT OPINION WAS LIKEWISE A PURCHASER IN BAD FAITH.
D.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT OVERLOOKED THAT THE
PETITIONERS SPOUSES VILBAR ARE THE OWNERS OF LOT[S] 21 AND 20 UPON DELIVERY THEREOF.
E.
THE COURT OF APPEALS ERRED IN ASSUMING THAT TCT NO. 36777 WAS NOT VALIDLY ISSUED IN
FAVOR OF THE PETITIONERS.80
The pivotal issue to be resolved is: who between the parties has a better right over Lots 20 and 21?
Petitioners contend that they are the rightful owners and possessors of the contested properties through a valid sale
perfected in 1981. They maintain that Gorospe, Sr., the predecessor-in-interest of Opinion, did not acquire
ownership over Lots 20 and 21 because at the time of the levy and execution, said properties were no longer owned
by Dulos Realty. Gorospe, Sr. could not, therefore, validly pass any rights to Opinion which the former did not have
in the first place.81
Our Ruling
The Court finds no merit in the Petition.

Respondent Opinion’s predecessor-in-
interest is an innocent third party
purchaser in the public auction sale,
absent proof to the contrary.
This Court notes that Dulos Realty, the former owner and common predecessor of the parties herein, contracted
with the spouses Vilbar for the sale and transfer of Lots 20 and 21 on July 10, 1979. As early as August 1979, the
spouses Vilbar were already in peaceful and actual possession of the subject properties and have been exercising
acts of ownership and dominion over their portion of Lot 20 and the entire Lot 21 despite the fact that the purchase
price of the lots have not yet been paid in full. Admittedly, all these took place before Gorospe, Sr. filed his
Complaint for Sum of Money, Specific Performance and Damages against Dulos Realty on May 12, 1981; prior to
the issuance of the Writ of Execution and Alias Writ of Execution by the trial court on May 7, 1982 and September
30, 1983, respectively;82 prior to the levy of the properties of Dulos Realty on October 31, 1984 to answer for the
judgment favorable to Gorospe, Sr. in said collection/specific performance case; and prior to the public auction sale
held on June 24, 1985. However, the Court also notes that the sale of Lot 20 was not annotated on the original title
in the name of Dulos Realty, while only a Contract to Sell was executed between the spouses Vilbar and Dulos
Realty as regards Lot 21 which makes the issuance of the title in the name of Bernadette Vilbar questionable. What
makes spouses Vilbar’s title over Lot 21 even more doubtful is the 2nd Indorsement issued by the Registry of Deeds
of Pasay City which states that Bernadette Vilbar’s title over said lot is presumed to be not validly issued.
The spouses Vilbar contend that Gorospe, Sr. acted in bad faith when he levied on the disputed properties and
bought them at public auction. However, this Court cannot treat as significant the alleged fact that Gorospe, Sr. was
the Chief Executive Officer and Chairman of the Board of Directors of Dulos Realty at the time the transactions with
the spouses Vilbar were entered into by the company. Evidence on record shows that the Deed of Absolute Sale
dated June 1, 1981 covering Lot 20, as well as the Contract to Sell over Lot 21, was signed by Juan as President of
Dulos Realty. Simply, spouses Vilbar cannot ascribe bad faith on the part of Gorospe, Sr. absent clear and
convincing proof that he had knowledge of the said spouses’ transactions with the company. As far as the Court is
concerned, the evidence presented shows that Gorospe, Sr. had no knowledge of the transactions between Dulos
Realty and the spouses Vilbar because it was Juan who executed and signed the documents. More importantly, the
aforementioned Deed of Absolute Sale and Contract to Sell were not registered and annotated on the original titles
in the name of Dulos Realty. Under land registration laws, the said properties were not encumbered then, and third
parties need only to rely on the face of the duly issued titles. Consequently, the Court finds no bad faith on Gorospe,
Sr.’s part when he bought the properties at public auction free from liens and encumbrances.
It is worth stressing at this point that bad faith cannot be presumed. "It is a question of fact that must be proven"83 by
clear and convincing evidence. "[T]he burden of proving bad faith rests on the one alleging it."84 Sadly, spouses
Vilbar failed to adduce the necessary evidence. Thus, this Court finds no error on the part of the CA when it did not
find bad faith on the part of Gorospe, Sr.
Furthermore, the Court recognizes "[t]he settled rule that levy on attachment, duly registered, takes preference over
a prior unregistered sale. This result is a necessary consequence of the fact that the [properties] involved [were]
duly covered by the Torrens system which works under the fundamental principle that registration is the operative
act which gives validity to the transfer or creates a lien upon the land."85 As aptly observed by the trial court:
To say the least, there is no reason to doubt that the predecessors-in-interest of the plaintiff (Opinion) with respect
to the said properties, the defendants Gorospes, likewise acquired the same through lawful means. Indeed, and as
acknowledged by both plaintiff Opinion and defendants Sps. Vilbar, the defendant Dulos Realty previously owned
the above parcels of land under TCT Nos. 39849 and 39850. However, the said titles were cancelled after the
Decision dated 01 April 1982 rendered in favor of defendant Otilio Gorospe, Sr. was implemented or executed.
Consequently, TCT Nos. 117330 and 117331 were issued in the name of defendant Otilio Gorospe, Sr. Later on,
the foregoing titles were cancelled owing to the death of the wife of defendant Otilio Gorospe, Sr., the late Leonor
Gorospe, and TCT Nos. 44796 and 44797 were issued to defendants Gorospes as surviving heirs. These two titles
then became the subject of the mortgage agreement that defendants Gorospes executed in favor of plaintiff Opinion
on 12 January 1995.
The Court notes that when TCT No. 117330 dated 02 June 1987 for Lot 21 in the name of defendant Otilio Gorospe,
Sr. was issued to cancel TCT No. 39850 for the same lot registered in favor of the defendant Dulos Realty there was
no mention whatsoever that the latter title was already cancelled by TCT No. 36777 supposedly issued on 22 May
1981 to defendant Bernadette Vilbar. This being so, the subsequent cancellation of TCT No. 117330 by TCT No.
44796 dated 09 January 1995 for Lot 21 could not be affected by the supposed existence of the title of defendants
Spouses Vilbar.
As to Lot 20, it is also noteworthy that the supposed Deed of Absolute Sale dated 01 June 1981 in favor of
defendants Bernadette Vilbar and Guingon was not annotated on TCT No. 39849. Thus, when this was cancelled by
TCT No. 117331 and, later on, by TCT No. 44797 also dated 09 January 1995, it was not subject to any lien or
encumbrance whatsoever pertaining to the claim of the above defendants over the same.86 (Emphasis supplied)
In effect, Gorospe, Sr. acquired through lawful means a valid right to the properties, and he and his son had a legal
right to mortgage the same to Opinion. As a consequence, the Goropes transmitted property rights to Opinion, who,
in turn, acquired valid rights from the Gorospes.
Respondent Opinion is a Buyer in Good Faith.
This Court also treats Opinion as a buyer in good faith. Admittedly, Opinion stated that prior to the execution of the
mortgage, he only went to Lots 20 and 21 once and saw that the properties had occupants. He likewise admitted
that he never talked to the spouses Vilbar and Guingon to determine the nature of their possession of the properties,
but merely relied on the representation of Gorospe, Sr. that the occupants were mere tenants. He never bothered to
request for any kind of proof, documentary or otherwise, to confirm this claim. Nevertheless, this Court agrees with
the CA that Opinion is not required to go beyond the Torrens title, viz:
Contrary to the [Spouses Vilbar’s] claim, [Opinion] was never remiss in his duty of ensuring that the Gorospes had
clean title over the property. [Opinion] had even conducted an investigation. He had, in this regard, no reason not to
believe in the assurance of the Gorospes, more so that the claimed right of [Spouses Vilbar] was never annotated
on the certificate of title covering lot 20, because it is settled that a party dealing with a registered land does not
have to inquire beyond the Certificate of Title in determining the true owner thereof, and in guarding or protecting his
interest, for all that he has to look into and rely on are the entries in the Certificate of Title.87
Inarguably, Opinion acted in good faith in dealing with the registered owners of the properties. He relied on the titles
presented to him, which were confirmed by the Registry of Deeds to be authentic, issued in accordance with the
law, and without any liens or encumbrances.88
Besides, assuming arguendo that the Gorospes’ titles to the subject properties happened to be fraudulent, public
policy considers Opinion to still have acquired legal title as a mortgagee in good faith. As held in Cavite
Development Bank v. Spouses Lim:89
There is, however, a situation where, despite the fact that the mortgagor is not the owner of the mortgaged property,
his title being fraudulent, the mortgage contract and any foreclosure sale arising therefrom are given effect by
reason of public policy. This is the doctrine of ‘the mortgagee in good faith’ based on the rule that all persons dealing
with property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what
appears on the face of the title. The public interest in upholding the indefeasibility of a certificate of title, as evidence
of the lawful ownership of the land or of any encumbrance thereon, protects a buyer or mortgagee who, in good
faith, relied upon what appears on the face of the certificate of title.90
Respondent Opinion was proven to be in good faith when he dealt with the Gorospes and relied on the titles
presented to him. Spouses Vilbar, on the other hand, failed to present substantial evidence to prove otherwise.
Proofs of ownership of spouses Vilbar
over Lots 20 and 21 are insufficient to
conclude real ownership, thus, they
cannot be considered as owners of
subject lots.
In support of their claim of ownership, spouses Vilbar presented the following documentary evidence: (1) Contracts
to Sell; (2) Deed of Absolute Sale over Lot 20; (3) Real Estate Mortgage Agreement with DBP over Lot 21 with
reference to the spouses Vilbar as owners of the said property covered by TCT No. 36777; (4) Cancellation of
Mortgage issued by the DBP in favor of the spouses Vilbar in connection with Lot 21; (5) various original Official
Receipts issued by Dulos Realty in favor of the spouses Vilbar for installment payments of the purchase price of the
lots in question; (6) various original Official Receipts issued by the DBP in favor of the spouses Vilbar for payment of
loan amortizations; (7) owner’s duplicate copy of TCT No. 36777 in the name of Bernadette Vilbar; (8) owner’s
duplicate copy of TCT No. S-39849 in the custody of the spouses Vilbar; and, (9) tax declarations and receipts.
A review of these documents leads the Court to the same inescapable conclusion reached by the trial court. With 1âw phi1
regard to Lot 20, spouses Vilbar brag of a Deed of Absolute Sale executed by Dulos Realty in their favor and aver
that they have the owner’s copy of TCT No. S-39849 and are presently enjoying actual possession of said property.
However, these are not sufficient proofs of ownership. For some unknown reasons, the spouses Vilbar did not
cause the transfer of the certificate title in their name, or at the very least, annotate or register such sale in the
original title in the name of Dulos Realty. This, sadly, proved fatal to their cause. Time and time again, this Court has
ruled that "a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor
of the person whose name appears therein."91 Having no certificate of title issued in their names, spouses Vilbar
have no indefeasible and incontrovertible title over Lot 20 to support their claim. Further, it is an established rule that
"registration is the operative act which gives validity to the transfer or creates a lien upon the land."92 "Any buyer or
mortgagee of realty covered by a Torrens certificate of title x x x is charged with notice only of such burdens and
claims as are annotated on the title."93 Failing to annotate the deed for the eventual transfer of title over Lot 20 in
their names, the spouses Vilbar cannot claim a greater right over Opinion, who acquired the property with clean title
in good faith and registered the same in his name by going through the legally required procedure.
Spouses Vilbar’s possession of the owner’s copy of TCT No. 39849 is of no moment. It neither cast doubt on
Gorospe Sr.’s TCT No. 117331 from which Opinion’s TCT No. T-59011 covering Lot 20 emanated nor bar Gorospe
Sr. from transferring the title over Lot 20 to his name. It should be recalled that Gorospe Sr. acquired Lots 20 and 21
thru forced sale. Under Section 10794 of Presidential Decree No. 1529,95 Gorospe Sr. could have the TCTs of said
lots cancelled and transferred to his name even if the previous registered owner (Dulos Realty) refused or neglected
to surrender the owner’s copy thereof. In Valbuena v. Reyes,96 it was held that:
[W]here one acquires a valid deed or title to a property as a result of execution sale, tax sale, or any sale to enforce
a lien, after the expiration of the period, if any, allowed by law for redemption, when said new owner goes to court
and the office of the register of deeds to have his deed recorded and have a new certificate of title issued in his
name, it is sufficient for purposes of notifying the former owner to surrender his certificate of title and show cause
why it should not be cancelled, that the notification is effected by mail or by publication as the court may order; and if
despite such notification by mail or by publication, he fails to appear and surrender his certificate of title, the court
may validly order the cancellation of that certificate of title and the issuance of a new one in favor of the new owner.97
Here, it is clear that Gorospe Sr. was able to secure TCT No. 117331,98 which was marked as Exhibit "N." Said title
explicitly provides that it cancelled TCT No. 39849. Hence, having been superseded by TCT No. 117331, spouses
Vilbar’s possession of TCT No. 39849 is of no consequence. It may not be amiss to state at this point that spouses
Vilbar’s claim that Dulos Realty conveyed to them Lot 20 on June 1, 1981 is incongruous with Dulos Realty’s filing of
a complaint for reconveyance against Gorospe Sr. on January 4, 1990. We simply find it difficult to understand why
Dulos Realty would seek recovenyance of Lot 20 from Gorospe Sr. if, indeed, it had already sold the same almost a
decade earlier to spouses Vilbar as evidenced by the latter’s Deed of Absolute Sale99 dated June 1, 1981. (This
complaint docketed as Civil Case No. 88-2800 though was dismissed for failure to prosecute.)100
With respect to Lot 21, the Court is likewise puzzled as to why spouses Vilbar’s TCT No. 36777 does not indicate
where it came from. The issuance of the said title also becomes suspect in light of the fact that no Deed of Absolute
Sale was ever presented as basis for the transfer of the title from Dulos Realty. In fact, the spouses Vilbar do not
even know if a Deed of Absolute Sale over Lot 21 was executed in their favor. As the evidence extant on record
stands, only a Contract to Sell which is legally insufficient to serve as basis for the transfer of title over the property
is available. At most, it affords spouses Vilbar an inchoate right over the property. Absent that important deed of
conveyance over Lot 21 executed between Dulos Realty and the spouses Vilbar, TCT No. 36777 issued in the
name of Bernadette Vilbar cannot be deemed to have been issued in accordance with the processes required by
law. In the same manner, absent the corresponding inscription or annotation of the required transfer document in
the original title issued in the name of Dulos Realty, third parties are not charged with notice of said burden and/or
claim over the property. The aforementioned flaws in the title (TCT No. 36777) of spouses Vilbar is aggravated by
the 2nd Indorsement dated May 11, 1988 of the Registry of Deeds of Pasay City which provides that TCT No. 36777
is presumed not to have been validly issued considering that no inscription or annotation exists at the back of the
original title (TCT No. S-39850) showing that a deed of sale between Dulos Realty and spouses Vilbar had been
registered, coupled with the established material discrepancies in the certificate of title in the custody of the Registry
of Deeds of Las Piñas City and the title presented by the spouses Vilbar.
Simply, the spouses Vilbar were not able to present material evidence to prove that TCT No. 36777 was issued in
accordance with the land registration rules.
In addition, the real estate mortgage entered into by the spouses Vilbar with the DBP does not, by itself, result in a
conclusive presumption that they have a valid title to Lot 21. The basic fact remains that there is no proof of
conveyance showing how they acquired ownership over Lot 21 justifying the issuance of the certificate of title in their
name.
With respect to the tax declarations, the trial court aptly declared, thus:
As to the tax declarations and real property tax payments made by the defendants Sps. Vilbar for Lot 21 the same
are of no moment. It has been held that tax declarations are not conclusive proofs of ownership, let alone of the
private character of the land – at best, they are merely ‘indicia of a claim of ownership.’ (Seville v. National
Development Company, 351 SCRA 112) However, and with the plaintiff presenting convincing evidence of the basis
and validity of his acquisition of the subject lots, such "indicia" in favor of the defendant Sps. Vilbar had been
effectively impugned or refuted.101
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated May 26 2006 of
he Court of Appeals in CA-G.R CV No. 84409 affirming the Decision dated January 31, 2005 of the Regional Trial
Court Branch 255 Las Piñas City in Civil Case No. 98-0302 is hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 192034 January 13, 2014
ALPHA SHIP MANAGEMENT CORPORATION/JUNEL M CHAN and/or CHUO-KAIUN COMPANY,

LIMITED,Petitioners,
vs.
ELEOSIS V. CALO, Respondent.
DECISION
DEL CASTILLO, J.:
An employee s disability becomes permanent and total when so declared by the company-designated physician, or,
in case of absence of such a declaration either of fitness or permanent total disability, upon the lapse of the 120-or
240-day treatment period, while the employee s disability continues and he is unable to engage in gainful
employment during such period, and the company-designated physician fails to arrive at a definite assessment of
the employee s fitness or disability.
Assailed in this Petition for Review on Certiorari1 are the December 17, 2009 Decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 105550 which reversed and set aside the March 31, 2008 Decision3 of the National Labor
Relations Commission (NLRC) and reinstated the March 30, 2007 Decision4 of the Labor Arbiter, and its April 26,
2010 Resolution5 denying reconsideration thereof.
Factual Antecedents
Respondent Eleosis V. Calo worked for petitioners – Alpha Ship Management Corporation, Junel M. Chan and their
foreign principal, Chuo-Kaiun Company Limited (CKCL) – since 1998 under seven employment contracts. On
February 17, 2004, respondent was once more hired by petitioners as Chief Cook on board CKCL’s vessel, MV Iris.
Respondent commenced his duties as Chief Cook aboard MV Iris on March 5, 2004.
On July 13, 2004, while MV Iris was in Shanghai, China, respondent suffered back pain on the lower part of his
lumbar region and urinated with solid particles. On checkup, the doctor found him suffering from urinary tract
infection and renal colic, and was given antibiotics. When respondent’s condition did not improve, he consulted
another doctor in Chile sometime in August 2004, and was found to have kidney problems and urinary tract infection
but was declared fit for work on a "light duty" basis.6
On September 19, 2004, respondent suffered an attack of severe pain in his loin area below the ribs radiating to his
groin. At the Honmoku Hospital in Yokohama, Japan, respondent was diagnosed with suspected renal and/or ureter
calculus.7 He was declared "unfit for work" and advised to be sent home and undergo further detailed examination
and treatment.8
Respondent was thus repatriated on October 12, 2004 and was referred by petitioners to Dr. Nicomedes G. Cruz
(Dr. Cruz), the company-designated physician.
On October 20, 2004, Dr. Cruz examined respondent, and thereafter, in his Medical Report,9 Dr. Cruz wrote:
The patient was seen today in our clinic. The IVP x-ray showed mild prostate enlargement with signs suggestive of
cystitis. He was seen by our urologist and repeat urinalysis was requested.
DIAGNOSIS:
To consider Ureterolithiasis, right
MEDICATION:
Buscopan
Advised to come back on November 10, 200410
Respondent was examined once more on November 10, 2004, and his Medical Report11 for such examination reads
as follows:
The patient was seen today in our clinic. The urinalysis done was normal. He complains of right lumbosacral pain
which is probably secondary to lumbosacral muscular strain. He was seen by our urologist and ultrasound of the
KUB-P was requested.
DIAGNOSIS:
To consider Ureterolithiasis, right
MEDICATION:
Mobic
Advised to come back on November 17, 2004
Respondent returned to Dr. Cruz for check-up on November 17, 2004. His Medical Report12 for such appointment
states:
The patient was seen today in our clinic. The ultrasound of the KUB showed the following 1) small, mild calyceal
non-obstructing stone his [sic] left kidney 2) cortical cyst at the inferior pole of the left kidney 3) small parenchymal
calcification in the mid portion of the right kidney and 4) mild prostatic enlargement with concretion. Our urologist
recommended medical dissolution of the left kidney stone since it is small. However, he recommended lumbosacral
x-ray of the back to evaluate the right lower back pain.
DIAGNOSIS:
Ureterolithiasis, left
MEDICATION:
Sambong
Acalka
Macrodantin
Advised to come back on December 15, 200413
On December 15, 2004, respondent returned to Dr. Cruz for check-up, and in his Medical Report14 he wrote:
The patient was seen today in our clinic. There is occasional low back pain. The x–ray showed mild lumbar
osteophytes. He is for urinalysis and ultrasound of the kidneys.
DIAGNOSIS:
Ureterolithiasis, left
MEDICATION:
Sambong
Acalka
Macrodantin
Advised to come back on January 5, 200515
Dr. Cruz’s Medical Report16 for January 5, 2005 reads as follows:
The patient was seen today in our clinic. The latest ultrasound of the kidneys showed the persistence of non-
obstructing calculus located at the middle calyx of the left kidney. The right kidney is normal. The urinalysis showed
microhematuria. Clinically, he still has occasional low back pain. Our urologist recommended KUB x-ray with bowel
preparation.
DIAGNOS
Nephrolithiasis, left
MEDICATION:
Sambong
Acalka
Macrodantin
Advised to come back on January 12, 200517
Further Medical Reports18 indicate that respondent returned to Dr. Cruz for additional check-ups on January 12 and
17, 2005; February 7, 14 and 18, 2005; March 4, 9 and 30, 2005; April 4, 20 and 27, 2005; May 11 and 18, 2005;
June 8, 20 and 27, 2005; July 18, 25 and 27, 2005; August 3, 22 and 31, 2005; September 14, 2005; and October 5
and 14, 2005.
Meanwhile, on July 28, 2005, respondent – who felt that his condition has not improved – consulted another
specialist in internal medicine, Dr. Efren R. Vicaldo (Dr. Vicaldo), who issued the following diagnosis contained in a
two-page Medical Certificate:19
July 28, 2005
TO WHOM IT MAY CONCERN:
This is to certify that Eleosis V. Calo, 57 years of age, of Parañaque City was examined and treated as out-
patient/confined in this hospital on/from July 28, 2005 with the following findings and/or diagnosis/ diagnoses:
Hypertension I
Nephrolithiasis, left
Impediment Grade X (20.15%)
(signed)
EFREN R. VICALDO, M.D.
JUSTIFICATION OF IMPEDIMENT GRADE X (20.15%)

FOR SEAMAN ELEOSIS V. CALO
 This patient/seaman presented with a history of passing sandy material in the urine noted sometime
August of 2004. He had a check up in Shanghai and he was diagnosed [with] UTI. He had another
check up in Peru with the same diagnosis of urinary tract infection. He had episodes of lumbar pain,
cold sweats and abdominal pain for which he had a check up in Japan in September, 2004. He
underwent abdominal ultrasound, urinalysis and Xray of the KUB.
 He was subsequently repatriated [in] October, 2004 and he underwent several laboratory work up.
He was diagnosed [with] hypertension and nephrolithiasis, left.
 When seen at the clinic, his blood pressure was elevated at 130/90 mmHg; the rest of his PE
findings were unremarkable.
 He is now unfit to resume work as seaman in any capacity.
 His illness is considered work aggravated/related.
 He requires maintenance medication to control his hypertension to prevent other cardiovascular
complications such as coronary artery disease, stroke and renal insufficiency.
 With his nephrolithiasis, he is prone to develop ascending urinary tract infection so that he has to
monitor his urinalysis and be treated for any signs of infection.
 He may require intervention in the form of lithotripsy or surgery to remove his nephrolithiasis.
 His renal colic may be a recurrent discomfort impairing his quality of life.
 He is not expected to land a gainful employment given his medical background.
Thank you.
(signed)
Efren R. Vicaldo, M.D.20
Respondent underwent surgery for his nephrolithiasis on August 31, 2005. On September 12, 2005, respondent
took an x-ray examination which registered the following results:
ROENTGENOLOGICAL FINDINGS:
Previous film not available for comparison.
Plain radiograph of the KUB shows gas and fecal-filled bowel loops
which partially obscure both renal shadows.
No opaque lithiasis noted.
Spur formations are noted on the lumbar vertebrae.
IMPRESSION:
DEGENERATIVE OSSEOUS CHANGES OF THE LUMBAR VERTEBRAE 21
Respondent filed a claim for disability benefits with petitioners, but the claim was denied.
Thus, on October 18, 2005, respondent filed against the petitioners a Complaint22 for the recovery of total permanent
disability benefits, illness allowance, reimbursement of medical expenses, damages and attorney’s fees.
On July 3, 2006, respondent returned to Dr. Cruz and underwent urinalysis, ultrasound and x-ray. On July 18, 2006,
Dr. Cruz issued his final Medical Report,23 stating thus:
He (respondent) was repatriated because of right flank pain and gross hematuria. The IVP done showed mild
prostatic enlargement with signs of cystitis. Ultrasound of the KUB done revealed small mild calyseal non-
obstructing stone on the left side. The recent x-ray showed neither opacity nor filling defect. The IVP showed pyelitis
(inflammation of the kidney). The repeat ultrasound showed decrease in the size of the echogenic focus and cyst in
the upper pole of the left kidney. The right kidney is normal. Last August 31, 2005, he underwent ESWL.
He was last seen in our clinic last October 14, 2005 and was advised to come back on November 07, 2005 but
failed to do so.
At present, the repeat urinalysis is normal. The ultrasound of the KUB showed left renal cortical cyst and enlarged
prostate gland with concretions. Our urologist opined that Mr. Calo is now stone free and normal.
He is now fit to work as a seafarer on account of the [absence of kidney stones].
DIAGNOSIS:
Nephrolithiasis, left, treated
RECOMMENDATION:
He is fit to work.24
On March 30, 2007, the Labor Arbiter issued his Decision25 which decreed as follows:
WHEREFORE, both respondent companies are ordered to pay, jointly and severally, the complainant, the amount of
US$60,000.00 or its peso equivalent at the time of payment as disability compensation and US$6,000.00 or its peso
equivalent at the time of payment, as attorney’s fees.
Other claims are DISMISSED for lack of merit.
SO ORDERED.26
The Labor Arbiter granted permanent total disability benefits and attorney’s fees to respondent, but denied his claim
for moral and exemplary damages.
The Labor Arbiter held that respondent suffered permanent disability as a result of his inability to work despite
undergoing treatment and medication by the company-designated physician for more than 120 days, or from
October 15, 2004 through July 18, 2006; the company-designated physician’s July 18, 2006 "fit to work" declaration
was irrelevant and belated as it was made long after the expiration of the continuous 120-day period during which
respondent was unable to work, which thus entitles the latter to permanent total disability benefits under the law.
The Labor Arbiter cited United Philippine Lines, Inc. and/or Holland America Line, Inc. v. Beseril,27 which held:
Notatu dignum is the correct observation of the appellate court in its above-quoted portion of its decision that it was
only after respondent had filed a claim for permanent disability that Doctors Abaya and Hill declared him fit for sea
duty.
But even in the absence of an official finding by the company-designated physicians that respondent is unfit for sea
duty, respondent is deemed to have suffered permanent disability. Permanent disability is the inability of a worker to
perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. It is
undisputed that from the time respondent suffered a heart attack on December 5, 1997, he was unable to work for
more than 120 days, his cardiac rehabilitation and physical therapy having ended only on May 28, 1998. That
respondent was found to be "fit to return to work" by Clinica Manila (where he underwent regular cardiac
rehabilitation program and physical therapy from January 15 to May 28, 1998 under UPL’s account) on September
22, 1998 or a few months after his rehabilitation does not matter. Crystal Shipping Inc. v. Natividad teaches:
Petitioners tried to contest the above findings by showing that respondent was able to work again as a chief mate in
March 2001. Nonetheless, this information does not alter the fact that as a result of his illness, respondent was
unable to work as a chief mate for almost three years. It is of no consequence that respondent was cured after a
couple of years. The law does not require that the illness should be incurable. What is important is that he was
unable to perform his customary work for more than 120 days which constitutes permanent total disability. An award
of a total and permanent disability benefit would be germane to the purpose of the benefit, which is to help the
employee in making ends meet at the time when he is unable to work.28 (Underscoring supplied)
Petitioners appealed to the NLRC. On March 31, 2008, the NLRC rendered its Decision29 granting petitioners’ appeal
and reversing the Labor Arbiter’s March 30, 2007 Decision, thus:
WHEREFORE, the appeal is GRANTED. The decision of the Labor Arbiter dated March 30, 2007 is VACATED and
SET ASIDE and a new one entered dismissing the complaint for lack of merit.
SO ORDERED.30
In a Resolution31 dated June 30, 2008 respondent’s Motion for Reconsideration was denied. Essentially, the NLRC
held that for purposes of claiming disability benefits under the Philippine Overseas Employment Administration
(POEA) Standard Employment Contract, it is the company-designated physician, Dr. Cruz – and not respondent’s
physician Dr. Vicaldo – who should make the corresponding proclamation or finding that respondent suffered
permanent total or partial disability. Thus, Dr. Cruz’s July 18, 2006 Medical Report declaring respondent as fit to
work prevails over Dr. Vicaldo’s July 28, 2005 Medical Certificate declaring respondent unfit to resume work as
seaman in any capacity.
The NLRC added that while the July 18, 2006 certification of fitness was issued more than one year following
respondent’s disembarkation, its belated issuance is not sufficient to establish petitioners’ liability for disability
compensation, especially where respondent was to blame for his failure to report to Dr. Cruz and continue
treatment. The NLRC was referring to respondent’s failure to return for further treatment by Dr. Cruz, as directed,
after October 14, 2005. It held that as a result, respondent’s Complaint was prematurely filed since his treatment
was still ongoing at the time of its filing, and that he is guilty of unjustified abandonment of treatment.
In a Petition for Certiorari32 filed with the CA, respondent sought a reversal of the Decision of the NLRC, arguing that
the latter committed grave abuse of discretion and gross error in upholding Dr. Cruz’s July 18, 2006 Medical Report;
in disregarding the 120-day rule which entitles the employee to permanent disability benefits in the event of
continuous inability to perform his work for more than 120 days; and in ordering the dismissal of his Complaint.
On December 17, 2009, the CA issued the assailed Decision which contained the following decretal portion:
WHEREFORE, premises considered, the March 31, 2008 Decision and June 30, 2008 Resolution of public
respondent National Labor Relations Commission are REVERSED and SET ASIDE. Accordingly, the March 30,
2007 Decision of the Labor Arbiter is REINSTATED.
SO ORDERED.33
The CA held that the company-designated physician’s findings are not conclusive and binding on the issue of the
employee’s state of health, disability, or fitness to resume work. It held, thus:
In fine, therefore, the better view is this: While it is mandatory for the seafarer to be examined first by the company-
designated physician, the latter’s findings, however, should not be conclusive and binding upon the former nor upon
the courts or labor tribunals. The seafarer’s right to seek the opinion of his own doctor should be recognized. In case
of disagreement between the findings of his doctor and those of the company physician, the parties may jointly seek
the opinion of a third, independent doctor, whose decision shall be final and binding upon them. In the absence,
however, of the opinion of a third, independent doctor as in this case, the findings of the company-designated
physician and the seafarer’s physician should be duly evaluated and weighed against each other based on their
inherent merits. The foregoing, to Our mind, is more in accord with the spirit of the law and jurisprudence, not to
mention the policy of social justice.34
The CA found incredible Dr. Cruz’s findings in his July 18, 2006 Medical Report, which it held were self-serving and
hearsay as they were based on the opinion of an unnamed urologist, whose opinion was not backed by the
appropriate separate medical certificate.
The CA added that the NLRC gravely erred in not considering that respondent had already been under medical
treatment and incapacitated to work for more than 120 days, or even 240 days – which is the maximum allowable
period of treatment pursuant to Rule X, Section 2 of the Amended Rules on Employee’s Compensation35 and the
pronouncement in Vergara v. Hammonia Maritime Services, Inc.36 which held that if the 120-day period elapsed and
no declaration of disability or fitness is made because the employee required further medical treatment, then
treatment should continue up to a maximum of 240 days, subject to the right of the employer to declare within this
period that a permanent partial or total disability already exists; a temporary total disability only becomes permanent
when so declared by the company-designated physician within the period allowed, or upon expiration of the
maximum 240-day medical treatment period in case of absence of a declaration of fitness or permanent disability.
The CA held that herein respondent was repatriated on October 12, 2004, and his last medical examination was
conducted on October 14, 2005; clearly, more than 240 days have elapsed without respondent having been
declared either fit to work or permanently disabled. He was declared fit to work only on July 18, 2006, or long after
his labor Complaint was filed and almost two years from his repatriation; respondent is thus deemed permanently
disabled.
Finally, the CA declared that respondent’s permanent disability was total, considering that both his personal
physician Dr. Vicaldo and the company-designated physician Dr. Cruz declared him "unfit to work as seaman in any
capacity" and "is not expected to land a gainful employment given his medical background," and that there was
persistence of the left kidney stone "located inside the diverticulum and it is impossible to pass out the stone thru his
urine." It held that for total disability to exist, it is not required that the employee be absolutely disabled or totally
paralyzed; it is merely necessary that the injury or illness be such that the employee cannot pursue his/her usual
work and earn therefrom. And to be permanent, a total disability should last continuously for more than 120 days –
or 240 days, per the Vergara ruling.
Petitioners filed a Motion for Reconsideration,37 but the CA denied the same in its April 26, 2010 Resolution. Hence,
Issues
Petitioners submit the following issues for resolution:
1. Whether x x x respondent is entitled to disability benefits under the POEA Standard Employment Contract
for Seafarers despite the fact that he was declared fit to work.
2. Whether x x x respondent is entitled to attorney’s fees.38
Praying that the assailed CA dispositions be set aside and that a pronouncement be made denying respondent the
adjudged disability benefits and attorney’s fees, petitioners maintain that respondent is not entitled to disability
benefits and attorney’s fees; and even granting without admitting that respondent is entitled to disability benefits, the
same should be limited to US$10,075.00 in view of the Grade 10 disability rating given by Dr. Vicaldo, respondent’s
personal physician.
With regard to disability benefits, petitioners argue that although respondent was subjected to treatment for one year
and nine months (or from October 20, 2004, respondent’s first examination by Dr. Cruz, up to July 3, 2006,
respondent’s last visit to the latter) and that Dr. Cruz’s July 18, 2006 Medical Report cum declaration of fitness to
work was issued later, the prolonged treatment should be blamed on respondent as he failed to report to Dr. Cruz
when required; instead, he sought treatment from his personal physician and abandoned treatment being made by
Dr. Cruz.
Petitioners insist further that as between Dr. Cruz and Dr. Vicaldo, the former’s opinion and diagnosis as the
company-designated physician should prevail, pursuant to the provisions of the employment contract, law, and
jurisprudence.
Petitioners add that respondent’s own personal physician, Dr. Vicaldo, did not declare respondent to be suffering
from permanent total disability; in fact, Dr. Vicaldo diagnosed him as suffering from a mere Grade 10 disability
which, under his employment contract, entitles respondent to receive only US$10,075.00, and not the adjudged
US$60,000.00. In other words, respondent’s illness – nephrolithiasis – is not a Grade 1 disability which entitles him
to the maximum disability compensation.
On the issue of attorney’s fees, petitioners claim that as a necessary result of the fact that respondent is not entitled
to disability compensation, no attorney’s fees may be awarded to him as well. They add that they were not amiss in
their obligations toward respondent, and saw to it that he was given appropriate treatment and medication until he
was finally declared fit to work; and that they acted in good faith and shouldered all of respondent’s expenses in
obtaining treatment for his condition. In view of their good faith and the faithful observance of their obligations under
the law, respondent has no right to recover attorney’s fees.
Respondent’s Argument
In his Comment,39 respondent counters that the CA was correct in ruling that the company-designated physician’s
findings are not conclusive and binding; that Dr. Cruz’s findings in his July 18, 2006 Medical Report were self-
serving and hearsay as they were based on the opinion of an unnamed urologist and not of his personal knowledge;
and that the said July 18, 2006 Medical Report is self-serving for having been issued only after his Complaint was
filed.
Respondent adds that he is not guilty of abandonment of treatment, stating that he has been under treatment by the
company-designated physician for over eight months, without improvement in his condition, which thus gave him the
right to consult another physician.
On the issue of the adjudged disability benefit, respondent argues that he is entitled to the full US$60,000.00, and
not merely the lower amount of US$10,075.00 advanced by petitioners. Citing Oriental Shipmanagement Co., Inc. v.
Bastol,40 he contends that "permanent disability" is defined as the inability of a worker to perform his job for more
than 120 days, without regard to the loss of any part of his body; thus, his inability to perform his usual work as Chief
Cook on board an ocean-going vessel for more than 120 days due to his illness makes his disability total and
permanent and entitles him to full disability benefits under the law.
Finally, respondent insists on the correctness of the award of attorney’s fees, arguing that petitioners’ unjustified
failure/refusal to satisfy his claim for disability benefits compelled him to litigate to protect his rights and interests, for
which he is entitled to attorney’s fees equivalent to 10% of the monetary award.
Our Ruling
Art. 192. Permanent total disability. – x x x
(c) The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as
otherwise provided for in the Rules;
The 120-day period may be extended up to 240 days, under Rule X, Section 2 of the Amended Rules on Employees
Compensation and pursuant to the pronouncement in Vergara v. Hammonia Maritime Services, Inc.41 stating that a
temporary total disability becomes permanent when so declared by the company-designated physician within the
period allowed, or upon expiration of the maximum 240-day medical treatment period in case of absence of a
declaration of fitness or permanent disability.
It is settled that the above provisions of the Labor Code and the Amended Rules on Employees Compensation on
disabilities apply to seafarers;42 the POEA Standard Employment Contract, which respondent holds, is not the sole
basis for determining their rights in the event of work-related injury, illness or death. It may likewise be true that
under respondent’s POEA Standard Employment Contract, only those injuries or disabilities that are classified as
Grade 1 are considered total and permanent. However, the Court has made it clear, in Kestrel Shipping Co., Inc. v.
Munar,43 that –
x x x if those injuries or disabilities with a disability grading from 2 to 14, hence, partial and permanent, would
incapacitate a seafarer from performing his usual sea duties for a period of more than 120 or 240 days, depending
on the need for further medical treatment, then he is, under legal contemplation, totally or permanently disabled. In
other words, an impediment should be characterized as partial and permanent not only under the Schedule of
Disabilities found in Section 32 of the POEA-SEC but should be so under the relevant provisions of the Labor Code
and the Amended Rules on Employee[s] Compensation (AREC) implementing Title II, Book IV of the Labor Code.
That while the seafarer is partially injured or disabled, he is not precluded from earning doing [sic] the same work he
had before his injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents
him from engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall be deemed
totally and permanently disabled.
Moreover, the company-designated physician is expected to arrive at a definite assessment of the seafarer’s fitness
to work or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarer’s
medical condition remains unresolved, the seafarer shall be deemed totally or permanently disabled. 1âwphi1
xxxx
Consequently, if after the lapse of the stated periods, the seafarer is still incapacitated to perform his usual sea
duties and the company-designated physician had not yet declared him fit to work or permanently disabled, whether
total or permanent, the conclusive presumption that the latter is totally and permanently disabled arises.44(Emphasis
supplied)
Thus, from the above, it can be said that an employee’s disability becomes permanent and total when so declared
by the company-designated physician, or, in case of absence of such a declaration either of fitness or permanent
total disability, upon the lapse of the 120 or 24045-day treatment period, while the employee’s disability continues and
he is unable to engage in gainful employment during such period, and the company-designated physician fails to
arrive at a definite assessment of the employee’s fitness or disability. This is true "regardless of whether the
employee loses the use of any part of his body."46
Respondent was repatriated on October 12, 2004 and underwent treatment by the company-designated physician,
Dr. Cruz, until October 14, 2005, or for a continuous period of over one year – or for more than the statutory 120-
day47 or even 240-day48 period. During said treatment period, Dr. Cruz did not arrive at a definite assessment of
respondent’s fitness or disability; thus, respondent’s medical condition remained unresolved. It was only on July 18,
2006 that respondent was declared fit to work by Dr. Cruz. Such declaration, however, became irrelevant, for by
then, respondent had been under medical treatment and unable to engage in gainful employment for more than 240
days. Pursuant to the doctrine in Kestrel, the conclusive presumption that the respondent is totally and permanently
disabled thus arose. The CA is therefore correct in declaring that respondent suffered permanent total disability.
In the same manner, the issue of which among the two diagnoses or opinions should prevail – that of Dr. Cruz or Dr.
Vicaldo – is rendered irrelevant in view of the lapse of the said 240-day period. As far as the parties are concerned,
respondent’s medical treatment and disability continued for more than 240 days without any finding or diagnosis by
the company-designated physician that he was fit to resume work. Thus, consonant with law and jurisprudence,
respondent is entitled to a declaration of permanent total disability, as well as the corresponding benefit attached
thereto in the amount of US$60,000.00.
The Court likewise notes the CA’s finding that while respondent was given an Impediment Grade 10 (20.15%) by his
physician, he was nevertheless deemed unfit to work as seaman in any capacity and not expected to land gainful
employment given his medical background. Moreover, it has been found that surgical intervention may be required
to remove respondent’s nephrolithiasis; if not, he is prone to develop ascending urinary tract infection. It must be
remembered that in August 2004, while respondent was still on ship duty, he was diagnosed with urinary tract
infection by a company-approved physician and declared fit to work, but only on a "light duty" basis; and when the
same infection recurred with his kidney stones, he was declared unfit to work by the physician at Honmoku Hospital
in Japan. If respondent’s nephrolithiasis is not cured, certainly he cannot be expected to return to work under his
condition.
With respect to attorney’s fees, it is clear that respondent was compelled to litigate due to petitioners’ failure to
satisfy his valid claim. Where an employee is forced to litigate and incur expenses to protect his rights and interest,
he is entitled to an award of attorney’s fees equivalent to ten percent (10%) of the total award at the time of actual
payment.49
Lastly, while the Labor Arbiter’s March 30, 2007 Decision is correct and should be reinstated, a modification thereof
is in order, in that the awards therein should be paid in no other form than in Philippine pesos.50
WHEREFORE, the Petition is DENIED. The assailed December 17, 2009 Decision and April 26, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 105550 are AFFIRMED, and the March 30, 2007 Decision of the Labor
Arbiter is REINSTATED, with the MODIFICATION that petitioners Alpha Ship Management Corporation, Junel M.
Chan and/or Chuo-Kaiun Company Limited are ordered to jointly and severally pay respondent Eleosis V. Calo the
amounts of US$60,000.00 as disability compensation and US$6,000.00 as attorney’s fees in Philippine pesos,
computed at the exchange rate prevailing at the time of payment.
SO ORDERED.
SECOND DIVISION
G.R. No. 183204 January 13, 2014
THE METROPOLITAN BANK AND TRUST COMPANY, Petitioner,

vs.
ANA GRACE ROSALES AND YO YUK TO, Respondents.
DECISION
DEL CASTILLO, J.:
Bank deposits, which are in the nature of a simple loan or mutuum,1 must be paid upon demand by the depositor.2
This Petition for Review on Certiorari3 under Rule 45 of the Rules of Court assails the April 2, 2008 Decision4 and the
May 30, 2008 Resolution5 of he Court of Appeals CA) in CA-G.R. CV No. 89086.
Factual Antecedents
Petitioner Metropolitan Bank and Trust Company is a domestic banking corporation duly organized and existing
under the laws of the Philippines.6 Respondent Ana Grace Rosales (Rosales) is the owner of China Golden Bridge
Travel Services,7 a travel agency.8 Respondent Yo Yuk To is the mother of respondent Rosales.9
In 2000, respondents opened a Joint Peso Account10 with petitioner’s Pritil-Tondo Branch.11 As of August 4, 2004,
respondents’ Joint Peso Account showed a balance of ₱2,515,693.52.12
In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese National applying for a
retiree’s visa from the Philippine Leisure and Retirement Authority (PLRA), to petitioner’s branch in Escolta to open
a savings account, as required by the PLRA.13 Since Liu Chiu Fang could speak only in Mandarin, respondent
Rosales acted as an interpreter for her.14
On March 3, 2003, respondents opened with petitioner’s Pritil-Tondo Branch a Joint Dollar Account15 with an initial
deposit of US$14,000.00.16
On July 31, 2003, petitioner issued a "Hold Out" order against respondents’ accounts.17
On September 3, 2003, petitioner, through its Special Audit Department Head Antonio Ivan Aguirre, filed before the
Office of the Prosecutor of Manila a criminal case for Estafa through False Pretences, Misrepresentation, Deceit,
and Use of Falsified Documents, docketed as I.S. No. 03I-25014,18 against respondent Rosales.19 Petitioner accused
respondent Rosales and an unidentified woman as the ones responsible for the unauthorized and fraudulent
withdrawal of US$75,000.00 from Liu Chiu Fang’s dollar account with petitioner’s Escolta Branch.20Petitioner alleged
that on February 5, 2003, its branch in Escolta received from the PLRA a Withdrawal Clearance for the dollar
account of Liu Chiu Fang;21 that in the afternoon of the same day, respondent Rosales went to petitioner’s Escolta
Branch to inform its Branch Head, Celia A. Gutierrez (Gutierrez), that Liu Chiu Fang was going to withdraw her
dollar deposits in cash;22 that Gutierrez told respondent Rosales to come back the following day because the bank
did not have enough dollars;23 that on February 6, 2003, respondent Rosales accompanied an unidentified impostor
of Liu Chiu Fang to the bank;24 that the impostor was able to withdraw Liu Chiu Fang’s dollar deposit in the amount
of US$75,000.00;25 that on March 3, 2003, respondents opened a dollar account with petitioner; and that the bank
later discovered that the serial numbers of the dollar notes deposited by respondents in the amount of
US$11,800.00 were the same as those withdrawn by the impostor.26
Respondent Rosales, however, denied taking part in the fraudulent and unauthorized withdrawal from the dollar
account of Liu Chiu Fang.27 Respondent Rosales claimed that she did not go to the bank on February 5,
2003.28Neither did she inform Gutierrez that Liu Chiu Fang was going to close her account.29 Respondent Rosales
further claimed that after Liu Chiu Fang opened an account with petitioner, she lost track of her.30 Respondent
Rosales’ version of the events that transpired thereafter is as follows:
On February 6, 2003, she received a call from Gutierrez informing her that Liu Chiu Fang was at the bank to close
her account.31 At noon of the same day, respondent Rosales went to the bank to make a transaction.32 While she
was transacting with the teller, she caught a glimpse of a woman seated at the desk of the Branch Operating Officer,
Melinda Perez (Perez).33 After completing her transaction, respondent Rosales approached Perez who informed her
that Liu Chiu Fang had closed her account and had already left.34 Perez then gave a copy of the Withdrawal
Clearance issued by the PLRA to respondent Rosales.35 On June 16, 2003, respondent Rosales received a call from
Liu Chiu Fang inquiring about the extension of her PLRA Visa and her dollar account.36 It was only then that Liu Chiu
Fang found out that her account had been closed without her knowledge.37 Respondent Rosales then went to the
bank to inform Gutierrez and Perez of the unauthorized withdrawal.38 On June 23, 2003, respondent Rosales and Liu
Chiu Fang went to the PLRA Office, where they were informed that the Withdrawal Clearance was issued on the
basis of a Special Power of Attorney (SPA) executed by Liu Chiu Fang in favor of a certain Richard So.39 Liu Chiu
Fang, however, denied executing the SPA.40 The following day, respondent Rosales, Liu Chiu Fang, Gutierrez, and
Perez met at the PLRA Office to discuss the unauthorized withdrawal.41 During the conference, the bank officers
assured Liu Chiu Fang that the money would be returned to her.42
On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution dismissing the criminal case
for lack of probable cause.43 Unfazed, petitioner moved for reconsideration.
On September 10, 2004, respondents filed before the Regional Trial Court (RTC) of Manila a Complaint44 for Breach
of Obligation and Contract with Damages, docketed as Civil Case No. 04110895 and raffled to Branch 21, against
petitioner. Respondents alleged that they attempted several times to withdraw their deposits but were unable to
because petitioner had placed their accounts under "Hold Out" status.45 No explanation, however, was given by
petitioner as to why it issued the "Hold Out" order.46 Thus, they prayed that the "Hold Out" order be lifted and that
they be allowed to withdraw their deposits.47 They likewise prayed for actual, moral, and exemplary damages, as
well as attorney’s fees.48
Petitioner alleged that respondents have no cause of action because it has a valid reason for issuing the "Hold Out"
order.49 It averred that due to the fraudulent scheme of respondent Rosales, it was compelled to reimburse Liu Chiu
Fang the amount of US$75,000.0050 and to file a criminal complaint for Estafa against respondent Rosales.51
While the case for breach of contract was being tried, the City Prosecutor of Manila issued a Resolution dated
February 18, 2005, reversing the dismissal of the criminal complaint.52 An Information, docketed as Criminal Case
No. 05-236103,53 was then filed charging respondent Rosales with Estafa before Branch 14 of the RTC of Manila.54
On January 15, 2007, the RTC rendered a Decision55 finding petitioner liable for damages for breach of
contract.56The RTC ruled that it is the duty of petitioner to release the deposit to respondents as the act of withdrawal
of a bank deposit is an act of demand by the creditor.57 The RTC also said that the recourse of petitioner is against
its negligent employees and not against respondents.58 The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioner] METROPOLITAN BANK &
TRUST COMPANY to allow [respondents] ANA GRACE ROSALES and YO YUK TO to withdraw their Savings and
Time Deposits with the agreed interest, actual damages of ₱50,000.00, moral damages of ₱50,000.00, exemplary
damages of ₱30,000.00 and 10% of the amount due [respondents] as and for attorney’s fees plus the cost of suit.
The counterclaim of [petitioner] is hereby DISMISSED for lack of merit.
SO ORDERED.59
Aggrieved, petitioner appealed to the CA.
On April 2, 2008, the CA affirmed the ruling of the RTC but deleted the award of actual damages because "the basis
for [respondents’] claim for such damages is the professional fee that they paid to their legal counsel for
[respondent] Rosales’ defense against the criminal complaint of [petitioner] for estafa before the Office of the City
Prosecutor of Manila and not this case."60 Thus, the CA disposed of the case in this wise:
WHEREFORE, premises considered, the Decision dated January 15, 2007 of the RTC, Branch 21, Manila in Civil
Case No. 04-110895 is AFFIRMED with MODIFICATION that the award of actual damages to [respondents]
Rosales and Yo Yuk To is hereby DELETED.
SO ORDERED.61
Petitioner sought reconsideration but the same was denied by the CA in its May 30, 2008 Resolution.62
Issues
A. THE [CA] ERRED IN RULING THAT THE "HOLD-OUT" PROVISION IN THE APPLICATION AND
AGREEMENT FOR DEPOSIT ACCOUNT DOES NOT APPLY IN THIS CASE.
B. THE [CA] ERRED WHEN IT RULED THAT PETITIONER’S EMPLOYEES WERE NEGLIGENT IN
RELEASING LIU CHIU FANG’S FUNDS.
C. THE [CA] ERRED IN AFFIRMING THE AWARD OF MORAL DAMAGES, EXEMPLARY DAMAGES,
AND ATTORNEY’S FEES.63
Petitioner contends that the CA erred in not applying the "Hold Out" clause stipulated in the Application and
Agreement for Deposit Account.64 It posits that the said clause applies to any and all kinds of obligation as it does
not distinguish between obligations arising ex contractu or ex delictu.65 Petitioner also contends that the fraud
committed by respondent Rosales was clearly established by evidence;66 thus, it was justified in issuing the "Hold-
Out" order.67 Petitioner likewise denies that its employees were negligent in releasing the dollars.68 It claims that it
was the deception employed by respondent Rosales that caused petitioner’s employees to release Liu Chiu Fang’s
funds to the impostor.69
Lastly, petitioner puts in issue the award of moral and exemplary damages and attorney’s fees. It insists that
respondents failed to prove that it acted in bad faith or in a wanton, fraudulent, oppressive or malevolent manner.70
Respondents, on the other hand, argue that there is no legal basis for petitioner to withhold their deposits because
they have no monetary obligation to petitioner.71 They insist that petitioner miserably failed to prove its accusations
against respondent Rosales.72 In fact, no documentary evidence was presented to show that respondent Rosales
participated in the unauthorized withdrawal.73 They also question the fact that the list of the serial numbers of the
dollar notes fraudulently withdrawn on February 6, 2003, was not signed or acknowledged by the alleged
impostor.74Respondents likewise maintain that what was established during the trial was the negligence of
petitioner’s employees as they allowed the withdrawal of the funds without properly verifying the identity of the
depositor.75Furthermore, respondents contend that their deposits are in the nature of a loan; thus, petitioner had the
obligation to return the deposits to them upon demand.76 Failing to do so makes petitioner liable to pay respondents
moral and exemplary damages, as well as attorney’s fees.77
Our Ruling
At the outset, the relevant issues in this case are (1) whether petitioner breached its contract with respondents, and
(2) if so, whether it is liable for damages. The issue of whether petitioner’s employees were negligent in allowing the
withdrawal of Liu Chiu Fang’s dollar deposits has no bearing in the resolution of this case. Thus, we find no need to
discuss the same.
The "Hold Out" clause does not apply
to the instant case.
Petitioner claims that it did not breach its contract with respondents because it has a valid reason for issuing the
"Hold Out" order. Petitioner anchors its right to withhold respondents’ deposits on the Application and Agreement for
Deposit Account, which reads:
Authority to Withhold, Sell and/or Set Off:
The Bank is hereby authorized to withhold as security for any and all obligations with the Bank, all monies,
properties or securities of the Depositor now in or which may hereafter come into the possession or under the
control of the Bank, whether left with the Bank for safekeeping or otherwise, or coming into the hands of the Bank in
any way, for so much thereof as will be sufficient to pay any or all obligations incurred by Depositor under the
Account or by reason of any other transactions between the same parties now existing or hereafter contracted, to
sell in any public or private sale any of such properties or securities of Depositor, and to apply the proceeds to the
payment of any Depositor’s obligations heretofore mentioned.
xxxx
JOINT ACCOUNT
xxxx
The Bank may, at any time in its discretion and with or without notice to all of the Depositors, assert a lien on any
balance of the Account and apply all or any part thereof against any indebtedness, matured or unmatured, that may
then be owing to the Bank by any or all of the Depositors. It is understood that if said indebtedness is only owing
from any of the Depositors, then this provision constitutes the consent by all of the depositors to have the Account
answer for the said indebtedness to the extent of the equal share of the debtor in the amount credited to the
Account.78
Petitioner’s reliance on the "Hold Out" clause in the Application and Agreement for Deposit Account is misplaced.
The "Hold Out" clause applies only if there is a valid and existing obligation arising from any of the sources of
obligation enumerated in Article 115779 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and quasi-
delict. In this case, petitioner failed to show that respondents have an obligation to it under any law, contract, quasi-
contract, delict, or quasi-delict. And although a criminal case was filed by petitioner against respondent Rosales, this
is not enough reason for petitioner to issue a "Hold Out" order as the case is still pending and no final judgment of
conviction has been rendered against respondent Rosales. In fact, it is significant to note that at the time petitioner
issued the "Hold Out" order, the criminal complaint had not yet been filed. Thus, considering that respondent
Rosales is not liable under any of the five sources of obligation, there was no legal basis for petitioner to issue the
"Hold Out" order. Accordingly, we agree with the findings of the RTC and the CA that the "Hold Out" clause does not
apply in the instant case.
In view of the foregoing, we find that petitioner is guilty of breach of contract when it unjustifiably refused to release
respondents’ deposit despite demand. Having breached its contract with respondents, petitioner is liable for
damages.
Respondents are entitled to moral and

exemplary damages and attorney’s fees. 1âwphi1
In cases of breach of contract, moral damages may be recovered only if the defendant acted fraudulently or in bad
faith,80 or is "guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations."81
In this case, a review of the circumstances surrounding the issuance of the "Hold Out" order reveals that petitioner
issued the "Hold Out" order in bad faith. First of all, the order was issued without any legal basis. Second, petitioner
did not inform respondents of the reason for the "Hold Out."82 Third, the order was issued prior to the filing of the
criminal complaint. Records show that the "Hold Out" order was issued on July 31, 2003,83 while the criminal
complaint was filed only on September 3, 2003.84 All these taken together lead us to conclude that petitioner acted in
bad faith when it breached its contract with respondents. As we see it then, respondents are entitled to moral
damages.
As to the award of exemplary damages, Article 222985 of the Civil Code provides that exemplary damages may be
imposed "by way of example or correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages." They are awarded only if the guilty party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.86
In this case, we find that petitioner indeed acted in a wanton, fraudulent, reckless, oppressive or malevolent manner
when it refused to release the deposits of respondents without any legal basis. We need not belabor the fact that the
banking industry is impressed with public interest.87 As such, "the highest degree of diligence is expected, and high
standards of integrity and performance are even required of it."88 It must therefore "treat the accounts of its
depositors with meticulous care and always to have in mind the fiduciary nature of its relationship with them."89 For
failing to do this, an award of exemplary damages is justified to set an example.
The award of attorney's fees is likewise proper pursuant to paragraph 1, Article 220890 of the Civil Code.
In closing, it must be stressed that while we recognize that petitioner has the right to protect itself from fraud or
suspicions of fraud, the exercise of his right should be done within the bounds of the law and in accordance with due
process, and not in bad faith or in a wanton disregard of its contractual obligation to respondents.
WHEREFORE, the Petition is hereby DENIED. The assailed April 2, 2008 Decision and the May 30, 2008
Resolution of the Court of Appeals in CA-G.R. CV No. 89086 are hereby AFFIRMED. SO ORDERED.
SECOND DIVISION
G.R. No. 189840 December 11, 2013

vs.
JAY MONTEVIRGEN y OZARAGA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
Failure to physically inventory and photograph the shabu seized from an accused in the manner prescribed by law
do not invalidate his arrest or render said drug inadmissible in evidence if its integrity and evidentiary value remain
intact. It could still be utilized in determining the guilt or innocence of the accused.1
Factual Antecedents
On appeal is the Decision2 dated July 31, 2009 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 03208 which
affirmed the Decision3 dated December 18, 2007 of Branch 65, Regional Trial Court (RTC) of Makati City in Criminal
Case Nos. 05-1396 to 1397 convicting beyond reasonable doubt Jay Montevirgen y Oza.raga (appellant) for the
crime of illegal sale and possession of shabu under Sections 5 and 11, Article II of Republic Act (RA) No. 9165 or
the "Comprehensive Dangerous Drugs Act of 2002."
The Informations against appellant read as follows:
Criminal Case No. 05-1396
That on or about the 19th day of July 2005, in the City of Makati, Philippines, a place within the jurisdiction of this
Honorable Court, the above-named accused, without being authorized by law, did then and there willfully, unlawfully
and feloniously sell distribute and transport, weighing zero point zero four (0.04) gram of Methylamphetamine
Hydrochloride (Shabu), which is a dangerous drug, in violation of the above-cited law.
CONTRARY TO LAW.4
Criminal Case No. 05-1397
That on or about the 19th day of July 2005, in the City of Makati, Philippines, a place within the jurisdiction of this
Honorable Court, the abovenamed accused, not lawfully authorized to possess or otherwise use any dangerous
drug and without the corresponding license or prescription, did then and there willfully, unlawfully and feloniously
have in his possession, direct custody and control weighing zero point zero four (0.04) gram and zero point ten
(0.10) gram or [a] total weight of zero point fourteen (0.14) gram of Methylamphetamine Hydrochloride (Shabu),
which is a dangerous drug, in violation of the above-cited law.
CONTRARY TO LAW.5
During arraignment, appellant pleaded "not guilty" in the two cases. After the pre-trial conference, a joint trial on the
merits ensued.
On July 18, 2005, P/Supt. Marietto Valerio (P/Supt. Valerio) of the Makati City Police Station Anti-Illegal Drugs
Special Operation Task Force received a report from a confidential informant that appellant was selling shabu in
Malvar Street, Barangay South Cembo, Makati City. Thus, he immediately formed a team composed of police
officers and personnel of the Makati Anti-Drug Abuse Council (MADAC) to conduct a buy-bust operation against
appellant. The members of the entrapment team were PO3 Esterio M. Ruiz, Jr. (PO3 Ruiz), PO1 Percival Mendoza,
PO1 Honorio Marmonejo (PO1 Marmonejo), Barangay Captain Rodolfo Doromal, Eugenio Dizer, Miguel Castillo,
Leo Sese, and Anthony Villanueva. PO3 Ruiz was designated as poseur-buyer and was provided with two 100-peso
bills marked money. PO1 Marmonejo, on the other hand, coordinated the operation with the Philippine Drug
Enforcement Agency (PDEA), which issued a Certificate of Coordination.6 The buy-bust team then proceeded to the
subject area but could not locate appellant.7
The next day, July 19, 2005, the buy-bust team returned to Malvar Street and found appellant talking to three men.
After these men departed, PO3 Ruiz, accompanied by the confidential informant, approached appellant. The
confidential informant introduced PO3 Ruiz to appellant and told him that PO3 Ruiz wanted to buy shabu. Appellant
asked PO3 Ruiz how much he wanted to buy and he replied, ₱200.00. Appellant pulled out from his pocket three
plastic sachets containing white crystalline substance and told PO3 Ruiz to choose one. He complied and gave the
marked money to appellant as payment. Appellant pocketed the remaining plastic sachets together with the marked
money. PO3 Ruiz then took off his cap – the pre-arranged signal that the transaction had been consummated. The
other buy-bust team members then rushed to the scene to assist PO3 Ruiz in apprehending appellant. The two
other plastic sachets and marked money were recovered from appellant after PO3 Ruiz ordered him to empty his
pockets. PO3 Ruiz then marked the plastic sachets – "EMR" for the one appellant sold to him and "EMR-1" and
"EMR-2"8 for the other two sachets confiscated from appellant.
Appellant was taken to the police headquarters where he was booked and the incident recorded in the police blotter.
The items seized from him were turned over to the duty investigator who prepared a request for laboratory
examination and then sent to the crime laboratory. The results revealed that the contents of the plastic sachets are
positive for shabu.9
Appellant testified that on July 19, 2005, at around 2 p.m., he was in his house with his wife and child when he was
roused from sleep by a man armed with a gun. Several other armed men entered his house. He was told that a buy-
bust operation was being conducted. They searched his house then appellant was made to board a vehicle where
he was showed a plastic sachet containing white crystalline substance that he believed to be shabu. He struggled to
free himself and denied ownership thereof but his actions were futile. He was taken to Barangay Olympia, Makati
City, where he was detained for 30 minutes, then brought to the crime laboratory for drug testing.10
Defense witness Fancy Dela Cruz corroborated the testimony of appellant. She averred that at around 1:30 p.m. of
July 19, 2005, two vehicles parked almost in front of her. Several men alighted from the vehicles and forced open
the door of appellant’s house. She inquired as to their intentions but was told not to intervene and to avoid
involvement. She complied but heard one of the men telling appellant to get up and put on his clothes. The men
then had appellant board one of the vehicles and sped away. She looked for appellant’s wife and informed her of the
incident.11
The RTC gave credence to the testimony of the prosecution witnesses on the events that transpired prior to and
during the buy-bust operation. It rendered a verdict of conviction on December 18, 2007,12 viz:
WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:
1. In Criminal Case No. 05-1396, the Court finds accused JAY MONTEVIRGEN y OZARAGA, GUILTY
beyond reasonable doubt of the charge for violation of Sec. 5, Art. II, RA 9165, and sentences him to suffer
LIFE imprisonment and to pay a fine of FIVE Hundred Thousand (₱500,000.00) pesos;
2. In Criminal Case No. 05-1397, the Court finds accused JAY MONTEVIRGEN y OZARAGA, GUILTY
beyond reasonable doubt of the charge for violation of Sec. 11, Art. II, RA 9165 and sentences him to suffer
the penalty of imprisonment of Twelve (12) years and one (1) day as minimum to Twenty (20) years as
maximum and to pay a fine of Three Hundred Thousand (₱300,000.00);
The period of detention of the accused should be given full credit.
Let the dangerous drug subject matter of these cases be disposed of in the manner provided for by law.
SO ORDERED.13
On appeal, the CA concurred with the RTC’s findings and conclusions and, consequently, affirmed its judgment in
the assailed Decision14 of July 31, 2009. The dispositive portion of CA’s Decision reads:
WHEREFORE, the appeal is DENIED. The December 18, 2007 Decision of the Regional Trial Court of the City of
Makati, Branch 65 is hereby AFFIRMED.
SO ORDERED.15
Still unable to accept his conviction, appellant is now before us raising the same interrelated errors he assigned
before the CA, viz:
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE NON-
COMPLIANCE WITH THE REQUIREMENTS FOR THE PROPER CUSTODY OF SEIZED DANGEROUS DRUGS
UNDER R.A. NO. 9165.
II
THE TRIAL COURT GRAVELY ERRED IN GIVING CREDENCE TO THE PROSECUTION’S EVIDENCE
NOTWIT[H]STANDING THE FAILURE OF THE A[P]PREHENDING TEAM TO PROVE [THE] INTEGRITY OF THE
SEIZED DRUGS.16
In his joint discussion of these errors, appellant contends that the police officers involved in the buy-bust operation
failed to observe the proper procedure in the custody and control of the seized drug by not marking the confiscated
specimens in the manner mandated by law. He claims that the arresting team did not immediately conduct a
physical inventory of the seized items and photograph the same in the presence of his representative or counsel,
representative from media, Department of Justice, and any elected public officials pursuant to Section 21 of the
Implementing Rules and Regulations of RA 9165. He also argues that the Certificate of Coordination has no weight
in evidence and cannot be used to prove the legitimacy of the buy-bust operation since it was issued for the failed
entrapment operation the previous day, July 18, 2005.
Appellee, through the Office of the Solicitor General argues that the prosecution sufficiently established all the
elements of illegal sale and possession of shabu against appellant. It asserts that the integrity and evidentiary value
of the shabu seized from appellant were properly preserved by the arresting team.
Our Ruling
Elements for the Prosecution of Illegal

Sale and Possession of Shabu.
In every prosecution for the illegal sale of shabu, under Section 5, Article II of RA 9165, the following elements must
be proved: "(1) the identity of the buyer and the seller, the object and the consideration; and (2) the delivery of the
thing sold and the payment therefor. x x x What is material in a prosecution for illegal sale of dangerous drugs is the
proof that the transaction or sale actually took place, coupled with the presentation in court of the corpus delicti"17 or
the illicit drug in evidence. On the other hand, in prosecuting a case for illegal possession of dangerous drugs under
Section 11, Article II of the same law, the following elements must concur: "(1) the accused is in possession of an
item or object, which is identified as a prohibited drug; (2) such possession is not authorized by law; and (3) the
accused freely and consciously possessed the drug.18
In this case, all the elements for the illegal sale of shabu were established. PO3 Ruiz, the poseur-buyer, positively
identified appellant as the person he caught in flagrante delicto selling a white crystalline substance believed to
be shabu in the entrapment operation conducted by the police and MADAC operatives. Upon receipt of the ₱200.00
buy-bust money, appellant handed to PO3 Ruiz the sachet containing 0.04 gram of white crystalline substance
which later tested positive for shabu. "The delivery of the contraband to the poseur-buyer and the receipt by the
seller of the marked money successfully consummated the buy-bust transaction x x x."19
All the elements in the prosecution for illegal possession of dangerous drugs were also established. First, the two
plastic sachets containing shabu subject of the case for the illegal possession of drugs were found in appellant’s
pocket after a search on his person was made following his arrest in flagrante delicto for the illegal sale of shabu. It
must be remembered that a person lawfully arrested may be searched for anything which may have been used or
constitute proof in the commission of an offense without a warrant.20 Second, appellant did not adduce evidence
showing his legal authority to possess the shabu. Third, appellant’s act of allowing the poseur-buyer to choose one
from among the three sachets and putting back into his pocket the two sachets of shabu not chosen clearly shows
that he freely and consciously possessed the illegal drugs. Hence, appellant was correctly charged and convicted
for illegal possession of shabu.
Appellant’s defense of denial cannot prevail against the positive testimony of prosecution witnesses. There is also
no imputation by appellant of any evil motives on the part of the buy-bust team to falsely testify against him. Their
testimonies and actuations therefore enjoy the presumption of regularity.
Failure to Physically Inventory and

Photograph the Shabu After Seizure
and Confiscation is Not Fatal.
Appellant draws attention to the failure of the apprehending police officers to comply with Section 21(a), Article II of
the Implementing Rules and Regulations of RA 9165 regarding the physical inventory and photograph of the seized
items. This provision reads as follows:
(1) The apprehending officer/team having initial custody and control of the drugs shall, immediately after seizure and
of the inventory and be given a copy thereof; Provided, that the physical inventory and photograph shall be
the apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided further, that non-
seizures of and custody over said items.
In other words, the failure of the prosecution to show that the police officers conducted the required physical
inventory and take photograph of the objects confiscated does not ipso facto render inadmissible in evidence the
items seized. There is a proviso in the implementing rules stating that when it is shown that there exist justifiable
grounds and proof that the integrity and evidentiary value of the evidence have been preserved, the seized items
can still be used in determining the guilt or innocence of the accused.21
Here, the absence of evidence that the buy-bust team made an inventory and took photographs of the drugs seized
from appellant was not fatal since the prosecution was able to preserve the integrity and evidentiary value of
the shabu. PO3 Ruiz, the poseur-buyer and apprehending officer, marked the seized items in front of appellant,
the barangay captain and other members of the buy-bust team, immediately after the consummation of the drug
transaction. He then delivered the seized items to the duty investigator, who in turn sent the same to the PNP Crime
Laboratory for examination on the same day. During trial, PO3 Ruiz was able to identify the said markings and
explain how they were made.
Clearly, there was no hiatus or confusion in the confiscation, handling, custody and examination of the shabu. The
1âwphi1
illegal drugs that were confiscated from appellant, taken to the police headquarters, subjected to qualitative
examination at the crime laboratory, and finally introduced in evidence against appellant were the same illegal drugs
that were confiscated from him when he was caught in flagrante delicto selling and possessing the same.
Appellant’s contention that the buy-bust team should have coordinated with the PDEA on the day the entrapment
operation occurred deserves scant consideration. Coordination with the PDEA is not an indispensable element of a
proper buy-bust operation.22 A buy-bust operation is not invalidated by mere noncoordination with the PDEA.23
Penalty
Under Section 5, Article II of RA 9165, the penalty for the unauthorized sale of shabu, regardless of its quantity and
purity, is life imprisonment to death and a fine ranging from ₱500,000.00 to ₱10 million. Since the penalty imposed
by the RTC and affirmed by the CA is within the prescribed range, we affirm the lower courts’ imposition of life
imprisonment as well as the payment of fine of ₱500,000.00.
On the other hand, Section 11(3), Article II of the same law provides that illegal possession of less than five grams
of shabu is penalized with imprisonment of twelve (12) years and one (1) day to twenty (20) years plus a fine
ranging from ₱300,000.00 to ₱400,000.00.
Appellant was found guilty of selling one sachet containing 0.04 gram of shabu and of possessing two other sachets
of the same substance with a total weight of 0.14 gram. Hence, applying the above provisions, the penalty of
imprisonment of twelve (12) years and one (1) day as minimum to twenty (20) years as maximum and the payment
of fine of ₱300,000.00 imposed by the RTC and affirmed by the CA are also proper.
WHEREFORE, the appeal is DISMISSED. The assailed Decision dated July 31, 2009 of the Court of Appeals in CA-
G.R. CR-H.C. No. 03208 affirming the conviction of Jay Montevirgen y Ozaraga by the Regional Trial Court of
Makati City, Branch 65, for violation of Sections 5 and 11, Article II of Republic Act No. 9165, is AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. NO. 192105 December 9, 2013
ANTONIO LOCSIN, II, Petitioner,

vs.
MEKENI FOOD CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
In the absence of specific terms and conditions governing a car plan agreement between the employer and employe
former may not retain the installment payments made by the latter on the car plan and treat them as rents for the
use of the service vehicle, in the event that the employee ceases his employment and is unable to complete the
installment payments on the vehicle. The underlying reason is that the service vehicle was precisely used in the
former' s business; any personal benefit obtained by the employee from its use is merely incidental. This Petition for
Review on Certiorari1 assails the January 27, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
109550, as well as its April 23, 2010 Resolution3 denying petitioner’s Motion for Partial Reconsideration.4
Factual Antecedents
In February 2004, respondent Mekeni Food Corporation(Mekeni)–a Philippine company engaged in food
manufacturing and meat processing –offered petitioner Antonio Locsin II the position of Regional Sales Manager to
over see Mekeni’s National Capital Region Supermarket/Food Service and South Luzon operations. In addition to a
compensation and benefit package, Mekeni offered petitioner a car plan, under which one-half of the cost of the
vehicle is to be paid by the company and the other half to be deducted from petitioner’s salary. Mekeni’s offer was
contained in an Offer Sheet5 which was presented to petitioner.
Petitioner began his stint as Mekeni Regional Sales Manager on March 17, 2004. To be able to effectively cover his
appointed sales territory, Mekeni furnished petitioner with a used Honda Civic car valued at ₱280,000.00, which
used to be the service vehicle of petitioner’s immediate supervisor. Petitioner paid for his 50% share through salary
deductions of ₱5,000.00 each month.
Subsequently, Locsin resigned effective February 25, 2006. By then, a total of ₱112,500.00 had been deducted
from his monthly salary and applied as part of the employee’s share in the car plan. Mekeni supposedly put in an
equivalent amount as its share under the car plan. In his resignation letter, petitioner made an offer to purchase his
service vehicle by paying the outstanding balance thereon. The parties negotiated, but could not agree on the terms
of the proposed purchase. Petitioner thus returned the vehicle to Mekeni on May 2, 2006.
Petitioner made personal and written follow-ups regarding his unpaid salaries, commissions, benefits, and offer to
purchase his service vehicle. Mekeni replied that the company car plan benefit applied only to employees who have
been with the company for five years; for this reason, the balance that petitioner should pay on his service vehicle
stood at ₱116,380.00 if he opts to purchase the same.
On May 3, 2007, petitioner filed against Mekeni and/or its President, Prudencio S. Garcia, a Complaint6for the
recovery of monetary claims consisting of unpaid salaries, commissions, sick/vacation leave benefits, and recovery
of monthly salary deductions which were earmarked for his cost-sharing in the car plan. The case was docketed in
the National Labor Relations Commission(NLRC), National Capital Region(NCR), Quezon City as NLRC NCR
CASE NO. 00-05-04139-07.
On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a Decision,7 decreeing as follows:
WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered directing respondents to turn-
over to complainant x x x the subject vehicle upon the said complainant’s payment to them of the sum of
₱100,435.84.SO ORDERED.8 Ruling of the National Labor Relations Commission On appeal,9 the Labor Arbiter’s
Decision was reversed in a February 27, 2009 Decision10 of the NLRC, thus: WHEREFORE, premises considered,
the appeal is hereby Granted. The assailed Decision dated October 30, 2007 is hereby REVERSED and SET
ASIDE and a new one entered ordering respondent-appellee Mekeni Food Corporation to pay complainant-appellee
the following:
1.Unpaid Salary in the amount of ₱12,511.45;
2.Unpaid sick leave/vacation leave pay in the amount of ₱14,789.15;
3.Unpaid commission in the amount of ₱9,780.00; and
4.Reimbursement of complainant’s payment under the car plan agreement in the amount of ₱112,500.00;
and
5.The equivalent share of the company as part of the complainant’s benefit under the car plan 50/50 sharing
amounting to ₱112,500.00.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to deduct the sum of ₱4,736.50 representing
complainant-appellant’s cash advance from his total monetary award.

SO ORDERED.11 The NLRC held that petitioner’s amortization payments on his service vehicle amounting to
₱112,500.00 should be reimbursed; if not, unjust enrichment would result, as the vehicle remained in the
possession and ownership of Mekeni.
On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a Decision,7 decreeing as follows:
WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered directing respondents to turn-
over to complainant x x xthe subject vehicle upon the said complainant’s payment to them of the sum of
₱100,435.84.
SO ORDERED.8
On appeal,9 the Labor Arbiter’s Decision was reversedin a February 27, 2009 Decision10of the NLRC, thus:
WHEREFORE, premises considered, the appeal is hereby Granted. The assailed Decision dated October 30, 2007
is hereby REVERSED and SET ASIDE and a new one entered ordering respondent-appellee Mekeni Food
Corporation to pay complainant-appellee the following:
1.Unpaid Salary in the amount of ₱12,511.45;
2.Unpaid sick leave/vacation leave pay in the amount of ₱14,789.15;
3.Unpaid commission in the amount of ₱9,780.00; and
4.Reimbursement of complainant’s payment under the car plan agreement in the amount of ₱112,500.00;
and
5.The equivalent share of the company as part of the complainant’s benefit under the car plan 50/50 sharing
amounting to ₱112,500.00.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to deduct the sum of ₱4,736.50 representing
complainant-appellant’s cash advance from his total monetary award.
SO ORDERED.11
The NLRC held that petitioner’s amortization payments on his service vehicle amounting to ₱112,500.00 should be
reimbursed; if not, unjust enrichment would result, as the vehicle remained in the possession and ownership of
Mekeni.
In addition, the employer’s share in the monthly car plan payments should likewise be awarded to petitioner
because it forms part of the latter’s benefits under the car plan. It held further that Mekeni’s claim that the company
car plan benefit applied only to employees who have been with the company for five years has not been
substantiated by its evidence, in which case the car plan agreement should be construed in petitioner’s favor.
Mekeni moved to reconsider, but in an April 30, 2009 Resolution,12 the NLRC sustained its original findings.
Mekeni filed a Petition for Certiorari13 with the CA assailing the NLRC’s February 27, 2009 Decision, saying that the
NLRC committed grave abuse of discretion in holding it liable to petitioner as it had no jurisdiction to resolve
petitioner’s claims, which are civil in nature.
On January 27, 2010, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the National Labor Relations Commission
dated 27 February 2009, in NLRC NCR Case No. 00-05-04139-07, and its Resolution dated 30 April 2009 denying
reconsideration thereof, are MODIFIED in that the reimbursement of Locsin’s payment under the car plan in the
amount of ₱112,500.00, and the payment to him of Mekeni’s 50% share in the amount of ₱112,500.00 are
DELETED. The rest of the decision is AFFIRMED.
SO ORDERED.14
In arriving at the above conclusion, the CA held that the NLRC possessed jurisdiction over petitioner’s claims,
including the amounts he paid under the car plan, since his Complaint against Mekeni is one for the payment of
salaries and employee benefits. With regard to the car plan arrangement, the CA applied the ruling in Elisco Tool
Manufacturing Corporation v. Court of Appeals,15 where it was held that –
First. Petitioner does not deny that private respondent Rolando Lantan acquired the vehicle in question under a car
plan for executives of the Elizalde group of companies. Under a typical car plan, the company advances the
purchase price of a car to be paid back by the employee through monthly deductions from his salary. The company
retains ownership of the motor vehicle until it shall have been fully paid for. However, retention of registration of the
car in the company’s name is only a form of a lien on the vehicle in the event that the employee would abscond
before he has fully paid for it. There are also stipulations in car plan agreements to the effect that should the
employment of the employee concerned be terminated before all installments are fully paid, the vehicle will be taken
by the employer and all installments paid shall be considered rentals per agreement.16
In the absence of evidence as to the stipulations of the car plan arrangement between Mekeni and petitioner, the CA
treated petitioner’s monthly contributions in the total amount of ₱112,500.00 as rentals for the use of his service
vehicle for the duration of his employment with Mekeni. The appellate court applied Articles 1484-1486 of the Civil
Code,17 and added that the installments paid by petitioner should not be returned to him inasmuch as the amounts
are not unconscionable. It made the following pronouncement:
Having used the car in question for the duration of his employment, it is but fair that all of Locsin’s payments be
considered as rentals therefor which may be forfeited by Mekeni. Therefore, Mekeni has no obligation to return
these payments to Locsin. Conversely, Mekeni has no right to demand the payment of the balance of the purchase
price from Locsin since the latter has already surrendered possession of the vehicle.18
Moreover, the CA held that petitioner cannot recover Mekeni’s corresponding share in the purchase price of the
service vehicle, as this would constitute unjust enrichment on the part of petitioner at Mekeni’s expense.
The CA affirmed the NLRC judgment in all other respects. Petitioner filed his Motion for Partial Reconsideration, 19but
the CA denied the same in its April 23, 2010 Resolution.
Thus, petitioner filed the instant Petition; Mekeni, on the other hand, took no further action.
Issue
Petitioner raises the following solitary issue:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THE CAR
PLAN PRIVILEGE AS PART OF THE COMPENSATION PACKAGE OFFERED TO PETITIONER AT THE
INCEPTION OF HIS EMPLOYMENT AND INSTEAD LIKENED IT TO A CAR LOAN ON INSTALLMENT, IN SPITE
OF THE ABSENCE OF EVIDENCE ONRECORD.20
In his Petition and Reply,21 petitioner mainly argues that the CA erred in treating his monthly contributions to the car
plan, totaling ₱112,500.00, as rentals for the use of his service vehicle during his employment; the car plan which he
availed ofwasa benefit and it formed part of the package of economic benefits granted to him when he was hired as
Regional Sales Manager. Petitioner submits that this is shown by the Offer Sheet which was shown to him and
which became the basis for his decision to accept the offer and work for Mekeni.
Petitioner adds that the absence of documentary or other evidence showing the terms and conditions of the Mekeni
company car plan cannot justify a reliance on Mekeni’s self-serving claimsthat the full terms thereof applied only to
employees who have been with the company for at least five years; in the absence of evidence, doubts should be
resolved in his favor pursuant to the policy of the law that affords protection to labor, as well asthe principle that all
doubts shouldbe construed to its benefit.
Finally, petitioner submits that the ruling in the Elisco Tool casecannot apply to his case because the car plan
subject of the said case involved a car loan, which his car plan benefit was not; it was part of his compensation
package, and the vehicle was an important component of his work which required constant and uninterrupted
mobility. Petitioner claims that the car plan was in fact more beneficial to Mekeni than to him; besides, he did not
choose to avail of it, as it was simply imposed upon him. He concludes that it is only just that his payments should
be refunded and returned to him.
Petitioner thus prays for the reversal of the assailed CA Decision and Resolution, and that the Court reinstate the
NLRC’s February 27, 2009 Decision.
In its Comment,22 Mekeni argues that the Petition does not raise questions of law, but merely of fact, which thus
requires the Court to review anew issues already passed upon by the CA – an unauthorized exercise given that the
Supreme Court is not a trier of facts, nor is it its function to analyze or weigh the evidence of the parties all over
again.23 It adds that the issue regarding the car plan and the conclusions of the CA drawn from the evidence on
record are questions of fact.
Mekeni asserts further that the service vehicle was merely a loan which had to be paid through the monthly salary
deductions.If it is not allowed to recover on the loan, this would constitute unjust enrichment on the part of petitioner.
Our Ruling
The Petition is partially granted.
To begin with, the Court notes that Mekeni did not file a similar petition questioning the CA Decision; thus, it is
deemed to have accepted what was decreed. The only issue that must be resolved in this Petition, then, is whether
petitioner is entitled to a refund of all the amounts applied to the cost of the service vehicle under the car plan.
When the conclusions of the CA are grounded entirely on speculation, surmises and conjectures, or when the
inferences made by it are manifestly mistaken or absurd, its findings are subject to review by this Court.24
From the evidence on record, it is seen that the Mekeni car plan offered to petitioner was subject to no other term or
condition than that Mekeni shall cover one-half of its value, and petitioner shall in turn pay the other half through
deductions from his monthly salary.Mekeni has not shown, by documentary evidence or otherwise, that there are
other terms and conditions governing its car plan agreement with petitioner. There is no evidence to suggest that if
petitioner failed to completely cover one-half of the cost of the vehicle, then all the deductions from his salary going
to the cost of the vehicle will be treated as rentals for his use thereof while working with Mekeni, and shall not be
refunded. Indeed, there is no such stipulation or arrangement between them. Thus, the CA’s reliance on Elisco
Toolis without basis, and its conclusions arrived at in the questioned decision are manifestly mistaken. To repeat
what was said in Elisco Tool –
First. Petitioner does not deny that private respondent Rolando Lantan acquired the vehicle in question under a car
plan for executives of the Elizalde group of companies. Under a typical car plan, the company advances the
purchase price of a car to be paid back by the employee through monthly deductions from his salary. The company
retains ownership of the motor vehicle until it shall have been fully paid for. However, retention of registration of the
car in the company’s name is only a form of a lien on the vehicle in the event that the employee would abscond
before he has fully paid for it. There are also stipulations in car plan agreements to the effect that should the
employment of the employee concerned be terminated before all installments are fully paid, the vehicle will be taken
by the employer and all installments paid shall be considered rentals per agreement.25 (Emphasis supplied)
It was made clear in the above pronouncement that installments made on the car plan may be treated as rentals
only when there is an express stipulation in the car plan agreement to such effect. It was therefore patent error for
the appellate court to assume that, even in the absence of express stipulation, petitioner’s payments on the car plan
may be considered as rentals which need not be returned.
Indeed, the Court cannot allow that payments made on the car plan should be forfeited by Mekeni and treated
simply as rentals for petitioner’s use of the company service vehicle. Nor may they be retained by it as purported
loan payments, as it would have this Court believe. In the first place, there is precisely no stipulation to such effect in
their agreement. Secondly, it may not be said that the car plan arrangement between the parties was a benefit that
the petitioner enjoyed; on the contrary, it wasan absolute necessity in Mekeni’s business operations, which benefit
edit to the fullest extent: without the service vehicle, petitioner would have been unable to rapidly cover the vast
sales territory assigned to him, and sales or marketing of Mekeni’s products could not have been booked or made
fast enough to move Mekeni’s inventory. Poor sales, inability to market Mekeni’s products, a high rate of product
spoil age resulting from stagnant inventory, and poor monitoring of the sales territory are the necessary
consequences of lack of mobility. Without a service vehicle, petitioner would have been placed at the mercy of
inefficient and unreliable public transportation; his official schedule would have been dependent on the arrival and
departure times of buses or jeeps, not to mention the availability of seats in them. Clearly, without a service vehicle,
Mekeni’s business could only prosper at a snail’s pace, if not completely paralyzed. Its cost of doing business would
be higher as well. The Court expressed just such a view in the past. Thus –
In the case at bar, the disallowance of the subject car plan benefits would hamper the officials in the performance of
their functions to promote and develop trade which requires mobility in the performance of official business. Indeed,
the car plan benefits are supportive of the implementation of the objectives and mission of the agency relative to the
nature of its operation and responsive to the exigencies of the service.26 (Emphasis supplied) Any benefit or privilege
enjoyed by petitioner from using the service vehicle was merely incidental and insignificant, because for the most
part the vehicle was under Mekeni’s control and supervision. Free and complete disposal is given to the petitioner
only after the vehicle’s cost is covered or paid in full. Until then, the vehicle remains at the beck and call of Mekeni.
Given the vast territory petitioner had to cover to be able to perform his work effectively and generate business for
his employer, the service vehicle was an absolute necessity, or else Mekeni’s business would suffer adversely.
Thus, it is clear that while petitioner was paying for half of the vehicle’s value, Mekeni was reaping the full benefits
from the use thereof.
In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions to the car plan. Under Article
1âw phi 1
22 of the Civil Code, "[e]very person who through an act of performance by another, or any other means, acquires
or comes into possession of something at the expense of the latter without just or legal ground, shall return the
same to him." Article 214227of the same Code likewise clarifies that there are certain lawful, voluntary and unilateral
acts which give rise to the juridical relation of quasi-contract, to the end that no one shall be unjustly enriched or
benefited at the expense of another. In the absence of specific terms and conditions governing the car plan
arrangement between the petitioner and Mekeni, a quasi-contractual relation was created between them.
Consequently, Mekeni may not enrich itself by charging petitioner for the use of its vehicle which is otherwise
absolutely necessaryto the full and effective promotion of its business. It may not, under the claim that petitioner’s
payments constitute rents for the use of the company vehicle, refuse to refund what petitioner had paid, for the
reasons that the car plan did not carry such a condition; the subject vehicle is an old car that is substantially, if not
fully, depreciated; the car plan arrangement benefited Mekeni for the most part; and any personal benefit obtained
by petitioner from using the vehicle was merely incidental.
Conversely, petitioner cannot recover the monetary value of Mekeni’s counterpart contribution to the cost of the
vehicle; that is not property or money that belongs to him, nor was it intended to be given to him in lieu of the car
plan. In other words, Mekeni’s share of the vehicle’s cost was not part of petitioner’s compensation package. To
start with, the vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to refund
petitioner’s payments, so should petitioner not be awarded the value of Mekeni’s counter part contribution to the car
plan, as this would unjustly enrich him at Mekeni’s expense.
There is unjust enrichment ''when a person unjustly retains a benefit to the loss of another, or when a person retains
money or property of another against the fundamental principles of justice, equity and good conscience." The
principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at the expense of another. The main objective of the principle
against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or
consideration. x x x28
WHEREFORE, the Petition is GRANTED IN PART. The assailed January 27, 2010 Decision and April 23, 2010
Resolution of the Court of Appeals in CA-G.R. SP No. 109550 are MODIFIED, in that respondent Mekeni Food
Corporation is hereby ordered to REFUND petitioner Antonio Locsin II's payments under the car plan agreement in
the total amount of₱112,500.00.
Thus, except for the counterpart or equivalent share of Mekeni Food Corporation in the car plan agreement
amounting to ₱112,500.00, which is DELETED, the February 27, 2009 Decision of the National Labor Relations
Commission is affirmed in all respects.
SO ORDERED.
SECOND DIVISION
G.R. No. 194169 December 4, 2013
ROMEO R. ARAULLO, Petitioner,

vs.
OFFICE OF THE OMBUDSMAN, HON. MERCEDITAS N. GUTIERREZ, HON. GERARDO C. NOGRALES, HON.
ROMEO L. GO, HON. PERLITA B. VELASCO, and ARDEN S. ANNI, Respondents.
DECISION
DEL CASTILLO, J.:
A public officer who acts pursuant to the dictates of law and within the limits of allowable discretion can hardly be
considered guilty of misconduct.
This Petition for Certiorari1 seeks to set aside the undated Decision2 of the Office of the Ombudsman (Ombudsman)
in Case No. OMB-C-A-09-0437-H, entitled "Romeo R. Aruallo, Complainant, versus Gerardo C. Nograles, Romeo L.
Go, Perlita B. Velasco, and Arden S. Anni, Respondents."
Factual Antecedents
Relative to National Labor relations Commission (NLRC), National Capital Region (NCR) NLRC NCR Case No. 00-
01-00581-2001 (the labor case) entitled "Romeo R. Araullo, Complainant, versus Club Filipino, Inc., Respondent,"
which is a case for illegal dismissal with a prayer for the recovery of salaries, benefits, and damages filed by herein
petitioner Romeo R. Araullo against his former employer Club Filipino, Inc. (Club Filipino) with the Quezon City NCR
Office of the NLRC, judgment3 was rendered by the Court of Appeals (CA), to wit:
WHEREFORE, the instant petition is GRANTED. The Decisions of the NLRC and the Labor Arbiter are vacated and
set aside. Petitioner Araullo’s dismissal is hereby declared illegal. Accordingly, the respondent Club Filipino is
hereby ordered to reinstate Araullo to his former position without loss of seniority rights and to pay petitioner full
[backwages], inclusive of allowances, including 13th month pay, as well as other monetary benefits, computed from
the time his compensation was withheld from him to the time of his reinstatement. Should reinstatement be no
longer possible the respondent Club Filipino should instead pay Araullo separation pay equivalent to one month a
day [sic] for every year of service, with the fraction of at least six (6) months be [sic] considered as one whole year.
SO ORDERED.4
The above CA judgment became final and executory after it was affirmed by this Court via a Decision5 dated
November 29, 2006 in G.R. No. 167723. Thus, the labor case was remanded to the NLRC for computation of
petitioner’s actual entitlements. The Labor Arbiter handling the case, Fedriel Panganiban (Arbiter Panganiban)
directed the NLRC Computation and Examination Unit to compute the liabilities of Club Filipino, after which the said
office submitted a written computation6 granting petitioner the following:
Backwages ₱1,494,000.00 13th Month Pay 124,500.00 Sick Leave/Vacation Leave 143,652.25 Separation Pay
576,000.00 Total ₱2,338,152.257
On December 13, 2007, Arbiter Panganiban issued an Order8 voluntarily inhibiting himself from handling the labor
case "to obviate any suspicion of partiality." The Order reads in part:
It was explained to the parties that after the submission of the comment, an order will be issued by this Arbitration
Branch, however, even before the expiration of the ten[-]day period in which the respondent is to submit the
comment, complainant’s counsel bombarded this office with constant follow-ups insisting for the issuance of the writ
of execution. Complainant’s counsel even hinted that he will be filing a case before the Ombudsman if the writ of
execution will not be issued.9 Club Filipino appealed Arbiter Panganiban’s Order of inhibition with the NLRC.
Meanwhile, the labor case was raffled to herein respondent Labor Arbiter Arden S. Anni (Arbiter Anni) on January 4,
2008. On January 8, 2008, petitioner filed a 4th
Ex-Parte Manifestation With Very Urgent Prayer For Issuance Of Writ Of Execution.10
On January 21, 2008, Club Filipino filed a Motion to Recompute dated January 10, 2008.11
On January 31, 2008, Arbiter Anni issued an Order12 holding in abeyance any action on petitioner’s motion for
execution and other related motions until Club Filipino’s appeal with the NLRC relative to Arbiter Panganiban’s
inhibition is resolved. In a May 15, 2008 Decision13 which became final and executory, the NLRC dismissed Club
Filipino’s appeal relative to Arbiter Panganiban’s voluntary inhibition, and ordered that the records of the labor case
be immediately forwarded to the branch of origin for continuation of the execution proceedings. On July 29, 2008,
Arbiter Anni issued a Writ of Execution14 ordering the collection of the ₱2,338,152.25 award as computed by the
NLRC Computation and Examination Unit, as well as execution fees in the amount of ₱23,380.00. Club Filipino
moved to quash the Writ of Execution,15 claiming that Arbiter Anni improvidently issued the writ without resolving the
pending incidents and issues and in violation of the NLRC rules of procedure – in that it was issued without the
required order approving the computation and without giving notice of such approval to the parties.16
The motion to quash was set for hearing on August 20, 2008. Even before Club Filipino’s motion to quash could be
heard on its scheduled hearing date, Arbiter Anni in an August 12, 2008 Order17 quashed the Writ of Execution,
enjoined the sheriff from conducting further execution, and lifted all notices of garnishment issued to the banks.
Then, on August 14, 2008, he issued another Order voluntarily inhibiting himself from further proceedings in the
labor case, on the ground that his "sense of impartiality may be questioned by any of the parties because of (his)
rapport with Atty. Roberto ‘Obet’ De Leon, President of Club Filipino, and respondent’s counsel, Atty. Ernesto P.
Tabao x x x, who are both (his) fraternity brothers in San Beda College of Law." 18
On August 22, 2008, petitioner filed with the NLRC a Very Urgent Petition to Set Aside the Order of Labor Arbiter
Arden S. Anni dated 12 August 200819 claiming that the assailed Order defied the NLRC’s directive to continue with
the execution of the case; that execution of the judgment is ministerial, and the quashing of the writ constitutes an
evasion of a positive duty; that Arbiter Anni’s inhibition was calculated to favor Club Filipino and his fraternity
brothers; that Club Filipino’s motion to quash was a mere scrap of paper because petitioner’s counsel was not
furnished with a copy thereof; and that the Writ of Execution has been duly implemented and completely satisfied.
However, the Petition was denied for lack of merit in an October 29, 2008 Resolution20 issued by the First Division of
the NLRC, composed of the herein respondent Commissioners – Presiding Commissioner Gerardo C. Nograles and
Commissioners Romeo L. Go, and Perlita B. Velasco. The following was decreed:
WHEREFORE, the petition to set aside the quashal order dated August 12, 2008 is hereby DENIED for lack of merit
and the Motion for the Issuance of Preliminary Injunction and/or Temporary Restraining Order is DISMISSED for
being MOOT and academic. Let the entire records be immediately forwarded to the Arbitration Branch of origin for
the purpose aforementioned. SO ORDERED.21
In the above-quoted October 29, 2008 Resolution, the respondent Commissioners noted that in Arbiter
Panganiban’s December 13, 2007 Order,22 he committed that after the parties shall have submitted their comments
to the NLRC Computation and Examination Unit’s written computation, he will issue the corresponding order, either
approving or disapproving the computation; however, the matter was overtaken by his voluntary inhibition from the
case. And when Arbiter Anni took over, he improvidently issued the Writ of Execution without first approving or
disapproving the NLRC Computation and Examination Unit’s computation or resolving Club Filipino’s subsequent
January 10, 2008 Motion to Recompute, thus circumventing Rule XI, Section 4 of the 2005 NLRC Revised Rules of
Procedure23 (NLRC Rules). The logical step, then, was to first resolve the pending issues and incidents in
accordance with the NLRC Rules; a remand of the case to the Labor Arbiter was thus in order. Petitioner moved to
reconsider, but in a March 18, 2009 Resolution,24 the respondent Commissioners resolved to deny his motion for
reconsideration.
Ruling of the Ombudsman
On July 28, 2009, petitioner filed a Complaint25 before the Ombudsman against the respondent Commissioners and
Arbiter Anni, for violation of Section 3(e)26 of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, and
Article 206 of the Revised Penal Code.27
The criminal aspect was docketed as OMB-C-C-09-0410-H; it was later dismissed by the Ombudsman via an
undated Resolution.28
On the other hand, the administrative case – docketed as OMB-C-A-09-0437-H – was based on a charge of grave
misconduct. Petitioner charged that Arbiter Anni entertained Club Filipino’s motion to quash despite the fact that
only he – and not his counsel – was furnished with a copy thereof; that he hastily resolved to quash the Writ of
Execution and lift the notices of garnishment even before the scheduled date of hearing of Club Filipino’s motion to
quash; and that after quashing the Writ of Execution, he voluntarily inhibited himself from further proceeding with the
labor case to "wash his hands" of the improper quashal of the Writ of Execution. Petitioner accused Arbiter Anni of
conspiring with his fraternity brothers in Club Filipino to delay the execution of the decision in the labor case, thus
giving unwarranted benefits and advantage to them. On the other hand, petitioner accused the respondent
Commissioners of gross misconduct for improperly affirming and "legitimizing", through their October 29, 2008
Resolution, Arbiter Anni’s order quashing the Writ of Execution. In their Counter-Affidavit,29 the respondent
Commissioners set up the defense that they acted lawfully and regularly in the performance of their functions
relative to petitioner’s labor case – specifically the quashing of the Writ of Execution, which was issued improvidently
by Arbiter Anni; that if they allowed the execution to proceed, Club Filipino’s right to due process would have been
violated, and this would have opened the door to further appeals or proceedings. They added that they did not act
with partiality, malice or with deliberate intent to cause damage to petitioner, nor is there evidence to show that they
acted in such manner; on the contrary, they acted with caution, prudence, good faith, and with due regard for the
rules of procedure of the NLRC. They maintained that the presumption of regularity should apply to them, and they
should be afforded a wide latitude of discretion, as government officers possessing the knowledge, expertise, and
experience in labor matters. They note particularly petitioner’s repeated threats to file an administrative case if the
labor case is not decided in his favor, from Arbiter Panganiban’s December 13, 2007 Order which revealed
petitioner’s counsel’s threat to file an administrative case if the Writ of Execution is not granted, to the insinuation
that if petitioner’s Very Urgent Petition to Set Aside the Order of Labor Arbiter Arden S. Anni dated 12 August 2008
is denied, a complaint with the Ombudsman would be instituted. For his part, Arbiter Anni in his Counter-
Affidavit 30avowed that there is no plot or conspiracy to delay the execution of the final judgment in the labor case;
that he was not influenced by his fraternity brothers in Club Filipino; that he was compelled to quash the Writ of
Execution on account of pending incidents that had to be resolved first, in conformity with Rule XI, Section 4 of the
NLRC Rules; that when the writ was quashed, garnishment had not been effected; that he scheduled the hearing on
the motion to quash on August 20, 2008 only because the motion could not be accommodated in his official
calendar – thus, in issuing his August 12, 2008 Order quashing the Writ of Execution, he did not violate petitioner’s
right to due process; that it was necessary to quash the Writ of Execution as it did not conform to Rule XI, Section 4
of the NLRC Rules; that in inhibiting himself from the case, he had no intention to delay the execution of the
judgment therein; and that petitioner should not be allowed to obtain execution and satisfaction of the judgment at
the expense and in violation of the rights of Club Filipino. In a Consolidated Reply-Affidavit,31 petitioner reiterated
that he should have been heard on the motion to quash before the Writ of Execution was withdrawn; that Arbiter
Anni’s August 12, 2008 Order quashing the writ was patently void as the motion to quash was still scheduled to be
heard on August 20, 2008; that in issuing the Writ of Execution on July 29, 2008 ordering the collection of the
amount of ₱2,338,152.25, Arbiter Anni is deemed to have approved the said computation of the NLRC Computation
and Examination Unit; that because the Writ of Execution was validly issued and the order quashing it is void, the
respondent Commissioners are guilty of misconduct in sustaining the said order, and caused undue injury to the
petitioner as a result of the delay in the execution and unwarranted benefits given by the respondents to Club
Filipino; and that Arbiter Anni is guilty of evident partiality, causing undue injury to petitioner and delay in the labor
case, as well as giving unwarranted benefits and advantage to his fraternity brothers in Club Filipino. Meanwhile, it
appears that the labor case was assigned to Arbiter Fe S. Cellan (Arbiter Cellan), who proceeded with the
execution. In a September 14, 2009 Order, Arbiter Cellan corrected the computed award, thus:
WHEREFORE, in view of the foregoing, the Motion to Recompute is denied. However, the computation of the
backwages and separation pay should be corrected and should be limited until 03 October 2007 and the
outstanding account of complainant in the amount of ₱186,545.81 should be deducted therefrom. SO ORDERED.32
It likewise appears that a recomputation was made, and the award due to petitioner was reduced to ₱2,117,002.35;
that in an October 8, 2009 Order, Arbiter Cellan approved the new computation and ordered the issuance of a Writ
of Execution; and that on December 10, 2010, petitioner received in full the amount of the judgment award.33
Meanwhile, in OMB-C-A-09-0437-H, the assailed undated Decision was issued, decreeing as follows:
WHEREFORE, the charge of Grave Misconduct against the respondents is hereby dismissed. SO ORDERED.34
The Ombudsman held that the quashing of the Writ of Execution was done to correct an error in the proceedings in
the labor case; there were pending motions and incidents that remained unresolved – yet the Writ of Execution was
issued nonetheless. In quashing the writ, the Ombudsman believed that Arbiter Anni was motivated by the desire to
rectify any violation of the NLRC Rules and prevent further contravention thereof, and not by ill motive to delay the
case or favor Club Filipino. The Ombudsman further assumed that it was necessary for Arbiter Anni to have
corrected himself before inhibiting from the labor case. The Ombudsman added that "the writ of execution would
have been nullified regardless of the motion to quash filed by Club Filipino because there was a need to rectify a
lapse in the labor proceedings,"35 and that this was "precisely the reason why the respondent Commissioners
sustained the ruling"36 of Arbiter Anni. Finally, the Ombudsman held that in the absence of a clear and manifest
intent to violate the law, or a flagrant disregard of established rule, there could be no grave misconduct on the
respondents’ part. On the contrary, what respondents did was to "correct an error to avoid any transgression of the
rules of procedure."37
Issue
With the dismissal of his charges, petitioner commenced the instant Petition, which raises the sole issue of whether
there is substantial evidence to hold respondents liable for grave misconduct.
Essentially, petitioner in his Petition and Consolidated Reply38 reiterates his arguments in his original charge: that
Arbiter Anni entertained Club Filipino’s motion to quash despite the fact that only he – and not his counsel – was
furnished with a copy thereof; that Arbiter Anni hastily resolved to quash the Writ of Execution and lift the notices of
garnishment even before the motion to quash could be heard; that Arbiter Anni conspired with his fraternity brothers
in Club Filipino to delay the execution of the decision in the labor case, thus giving unwarranted benefits and
advantage to Club Filipino and causing undue injury to petitioner; and that the respondent Commissioners
improperly affirmed, through their October 29, 2008 Resolution, Arbiter Anni’s order quashing the Writ of Execution.
Petitioner concludes that in view of the foregoing, the Ombudsman committed patent error and grave abuse of
discretion in exonerating the respondents from the charge of grave misconduct. He likewise takes exception to the
fact that the assailed decision is undated – insinuating that it is an irregular and highly unusual circumstance, and
notes that his counsel of record was not furnished with a copy of the assailed Decision. Petitioner thus prays that the
Court set aside the assailed Decision of the Ombudsman and declare respondents guilty of grave misconduct.
In their Comment39 praying for the dismissal of the Petition, respondent Commissioners argue that no grave abuse of
discretion exists to warrant a reversal of the Ombudsman’s ruling; that in the absence of evidence that it acted in a
capricious, whimsical and arbitrary manner, its findings are entitled to respect; that the elements of grave
misconduct are not present in their case; that they acted lawfully, regularly, and with prudence and caution, in the
performance of their functions; that in issuing the October 29, 2008 Resolution, they merely rectified Arbiter Anni’s
mistake in issuing the Writ of Execution without observing the proper procedure under the NLRC Rules. In his
Comment,40 Arbiter Anni maintains his innocence, insisting that he acted in good faith and under a sense of duty to
rectify his mistake in improvidently issuing the Writ of Execution. He claims that he did not commit grave
misconduct, nor did he act with a clear intent to violate the law or flagrantly disregard the NLRC Rules; that he
favored no one; that in inhibiting from the case, he acted prudently; that in sustaining his actions, the Ombudsman
did not commit grave abuse of discretion, but was merely acting in accordance with the facts, the law and evidence
on record. The Ombudsman, on the other hand, insists in its Comment41 that there is no substantial evidence to hold
respondents liable for grave misconduct; and in the absence of such evidence, the instant Petition must necessarily
fail as the requisite grave abuse of discretion is lacking.
Our Ruling
The Petition is dismissed.
During execution proceedings, errors may be committed such that the rights of a party may be prejudiced, in which
case corrective measures are called for. These may involve instances where –
1) the [W]rit of [E]xecution varies the judgment;
2) there has been a change in the situation of the parties making execution inequitable or unjust;
3) execution is sought to be enforced against property exempt from execution;
4) it appears that the controversy has never been subject to the judgment of the court; 5) the terms of the
judgment are not clear enough and there remains room for interpretation thereof; or
6) x x x the [W]rit of [E]xecution [was] improvidently issued, or x x x is defective in substance, or [was] issued
against the wrong party, or x x x the judgment debt has been paid or otherwise satisfied, or the writ was
issued without authority.42
In such event, one of the corrective measures that may be taken is the quashing of the Writ of Execution.43
There is no doubt that Arbiter Anni’s July 29, 2008 Writ of Execution was procedurally irregular, as it pre-empted the
NLRC Rules which require that where further computation of the award in the decision is necessary during the
course of the execution proceedings, no Writ of Execution shall be issued until after the computation has been
approved by the Labor Arbiter in an order issued after the parties have been duly notified and heard on the matter.
When the writ was issued, there was as yet no order approving the computation made by the NLRC Computation
and Examination Unit, and there was a pending and unresolved Motion to Recompute filed by Club Filipino. A
cursory examination of the motion reveals that it raised valid issues that required determination in order to arrive at a
just resolution, so that none of the parties would be unjustly enriched. For example, it appears that petitioner owed
Club Filipino a substantial amount of money which the latter sought to deduct from the judgment award by way of
compensation; if this is true, then the necessary adjustment in the award may be made to allow Club Filipino to
recover what petitioner owes it, to the extent allowable by law. Since the Writ of Execution was issued in
contravention of the law, it is irregular and defective, and there was no need to further hear Club Filipino’s motion to
quash the writ; Arbiter Anni’s issuance of the August 12, 2008 Order quashing the writ ahead of the scheduled
August 20, 2008 hearing is therefore not improper. "A void judgment or order has no legal and binding effect, force
or efficacy for any purpose. In contemplation of law, it is non-existent. x x x It is not even necessary to take any
steps to vacate or avoid a void judgment or final order; it may simply be ignored."44
The Court cannot blame the respondents for not treating the Writ of Execution as an implicit approval of the NLRC
Computation and Examination Unit’s computation, or even as an implied denial of Club Filipino’s Motion to
Recompute, because the NLRC Rules precisely require that the computation must be approved by the Labor Arbiter
in an order issued after the parties have been duly notified and heard. Besides, the pending motion to recompute
was not touched upon in the Writ of Execution. Finally, given petitioner’s threats of exacting criminal and
administrative liability if he did not have his way, respondents chose to act with extreme caution and took an
academic and literal approach in construing and applying the NLRC Rules. Nor may it be said that in quashing the
Writ of Execution or in inhibiting himself from the labor case, Arbiter Anni unduly favored Club Filipino. Quite the
contrary, Arbiter Anni risked being dragged to court on a gross ignorance charge by issuing the Writ of Execution in
disregard of the NLRC Rules; if he did not quash the writ, he would likewise have been perceived as favoring
petitioner. Moreover, it could also be said that if Arbiter Anni favored his fraternity brothers in Club Filipino, he would
not have issued the Writ of Execution in the first place; and he would have stayed on with the case, instead of
inhibiting himself therefrom. On the part of the respondent Commissioners, the Court detects no irregularity in their
actions either. While petitioner accuses them of gross misconduct for improperly affirming, through their October 29,
2008 Resolution, Arbiter Anni’s order quashing the Writ of Execution, the Court believes otherwise; they acted
pursuant to the NLRC Rules, and averted further mistake and damage by affirming the quashing of an otherwise
improvident writ. The Court fails to discern any indication of malice, bad faith, misconduct, or even negligence in the
respondents’ actions. Nor are there signs of partiality or attempts to favor a party to the case. All their actions were
aboveboard. Even Arbiter Anni’s subsequent inhibition from the case is far from questionable; like Arbiter
Panganiban, he may have been rendered uneasy by petitioner’s threats of criminal and administrative sanction if he
failed to expedite the proceedings. Under the 2005 NLRC Rules, a Labor Arbiter may voluntarily inhibit himself from
the resolution of a case and shall so state in writing the legal justifications therefor. Arbiter Anni was not precluded
from voluntarily inhibiting himself from the case; indeed, his inhibition was warranted under the circumstances and
given his fraternity ties with the President of Club Filipino and its counsel of record. What may have been placed in
question is the timing of his inhibition; one may wonder why he had to do so just days after he quashed his own Writ
of Execution. Petitioner – given his leaning – understandably interprets this as an attempt to prolong the execution
proceedings. An objective analysis of the situation, however, engenders the view that inhibition was a well-
1âwphi1
considered decision on Arbiter Anni’s part, who realizing that he committed a procedural misstep by his impetuous
issuance of the Writ of Execution which set him up for a possible administrative case grounded on gross ignorance
or otherwise, quashed his own writ. At the same time, he realized that his action of quashing the writ would be
scrutinized or misinterpreted, given his fraternity ties with the Club Filipino President and counsel; thus, he took it
upon himself to reveal such relationship, and then recuse himself from the case in order to avoid a possible
administrative case. In short, the events reveal that Arbiter Anni acted with his interest solely in mind; he had no
intentions of favoring any party to the case. His actions do not betray malice, bad faith, misconduct, or even
negligence. "Misconduct is a transgression of some established and definite rule of action, more particularly,
unlawful behavior or gross negligence by a public officer. x x x [And when] the elements of corruption, clear intent to
violate the law or flagrant disregard of established rule [are] manifest,"45 the public officer shall be liable for grave
misconduct. Evidently, a public officer who acts pursuant to the dictates of law and within the limits of allowable
discretion can hardly be considered guilty of misconduct. Finding no irregularity in the acts of respondents, the
Ombudsman did not commit grave abuse of discretion in exonerating them from the administrative charge of grave
misconduct. As a matter of fact, its disposition is correct in every respect. Thus, the Court’s policy of non-
interference with the Ombudsman’s exercise of sound discretion and judgment stands. Next, petitioner ascribes
wrongdoing because the assailed decision of the Ombudsman is undated, and allegedly his counsel was not
furnished with a copy thereof. In the past, this Court did not pay much attention to the fact that the assailed
decisions or orders brought before it were undated;46 indeed, in many of those cases, the Court even sustained
these undated dispositions. Unless the date itself was material or constituted the very subject matter of the inquiry,
the Court made short shrift of the defect. On the other hand, it appears that the apparent failure of petitioner’s
counsel to be served with a copy of the assailed decision did not prejudice petitioner’s rights; it did not prevent him
from timely filing this Petition. And if there were any procedural infirmities attendant or leading to petitioner’s filing of
the instant Petition, they seem to have been ignored or overlooked for petitioner’s own benefit.
Finally, we wrote that the assailed undated Decision of the Ombudsman in OMB-C-A-09-0437-H, petitioner went
directly to this Court via this Petition for Certiorari. This is not allowed. It is settled jurisprudence that "appeals from
decisions of the Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of
Appeals under the provisions of Rule 43, in line with the regulatory philiosophy adopted in appeals from quasi-
judicial agencies in the 1997 Revised Rules of Civil Procedure." 47
WHEREFORE, the Petition is DISMISSED for lack of merit.
SO ORDERED.
EN BANC
G.R. No. 175356 December 3, 2013
MANILA MEMORIAL PARK, INC. AND LA FUNERARIA PAZ-SUCAT, INC., Petitioners,

vs.
SECRETARY OF THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT and THE SECRETARY OF
THE DEPARTMENT OF FINANCE, Respondents.
DECISION
DEL CASTILLO, J.:
When a party challeges the constitutionality of a law, the burden of proof rests upon him.
Before us is a Petition for Prohibition2 under Rule 65 of the Rules of Court filed by petitioners Manila Memorial Park,
Inc. and La Funeraria Paz-Sucat, Inc., domestic corporations engaged in the business of providing funeral and
burial services, against public respondents Secretaries of the Department of Social Welfare and Development
(DSWD) and the Department of Finance (DOF).
Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432,3 as amended by RA 9257,4 and
the implementing rules and regulations issued by the DSWD and DOF insofar as these allow business
establishments to claim the 20% discount given to senior citizens as a tax deduction.
Factual Antecedents
On April 23, 1992, RA 7432 was passed into law, granting senior citizens the following privileges:
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the following:
a) the grant of twenty percent (20%) discount from all establishments relative to utilization of transportation
services, hotels and similar lodging establishment[s], restaurants and recreation centers and purchase of
medicine anywhere in the country: Provided, That private establishments may claim the cost as tax credit;
b) a minimum of twenty percent (20%) discount on admission fees charged by theaters, cinema houses and
concert halls, circuses, carnivals and other similar places of culture, leisure, and amusement;
c) exemption from the payment of individual income taxes: Provided, That their annual taxable income does
not exceed the property level as determined by the National Economic and Development Authority (NEDA)
for that year;
d) exemption from training fees for socioeconomic programs undertaken by the OSCA as part of its work;
e) free medical and dental services in government establishment[s] anywhere in the country, subject to
guidelines to be issued by the Department of Health, the Government Service Insurance System and the
Social Security System;
f) to the extent practicable and feasible, the continuance of the same benefits and privileges given by the
Government Service Insurance System (GSIS), Social Security System (SSS) and PAG-IBIG, as the case
may be, as are enjoyed by those in actual service.
On August 23, 1993, Revenue Regulations (RR) No. 02-94 was issued to implement RA 7432. Sections 2(i) and 4
of RR No. 02-94 provide:
Sec. 2. DEFINITIONS. – For purposes of these regulations: i. Tax Credit – refers to the amount representing the
20% discount granted to a qualified senior citizen by all establishments relative to their utilization of transportation
services, hotels and similar lodging establishments, restaurants, drugstores, recreation centers, theaters, cinema
houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement, which discount
shall be deducted by the said establishments from their gross income for income tax purposes and from their gross
sales for value-added tax or other percentage tax purposes. x x x x Sec. 4. RECORDING/BOOKKEEPING
REQUIREMENTS FOR PRIVATE ESTABLISHMENTS. – Private establishments, i.e., transport services, hotels and
similar lodging establishments, restaurants, recreation centers, drugstores, theaters, cinema houses, concert halls,
circuses, carnivals and other similar places of culture[,] leisure and amusement, giving 20% discounts to qualified
senior citizens are required to keep separate and accurate record[s] of sales made to senior citizens, which shall
include the name, identification number, gross sales/receipts, discounts, dates of transactions and invoice number
for every transaction. The amount of 20% discount shall be deducted from the gross income for income tax
purposes and from gross sales of the business enterprise concerned for purposes of the VAT and other percentage
taxes.
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation,5 the Court declared Sections 2(i) and 4 of
RR No. 02-94 as erroneous because these contravene RA 7432,6 thus:
RA 7432 specifically allows private establishments to claim as tax credit the amount of discounts they grant. In turn,
the Implementing Rules and Regulations, issued pursuant thereto, provide the procedures for its availment. To deny
such credit, despite the plain mandate of the law and the regulations carrying out that mandate, is indefensible.
First, the definition given by petitioner is erroneous. It refers to tax credit as the amount representing the 20 percent
discount that "shall be deducted by the said establishments from their gross income for income tax purposes and
from their gross sales for value-added tax or other percentage tax purposes." In ordinary business language, the tax
credit represents the amount of such discount. However, the manner by which the discount shall be credited against
taxes has not been clarified by the revenue regulations. By ordinary acceptation, a discount is an "abatement or
reduction made from the gross amount or value of anything." To be more precise, it is in business parlance "a
deduction or lowering of an amount of money;" or "a reduction from the full amount or value of something, especially
a price." In business there are many kinds of discount, the most common of which is that affecting the income
statement or financial report upon which the income tax is based.
xxxx
Sections 2.i and 4 of Revenue Regulations No. (RR) 2-94 define tax credit as the 20 percent discount deductible
from gross income for income tax purposes, or from gross sales for VAT or other percentage tax purposes. In effect,
the tax credit benefit under RA 7432 is related to a sales discount. This contrived definition is improper, considering
that the latter has to be deducted from gross sales in order to compute the gross income in the income statement
and cannot be deducted again, even for purposes of computing the income tax. When the law says that the cost of
the discount may be claimed as a tax credit, it means that the amount — when claimed — shall be treated as a
reduction from any tax liability, plain and simple. The option to avail of the tax credit benefit depends upon the
existence of a tax liability, but to limit the benefit to a sales discount — which is not even identical to the discount
privilege that is granted by law — does not define it at all and serves no useful purpose. The definition must,
therefore, be stricken down.
Laws Not Amended by Regulations
Second, the law cannot be amended by a mere regulation. In fact, a regulation that "operates to create a rule out of
harmony with the statute is a mere nullity;" it cannot prevail. It is a cardinal rule that courts "will and should respect
the contemporaneous construction placed upon a statute by the executive officers whose duty it is to enforce it x x
x." In the scheme of judicial tax administration, the need for certainty and predictability in the implementation of tax
laws is crucial. Our tax authorities fill in the details that "Congress may not have the opportunity or competence to
provide." The regulations these authorities issue are relied upon by taxpayers, who are certain that these will be
followed by the courts. Courts, however, will not uphold these authorities’ interpretations when clearly absurd,
erroneous or improper. In the present case, the tax authorities have given the term tax credit in Sections 2.i and 4 of
RR 2-94 a meaning utterly in contrast to what RA 7432 provides. Their interpretation has muddled x x x the intent of
Congress in granting a mere discount privilege, not a sales discount. The administrative agency issuing these
regulations may not enlarge, alter or restrict the provisions of the law it administers; it cannot engraft additional
requirements not contemplated by the legislature.
In case of conflict, the law must prevail. A "regulation adopted pursuant to law is law." Conversely, a regulation or
any portion thereof not adopted pursuant to law is no law and has neither the force nor the effect of law.7
On February 26, 2004, RA 92578 amended certain provisions of RA 7432, to wit:
(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels
and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all
establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services for the
death of senior citizens;
xxxx
The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost
of the goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from
gross income for the same taxable year that the discount is granted. Provided, further, That the total amount of the
claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax
purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code,
as amended.
To implement the tax provisions of RA 9257, the Secretary of Finance issued RR No. 4-2006, the pertinent provision
of which provides:
SEC. 8. AVAILMENT BY ESTABLISHMENTS OF SALES DISCOUNTS AS DEDUCTION FROM GROSS INCOME.

– Establishments enumerated in subparagraph (6) hereunder granting sales discounts to senior citizens on the sale
of goods and/or services specified thereunder are entitled to deduct the said discount from gross income subject to
the following conditions:
(1) Only that portion of the gross sales EXCLUSIVELY USED, CONSUMED OR ENJOYED BY THE
SENIOR CITIZEN shall be eligible for the deductible sales discount.
(2) The gross selling price and the sales discount MUST BE SEPARATELY INDICATED IN THE OFFICIAL
RECEIPT OR SALES INVOICE issued by the establishment for the sale of goods or services to the senior
citizen.
(3) Only the actual amount of the discount granted or a sales discount not exceeding 20% of the gross
selling price can be deducted from the gross income, net of value added tax, if applicable, for income tax
purposes, and from gross sales or gross receipts of the business enterprise concerned, for VAT or other
percentage tax purposes.
(4) The discount can only be allowed as deduction from gross income for the same taxable year that the
discount is granted.
(5) The business establishment giving sales discounts to qualified senior citizens is required to keep
separate and accurate record[s] of sales, which shall include the name of the senior citizen, TIN, OSCA ID,
gross sales/receipts, sales discount granted, [date] of [transaction] and invoice number for every sale
transaction to senior citizen.
(6) Only the following business establishments which granted sales discount to senior citizens on their sale
of goods and/or services may claim the said discount granted as deduction from gross income, namely:
xxxx
(i) Funeral parlors and similar establishments – The beneficiary or any person who shall shoulder the funeral and
burial expenses of the deceased senior citizen shall claim the discount, such as casket, embalmment, cremation
cost and other related services for the senior citizen upon payment and presentation of [his] death certificate.
The DSWD likewise issued its own Rules and Regulations Implementing RA 9257, to wit:
RULE VI DISCOUNTS AS TAX DEDUCTION OF ESTABLISHMENTS
Article 8. Tax Deduction of Establishments. – The establishment may claim the discounts granted under Rule V,
Section 4 – Discounts for Establishments, Section 9, Medical and Dental Services in Private Facilities and Sections
10 and 11 – Air, Sea and Land Transportation as tax deduction based on the net cost of the goods sold or services
rendered.
Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year
that the discount is granted; Provided, further, That the total amount of the claimed tax deduction net of value added
tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper
documentation and to the provisions of the National Internal Revenue Code, as amended; Provided, finally, that the
implementation of the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of
Internal Revenue (BIR) and approved by the Department of Finance (DOF).
Feeling aggrieved by the tax deduction scheme, petitioners filed the present recourse, praying that Section 4 of RA
7432, as amended by RA 9257, and the implementing rules and regulations issued by the DSWD and the DOF be
declared unconstitutional insofar as these allow business establishments to claim the 20% discount given to senior
citizens as a tax deduction; that the DSWD and the DOF be prohibited from enforcing the same; and that the tax
credit treatment of the 20% discount under the former Section 4 (a) of RA 7432 be reinstated.
Issues
A.
WHETHER THE PETITION PRESENTS AN ACTUAL CASE OR CONTROVERSY.
B.
WHETHER SECTION 4 OF REPUBLIC ACT NO. 9257 AND X X X ITS IMPLEMENTING RULES AND
REGULATIONS, INSOFAR AS THEY PROVIDE THAT THE TWENTY PERCENT (20%) DISCOUNT TO SENIOR
CITIZENS MAY BE CLAIMED AS A TAX DEDUCTION BY THE PRIVATE ESTABLISHMENTS, ARE INVALID AND
UNCONSTITUTIONAL.9
Petitioners emphasize that they are not questioning the 20% discount granted to senior citizens but are only
assailing the constitutionality of the tax deduction scheme prescribed under RA 9257 and the implementing rules
and regulations issued by the DSWD and the DOF.10
Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the Constitution, which provides
that: "[p]rivate property shall not be taken for public use without just compensation."11
In support of their position, petitioners cite Central Luzon Drug Corporation,12 where it was ruled that the 20%
discount privilege constitutes taking of private property for public use which requires the payment of just
compensation,13 and Carlos Superdrug Corporation v. Department of Social Welfare and Development,14 where it
was acknowledged that the tax deduction scheme does not meet the definition of just compensation.15
Petitioners likewise seek a reversal of the ruling in Carlos Superdrug Corporation16 that the tax deduction scheme
adopted by the government is justified by police power.17
They assert that "[a]lthough both police power and the power of eminent domain have the general welfare for their
object, there are still traditional distinctions between the two"18 and that "eminent domain cannot be made less
supreme than police power."19
Petitioners further claim that the legislature, in amending RA 7432, relied on an erroneous contemporaneous
construction that prior payment of taxes is required for tax credit.20
Petitioners also contend that the tax deduction scheme violates Article XV, Section 421 and Article XIII, Section 1122of
the Constitution because it shifts the State’s constitutional mandate or duty of improving the welfare of the elderly to
the private sector.23
Under the tax deduction scheme, the private sector shoulders 65% of the discount because only 35%24 of it is
actually returned by the government.25
Consequently, the implementation of the tax deduction scheme prescribed under Section 4 of RA 9257 affects the
businesses of petitioners.26
Thus, there exists an actual case or controversy of transcendental importance which deserves judicious disposition
on the merits by the highest court of the land.27
Respondents, on the other hand, question the filing of the instant Petition directly with the Supreme Court as this
disregards the hierarchy of courts.28
They likewise assert that there is no justiciable controversy as petitioners failed to prove that the tax deduction
treatment is not a "fair and full equivalent of the loss sustained" by them.29
As to the constitutionality of RA 9257 and its implementing rules and regulations, respondents contend that
petitioners failed to overturn its presumption of constitutionality.30
More important, respondents maintain that the tax deduction scheme is a legitimate exercise of the State’s police
power.31
Our Ruling
There exists an actual case or controversy.
We shall first resolve the procedural issue. When the constitutionality of a law is put in issue, judicial review may be
availed of only if the following requisites concur: "(1) the existence of an actual and appropriate case; (2) the
existence of personal and substantial interest on the part of the party raising the [question of constitutionality]; (3)
recourse to judicial review is made at the earliest opportunity; and (4) the [question of constitutionality] is the lis mota
of the case."32
In this case, petitioners are challenging the constitutionality of the tax deduction scheme provided in RA 9257 and
the implementing rules and regulations issued by the DSWD and the DOF. Respondents, however, oppose the
Petition on the ground that there is no actual case or controversy. We do not agree with respondents. An actual
case or controversy exists when there is "a conflict of legal rights" or "an assertion of opposite legal claims
susceptible of judicial resolution."33
The Petition must therefore show that "the governmental act being challenged has a direct adverse effect on the
individual challenging it."34
In this case, the tax deduction scheme challenged by petitioners has a direct adverse effect on them. Thus, it cannot
be denied that there exists an actual case or controversy.
The validity of the 20% senior citizen discount and tax deduction scheme under RA 9257, as an exercise of
police power of the State, has already been settled in Carlos Superdrug Corporation.
Petitioners posit that the resolution of this case lies in the determination of whether the legally mandated 20% senior
citizen discount is an exercise of police power or eminent domain. If it is police power, no just compensation is
warranted. But if it is eminent domain, the tax deduction scheme is unconstitutional because it is not a peso for peso
reimbursement of the 20% discount given to senior citizens. Thus, it constitutes taking of private property without
payment of just compensation. At the outset, we note that this question has been settled in Carlos Superdrug
Corporation.35
In that case, we ruled:
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private
property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and
capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to
provide a scheme whereby drugstores will be justly compensated for the discount. Examining petitioners’
arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme
as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens. Based on
the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount
privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible
expense that is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an
amount that is allowed by law to reduce the income prior to the application of the tax rate to compute the amount of
tax which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but
merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the discount as a deduction
reduces the net income of the private establishments concerned. The discounts given would have entered the
coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The
permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for
public use or benefit. This constitutes compensable taking for which petitioners would ordinarily become entitled to a
just compensation. Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. The measure is not the taker’s gain but the owner’s loss. The word just is used to intensify the
meaning of the word compensation, and to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full and ample. A tax deduction does not offer full reimbursement of the senior
citizen discount. As such, it would not meet the definition of just compensation. Having said that, this raises the
question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program. The Court believes so. The Senior
Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to grant
benefits and privileges to them for their improvement and well-being as the State considers them an integral part of
our society. The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus,
1âwphi 1
the Act provides: SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
SECTION 1. Declaration of Policies and Objectives. — Pursuant to Article XV, Section 4 of the Constitution, it is the
duty of the family to take care of its elderly members while the State may design programs of social security for
them. In addition to this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall
provide social justice in all phases of national development." Further, Article XIII, Section 11, provides: "The State
shall adopt an integrated and comprehensive approach to health development which shall endeavor to make
essential goods, health and other social services available to all the people at affordable cost. There shall be priority
for the needs of the underprivileged sick, elderly, disabled, women and children." Consonant with these
constitutional principles the following are the declared policies of this Act:
xxx xxx xxx
(f) To recognize the important role of the private sector in the improvement of the welfare of senior citizens and to
actively seek their partnership.
To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental
services, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals,
and other similar places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization of
services in hotels and similar lodging establishments, restaurants and recreation centers; and purchases of
medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that
business establishments extending the twenty percent discount to senior citizens may claim the discount as a tax
deduction. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has
general welfare for its object. Police power is not capable of an exact definition, but has been purposely veiled in
general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient
and flexible response to conditions and circumstances, thus assuring the greatest benefits. Accordingly, it has been
described as "the most essential, insistent and the least limitable of powers, extending as it does to all the great
public needs." It is "[t]he power vested in the legislature by the constitution to make, ordain, and establish all manner
of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the
constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the
same." For this reason, when the conditions so demand as determined by the legislature, property rights must bow
to the primacy of police power because property rights, though sheltered by due process, must yield to general
welfare. Police power as an attribute to promote the common good would be diluted considerably if on the mere plea
of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in
the absence of evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis
for its nullification in view of the presumption of validity which every law has in its favor. Given these, it is incorrect
for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their business, because
petitioners have not taken time to calculate correctly and come up with a financial report, so that they have not been
able to show properly whether or not the tax deduction scheme really works greatly to their disadvantage. In treating
the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF Opinion,
for every ₱1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32
will be refunded by the government by way of a tax deduction. To illustrate this point, petitioner Carlos Super Drug
cited the anti-hypertensive maintenance drug Norvasc as an example. According to the latter, it acquires Norvasc
from the distributors at ₱37.57 per tablet, and retails it at ₱39.60 (or at a margin of 5%). If it grants a 20% discount
to senior citizens or an amount equivalent to ₱7.92, then it would have to sell Norvasc at ₱31.68 which translates to
a loss from capital of ₱5.89 per tablet. Even if the government will allow a tax deduction, only ₱2.53 per tablet will be
refunded and not the full amount of the discount which is ₱7.92. In short, only 32% of the 20% discount will be
reimbursed to the drugstores. Petitioners’ computation is flawed. For purposes of reimbursement, the law states that
the cost of the discount shall be deducted from gross income, the amount of income derived from all sources before
deducting allowable expenses, which will result in net income. Here, petitioners tried to show a loss on a per
transaction basis, which should not be the case. An income statement, showing an accounting of petitioners' sales,
expenses, and net profit (or loss) for a given period could have accurately reflected the effect of the discount on their
income. Absent any financial statement, petitioners cannot substantiate their claim that they will be operating at a
loss should they give the discount. In addition, the computation was erroneously based on the assumption that their
customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the
amount of the discount.
Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines
given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the
mark-up at 5%. Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result of this
decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being oppressive, simply
because they cannot afford to raise their prices for fear of losing their customers to competition. The Court is not
oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business.
While the Constitution protects property rights, petitioners must accept the realities of business and the State, in the
exercise of police power, can intervene in the operations of a business which may result in an impairment of
property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for
the protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of
contracts and public utilities, continuously serve as x x x reminder[s] that the right to property can be relinquished
upon the command of the State for the promotion of public good. Undeniably, the success of the senior citizens
program rests largely on the support imparted by petitioners and the other private establishments concerned. This
being the case, the means employed in invoking the active participation of the private sector, in order to achieve the
purpose or objective of the law, is reasonably and directly related. Without sufficient proof that Section 4 (a) of R.A.
No. 9257 is arbitrary, and that the continued implementation of the same would be unconscionably detrimental to
petitioners, the Court will refrain from quashing a legislative act.36 (Bold in the original; underline supplied)
We, thus, found that the 20% discount as well as the tax deduction scheme is a valid exercise of the police power of
the State.
No compelling reason has been proffered to overturn, modify or abandon the ruling in Carlos Superdrug
Corporation.
Petitioners argue that we have previously ruled in Central Luzon Drug Corporation37 that the 20% discount is an
exercise of the power of eminent domain, thus, requiring the payment of just compensation. They urge us to re-
examine our ruling in Carlos Superdrug Corporation38 which allegedly reversed the ruling in Central Luzon Drug
Corporation.39
They also point out that Carlos Superdrug Corporation40 recognized that the tax deduction scheme under the
assailed law does not provide for sufficient just compensation. We agree with petitioners’ observation that there are
statements in Central Luzon Drug Corporation41 describing the 20% discount as an exercise of the power of eminent
domain, viz.:
[T]he privilege enjoyed by senior citizens does not come directly from the State, but rather from the private
establishments concerned. Accordingly, the tax credit benefit granted to these establishments can be deemed as
their just compensation for private property taken by the State for public use. The concept of public use is no longer
confined to the traditional notion of use by the public, but held synonymous with public interest, public benefit, public
welfare, and public convenience. The discount privilege to which our senior citizens are entitled is actually a benefit
enjoyed by the general public to which these citizens belong. The discounts given would have entered the coffers
and formed part of the gross sales of the private establishments concerned, were it not for RA 7432. The permanent
reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or
benefit. As a result of the 20 percent discount imposed by RA 7432, respondent becomes entitled to a just
compensation. This term refers not only to the issuance of a tax credit certificate indicating the correct amount of the
discounts given, but also to the promptness in its release. Equivalent to the payment of property taken by the State,
such issuance — when not done within a reasonable time from the grant of the discounts — cannot be considered
as just compensation. In effect, respondent is made to suffer the consequences of being immediately deprived of its
revenues while awaiting actual receipt, through the certificate, of the equivalent amount it needs to cope with the
reduction in its revenues. Besides, the taxation power can also be used as an implement for the exercise of the
power of eminent domain. Tax measures are but "enforced contributions exacted on pain of penal sanctions" and
"clearly imposed for a public purpose." In recent years, the power to tax has indeed become a most effective tool to
realize social justice, public welfare, and the equitable distribution of wealth. While it is a declared commitment
under Section 1 of RA 7432, social justice "cannot be invoked to trample on the rights of property owners who under
our Constitution and laws are also entitled to protection. The social justice consecrated in our [C]onstitution [is] not
intended to take away rights from a person and give them to another who is not entitled thereto." For this reason, a
just compensation for income that is taken away from respondent becomes necessary. It is in the tax credit that our
legislators find support to realize social justice, and no administrative body can alter that fact. To put it differently, a
private establishment that merely breaks even — without the discounts yet — will surely start to incur losses
because of such discounts. The same effect is expected if its mark-up is less than 20 percent, and if all its sales
come from retail purchases by senior citizens. Aside from the observation we have already raised earlier, it will also
be grossly unfair to an establishment if the discounts will be treated merely as deductions from either its gross
income or its gross sales. Operating at a loss through no fault of its own, it will realize that the tax credit limitation
1âwphi1
under RR 2-94 is inutile, if not improper. Worse, profit-generating businesses will be put in a better position if they
avail themselves of tax credits denied those that are losing, because no taxes are due from the latter.42 (Italics in the
original; emphasis supplied)
The above was partly incorporated in our ruling in Carlos Superdrug Corporation43 when we stated preliminarily
that—
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private
property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and
capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to
provide a scheme whereby drugstores will be justly compensated for the discount. Examining petitioners’
arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme
as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens. Based on
the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount
privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible
expense that is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an
amount that is allowed by law to reduce the income prior to the application of the tax rate to compute the amount of
tax which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but
merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the discount as a deduction
reduces the net income of the private establishments concerned. The discounts given would have entered the
coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The
permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for
public use or benefit. This constitutes compensable taking for which petitioners would ordinarily become entitled to a
just compensation. Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. The measure is not the taker’s gain but the owner’s loss. The word just is used to intensify the
meaning of the word compensation, and to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full and ample. A tax deduction does not offer full reimbursement of the senior
citizen discount. As such, it would not meet the definition of just compensation. Having said that, this raises the
question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program. The Court believes so.44
This, notwithstanding, we went on to rule in Carlos Superdrug Corporation45 that the 20% discount and tax deduction
scheme is a valid exercise of the police power of the State. The present case, thus, affords an opportunity for us to
clarify the above-quoted statements in Central Luzon Drug Corporation46 and Carlos Superdrug Corporation.47
First, we note that the above-quoted disquisition on eminent domain in Central Luzon Drug Corporation48 is obiter
dicta and, thus, not binding precedent. As stated earlier, in Central Luzon Drug Corporation,49 we ruled that the BIR
acted ultra vires when it effectively treated the 20% discount as a tax deduction, under Sections 2.i and 4 of RR No.
2-94, despite the clear wording of the previous law that the same should be treated as a tax credit. We were,
therefore, not confronted in that case with the issue as to whether the 20% discount is an exercise of police power
or eminent domain. Second, although we adverted to Central Luzon Drug Corporation50 in our ruling in Carlos
Superdrug Corporation,51 this referred only to preliminary matters. A fair reading of Carlos Superdrug
Corporation52would show that we categorically ruled therein that the 20% discount is a valid exercise of police
power. Thus, even if the current law, through its tax deduction scheme (which abandoned the tax credit scheme
under the previous law), does not provide for a peso for peso reimbursement of the 20% discount given by private
establishments, no constitutional infirmity obtains because, being a valid exercise of police power, payment of just
compensation is not warranted. We have carefully reviewed the basis of our ruling in Carlos Superdrug
Corporation53 and we find no cogent reason to overturn, modify or abandon it. We also note that petitioners’
arguments are a mere reiteration of those raised and resolved in Carlos Superdrug Corporation.54 Thus, we sustain
Carlos Superdrug Corporation.55
Nonetheless, we deem it proper, in what follows, to amplify our explanation in Carlos Superdrug Corporation56 as to
why the 20% discount is a valid exercise of police power and why it may not, under the specific circumstances of
this case, be considered as an exercise of the power of eminent domain contrary to the obiter in Central Luzon Drug
Corporation.57
Police power versus eminent domain.
Police power is the inherent power of the State to regulate or to restrain the use of liberty and property for public
welfare.58
The only limitation is that the restriction imposed should be reasonable, not oppressive.59
In other words, to be a valid exercise of police power, it must have a lawful subject or objective and a lawful method
of accomplishing the goal.60
Under the police power of the State, "property rights of individuals may be subjected to restraints and burdens in
order to fulfill the objectives of the government."61
The State "may interfere with personal liberty, property, lawful businesses and occupations to promote the general
welfare [as long as] the interference [is] reasonable and not arbitrary."62
Eminent domain, on the other hand, is the inherent power of the State to take or appropriate private property for
public use.63
The Constitution, however, requires that private property shall not be taken without due process of law and the
payment of just compensation.64
Traditional distinctions exist between police power and eminent domain. In the exercise of police power, a property
right is impaired by regulation,65 or the use of property is merely prohibited, regulated or restricted66 to promote public
welfare. In such cases, there is no compensable taking, hence, payment of just compensation is not required.
Examples of these regulations are property condemned for being noxious or intended for noxious purposes (e.g., a
building on the verge of collapse to be demolished for public safety, or obscene materials to be destroyed in the
interest of public morals)67 as well as zoning ordinances prohibiting the use of property for purposes injurious to the
health, morals or safety of the community (e.g., dividing a city’s territory into residential and industrial areas).68
It has, thus, been observed that, in the exercise of police power (as distinguished from eminent domain), although
the regulation affects the right of ownership, none of the bundle of rights which constitute ownership is appropriated
for use by or for the benefit of the public.69
On the other hand, in the exercise of the power of eminent domain, property interests are appropriated and applied
to some public purpose which necessitates the payment of just compensation therefor. Normally, the title to and
possession of the property are transferred to the expropriating authority. Examples include the acquisition of lands
for the construction of public highways as well as agricultural lands acquired by the government under the agrarian
reform law for redistribution to qualified farmer beneficiaries. However, it is a settled rule that the acquisition of title
or total destruction of the property is not essential for "taking" under the power of eminent domain to be present.70
Examples of these include establishment of easements such as where the land owner is perpetually deprived of his
proprietary rights because of the hazards posed by electric transmission lines constructed above his property71 or
the compelled interconnection of the telephone system between the government and a private company.72
In these cases, although the private property owner is not divested of ownership or possession, payment of just
compensation is warranted because of the burden placed on the property for the use or benefit of the public.
The 20% senior citizen discount is an exercise of police power.
It may not always be easy to determine whether a challenged governmental act is an exercise of police power or
eminent domain. The very nature of police power as elastic and responsive to various social conditions73 as well as
the evolving meaning and scope of public use74 and just compensation75 in eminent domain evinces that these are
not static concepts. Because of the exigencies of rapidly changing times, Congress may be compelled to adopt or
experiment with different measures to promote the general welfare which may not fall squarely within the
traditionally recognized categories of police power and eminent domain. The judicious approach, therefore, is to look
at the nature and effects of the challenged governmental act and decide, on the basis thereof, whether the act is the
exercise of police power or eminent domain. Thus, we now look at the nature and effects of the 20% discount to
determine if it constitutes an exercise of police power or eminent domain. The 20% discount is intended to improve
the welfare of senior citizens who, at their age, are less likely to be gainfully employed, more prone to illnesses and
other disabilities, and, thus, in need of subsidy in purchasing basic commodities. It may not be amiss to mention
also that the discount serves to honor senior citizens who presumably spent the productive years of their lives on
contributing to the development and progress of the nation. This distinct cultural Filipino practice of honoring the
elderly is an integral part of this law. As to its nature and effects, the 20% discount is a regulation affecting the ability
of private establishments to price their products and services relative to a special class of individuals, senior
citizens, for which the Constitution affords preferential concern.76
In turn, this affects the amount of profits or income/gross sales that a private establishment can derive from senior
citizens. In other words, the subject regulation affects the pricing, and, hence, the profitability of a private
establishment. However, it does not purport to appropriate or burden specific properties, used in the operation or
conduct of the business of private establishments, for the use or benefit of the public, or senior citizens for that
matter, but merely regulates the pricing of goods and services relative to, and the amount of profits or income/gross
sales that such private establishments may derive from, senior citizens. The subject regulation may be said to be
similar to, but with substantial distinctions from, price control or rate of return on investment control laws which are
traditionally regarded as police power measures.77
These laws generally regulate public utilities or industries/enterprises imbued with public interest in order to protect
consumers from exorbitant or unreasonable pricing as well as temper corporate greed by controlling the rate of
return on investment of these corporations considering that they have a monopoly over the goods or services that
they provide to the general public. The subject regulation differs therefrom in that (1) the discount does not prevent
the establishments from adjusting the level of prices of their goods and services, and (2) the discount does not apply
to all customers of a given establishment but only to the class of senior citizens. Nonetheless, to the degree material
to the resolution of this case, the 20% discount may be properly viewed as belonging to the category of price
regulatory measures which affect the profitability of establishments subjected thereto. On its face, therefore, the
subject regulation is a police power measure. The obiter in Central Luzon Drug Corporation,78 however, describes
the 20% discount as an exercise of the power of eminent domain and the tax credit, under the previous law,
equivalent to the amount of discount given as the just compensation therefor. The reason is that (1) the discount
would have formed part of the gross sales of the establishment were it not for the law prescribing the 20% discount,
and (2) the permanent reduction in total revenues is a forced subsidy corresponding to the taking of private property
for public use or benefit. The flaw in this reasoning is in its premise. It presupposes that the subject regulation, which
impacts the pricing and, hence, the profitability of a private establishment, automatically amounts to a deprivation of
property without due process of law. If this were so, then all price and rate of return on investment control laws
would have to be invalidated because they impact, at some level, the regulated establishment’s profits or
income/gross sales, yet there is no provision for payment of just compensation. It would also mean that overnment
cannot set price or rate of return on investment limits, which reduce the profits or income/gross sales of private
establishments, if no just compensation is paid even if the measure is not confiscatory. The obiter is, thus, at odds
with the settled octrine that the State can employ police power measures to regulate the pricing of goods and
services, and, hence, the profitability of business establishments in order to pursue legitimate State objectives for
the common good, provided that the regulation does not go too far as to amount to "taking."79
In City of Manila v. Laguio, Jr.,80 we recognized that— x x x a taking also could be found if government regulation of
the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases there
must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a
certain extent, if regulation goes too far it will be recognized as a taking. No formula or rule can be devised to
answer the questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes
recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many
other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a
matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic
loss caused by public action must be compensated by the government and thus borne by the public as a whole, or
whether the loss should remain concentrated on those few persons subject to the public action.81
The impact or effect of a regulation, such as the one under consideration, must, thus, be determined on a case-to-
case basis. Whether that line between permissible regulation under police power and "taking" under eminent
domain has been crossed must, under the specific circumstances of this case, be subject to proof and the one
assailing the constitutionality of the regulation carries the heavy burden of proving that the measure is
unreasonable, oppressive or confiscatory. The time-honored rule is that the burden of proving the unconstitutionality
of a law rests upon the one assailing it and "the burden becomes heavier when police power is at issue."82
The 20% senior citizen discount has not been shown to be unreasonable, oppressive or confiscatory.
In Alalayan v. National Power Corporation,83 petitioners, who were franchise holders of electric plants, challenged
the validity of a law limiting their allowable net profits to no more than 12% per annum of their investments plus two-
month operating expenses. In rejecting their plea, we ruled that, in an earlier case, it was found that 12% is a
reasonable rate of return and that petitioners failed to prove that the aforesaid rate is confiscatory in view of the
presumption of constitutionality.84
We adopted a similar line of reasoning in Carlos Superdrug Corporation85 when we ruled that petitioners therein
failed to prove that the 20% discount is arbitrary, oppressive or confiscatory. We noted that no evidence, such as a
financial report, to establish the impact of the 20% discount on the overall profitability of petitioners was presented in
order to show that they would be operating at a loss due to the subject regulation or that the continued
implementation of the law would be unconscionably detrimental to the business operations of petitioners. In the case
at bar, petitioners proceeded with a hypothetical computation of the alleged loss that they will suffer similar to what
the petitioners in Carlos Superdrug Corporation86 did. Petitioners went directly to this Court without first establishing
the factual bases of their claims. Hence, the present recourse must, likewise, fail. Because all laws enjoy the
presumption of constitutionality, courts will uphold a law’s validity if any set of facts may be conceived to sustain it.87
On its face, we find that there are at least two conceivable bases to sustain the subject regulation’s validity absent
clear and convincing proof that it is unreasonable, oppressive or confiscatory. Congress may have legitimately
concluded that business establishments have the capacity to absorb a decrease in profits or income/gross sales due
to the 20% discount without substantially affecting the reasonable rate of return on their investments considering (1)
not all customers of a business establishment are senior citizens and (2) the level of its profit margins on goods and
services offered to the general public. Concurrently, Congress may have, likewise, legitimately concluded that the
establishments, which will be required to extend the 20% discount, have the capacity to revise their pricing strategy
so that whatever reduction in profits or income/gross sales that they may sustain because of sales to senior citizens,
can be recouped through higher mark-ups or from other products not subject of discounts. As a result, the discounts
resulting from sales to senior citizens will not be confiscatory or unduly oppressive. In sum, we sustain our ruling in
Carlos Superdrug Corporation88 that the 20% senior citizen discount and tax deduction scheme are valid exercises
of police power of the State absent a clear showing that it is arbitrary, oppressive or confiscatory.
Conclusion
In closing, we note that petitioners hypothesize, consistent with our previous ratiocinations, that the discount will
force establishments to raise their prices in order to compensate for its impact on overall profits or income/gross
sales. The general public, or those not belonging to the senior citizen class, are, thus, made to effectively shoulder
the subsidy for senior citizens. This, in petitioners’ view, is unfair.
As already mentioned, Congress may be reasonably assumed to have foreseen this eventuality. But, more
importantly, this goes into the wisdom, efficacy and expediency of the subject law which is not proper for judicial
review. In a way, this law pursues its social equity objective in a non-traditional manner unlike past and existing
direct subsidy programs of the government for the poor and marginalized sectors of our society. Verily, Congress
must be given sufficient leeway in formulating welfare legislations given the enormous challenges that the
government faces relative to, among others, resource adequacy and administrative capability in implementing social
reform measures which aim to protect and uphold the interests of those most vulnerable in our society. In the
process, the individual, who enjoys the rights, benefits and privileges of living in a democratic polity, must bear his
share in supporting measures intended for the common good. This is only fair. In fine, without the requisite showing
of a clear and unequivocal breach of the Constitution, the validity of the assailed law must be sustained.
Refutation of the Dissent
The main points of Justice Carpio’s Dissent may be summarized as follows: (1) the discussion on eminent domain in
Central Luzon Drug Corporation89 is not obiter dicta ; (2) allowable taking, in police power, is limited to property that
is destroyed or placed outside the commerce of man for public welfare; (3) the amount of mandatory discount is
private property within the ambit of Article III, Section 990 of the Constitution; and (4) the permanent reduction in a
private establishment’s total revenue, arising from the mandatory discount, is a taking of private property for public
use or benefit, hence, an exercise of the power of eminent domain requiring the payment of just compensation. I We
maintain that the discussion on eminent domain in Central Luzon Drug Corporation91 is obiter dicta. As previously
discussed, in Central Luzon Drug Corporation,92 the BIR, pursuant to Sections 2.i and 4 of RR No. 2-94, treated the
senior citizen discount in the previous law, RA 7432, as a tax deduction instead of a tax credit despite the clear
provision in that law which stated –
a) The grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishment, restaurants and recreation centers
and purchase of medicines anywhere in the country: Provided, That private establishments may
claim the cost as tax credit; (Emphasis supplied)
Thus, the Court ruled that the subject revenue regulation violated the law, viz:
The 20 percent discount required by the law to be given to senior citizens is a tax credit, not merely a tax deduction
from the gross income or gross sale of the establishment concerned. A tax credit is used by a private establishment
only after the tax has been computed; a tax deduction, before the tax is computed. RA 7432 unconditionally grants a
tax credit to all covered entities. Thus, the provisions of the revenue regulation that withdraw or modify such grant
are void. Basic is the rule that administrative regulations cannot amend or revoke the law.93
As can be readily seen, the discussion on eminent domain was not necessary in order to arrive at this conclusion.
All that was needed was to point out that the revenue regulation contravened the law which it sought to implement.
And, precisely, this was done in Central Luzon Drug Corporation94 by comparing the wording of the previous law vis-
à-vis the revenue regulation; employing the rules of statutory construction; and applying the settled principle that a
regulation cannot amend the law it seeks to implement. A close reading of Central Luzon Drug Corporation95 would
show that the Court went on to state that the tax credit "can be deemed" as just compensation only to explain why
the previous law provides for a tax credit instead of a tax deduction. The Court surmised that the tax credit was a
form of just compensation given to the establishments covered by the 20% discount. However, the reason why the
previous law provided for a tax credit and not a tax deduction was not necessary to resolve the issue as to whether
the revenue regulation contravenes the law. Hence, the discussion on eminent domain is obiter dicta.
A court, in resolving cases before it, may look into the possible purposes or reasons that impelled the enactment of
a particular statute or legal provision. However, statements made relative thereto are not always necessary in
resolving the actual controversies presented before it. This was the case in Central Luzon Drug
Corporation96resulting in that unfortunate statement that the tax credit "can be deemed" as just compensation. This,
in turn, led to the erroneous conclusion, by deductive reasoning, that the 20% discount is an exercise of the power
of eminent domain. The Dissent essentially adopts this theory and reasoning which, as will be shown below, is
contrary to settled principles in police power and eminent domain analysis. II The Dissent discusses at length the
doctrine on "taking" in police power which occurs when private property is destroyed or placed outside the
commerce of man. Indeed, there is a whole class of police power measures which justify the destruction of private
property in order to preserve public health, morals, safety or welfare. As earlier mentioned, these would include a
building on the verge of collapse or confiscated obscene materials as well as those mentioned by the Dissent with
regard to property used in violating a criminal statute or one which constitutes a nuisance. In such cases, no
compensation is required. However, it is equally true that there is another class of police power measures which do
not involve the destruction of private property but merely regulate its use. The minimum wage law, zoning
ordinances, price control laws, laws regulating the operation of motels and hotels, laws limiting the working hours to
eight, and the like would fall under this category. The examples cited by the Dissent, likewise, fall under this
category: Article 157 of the Labor Code, Sections 19 and 18 of the Social Security Law, and Section 7 of the Pag-
IBIG Fund Law. These laws merely regulate or, to use the term of the Dissent, burden the conduct of the affairs of
business establishments. In such cases, payment of just compensation is not required because they fall within the
sphere of permissible police power measures. The senior citizen discount law falls under this latter category. III The
Dissent proceeds from the theory that the permanent reduction of profits or income/gross sales, due to the 20%
discount, is a "taking" of private property for public purpose without payment of just compensation. At the outset, it
must be emphasized that petitioners never presented any evidence to establish that they were forced to suffer
enormous losses or operate at a loss due to the effects of the assailed law. They came directly to this Court and
provided a hypothetical computation of the loss they would allegedly suffer due to the operation of the assailed law.
The central premise of the Dissent’s argument that the 20% discount results in a permanent reduction in profits or
income/gross sales, or forces a business establishment to operate at a loss is, thus, wholly unsupported by
competent evidence. To be sure, the Court can invalidate a law which, on its face, is arbitrary, oppressive or
confiscatory.97
But this is not the case here.
In the case at bar, evidence is indispensable before a determination of a constitutional violation can be made
because of the following reasons. First, the assailed law, by imposing the senior citizen discount, does not take any
of the properties used by a business establishment like, say, the land on which a manufacturing plant is constructed
or the equipment being used to produce goods or services. Second, rather than taking specific properties of a
business establishment, the senior citizen discount law merely regulates the prices of the goods or services being
sold to senior citizens by mandating a 20% discount. Thus, if a product is sold at ₱10.00 to the general public, then
it shall be sold at ₱8.00 ( i.e., ₱10.00 less 20%) to senior citizens. Note that the law does not impose at what
specific price the product shall be sold, only that a 20% discount shall be given to senior citizens based on the price
set by the business establishment. A business establishment is, thus, free to adjust the prices of the goods or
services it provides to the general public. Accordingly, it can increase the price of the above product to ₱20.00 but is
required to sell it at ₱16.00 (i.e. , ₱20.00 less 20%) to senior citizens. Third, because the law impacts the prices of
the goods or services of a particular establishment relative to its sales to senior citizens, its profits or income/gross
sales are affected. The extent of the impact would, however, depend on the profit margin of the business
establishment on a particular good or service. If a product costs ₱5.00 to produce and is sold at ₱10.00, then the
profit98 is ₱5.0099 or a profit margin100 of 50%.101
Under the assailed law, the aforesaid product would have to be sold at ₱8.00 to senior citizens yet the business
would still earn ₱3.00102 or a 30%103 profit margin. On the other hand, if the product costs ₱9.00 to produce and is
required to be sold at ₱8.00 to senior citizens, then the business would experience a loss of ₱1.00.104
But note that since not all customers of a business establishment are senior citizens, the business establishment
may continue to earn ₱1.00 from non-senior citizens which, in turn, can offset any loss arising from sales to senior
citizens.
Fourth, when the law imposes the 20% discount in favor of senior citizens, it does not prevent the business
establishment from revising its pricing strategy.
By revising its pricing strategy, a business establishment can recoup any reduction of profits or income/gross sales
which would otherwise arise from the giving of the 20% discount. To illustrate, suppose A has two customers: X, a
senior citizen, and Y, a non-senior citizen. Prior to the law, A sells his products at ₱10.00 a piece to X and Y
resulting in income/gross sales of ₱20.00 (₱10.00 + ₱10.00). With the passage of the law, A must now sell his
product to X at ₱8.00 (i.e., ₱10.00 less 20%) so that his income/gross sales would be ₱18.00 (₱8.00 + ₱10.00) or
lower by ₱2.00. To prevent this from happening, A decides to increase the price of his products to ₱11.11 per piece.
Thus, he sells his product to X at ₱8.89 (i.e. , ₱11.11 less 20%) and to Y at ₱11.11. As a result, his income/gross
sales would still be ₱20.00105 (₱8.89 + ₱11.11). The capacity, then, of business establishments to revise their pricing
strategy makes it possible for them not to suffer any reduction in profits or income/gross sales, or, in the alternative,
mitigate the reduction of their profits or income/gross sales even after the passage of the law. In other words,
business establishments have the capacity to adjust their prices so that they may remain profitable even under the
operation of the assailed law.
The Dissent, however, states that – The explanation by the majority that private establishments can always increase
their prices to recover the mandatory discount will only encourage private establishments to adjust their prices
upwards to the prejudice of customers who do not enjoy the 20% discount. It was likewise suggested that if a
company increases its prices, despite the application of the 20% discount, the establishment becomes more
profitable than it was before the implementation of R.A. 7432. Such an economic justification is self-defeating, for
more consumers will suffer from the price increase than will benefit from the 20% discount. Even then, such ability to
increase prices cannot legally validate a violation of the eminent domain clause.106
But, if it is possible that the business establishment, by adjusting its prices, will suffer no reduction in its profits or
income/gross sales (or suffer some reduction but continue to operate profitably) despite giving the discount, what
would be the basis to strike down the law? If it is possible that the business establishment, by adjusting its prices,
will not be unduly burdened, how can there be a finding that the assailed law is an unconstitutional exercise of police
power or eminent domain? That there may be a burden placed on business establishments or the consuming public
as a result of the operation of the assailed law is not, by itself, a ground to declare it unconstitutional for this goes
into the wisdom and expediency of the law.
The cost of most, if not all, regulatory measures of the government on business establishments is ultimately passed
on to the consumers but that, by itself, does not justify the wholesale nullification of these measures. It is a basic
postulate of our democratic system of government that the Constitution is a social contract whereby the people have
surrendered their sovereign powers to the State for the common good.107
All persons may be burdened by regulatory measures intended for the common good or to serve some important
governmental interest, such as protecting or improving the welfare of a special class of people for which the
Constitution affords preferential concern. Indubitably, the one assailing the law has the heavy burden of proving that
the regulation is unreasonable, oppressive or confiscatory, or has gone "too far" as to amount to a "taking." Yet,
here, the Dissent would have this Court nullify the law without any proof of such nature.
Further, this Court is not the proper forum to debate the economic theories or realities that impelled Congress to
shift from the tax credit to the tax deduction scheme. It is not within our power or competence to judge which
scheme is more or less burdensome to business establishments or the consuming public and, thereafter, to choose
which scheme the State should use or pursue. The shift from the tax credit to tax deduction scheme is a policy
determination by Congress and the Court will respect it for as long as there is no showing, as here, that the subject
regulation has transgressed constitutional limitations. Unavoidably, the lack of evidence constrains the Dissent to
rely on speculative and hypothetical argumentation when it states that the 20% discount is a significant amount and
not a minimal loss (which erroneously assumes that the discount automatically results in a loss when it is possible
that the profit margin is greater than 20% and/or the pricing strategy can be revised to prevent or mitigate any
reduction in profits or income/gross sales as illustrated above),108 and not all private establishments make a 20%
profit margin (which conversely implies that there are those who make more and, thus, would not be greatly affected
by this regulation).109
In fine, because of the possible scenarios discussed above, we cannot assume that the 20% discount results in a
permanent reduction in profits or income/gross sales, much less that business establishments are forced to operate
at a loss under the assailed law. And, even if we gratuitously assume that the 20% discount results in some degree
of reduction in profits or income/gross sales, we cannot assume that such reduction is arbitrary, oppressive or
confiscatory. To repeat, there is no actual proof to back up this claim, and it could be that the loss suffered by a
business establishment was occasioned through its fault or negligence in not adapting to the effects of the assailed
law. The law uniformly applies to all business establishments covered thereunder. There is, therefore, no unjust
discrimination as the aforesaid business establishments are faced with the same constraints. The necessity of proof
is all the more pertinent in this case because, as similarly observed by Justice Velasco in his Concurring Opinion,
the law has been in operation for over nine years now. However, the grim picture painted by petitioners on the
unconscionable losses to be indiscriminately suffered by business establishments, which should have led to the
closure of numerous business establishments, has not come to pass. Verily, we cannot invalidate the assailed law
based on assumptions and conjectures. Without adequate proof, the presumption of constitutionality must prevail. IV
At this juncture, we note that the Dissent modified its original arguments by including a new paragraph, to wit:
Section 9, Article III of the 1987 Constitution speaks of private property without any distinction. It does not state that
there should be profit before the taking of property is subject to just compensation. The private property referred to
for purposes of taking could be inherited, donated, purchased, mortgaged, or as in this case, part of the gross sales
of private establishments. They are all private property and any taking should be attended by corresponding
payment of just compensation. The 20% discount granted to senior citizens belong to private establishments,
whether these establishments make a profit or suffer a loss. In fact, the 20% discount applies to non-profit
establishments like country, social, or golf clubs which are open to the public and not only for exclusive membership.
The issue of profit or loss to the establishments is immaterial.110
Two things may be said of this argument. First, it contradicts the rest of the arguments of the Dissent. After it states
that the issue of profit or loss is immaterial, the Dissent proceeds to argue that the 20% discount is not a minimal
loss111 and that the 20% discount forces business establishments to operate at a loss.112
Even the obiter in Central Luzon Drug Corporation,113 which the Dissent essentially adopts and relies on, is premised
on the permanent reduction of total revenues and the loss that business establishments will be forced to suffer in
arguing that the 20% discount constitutes a "taking" under the power of eminent domain. Thus, when the Dissent
now argues that the issue of profit or loss is immaterial, it contradicts itself because it later argues, in order to justify
that there is a "taking" under the power of eminent domain in this case, that the 20% discount forces business
establishments to suffer a significant loss or to operate at a loss. Second, this argument suffers from the same flaw
as the Dissent's original arguments. It is an erroneous characterization of the 20% discount. According to the
Dissent, the 20% discount is part of the gross sales and, hence, private property belonging to business
establishments. However, as previously discussed, the 20% discount is not private property actually owned and/or
used by the business establishment. It should be distinguished from properties like lands or buildings actually used
in the operation of a business establishment which, if appropriated for public use, would amount to a "taking" under
the power of eminent domain. Instead, the 20% discount is a regulatory measure which impacts the pricing and,
hence, the profitability of business establishments. At the time the discount is imposed, no particular property of the
business establishment can be said to be "taken." That is, the State does not acquire or take anything from the
business establishment in the way that it takes a piece of private land to build a public road. While the 20% discount
may form part of the potential profits or income/gross sales114 of the business establishment, as similarly
characterized by Justice Bersamin in his Concurring Opinion, potential profits or income/gross sales are not private
property, specifically cash or money, already belonging to the business establishment. They are a mere expectancy
because they are potential fruits of the successful conduct of the business. Prior to the sale of goods or services, a
business establishment may be subject to State regulations, such as the 20% senior citizen discount, which may
impact the level or amount of profits or income/gross sales that can be generated by such establishment. For this
reason, the validity of the discount is to be determined based on its overall effects on the operations of the business
establishment.
Again, as previously discussed, the 20% discount does not automatically result in a 20% reduction in profits, or, to
align it with the term used by the Dissent, the 20% discount does not mean that a 20% reduction in gross sales
necessarily results. Because (1) the profit margin of a product is not necessarily less than 20%, (2) not all customers
of a business establishment are senior citizens, and (3) the establishment may revise its pricing strategy, such
reduction in profits or income/gross sales may be prevented or, in the alternative, mitigated so that the business
establishment continues to operate profitably. Thus, even if we gratuitously assume that some degree of reduction
in profits or income/gross sales occurs because of the 20% discount, it does not follow that the regulation is
unreasonable, oppressive or confiscatory because the business establishment may make the necessary
adjustments to continue to operate profitably. No evidence was presented by petitioners to show otherwise. In fact,
no evidence was presented by petitioners at all. Justice Leonen, in his Concurring and Dissenting Opinion,
characterizes "profits" (or income/gross sales) as an inchoate right. Another way to view it, as stated by Justice
Velasco in his Concurring Opinion, is that the business establishment merely has a right to profits. The Constitution
adverts to it as the right of an enterprise to a reasonable return on investment.115
Undeniably, this right, like any other right, may be regulated under the police power of the State to achieve important
governmental objectives like protecting the interests and improving the welfare of senior citizens. It should be noted
though that potential profits or income/gross sales are relevant in police power and eminent domain analyses
because they may, in appropriate cases, serve as an indicia when a regulation has gone "too far" as to amount to a
"taking" under the power of eminent domain. When the deprivation or reduction of profits or income/gross sales is
shown to be unreasonable, oppressive or confiscatory, then the challenged governmental regulation may be nullified
for being a "taking" under the power of eminent domain. In such a case, it is not profits or income/gross sales which
are actually taken and appropriated for public use. Rather, when the regulation causes an establishment to incur
losses in an unreasonable, oppressive or confiscatory manner, what is actually taken is capital and the right of the
business establishment to a reasonable return on investment. If the business losses are not halted because of the
continued operation of the regulation, this eventually leads to the destruction of the business and the total loss of the
capital invested therein. But, again, petitioners in this case failed to prove that the subject regulation is
unreasonable, oppressive or confiscatory.
V.
The Dissent further argues that we erroneously used price and rate of return on investment control laws to justify the
senior citizen discount law. According to the Dissent, only profits from industries imbued with public interest may be
regulated because this is a condition of their franchises. Profits of establishments without franchises cannot be
regulated permanently because there is no law regulating their profits. The Dissent concludes that the permanent
reduction of total revenues or gross sales of business establishments without franchises is a taking of private
property under the power of eminent domain. In making this argument, it is unfortunate that the Dissent quotes only
a portion of the ponencia – The subject regulation may be said to be similar to, but with substantial distinctions from,
price control or rate of return on investment control laws which are traditionally regarded as police power measures.
These laws generally regulate public utilities or industries/enterprises imbued with public interest in order to protect
consumers from exorbitant or unreasonable pricing as well as temper corporate greed by controlling the rate of
return on investment of these corporations considering that they have a monopoly over the goods or services that
they provide to the general public. The subject regulation differs therefrom in that (1) the discount does not prevent
the establishments from adjusting the level of prices of their goods and services, and (2) the discount does not apply
to all customers of a given establishment but only to the class of senior citizens. x x x116
The above paragraph, in full, states –
The subject regulation may be said to be similar to, but with substantial distinctions from, price control or rate of
return on investment control laws which are traditionally regarded as police power measures. These laws generally
regulate public utilities or industries/enterprises imbued with public interest in order to protect consumers from
exorbitant or unreasonable pricing as well as temper corporate greed by controlling the rate of return on investment
of these corporations considering that they have a monopoly over the goods or services that they provide to the
general public. The subject regulation differs therefrom in that (1) the discount does not prevent the establishments
from adjusting the level of prices of their goods and services, and (2) the discount does not apply to all customers of
a given establishment but only to the class of senior citizens.
Nonetheless, to the degree material to the resolution of this case, the 20% discount may be properly viewed as
belonging to the category of price regulatory measures which affects the profitability of establishments subjected
thereto. (Emphasis supplied)
The point of this paragraph is to simply show that the State has, in the past, regulated prices and profits of business
establishments. In other words, this type of regulatory measures is traditionally recognized as police power
measures so that the senior citizen discount may be considered as a police power measure as well. What is more,
the substantial distinctions between price and rate of return on investment control laws vis-à-vis the senior citizen
discount law provide greater reason to uphold the validity of the senior citizen discount law. As previously discussed,
the ability to adjust prices allows the establishment subject to the senior citizen discount to prevent or mitigate any
reduction of profits or income/gross sales arising from the giving of the discount. In contrast, establishments subject
to price and rate of return on investment control laws cannot adjust prices accordingly. Certainly, there is no
intention to say that price and rate of return on investment control laws are the justification for the senior citizen
discount law. Not at all. The justification for the senior citizen discount law is the plenary powers of Congress. The
legislative power to regulate business establishments is broad and covers a wide array of areas and subjects. It is
well within Congress’ legislative powers to regulate the profits or income/gross sales of industries and enterprises,
even those without franchises. For what are franchises but mere legislative enactments? There is nothing in the
Constitution that prohibits Congress from regulating the profits or income/gross sales of industries and enterprises
without franchises. On the contrary, the social justice provisions of the Constitution enjoin the State to regulate the
"acquisition, ownership, use, and disposition" of property and its increments.117
This may cover the regulation of profits or income/gross sales of all businesses, without qualification, to attain the
objective of diffusing wealth in order to protect and enhance the right of all the people to human dignity.118
Thus, under the social justice policy of the Constitution, business establishments may be compelled to contribute to
uplifting the plight of vulnerable or marginalized groups in our society provided that the regulation is not arbitrary,
oppressive or confiscatory, or is not in breach of some specific constitutional limitation. When the Dissent, therefore,
states that the "profits of private establishments which are non-franchisees cannot be regulated permanently, and
there is no such law regulating their profits permanently,"119 it is assuming what it ought to prove. First, there are laws
which, in effect, permanently regulate profits or income/gross sales of establishments without franchises, and RA
9257 is one such law. And, second, Congress can regulate such profits or income/gross sales because, as
previously noted, there is nothing in the Constitution to prevent it from doing so. Here, again, it must be emphasized
that petitioners failed to present any proof to show that the effects of the assailed law on their operations has been
unreasonable, oppressive or confiscatory. The permanent regulation of profits or income/gross sales of business
establishments, even those without franchises, is not as uncommon as the Dissent depicts it to be. For instance, the
minimum wage law allows the State to set the minimum wage of employees in a given region or geographical area.
Because of the added labor costs arising from the minimum wage, a permanent reduction of profits or income/gross
sales would result, assuming that the employer does not increase the prices of his goods or services. To illustrate,
suppose it costs a company ₱5.00 to produce a product and it sells the same at ₱10.00 with a 50% profit margin.
Later, the State increases the minimum wage. As a result, the company incurs greater labor costs so that it now
costs ₱7.00 to produce the same product. The profit per product of the company would be reduced to ₱3.00 with a
profit margin of 30%. The net effect would be the same as in the earlier example of granting a 20% senior citizen
discount. As can be seen, the minimum wage law could, likewise, lead to a permanent reduction of profits. Does this
mean that the minimum wage law should, likewise, be declared unconstitutional on the mere plea that it results in a
permanent reduction of profits? Taking it a step further, suppose the company decides to increase the price of its
product in order to offset the effects of the increase in labor cost; does this mean that the minimum wage law,
following the reasoning of the Dissent, is unconstitutional because the consuming public is effectively made to
subsidize the wage of a group of laborers, i.e., minimum wage earners? The same reasoning can be adopted
relative to the examples cited by the Dissent which, according to it, are valid police power regulations. Article 157 of
the Labor Code, Sections 19 and 18 of the Social Security Law, and Section 7 of the Pag-IBIG Fund Law would
effectively increase the labor cost of a business establishment. This would, in turn, be integrated as part of the cost
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of its goods or services. Again, if the establishment does not increase its prices, the net effect would be a permanent
reduction in its profits or income/gross sales. Following the reasoning of the Dissent that "any form of permanent
taking of private property (including profits or income/gross sales)120 is an exercise of eminent domain that requires
the State to pay just compensation,"121 then these statutory provisions would, likewise, have to be declared
unconstitutional. It does not matter that these benefits are deemed part of the employees’ legislated wages because
the net effect is the same, that is, it leads to higher labor costs and a permanent reduction in the profits or
income/gross sales of the business establishments.122
The point then is this – most, if not all, regulatory measures imposed by the State on business establishments
impact, at some level, the latter’s prices and/or profits or income/gross sales.123
If the Court were to sustain the Dissent’s theory, then a wholesale nullification of such measures would inevitably
result. The police power of the State and the social justice provisions of the Constitution would, thus, be rendered
nugatory. There is nothing sacrosanct about profits or income/gross sales. This, we made clear in Carlos Superdrug
Corporation:124
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of
petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the
absence of evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for
its nullification in view of the presumption of validity which every law has in its favor.
xxxx
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of
the business. While the Constitution protects property rights petitioners must the realities of business and the State,
in the exercise of police power, can intervene in the operations of a business which may result in an impairment of
property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the percept for
the protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of
contracts and public utilities, continously serve as a reminder for the promotion of public good.
Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the
other private establishments concerned. This being the case, the means employed in invoking the active
participation of the private sector, in order to achieve the purpose or objective of the law, is reasonably and directly
related. Without sufficient proof that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued
implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain form quashing
a legislative act.125
In conclusion, we maintain that the correct rule in determining whether the subject regulatory measure has
amounted to a "taking" under the power of eminent domain is the one laid down in Alalayan v. National Power
Corporation126 and followed in Carlos Superdurg Corporation127 consistent with long standing principles in police
power and eminent domain analysis. Thus, the deprivation or reduction of profits or income. Gross sales must be
clearly shown to be unreasonable, oppressive or confiscatory. Under the specific circumstances of this case, such
determination can only be made upon the presentation of competent proof which petitioners failed to do. A law,
which has been in operation for many years and promotes the welfare of a group accorded special concern by the
Constitution, cannot and should not be summarily invalidated on a mere allegation that it reduces the profits or
income/gross sales of business establishments.
WHEREFORE, the Petition is hereby DISMISSED for lack of merit.
SO ORDERED.
SECOND DIVISION
G.R. NO. 184496 December 2, 2013
HADJI HASHIM ABDUL, Petitioner,

vs.
HONORABLE SANDIGANBAYAN (FIFTH DIVISION) and PEOPLE OF THE PHILIPPINES, Respondents.
DECISION
DEL CASTILLO, J.:

"Where the issue has become moot and academic, there is no justiciable controversy, and adjudication thereof
would be of no practical use or value as courts do not sit to satisfy scholarly interest, however intellectually
challenging."1
Challenged in the instant Petition for Certiorari2 with prayer for Temporary Restraining Order (TRO) is the May 14,
2008 Resolution3 of respondent Sandiganbayan (respondent) in Criminal Case No. 27744. Said Resolution
suspended for a period of 90 days petitioner), Tan-Alem Abdul (Abdul) and Candidato S. Domado (Domado) from
their respective official positions as Municipal Mayor, Human Resource Management Officer, and Budget Officer of
the Municipality of Mulondo, Lanao del Sur. Likewise questioned is respondent’s Resolution4of September 2, 2008
denying petitioner ‘s Motion for Reconsideration.
The Undisputed Facts
Petitioner was first elected as municipal mayor of Mulondo, Lanao del Sur in the May 1998 election and re-elected
for a second term in the May 2001 election. It was while serving his second term as municipal mayor when the
Office of the Ombudsman-Mindanao filed an Information on September 5, 2002 charging petitioner, along with
Abdul and Domado, with falsification of public documents, defined and penalized under Article 171(2) of the Revised
Penal Code (RPC).5
The Information6 states:
That sometime on 22 April 1999, or prior or subsequent thereto, in the Municipality of Mulondo, Lanao del Sur, and
within the jurisdiction of this Honorable Court, the accused HADJI HASHIM ABDUL, being then the Municipal Mayor
of the Municipality of Mulondo, Lanao del Sur, a high ranking official, TAN-ALEM ABDUL, being then the Human
Resource Management Officer, and CANDIDATO S. DOMADO, being then the Budget Officer, all public officers,
taking advantage of their official positions and committing the offense in relation to their office, did then and there
willfully, unlawfully and feloniously, conspiring with one another, make it appear that Engr. Zubair F. Murad as
Municipal Engineer prepared and signed the Local Budget Preparation Form Nos. 152, 153 and 154 known as the
Program Appropriation and Obligation by Object, Personnel Schedule and Functional Statement and General
Objective, respectively, when in truth and in fact, as the accused well knew that said Zubair F. Murad was never
employed as Municipal Engineer of the said Municipality, to the damage and prejudice of public interest.
CONTRARY TO LAW.7
During the arraignment, petitioner and his co-accused pleaded not guilty to the offense charged. Before the
commencement of the trial, the Office of the Special Prosecutor (OSP) moved for the suspension pendente lite of
the petitioner and his co-accused as mandated under Section 13 of Republic Act No. 3019 (RA 3019) or the Anti-
Graft and Corrupt Practices Act,8 which provides:
Section 13. Suspension and loss of benefits. – Any incumbent public officer against whom any criminal prosecution
under a valid information under this Act or under Title Seven, Book II of the Revised Penal Code or for any offense
involving fraud upon government or public funds or property whether as a simple or as complex offense and in
whatever stage of execution and mode of participation, is pending in court, shall be suspended from office. x x x
The OSP averred that suspension under the above-quoted section is mandatory. In his Comment,9 petitioner
asserted that he cannot be suspended pendente lite because the crime for which he was charged is not among
those enumerated under Section 13 of RA 3019. He was not charged under RA 3019 or Title Seven, Book II of the
RPC. Neither does fraud upon government or public funds or property cover falsification of public document nor
fraud per se, an ingredient of the offense of falsification of public document. Finding the charge as squarely falling
within the ambit of Section 13, RA 3019, respondent granted in its Resolution10 of October 9, 2003 the OSP’s motion
and accordingly ordered the suspension pendente lite of the petitioner and his co-accused from their respective
positions and from any other public office which they may now or hereafter be holding for a period of 90 days from
notice. Petitioner moved for reconsideration,11 but the same was denied in a Resolution12 dated February 11, 2004.
Thus, on March 2, 2004 he filed with this Court a Petition for Certiorari with Prayer for TRO13 alleging that the
suspension order was issued with grave abuse of discretion amounting to lack of jurisdiction. In a Resolution14 dated
March 10, 2004, the Court dismissed the Petition, which dismissal attained finality on July 12, 2004.15 The
suspension order, however, was no longer implemented because it was superseded by the expiration of petitioner’s
second term as municipal mayor and his unsuccessful bid for re-election during the May 2004 election. During the
May 2007 election, petitioner emerged as the winner in the mayoralty race and again sat as Mayor of Mulondo,
Lanao del Sur. On February 21, 2008, the OSP once again moved for his and his co-accused’s suspension
pendente lite to implement respondent’s final and executory suspension order of October 9, 2003. 16 In his Comment
and Opposition, 17 petitioner called attention to respondent’s pronouncement in its Resolution18 dated December 20,
2004 that his defeat in the May 2004 election has effectively rendered his suspension moot and academic.
Nonetheless, respondent, through its Resolution of May 14, 2008, 19 ordered anew the suspension of petitioner from
his present position for a period of 90 days. Petitioner moved for reconsideration,20 but the same was denied in a
Resolution21 dated September 2, 2008. Undeterred, petitioner filed on October 2, 2008 the present Petition for
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Certiorari with prayer for TRO submitting again the sole issue of whether the Sandiganbayan acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in suspending him pendente lite from his position as
mayor of Mulondo, Lanao del Sur. On December 3, 2008, the Court issued a TRO enjoining the implementation of
the suspension Order.22 Subsequently, on November 24, 2009 while the present Petition was pending before the
Court, respondent Sandiganbayan promulgated its Decision23 acquitting petitioner and his co-accused of the offense
charged.
Our Ruling
We dismiss the Petition for being moot and academic. For a court to exercise its power of adjudication, there must
be an actual case or controversy. Thus, in Mattel, Inc. v. Francisco24 we have ruled that "[w]here the issue has
become moot and academic, there is no justiciable controversy, and an adjudication thereof 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 present case, the acquittal of herein petitioner operates as a supervening event
that mooted the present Petition. Any resolution on the validity or invalidity of the issuance of the order of
suspension could no longer affect his rights as a ranking public officer, for legally speaking he did not commit the
offense charged. Notwithstanding the mootness of the present Petition, petitioner nevertheless implores us to make
a clear and categorical resolution on whether the offense of falsification of public documents under Article 171 of the
RPC is included in the term "fraud" as contemplated under Section 13 of RA 3019. As earlier quoted, to warrant the
suspension of a public officer under the said Section 13, he must be charged with an offense (1) under RA 3019, or
(2) under Title Seven, Book II of the RPC, or (3) involving fraud upon government or public funds or property.
Admittedly, petitioner in this case was not charged under RA 3019. Neither was he charged under Title
Seven, 25Book II of the RPC as the crime of falsification of public documents under Article 171 of the RPC is covered
by Title Four, 26 Book II thereof. The relevant question now is whether falsification of public documents is considered
as fraud upon government or public funds or property. This issue is not of first impression. Close but not exactly
similar with the factual backdrop of this case is Bustillo v. Sandiganbayan.27 Petitioner therein was charged with
falsifying municipal vouchers which, as used in government, are official documents.28 He asserted the said offense
does not involve "fraud or property;" hence, his suspension finds no basis in Section 13 of RA 3019. In construing
the term "fraud" as used in Section 13 of RA 3019, the Court held in said case that the same is understood in its
general sense, that is, referring to "an instance or an act of trickery or deceit especially when involving
misrepresentation."29
And since vouchers are official documents signifying a cash outflow from government coffers, falsification thereof
invariably involves fraud upon public funds.30 Again, in Bartolo v. Sandiganbayan, Second Division, 31 the Court citing
Bustillo underscored the fact that "the term fraud as used in Section 13 of [RA] 3019 is understood in its generic
sense."32
In upholding the suspension of therein petitioner, the Court held that "the allegation of falsification of the three public
documents by making it appear that the flood control project was 100% complete [when in fact it was not,]
constitutes fraud upon public funds."33
In the same vein, the act imputed against petitioner constitutes fraud upon government or public funds. This was
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aptly explained by respondent in its Resolution34 dated October 9, 2003, viz:
x x x The existence of fraud in the commission of the offense charged can be easily associated from the natie of the
acts of herein accused when they made it appear and signed Local udget Preparation Forms No. 152, 153 and 154,
when in truth and in fact, said Engr. Murad was not even an employee of the Municipality of Mulondo, Lanao del
Sur. As a consequence of this act, several projects, their costs and extent, were authorized without the careful
assessment of [the] legitimate municipalengineer. This alone is sufficient to justify the Court’s conclusion that,
indeed, the alleged act of accused constitutes fraud upon the government.35
In fine , we reiterate that he issue on the validity or invalidity of petitioner’s suspension had mooted considering his
acquittal by the Sandiganbayan in its November 24, 2009 Decision. As such, there is no justiciable controversy for
this Court to adjucate.
WHEREFORE, the Petition is DISMISSED for being moot and academic.
SO ORDERED.
SECOND DIVISION
A.C. No. 4549 December 2, 2013
NESTOR FELIPE, ALBERTO V. FELIPE, AURORA FELIPE-ORANTE, ASUNCION FELIPE-DOMINGO,

MILAGROS FELIPE CABIGTING, and RODOLFO V. FELIPE, Complainants,
vs.
ATTY. CIRIACO A. MACAPAGAL, Respondent.
RESOLUTION
DEL CASTILLO, J.:
On March 5, 1996, a Petition1 for disbarment was filed against respondent Atty. Ciriaco A. Macapagal, docketed as
A.C. No. 4549. In A Resolution2 dated June 19, 1996, we required respondent to comment. Respondent received a
copy of the Resolution on July 16, 1996.3 On August 15, 1996, respondent filed an Urgent Ex-Parte Motion For
Extension Of Tme To File Comment.4 He requested for additional period of 30 days within which to file his comment
citing numerous professional commitments. We granted said request in our October 2, 1996 Resolution.5 The
extended deadline passed sans respondent’s comment. Thus on January 29, 1997, complainants file an Urgent
Motion To Submit The Administrative Case For Resolution Without Comment Of Respondent6 claiming the
respondent is deemed to have waived his right to file comment.
On February 24, 1997, we referred this administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report, and recommendation.7
The case was initially assigned to Investigating Commissioner Elizabeth Hermosisima-Palma who set the hearing
on October 22, 1997 at 9:00 a.m.8
The Minutes of the Hearing9 showed that both parties were present. The next hearing was set on November 6,
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199710 but was postponed upon request of the complainants' counsel.11
Noting that more than five months had lapsed after the postponement of the last hearing, complainants moved to
calendar the case.12
The new Investigating Commissioner, Arturo C. Delos Reyes, set the hearing of the case on January 12, 1999.13
During the scheduled hearing, complainants appeared and were directed to submit their Position
Paper. Respondent failed to attend despite receipt of notice.14
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Complainants submitted their Position Paper15 on January 28, 1999.16
It took 11 years, more particularly on February 26, 2010, before the IBP, thru Investigating Commissioner Agustinus
V. Gonzaga, submitted its Report and Recommendation.17
In his Report, the Investigating Commissioner quoted verbatim the allegations in the Petition; he then narrated the
proceedings undertaken by the IBP. Unfortunately, no discussion was made regarding the merits of the complaint.
However, it was recommended that respondent be suspended from the practice of law for one (1) month. In
Resolution No. XX-2011-246 dated November 19, 2011, the IBP Board of Governors adopted the Report and
Recommendation of the Investigating Commissioner with modification that respondent be suspended from the
practice of law for one (1) year. In their Petition, complainants alleged that they are co-plaintiffs in Civil Case No. A-
95-22906 pending before Branch 216 of the Regional Trial Court of Quezon City while respondent is the counsel for
the defendants therein; that respondent committed dishonesty when he stated in the defendants' Answer in Civil
Case No. A-95-22906 that the parties therein are strangers to each other despite knowing that the defendants are
half-brothers and half-sisters of complainants; and that they filed a criminal case for Perjury [against the defendants
in Civil Case No. A-95-22906] docketed as Criminal Case No. 41667 pending before Branch 36 of the Metropolitan
Trial Court (MeTC) of Manila. Complainants also alleged that respondent introduced a falsified Certificate of
Marriage as part of his evidence in Civil Case No. A-95-22906; and that they filed another Perjury charge [against
the defendants in Civil Case No. A-95-22906] before the Office of the City Prosecutor of Quezon City, docketed as
I.S. No. 95-15656-A. Next, complainants averred that respondent knowingly filed a totally baseless pleading
captioned as Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction; that said pleading is not
in accordance with the rules of procedure; that the said filing delayed the proceedings in Civil Case No. A-95-22906;
and that they filed a Vigorous Opposition to the said pleading. Complainants insisted that by the foregoing
actuations, respondent violated his duty as a lawyer and prayed that he be disbarred and ordered to pay
complainants the amount of ₱500,000 representing the damages that they suffered. In fine, complainants charged
respondent with dishonesty (1) when he stated in the defendants' Answer in Civil Case No. A-95-22906 that the
parties therein are strangers to each other; (2) when he introduced a falsified Certificate of Marriage as part of his
evidence in Civil Case No. A-95-22906; and (3) when he knowingly filed a totally baseless pleading captioned as
Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction in the same case. At the outset, we
note that in order to determine whether respondent is guilty of dishonesty, we will have to delve into the issue of
whether the complainants are indeed related to the defendants in Civil Case No. A-95-22906 being half-brothers
and half-sisters. We would also be tasked to make an assessment on the authenticity of the Certificate of Marriage
which respondent submitted in the proceedings in Civil Case No. A-95-22906. Similarly, we will have to make a
ruling on whether the Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction which
respondent filed was indeed baseless and irrelevant to the proceedings in Civil Case No. A-95-22906. Clearly, these
prerequisites cannot be accomplished in this administrative case. The resolution of whether the parties are related
to each other appears to be one of the issues brought up in Civil Case No. A-95-22906 which is a complaint for
Partition, Reconveyance, Declaration of Nullity of Documents and Damages. The complainants claimed that they
are the legitimate children of the late Gregorio V. Felipe, Sr. This was rebutted by the defendants therein, as
represented by the respondent, who denied their filiation with the complainants. Clearly, the issue of filiation must be
settled in those proceedings, and not in this administrative case. The same is true with regard to the issue of
authenticity of the Marriage Certificate which was submitted in evidence as well as the relevance of the Urgent
Motion to Recall Writ of Execution of the Writ of Preliminary Injunction.
Besides, as complainants have asserted, a criminal case for Perjury had already been filed against the defendants
in Civil Case No. A-95-22906 and docketed as Criminal Case No. 41667 pending before Branch 36 of the Manila
MeTC for their alleged "untruthful" statement that they are strangers to each other. They had also filed another
Perjury charge against the defendants in Civil Case No. A-95-22906 before the Office of the City Prosecutor of
Quezon City, docketed as I.S. No. 95-15656-A for allegedly submitting in evidence a falsified Marriage Certificate.
Moreover, they already filed a Vigorous Opposition to the Urgent Motion to Recall Writ of Execution of the Writ of
Preliminary Injunction filed by the respondent. In fine, these issues are proper subjects of and must be threshed out
in a judicial action. We held in Anacta v. Resurreccion18 that -
x x x it is imperative to first determine whether the matter falls within the disciplinary authority of the Court or
whether the matter is a proper subject of judicial action against lawyers. If the matter involves violations of the
lawyer's oath and code of conduct, then it falls within the Court's disciplinary authority. However, if the matter arose
from acts which carry civil or criminal liablity, and which do not directly require an inquiry into the moral fitness of the
lawyer, then the matter would be a proper subject of a judicial action which is understandably outside the purview of
the Court's disciplinary authority. x x x19
Similarly, we held in Virgo v. Amorin,20 viz:
While it is true that disbarment proceedings look into the worthiness of a respondent to remain as a member of the
bar, and need not delve into the merits of a related case, the Court, in this instance, however, cannot ascertain
whether Atty. Amorin indeed committed acts in violation of his oath as a lawyer concerning the sale and conveyance
of the Virgo Mansion without going through the factual matters that are subject of the aforementioned civil cases, x x
x. As a matter of prudence and so as not to preempt the conclusions that will be drawn by the court where the case
is pending, the Court deems it wise to dismiss the present case without prejudice to the filing of another one,
depending on the final outcome of the civil case.21 Thus, pursuant to the above pronouncements, the Petition filed by
complainants must be dismissed without prejudice. However, we cannot end our discussion here. It has not
escaped our notice that despite receipt of our directive, respondent did not file his comment. Neither did he file his
Position Paper as ordered by the IBP. And for this, he must be sanctioned.
Respondent's unjustified disregard of the lawful orders of this Court and the IBP is not only irresponsible, but also
constitutes utter disrespect for the judiciary and his fellow lawyers. His conduct is unbecoming of a lawyer, for
lawyers are particularly called upon to obey court orders and processes and are expected to stand foremost in
complying with court directives being themselves officers of the court. As an officer of the court, respondent is
expected to know that a resolution of this Court is not a mere request but an order which should be complied with
promptly and completely. This is also true of the orders of the IBP as the investigating arm of the Court in
administrative cases against lawyers.22
Under the circumstances, we deem a reprimand with warning commensurate to the infraction committed by the
respondent.23
ACCORDINGLY , respondent Atty. Ciriaco A. Macapagal is REPRIMANDED for failing to give due respect to the
Court and the Integrated Bar of the Philippines. He is WARNED that commission of a similar infraction will be dealt
with more severely. Resolution No. XX-2011-246 dated November 19, 2011 of the Integrated Bar of the Philippines
is SET ASIDE. A.C. No. 4549 is DISMISSED without prejudice. Let a copy of this Resolution be entered in the
personal records of respondent as a member of the Bar, and copies furnished the Office of the Bar Confidant, the
Integrated Bar of the Philippines, and the Office of the Court Administrator for circulation to all courts in the country.
SO ORDERED.
SECOND DIVISION
G.R. No. 191756 November 25, 2013

vs.
JONAS GUILLEN y ATIENZA, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
On appeal is the November 26, 2009 Decision1 of the Court of Appeals CA) in CA-G.R. CR-H.C. No. 03476 which
affirmed the June 10, 2008 Decision2 of the Regional Trial Court RTC) of Manila, Branch 48 finding appellant Jonas
Guillen y Atienza guilty beyond reasonable doubt of the crime of rape.
On May 31, 2002, an Information3 was filed charging appellant with the crime of rape, the accusatory portion of
which reads as follows:
That on or about May 20, 2002, in the City of Manila, Philippines, the said accused, by means of force, violence and
intimidation, by entering the room of "AAA",4 poking a balisong at her neck, forcing her to lie down on the floor,
pressing her with his thighs and removing her duster and panty and thereafter pulling down his brief and shorts, did
then and there wilfully, unlawfully and feloniously [insert] his penis into her vagina and succeeded in having carnal
knowledge of "AAA" against the latter’s will and consent, thereby gravely endangering her growth and development
to the damage and prejudice of the said "AAA".
Contrary to law.
When arraigned on July 11, 2002, appellant pleaded not guilty.5

Factual Antecedents
The version of the prosecution as summarized by the Office of the Solicitor General (OSG) are as follows:
On May 20, 2002, around 12 midnight, x x x "AAA" was inside her room on the second floor of a two-storey house
located at x x x Sampaloc, Manila. At that time "AAA" was playing cards x x x while waiting for her common-law
husband to arrive. Momentarily, someone knocked at the door. When "AAA" opened the door, appellant Jonas
Guillen y Atienza, who was her neighbor, entered the room and suddenly poked a balisong on her neck. Appellant
then turned off the lights, removed his clothes, placed himself on top of "AAA," and inserted his penis inside her
private parts. After the rape was consummated, appellant stood up and casually left the room.
x x x "AAA" immediately went out and x x x sought assistance from her sister-in-law. After being told of the incident,
"AAA’s" sister-in-law contacted the police. When the responding police officers arrived, appellant, who was readily
identified by "AAA" since he was her neighbor, was immediately arrested.
Per request for a medico legal examination prepared by P/Sr. Supt. Amador Serrano Pabustan of the Western
Police District, "AAA" was brought to the National Bureau of Investigation (NBI) for physical examination. Dra.
Annabelle Soliman, NBI medico-legal officer, conducted medical and genital examinations on "AAA". The
Preliminary Report dated May 20, 2002 issued by Dra. Soliman shows the following findings: 1) With extragenital
physical injury noted; 2) Healed hymenal laceration present; and 3) Pending laboratory examination result.
The Medico-Legal Report Number MG-02-366 issued by Dra. Soliman shows that private complainant’s hymen had
"deep healed laceration at 7 o’clock position;" positive for spermatozoa; and that there was "evident sign of
extragenital physical injury noted on the body of the subject at the time of the examination.6
Appellant denied the charge against him. He claimed that he had a drinking spree at Galas, Quezon City and went
home to Sampaloc, Manila at around 1:00 o’clock in the morning of May 20, 2002. He surmised that "AAA" filed the
charge against him because of his prior altercation with "AAA’s" husband.
In a Decision dated June 10, 2008, the trial court found appellant guilty as charged. The dispositive portion of the
Decision reads:
WHEREFORE, the Court finds accused JONAS GUILLEN Y ATIENZA guilty beyond reasonable doubt for the felony
of RAPE and pursuant to law, he is sentenced to suffer a prison term of reclusion perpetua and to pay victim the
following:
₱50,000.00 as moral damages;
₱30,000.00 as exemplary damages; and
To pay the cost.
The BJMP of the Manila City Jail is ordered to commit the accused to the National Bilibid Prison without
unnecessary delay.
SO ORDERED.7
Aggrieved, appellant filed a Notice of Appeal8 which was given due course by the trial court in its Order9 dated June
13, 2008.
After the filing of the parties’ briefs, the CA rendered its Decision disposing as follows:
WHEREFORE, in the light of all the foregoing, the instant appeal is DISMISSED for lack of merit. The decision of
the trial court dated June 10, 2008 is AFFIRMED.
SO ORDERED.10
Hence, this appeal.
ISSUE
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF RAPE DESPITE THE
PROSECUTION’S FAILURE TO OVERTHROW THE CONSTITUTIONAL PRESUMPTION OF INNOCENCE IN HIS
FAVOR.11
Appellant claims that the trial court gravely erred when it deemed his silence at the police station immediately after
his arrest as an implied admission of guilt. He also argues that aside from being incredible, "AAA’s" testimony is
insufficient to establish his guilt beyond reasonable doubt. Moreover, he insists that "AAA’s" healed lacerations do
not prove that he indeed raped "AAA."
OUR RULING
Indeed, records show that appellant remained silent and passive despite being confronted by "AAA" with the rape
charge at the police station immediately after his arrest. In taking appellant’s silence as an implied admission of
guilt, the RTC ratiocinated that:
Owing to the complaint of the victim, the accused was apprehended by responding police officer[s] of the Sampaloc
Police Station. At the police precinct, the accused was presented to the victim and [he] was positively identified as
the person who raped her. At this juncture, the accused after he was positively identified as the malefactor who
sexually molested and raped the victim x x x just [remained] SILENT. In other words, he did not DENY the
accusation lodged against him by the victim much less register any vehement PROTEST at the station.
The aforesaid blatant FAILURE of the accused to deny victim’s complaint against him is equivalent to an IMPLIED
ADMISSION of guilt. Assuming arguendo that he is innocent of the accusation filed against him, he should have
stood firm in his contention that he didn’t rape/abuse the victim and should have stressed at the police station that
on the date and time of the incident he was having a drinking spree with his friends.
A person who is accused of a felony/offense which he did not commit should be as BOLD and FEROCIOUS as a
LION in protecting the trampled rights as an innocent person.12
Appellant claims that his silence should not be used against him as he was just exercising his constitutional right to
remain silent.
We agree with the appellant.
It should be borne in mind that when appellant was brought to the police station, he was already a suspect to the
crime of rape. As such, he was already under custodial investigation. Section 12, Article III of the Constitution
explicitly provides, viz:
Any person under investigation for the commission of an offense shall have the right to be informed of his right to
remain silent and to have competent and independent counsel preferably of his own choice. If the person cannot
afford the services of counsel, he must be provided with one. These rights cannot be waived except in writing and in
the presence of counsel.
Clearly, when appellant remained silent when confronted by the accusation of "AAA" at the police station, he was
exercising his basic and fundamental right to remain silent. At that stage, his silence should not be taken against
him. Thus, it was error on the part of the trial court to state that appellant’s silence should be deemed as implied
admission of guilt. In fact, this right cannot be waived except in writing and in the presence of counsel and any
admission obtained in violation of this rule shall be inadmissible in evidence.13
In any case, we agree with the Decision of the trial court, as affirmed by the CA, finding appellant guilty of the crime
of rape. The trial court’s Decision convicting appellant of rape was anchored not solely on his silence and so-called
implied admission. More importantly, it was based on the testimony of "AAA" which, standing alone, is sufficient to
establish his guilt beyond reasonable doubt.
Article 266-A of the Revised Penal Code specifically provides that rape may be committed by a man who shall have
carnal knowledge of a woman through force, threats or intimidation. In this case, "AAA" categorically testified that
appellant forcibly undressed her, poked a knife at her neck, and inserted his penis into her vagina without her
consent and against her will. Thus, all elements of the crime of rape were duly established from the testimony of
"AAA". Moreover, "AAA" positively identified appellant as her assailant.
Appellant could only offer alibi and denial as his defenses. However, alibi and denial are weak defenses especially
when measured up against the positive identification made by the victim pointing to appellant as the malefactor.
Besides, appellant failed to prove that it was physically impossible for him to be at the crime scene at the time of its
commission. Aside from claiming that he was at Galas, Quezon City when the rape incident happened, he failed to
submit any proof to show that it is physically impossible for him to be at Sampaloc, Manila where and when the rape
happened. Besides, appellant’s alibi crumbles in the face of his apprehension near the scene of the crime
immediately after "AAA" reported the incident to the police authorities.
We are not persuaded by appellant’s contention that he could not have raped "AAA" inside her room as the
discovery of the crime would have been more likely considering its proximity to the room of "AAA’s" sister-in-law.
Jurisprudence teaches us that rape may be committed even in places where people congregate. Thus, it is not
impossible or unlikely that rape is perpetrated inside a room adjacent to a room occupied by other persons, as in
this case.
Likewise, the failure of "AAA" to shout for help should not be taken against her. People react differently when
1âwphi1
confronted with a shocking or startling situation. Some may show aggressive resistance while others may opt to
remain passive. The failure of "AAA" to shout for help and seek assistance should not be construed as consent, or
as voluntarily engaging in an illicit relationship with the appellant, as implied by the defense. It would be recalled that
appellant poked a knife at "AAA’s" neck. Such threat of immediate danger to her life cowed "AAA" to submit to the
carnal desires of the appellant. However, immediately after appellant left, "AAA" lost no time in seeking the help of
her sister-in-law and in reporting the incident to the police authorities. In fact, the police authorities were able to
apprehend appellant because "AAA" immediately reported the incident to them.
Anent appellant’s contention that "AAA’s" healed hymenal laceration does not prove rape, we find the same
irrelevant and immaterial. Hymenal laceration, whether fresh or healed, is not an element of the crime of rape. Even
a medical examination is not necessary as it is merely corroborative. As we mentioned before, the fact of rape in this
case was satisfactorily established by the testimony of "AAA" alone.
All the elements of rape having been established beyond reasonable doubt, both the trial court and the CA properly
found appellant guilty as charged and correctly imposed on him the penalty of reclusion perpetua.14
The RTC, as affirmed by the CA, awarded "AAA" moral damages of ₱50,000.00, exemplary damages of ₱30,000.00
and cost of suit. In line with prevailing jurisprudence, "AAA" is also entitled to an award of civil indemnity of
₱50,000.00. In addition, all damages awarded shall earn interest at the rate of 6 per annum from date of finality of
WHEREFORE, the appeal is DISMISSED. The November 26, 2009 Decision of the Court of Appeals in CA-G.R.
CR-H.C. No. 03476 which affirmed the June 10, 2008 Decision of the Regional Trial Court of Manila, Branch 48
finding appellant Jonas Guillen y Atienza guilty beyond reasonable doubt of the crime of rape and sentencing him to
suffer the penalty of reclusion perpetua is AFFIRMED with MODIFICATIONS that appellant is further ordered to pay
AAA civil indemnity in the amount of ₱50,000.00 and interest on all damages awarded at the rate of 6% per annum
from date of finality of judgment until fully paid.
SO ORDERED.
G.R. No. 180200 November 25, 2013
DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner,

vs.
JESSIE E. CANTOS, Respondent.
DECISION
DEL CASTILLO, J.:
"It is of the utmost importance x x x that the modes adopted to enforce the taxes levied should be interfered with as
little as possible. Any delay in the proceedings of the officers, upon whom the duty is devolved of collecting the
taxes, may derange the operations of government, and thereby cause serious detriment to the public."1
This Petition for Review on Certiorari2 assails the July 24, 2007 Decision3 of the Court of Appeals (CA) in CA-G.R.
CR No. 29009 which affirmed the July 7, 2003 Decision4 of the Regional Trial Court (RTC), Branch XI, Balayan,
Batangas in Civil Case No. 4051 dismissing petitioner Digital Telecommunications, Philippines, Inc.’s (petitioner)
Petition for Indirect Contempt/Prohibition against respondent Jessie E. Cantos (respondent) as Provincial Treasurer
of Batangas. Also assailed is the October 11, 2007 CA Resolution5 denying petitioner’s Motion for Reconsideration.
Factual Antecedents
By virtue of Republic Act (RA) No. 7678,6 petitioner was granted a legislative franchise to install, operate and
maintain telecommunications systems throughout the Philippines on February 17, 1994.
Upon seeking the renewal of its Mayor’s Permit to operate and provide telecommunications service in Balayan,
Batangas, petitioner was informed by then Mayor Benjamin E. Martinez, Jr. that its business operation would be
restrained should it fail to pay the assessed real property taxes on or before October 5, 1998. And as petitioner
failed to pay, the Chief of the Permit and License Division of Balayan, Batangas, Mr. Francisco P. Martinez, issued
on October 6, 1998 a Cease and Desist Order enjoining petitioner from further operating its business.
Petitioner thus promptly filed a case for Annulment of the Cease and Desist Order before the RTC of Balayan,
Batangas against the Mayor and the Chief of the Permit and License Division. The case was docketed as Civil Case
No. 3514 and raffled to Branch IX of said court.
In a Decision7 dated July 15, 1999, Branch IX ruled in favor of petitioner and declared that the issuance of the Cease
and Desist Order was without legal basis. It held that the enjoinment of petitioner’s business operation is not one of
the remedies available to enforce collection of real property taxes under existing laws. The RTC also ruled that
petitioner is only liable to pay real property taxes on properties not used in connection with the operation of its
franchise. In arriving at such conclusion, the RTC relied on Section 5 of RA 7678, which provides that:
Sec. 5. Tax Provisions. - The grantee shall be liable to pay the same taxes on its real estate, buildings, and personal
property exclusive of this franchise as other persons or corporations are now or hereafter may be required by law to
pay. In addition thereto, the grantee shall pay to the Bureau of Internal Revenue each year, within thirty (30) days
after the audit and approval of the accounts, a franchise tax as may be prescribed by law of all gross receipts of the
telephone or other telecommunications businesses transacted under this franchise by the grantee; provided, that the
grantee shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code
pursuant to Section 2 of Executive Order No. 72 unless the latter enactment is amended or repealed, in which case
the amendment or repeal shall be applicable thereto.
The grantee shall file the return with and pay the tax due thereon to the Commissioner of Internal Revenue or his
duly authorized representative in accordance with the National Internal Revenue Code and the return shall be
subject to audit by the Bureau of Internal Revenue. (Boldfacing and underscoring supplied)
and construed the phrase "exclusive of this franchise" in the first sentence as limiting petitioner’s exemption from
paying real property tax only to properties used in furtherance of its legislative franchise to provide
telecommunications services.
The dispositive portion of Branch IX’s Decision reads:
WHEREFORE, the Cease and Desist Order dated October 6, 1998 is hereby declared null and void for lack of legal
basis. The Court further declares that real properties of plaintiff [Digital] Telecommunications Philippines, Inc.
(DIGITEL) which are used in the operation of its franchise are exempt from the payment of real property taxes, but
those not used in connection thereto are subject to aforesaid taxes.
SO ORDERED.8
The then Mayor attempted to set aside the above Decision by filing a Petition for Certiorari before the CA. But his
efforts were in vain as the CA outrightly dismissed the Petition.9 The dismissal became final and executory as shown
in an Entry of Judgment dated February 2, 2000.10
In June 2002, respondent, in his capacity as Provincial Treasurer of the Province of Batangas, issued seven
Warrants of Levy11 certifying that several real properties of petitioner situated in the Municipalities of Ibaan, San
Juan, Sto. Tomas, Cuenca, Nasugbu, Balayan, and Lemery, all in the Province of Batangas, are delinquent in the
payment of real property taxes. Hence, the properties would be advertised and sold at public auction within 30 days
from petitioner’s receipt of the warrants.
On July 1, 2002, petitioner wrote respondent to request the lifting of the Warrants of Levy and to refrain from
proceeding with the public sale of its property located in Balayan, Batangas.12 It invoked the final Decision in Civil
Case No. 3514 decreeing petitioner’s exemption from the payment of real property tax which it claimed to be binding
upon respondent. But since the warrants remained unlifted, petitioner filed with the RTC a Petition for Indirect
Contempt and Prohibition with prayer for the issuance of a Writ of Preliminary Injunction and/or Temporary
Restraining Order (TRO)13 on July 5, 2002. The case was docketed as Civil Case No. 4051.
For his defense, respondent averred that he cannot be held liable for contempt or for having disobeyed the Decision
in Civil Case No. 3514 since the same relates to an action in personam and, therefore, binds only the parties
impleaded therein and their successors in interest.14 He also asserted that petitioner’s claim for tax exemption could
not be collaterally presented and resolved in a contempt proceeding and that petitioner should have resorted instead
to the remedies provided under the Local Government Code (LGC) in order to prevent the public sale of its
delinquent properties.
On July 25, 2002, the RTC granted15 petitioner’s prayer for TRO. Respondent, however, manifested that when said
TRO was served upon him, he had already effected the public auction of petitioner’s real properties.16 Thus,
petitioner filed a Very Urgent Manifestation and Motion17 to recall and nullify the auction sale and to order respondent
and his counsel to explain why they should not be held in contempt for their blatant defiance of the TRO. It also
thereafter asserted that respondent is bound by the final Decision rendered in Civil Case No. 3514 under the
principle of res judicata.18 It maintained that respondent has a shared interest with the defendants in Civil Case No.
3514 in that they are all interested in the levy, imposition and collection of real property tax and that the Province of
Batangas, including respondent, is estopped from denying privity because of the Province’s active participation in
both proceedings by virtue of the representation of the same counsel. Petitioner likewise contended that the
declaration in Civil Case No. 3514 that it is exempt from real property tax for properties used in the operation of its
franchise is considered in rem and binds the property itself.
On August 14, 2002, the RTC issued an Order19 denying petitioner’s prayer for the issuance of a Writ of Preliminary
Injunction. It held that the issuance of the writ prayed for had already become moot and academic since the public
auction sale sought to be enjoined was already consummated. It further noted that the writ as a provisional remedy
is unavailing to petitioner’s case as it should have availed of the remedy provided under Section 260 of the LGC in
order to stop the scheduled auction sale, that is, to pay the delinquent tax and interest due thereon under protest.
Petitioner filed a Joint Motion for Reconsideration and Motion to Declare Null and Void the Sale Conducted on July
25, 200220 which was, however, denied in an Order21 dated September 3, 2002. When petitioner elevated the denial
to the CA via a Petition for Certiorari,22 the same was dismissed in a Resolution23 dated November 18, 2002.
Meanwhile, acting on petitioner’s Motion for Judgment on the Pleadings,24 the RTC rendered its Decision25 dated July
7, 2003 dismissing petitioner’s Petition for Indirect Contempt and Prohibition against respondent (Civil Case No.
4051). The RTC ruled that since respondent was not a party in Civil Case No. 3514, he had no duty to render
obedience to the Decision therein. Furthermore, there being no identity of causes of action between Civil Case No.
3514 and Civil Case No. 4051, the former being an action in personam, the Decision in said case binds only the
parties impleaded therein and their successors in interest, which do not include the respondent. The said court
refused to rule on petitioner’s claim for exemption from payment of realty taxes ratiocinating that any case pertaining
thereto should be filed directly with the local government unit concerned.
WHEREFORE, in view of the foregoing, the instant petition is dismissed, with costs against the petitioner.
IT IS SO ORDERED.26
As petitioner’s Motion for Reconsideration27 was denied by the RTC in a Resolution28 dated September 17, 2004, it
appealed to the CA.29
In a Decision30 dated July 24, 2007, the CA found no merit in the appeal. First, it noted that the dismissal of the case
for indirect contempt by the RTC amounted to an acquittal from which an appeal is not allowed. In any case,
respondent’s act of issuing the warrants of levy did not constitute indirect contempt in Civil Case No. 3514 since the
final Decision issued in said case was not directed against him but to the Mayor and the Chief of the Permit and
License Division of Balayan, Batangas. The CA also concurred with the trial court’s ruling that petitioner’s claim for
tax exemption could not be presented and resolved in an indirect contempt case and opined that the correct remedy
is for petitioner to file an independent action for annulment of sale against the Province of Batangas and there
invoke its exemption from real property taxes.
WHEREFORE, premises considered, the assailed Decision dated July 7, 2003 and the Resolution dated September
17, 2004, rendered by the Regional Trial Court, Branch XI, Balayan, Batangas in Civil Case No. 4051 are
AFFIRMED.
SO ORDERED.31
Petitioner’s Motion for Reconsideration32 was denied by the CA in a Resolution33 dated October 11, 2007.
Issues
Petitioner, thence, filed this Petition on the following grounds:
(a) The Honorable Court of Appeals erred in ruling that Civil Case No. 4051 is simply a case for indirect contempt so
much [so] that its dismissal by the lower court would amount to acquittal from which an appeal would not lie;
(b) The Honorable Court of Appeals erred in ruling that respondent, not being a party to Civil Case No. 3514, cannot
be held in contempt for refusing to abide by the decision there[in];
(c) The Honorable Court of Appeals erred in ruling that the claim of Digitel for real property tax exemption cannot be
presented and resolved in the indirect contempt case; and
(d) The Honorable Court of Appeals erred in ruling that the "proper remedy is for Digitel to file an independent action
for annulment of sale against the Province of Batangas, invoking its exemption from payment of real property
taxes.34
Petitioner takes exception to the CA’s ruling that an appeal will not lie since the RTC Decision essentially amounts
to respondent’s acquittal. It posits that the CA can still take cognizance of the appeal since the same is also a
Petition for Prohibition. It is well within the authority of the said court to rule on the claim for tax exemption like in the
case of The City Government of Quezon City v. Bayan Telecommunications, Inc.35 wherein the claim for realty tax
exemption of another telecommunications company, Bayantel, was resolved through a Petition for Prohibition.
Petitioner likewise insists that respondent cannot defy the final ruling in Civil Case No. 3514 and also the
pronouncement of this Court in Digital Telecommunications Philippines, Inc. v. Province of Pangasinan36 that
petitioner is exempted from paying real property tax. Also, in consonance with said rulings, the sale by public
auction of petitioner’s properties is void ab initio, the same having been made under a mistaken premise that
petitioner’s properties are not exempt from realty taxes. Thus, an independent action to annul the sale of the
properties, contrary to the CA’s intimation, is not the proper remedy. Petitioner therefore prays for the nullification
and setting aside of the auction sale conducted by respondent against its real properties.
Our Ruling
Respondent is not guilty of indirect contempt.
At the outset, the Court shall address the issue on double jeopardy as discussed by petitioner in its Memorandum.
In his Comment, respondent reiterated the CA’s ruling that the RTC Decision amounts to an acquittal, hence, an
appeal does not lie. Arguing against it, petitioner contends that the rule on double jeopardy will not bar it from
pursuing its appeal because this is not a criminal case and respondent is not tried as an accused.
The Court is not persuaded. Indeed, contempt is not a criminal offense.37 However, a charge for contempt of court
partakes of the nature of a criminal action.38 Rules that govern criminal prosecutions strictly apply to a prosecution
for contempt.39 In fact, Section 11 of Rule 7140 of the Rules of Court provides that the appeal in indirect contempt
proceedings may be taken as in criminal cases. This Court has held that an alleged contemner should be accorded
the same rights as that of an accused.41 Thus, the dismissal of the indirect contempt charge against respondent
amounts to an acquittal, which effectively bars a second prosecution.42
Be that as it may, respondent is not guilty of indirect contempt. "Contempt of court is defined as a disobedience to
the court by acting in opposition to its authority, justice, and dignity. It signifies not only a willful disregard or
disobedience of the court’s order, but such conduct which tends to bring the authority of the court and the
administration of law into disrepute or, in some manner, to impede the due administration of justice. It is a defiance
of the authority, justice, or dignity of the court which tends to bring the authority and administration of the law into
disrespect or to interfere with or prejudice party-litigants or their witnesses during litigation."43
In this case, the acts of respondent in issuing the Warrants of Levy and in effecting the public auction sale of
petitioner’s real properties, were neither intended to undermine the authority of the court nor resulted to
disobedience to the lawful orders of Branch IX. He merely performed a ministerial function which he is bound to
perform under Sections 176 and 177 of RA 7160,44 viz:
Section 176. Levy on Real Property. - After the expiration of the time required to pay the delinquent tax, fee, or
charge, real property may be levied on before, simultaneously, or after the distraint of personal property belonging to
the delinquent taxpayer. To this end, the provincial, city or municipal treasurer, as the case may be, shall prepare a
duly authenticated certificate showing the name of the taxpayer and the amount of the tax, fee, or charge, and
penalty due from him. Said certificate shall operate with the force of a legal execution throughout the Philippines.
Levy shall be effected by writing upon said certificate the description of the property upon which levy is made. At the
same time, written notice of the levy shall be mailed to or served upon the assessor and the Register of Deeds of
the province or city where the property is located who shall annotate the levy on the tax declaration and certificate of
title of the property, respectively, and the delinquent taxpayer or, if he be absent from the Philippines, to his agent or
the manager of the business in respect to which the liability arose, or if there be none, to the occupant of the
property in question.
In case the levy on real property is not issued before or simultaneously with the warrant of distraint on personal
property, and the personal property of the taxpayer is not sufficient to satisfy his delinquency, the provincial, city or
municipal treasurer, as the case may be, shall within thirty (30) days after execution of the distraint, proceed with the
levy on the taxpayer's real property. .
A report on any levy shall, within ten (10) days after receipt of the warrant, be submitted by the levying officer to the
sanggunian concerned.
Section 177. Penalty for Failure to Issue and Execute Warrant. - Without prejudice to criminal prosecution under the
Revised Penal Code and other applicable laws, any local treasurer who fails to issue or execute the warrant of
distraint or levy after the expiration of the time prescribed, or who is found guilty of abusing the exercise thereof by
competent authority shall be automatically dismissed from the service after due notice and hearing.
Noteworthy at this point is that there is nothing in the records which would show that petitioner availed of the tax
exemption or submitted the requirements to establish that it is exempted from paying real property taxes. Section
206 of RA 7160 outlines the requirements for real property tax exemption, viz.:
Sec. 206. Proof of Exemption of Real Property from Taxation. - Every person by or for whom real property is
declared, who shall claim tax exemption for such property under this Title shall file with the provincial, city or
municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary
evidence in support of such claim including corporate charters, title of ownership, articles of incorporation, by-laws,
contracts, affidavits, certifications and mortgage deeds, and similar documents.
If the required evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in
the assessment roll. However, if the property shall be proven to be tax exempt, the same shall be dropped from the
assessment roll.
Neither did petitioner avail of the remedy of paying the assessed real property tax under protest as prescribed in
Section 25245 of RA 7160. Suffice it to say that the availment of these remedies could have prevented respondent’s
issuance of the Warrants of Levy and the conduct of the subsequent public auction sale of petitioner’s properties.
Due to petitioner’s non-availment of these remedies, respondent therefore remained duty bound to perform such
acts, otherwise, he may be subjected to the penalties prescribed for non-performance of his ministerial duties as
provincial treasurer.
Respondent is not bound by the Decision in Civil Case No. 3514.
Petitioner avers that respondent blatantly defied a final and binding Decision rendered in Civil Case No. 3514
declaring it exempt from paying taxes on its real properties. It argues that there is a shared identity of interest
between the defendants in Civil Case No. 3514 and respondent. Therefore, respondent is barred by the Decision in
the said case under the principle of res judicata.
The contention is specious. "Res judicata means ‘a matter adjudged; a thing judicially acted upon or decided; a
thing or matter settled by judgment.’"46 For res judicata to apply there must among others be, between the first and
the second actions, identity of the parties, identity of subject matter, and identity of causes of action.47 Here, there is
no identity of parties between Civil Case No. 3514 and the instant case. "Identity of parties exists ‘where the parties
in both actions are the same, or there is privity between them, or they are successors-in-interest by title subsequent
to the commencement of the action, litigating for the same thing and under the same title and in the same
capacity.’"48 In Civil Case No. 3514, the action was directed against Benjamin E. Martinez, Jr. and Francisco P.
Martinez in their capacities as Mayor and Chief of the Permit and License Division of the Municipality of Balayan,
Batangas, respectively. On the other hand, respondent, in the instant case, is being sued in his capacity as
Provincial Treasurer of the Province of Batangas. While the defendants in both cases similarly sought to enforce the
tax obligation of petitioner, they were sued under different capacities. Moreover, there is no identity in the causes of
action between the two cases. In Civil Case No. 3514, the propriety of the municipal officials’ closure/stoppage of
petitioner’s business operation in Balayan, Batangas was the one in question while what is involved in this case is
respondent’s act of issuing Warrants of Levy and proceeding with the auction sale of the real properties of petitioner.
Clearly, the principle of res judicata does not apply. The RTC and the CA are therefore correct in ruling that
respondent, not being a party thereto, is not bound by the Decision rendered in Civil Case No. 3514.
Petitioner’s reliance on the rulings in Civil Case No. 3514 and Digital Telecommunications Philippines, Inc. v.
Province of Pangasinan is misplaced.
In support of its prayer to annul the auction sale of its real properties, petitioner heavily relies on the Decision
rendered in Civil Case No. 3514 declaring that it is exempt from paying real property tax. In addition, it invokes
Digital Telecommunications Philippines, Inc. v. Province of Pangasinan49 wherein it was ruled that petitioner’s real
properties located within the territorial jurisdiction of Pangasinan that are actually, directly and exclusively used in its
franchise are exempt from realty tax.
As in Civil Case No. 3514, this Court’s Third Division in Digital Telecommunications Philippines, Inc. v. Province of
Pangasinan50 has interpreted the phrase "exclusive of this franchise" in the first sentence of Section 5 of RA 7678 as
limiting petitioner’s exemption from realty tax to real properties used in the pursuit of its legislative franchise. It was
1âwphi1
then held that RA 7678 exempted petitioner’s properties that are actually, directly, and exclusively used in the
conduct and operation of its franchise from real property tax.
But this ruling has already been abandoned.
In the later case of Digital Telecommunications Philippines, Inc. v. City Government of Batangas,51 the Court en
banc speaking thru Senior Associate Justice Antonio T. Carpio pronounced:
Nowhere in the language of the first sentence of Section 5 of RA 7678 does it expressly or even impliedly provide
that petitioner’s real properties that are actually, directly and exclusively used in its telecommunications business are
exempt from payment of realty tax. On the contrary the first sentence of Section 5 specifically states that the
petitioner, as the franchisee shall pay the ‘same taxes on its real estate, buildings, and personal property exclusive
of this franchise as other persons or corporations are now or hereafter may be required by law to pay.’
The heading of Section 5 is ‘Tax Provisions,’ not Tax Exemptions. To reiterate, the phrase ‘exemption from real
estate tax’ or other words conveying exemption from realty tax do not appear in the first sentence of Section 5. The
phrase ‘exclusive of this franchise’ in the first sentence of Section 5 merely qualifies the phrase personal property to
exclude petitioner’s legislative franchise, which is an intangible personal property. Petitioner’s franchise is subject to
tax in the second sentence of Section 5 which imposes the ‘franchise tax.’ Thus, there is no grant of tax exemption
in the first sentence of Section 5.
The interpretation of the phrase exclusive of this franchise in the Bayantel and Digitel cases goes against the basic
principle in construing tax exemptions. In PLDT v. City of Davao the Court held that ‘tax exemptions should be
granted only by clear and unequivocal provision of law on the basis of language too plain to be mistaken. They
cannot be extended by mere implication or inference.’
Tax exemptions must be clear and unequivocal. A taxpayer claiming a tax exemption must point to a specific
provision of law conferring on the taxpayer in clear and plain terms, exemption from a common burden. Any doubt
whether a tax exemption exists is resolved against the taxpayer.52
As things now stand, petitioner s real properties, whether used in the furtherance of its franchise or not, are subject
to real property tax. Hence, its reliance on the rulings in Civil Case No. 3514 and Digital Telecommunications
Philippines Inc. v. Province of Pangasinan53 becomes unavailing.
WHEREFORE, the Petition is DENIED. The assailed Decision dated July 24, 2007 and the Resolution dated
October 11, 2007 of the Court of Appeals in CA-GR. CR No. 29009 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 184565 November 20, 2013
MANOLITO DE LEON and LOURDES E. DE LEON, Petitioners,

vs.
BANK OF THE PHILIPPINES, Respondent.
DECISION
DEL CASTILLO, J.:
"[I]n the course of trial in a civil case, once plaintiff makes out a prima facie case in his favor, the duty or the burden
of evidence shifts to defendant to controvert plaintiffs prima facie case, otherwise, a verdict must be returned in
favor of plaintiff."1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the November 16, 2007
Decision3and the September 19 2008 Resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 91217.
Factual Antecedents
On June 13, 1995, petitioner-spouses Manolito and Lourdes de Leon executed a Promissory Note5 binding
themselves to pay Nissan Gallery Ortigas the amount of ₱458,784.00 in 36 monthly installments of ₱12,744.00, with
a late payment charge of five percent (5%) per month.6 To secure the obligation under the Promissory Note,
petitioner-spouses constituted a Chattel Mortgage7 over a 1995 Nissan Sentra 1300 4-Door LEC with Motor No. GA-
13-549457B and Serial No. BBAB-13B69336.8
On the same day, Nissan Gallery Ortigas, with notice to petitioner-spouses, executed a Deed of Assignment9 of its
rights and interests under the Promissory Note with Chattel Mortgage in favor of Citytrust Banking Corporation
(Citytrust).10
On October 4, 1996, Citytrust was merged with and absorbed by respondent Bank of the Philippine Islands (BPI).11
Petitioner-spouses, however, failed to pay their monthly amortizations from August 10, 1997 to June 10,
1998.12Thus, respondent BPI, thru counsel, sent them a demand letter13 dated October 16, 1998.
On November 19, 1998, respondent BPI filed before the Metropolitan Trial Court (MeTC) of Manila a Complaint14 for
Replevin and Damages, docketed as Civil Case No. 161617 and raffled to Branch 6, against petitioner-
spouses.15The summons, however, remained unserved, prompting the MeTC to dismiss the case without
prejudice.16Respondent BPI moved for reconsideration on the ground that it was still verifying the exact address of
petitioner-spouses.17 On March 21, 2002, the MeTC set aside the dismissal of the case.18 On April 24, 2002,
summons was served on petitioner-spouses.19
Petitioner-spouses, in their Answer,20 averred that the case should be dismissed for failure of respondent BPI to
prosecute the case pursuant to Section 321 of Rule 17 of the Rules of Court;22 that their obligation was extinguished
because the mortgaged vehicle was stolen while the insurance policy was still in force;23 that they informed Citytrust
of the theft of the mortgaged vehicle through its employee, Meldy Endaya (Endaya);24 and that respondent BPI
should have collected the insurance proceeds and applied the same to the remaining obligation.25
On November 11, 2003, respondent BPI presented its evidence ex parte.26 It offered as evidence the testimony of its
Account Consultant, Lilie Coria Ultu (Ultu), who testified on the veracity of the Promissory Note with Chattel
Mortgage, the Deed of Assignment, the demand letter dated October 16, 1998, and the Statement of Account27 of
petitioner-spouses.28
For their part, petitioner-spouses offered as evidence the Alarm Sheet issued by the Philippine National Police on
December 3, 1997, the Sinumpaang Salaysay executed by Reynaldo Llanos (Llanos), the Subpoena for Llanos, the
letter of Citytrust dated July 30, 1996, the letters of respondent BPI dated January 6, 1998 and June 25, 1998, and
the testimonies of Ultu and petitioner Manolito.29
On November 17, 2004, the MeTC rendered a Decision30 in favor of respondent BPI and declared petitioner-spouses
liable to pay their remaining obligation for failure to notify Citytrust or respondent BPI of the alleged theft of the
mortgaged vehicle and to submit proof thereof.31 The MeTC considered the testimony of petitioner Manolito dubious
and self-serving.32 Pertinent portions of the Decision read:
[Petitioner Manolito] declared on the witness stand that he sent to [Citytrust], through "fax," the papers necessary to
formalize his report on the loss of [the] subject motor vehicle, which included the Alarm Sheet (Exhibit "1") and the
Sinumpaang Salaysay of one Reynaldo Llanos y Largo (TSN dated August 3, 2004, pp. 17-19).
However, [his claim that] such documents were indeed received by [Citytrust] only remains self-serving and
gratuitous. No facsimile report has been presented that such documents were indeed transmitted to Citytrust. No
formal letter was made to formalize the report on the loss. For an individual such as [petitioner Manolito], who rather
appeared sharp and intelligent enough to know better, an apparent laxity has been displayed on his part. Heedless
of the consequences, [petitioner Manolito] simply satisfied himself with making a telephone call, if indeed one was
made, to [a rank and file employee] of Citytrust or [respondent BPI] x x x and did not exercise x x x due diligence to
verify any feedback or action on the part of the banking institution.
Worse, [petitioners] x x x failed to prove that they indeed submitted proof of the loss or theft of the motor vehicle.
[Petitioner-spouses] merely [presented] an Alarm Sheet and the Sinumpaang Salaysay of one Reynaldo Llanos y
Largo. But a formal police report on the matter is evidently missing. It behooved [petitioner-spouses] to establish the
alleged theft of the motor vehicle by submitting a police action on the matter, but this, they did not do.
Haplessly, therefore, the required notice and proof of such loss have not been satisfied.33
Thus, the MeTC disposed of the case in this wise:
WHEREFORE, judgment is hereby rendered in favor of [respondent BPI] and against [petitioner-spouses] Lourdes
E. De Leon and Jose Manolito De Leon, as follows:
(i) Ordering [petitioner-spouses] to jointly and severally pay the sum of ₱130,018.08 plus 5% interest per
month as late payment charges from date of default on August 10, 1997, until fully paid;
(ii) Ordering [petitioner-spouses] to jointly and severally pay attorney’s fees fixed in the reasonable sum of
₱10,000.00; and
(iii) Ordering [petitioner-spouses] to jointly and severally pay the costs of suit.
SO ORDERED.34
On appeal,35 the RTC, Branch 34, reversed the MeTC Decision. Unlike the MeTC, the RTC gave credence to the
testimony of petitioner Manolito that he informed Citytrust of the theft of the mortgaged vehicle by sending through
fax all the necessary documents.36 According to the RTC, since there was sufficient notice of the theft, respondent
BPI should have collected the proceeds of the insurance policy and applied the same to the remaining obligation of
petitioner-spouses.37 The fallo of the RTC Order38 dated July 18, 2005 reads:
WHEREFORE, premised from the above considerations and findings, the decision appealed from is hereby
reversed and set aside.
The Complaint and the counterclaim are hereby DISMISSED for lack of merit.
SO ORDERED.39
Aggrieved, respondent BPI elevated the case to the CA via a Petition for Review under Rule 42 of the Rules of
Court.
On November 16, 2007, the CA reversed and set aside the RTC Order and reinstated the MeTC Decision, thus:
WHEREFORE, the instant petition for review is GRANTED. The Order issued by the Regional Trial Court of Manila
(Branch 34), dated July 18, 2005, in Civil Case No. 05-111630, is REVERSED and SET ASIDE and the Decision of
the Metropolitan Trial Court of Manila (Branch 6) is REINSTATED. No pronouncement as to costs.
SO ORDERED.40
Petitioner-spouses moved for reconsideration, which the CA partly granted in its September 19, 2008
Resolution,41the dispositive portion of which reads:
WHEREFORE, the foregoing premises considered, our decision of 16 November 2007 is deemed amended only to
the extent herein discussed and the dispositive portion of said decision should now read as follows:
"WHEREFORE, the instant petition for review is GRANTED. The Order issued by the Regional Trial Court of Manila
(Branch 34), dated July 18, 2005, in Civil Case No. 05-111630, is REVERSED and SET ASIDE and the Decision of
the Metropolitan Trial Court of Manila (Branch 6) is REINSTATED with the [lone] modification that the therein
ordered payment of 5% interest per month as late payment charges, is reduced to 1% interest per month from date
of default on August 10, 1997 until fully paid.
No pronouncement as to costs."
IT IS SO ORDERED.42
Issue
Hence, this recourse by petitioner-spouses arguing that:
THE REVERSAL BY THE [CA] OF THE DECISION OF THE [RTC] OF MANILA (BRANCH 34) THAT THE
PETITIONERS HAVE SATISFIED THE REQUIRED NOTICE OF LOSS TO [CITYTRUST] IS CONTRARY TO LAW
AND THE DECISIONS OF THIS HONORABLE COURT.43
Ultimately, the issue boils down to the credibility of petitioner Manolito’s testimony.
Petitioner-spouses’ Arguments
Petitioner-spouses contend that the CA erred in not giving weight and credence to the testimony of petitioner
Manolito.44 They claim that his credibility was never an issue before the MeTC45 and that his testimony, that he sent
notice and proof of loss to Citytrust through fax, need not be supported by the facsimile report since it was not
controverted by respondent BPI.46 Hence, they insist that his testimony together with the documents presented is
sufficient to prove that Citytrust received notice and proof of loss of the mortgaged vehicle.47 Having done their part,
they should be absolved from paying their remaining obligation.48 Respondent BPI, on the other hand, should bear
the loss for failing to collect the proceeds of the insurance.49
Respondent BPI’s Arguments
Respondent BPI counter-argues that the burden of proving the existence of an alleged fact rests on the party
asserting it.50 In this case, the burden of proving that the mortgaged vehicle was stolen and that Citytrust received
notice and proof of loss of the mortgaged vehicle rests on petitioner-spouses.51 Unfortunately, they failed to present
clear and convincing evidence to prove these allegations.52 In any case, even if they were able to prove by clear and
convincing evidence that notice and proof of loss of the mortgaged vehicle was indeed faxed to Citytrust, this would
not absolve them from liability because the original documents were not delivered to Citytrust or respondent
BPI.53Without the original documents, Citytrust or respondent BPI would not be able to file an insurance claim.54
Our Ruling

The party who alleges a fact has the burden of proving it.
Section 1, Rule 131 of the Rules of Court defines "burden of proof" as "the duty of a party to present evidence on
the facts in issue necessary to establish his claim or defense by the amount of evidence required by law." In civil
cases, the burden of proof rests upon the plaintiff, who is required to establish his case by a preponderance of
evidence.55 Once the plaintiff has established his case, the burden of evidence shifts to the defendant, who, in turn,
has the burden to establish his defense.56
In this case, respondent BPI, as plaintiff, had to prove that petitioner-spouses failed to pay their obligations under
the Promissory Note. Petitioner-spouses, on the other hand, had to prove their defense that the obligation was
extinguished by the loss of the mortgaged vehicle, which was insured.
However, as aptly pointed out by the MeTC, the mere loss of the mortgaged vehicle does not automatically relieve
petitioner-spouses of their obligation57 as paragraph 7 of the Promissory Note with Chattel Mortgage provides that:
7. The said MORTGAGOR covenants and agrees to procure and maintain through the MORTGAGEE, a
comprehensive insurance from a duly accredited and responsible insurance company approved by the
MORTGAGEE, over the personalty hereinabove mortgaged to be insured against loss or damage by accident, theft,
and fire for a period of one (1) year from date hereof and every year thereafter until the mortgage DEBTS are fully
paid with an insurance company or companies acceptable to the MORTGAGEE in an amount not less than the
outstanding balance of the mortgage DEBTS; that he/it will make all loss, if any, under such policy or policies
payable to the MORTGAGEE forthwith. x x x
xxxx
MORTGAGOR shall immediately notify MORTGAGEE in case of loss, damage or accident suffered by herein
personalty mortgaged and submit proof of such loss, damages or accident. Said loss damage or accident for any
reason including fortuitous event shall not suspend, abate, or extinguish [petitioner spouses’] obligation under the
promissory note or sums due under this contract x x x
In case of loss or damage, the MORTGAGOR hereby irrevocably appoints the MORTGAGEE as his/its attorney-in-
fact with full power and authority to file, follow-up, prosecute, compromise or settle insurance claims; to sign,
execute and deliver the corresponding papers, receipts and documents to the insurance company as may be
necessary to prove the claim and to collect from the latter the insurance proceeds to the extent of its interest. Said
proceeds shall be applied by the MORTGAGEE as payment of MORTGAGOR’s outstanding obligation under the
Promissory Note and such other sums and charges as may be due hereunder or in other instruments of
indebtedness due and owing by the MORTGAGOR to the MORTGAGEE and the excess, if any, shall thereafter be
remitted to the MORTGAGOR. MORTGAGEE however shall be liable in the event there is a deficiency.
x x x x58
Based on the foregoing, the mortgagor must notify and submit proof of loss to the mortgagee. Otherwise, the
1âw phi 1
mortgagee would not be able to claim the proceeds of the insurance and apply the same to the remaining obligation.
This brings us to the question of whether petitioner-spouses sent notice and proof of loss to Citytrust or respondent
BPI.
Testimonial evidence must also be credible, reasonable, and in accord with human experience.
Testimonial evidence, to be believed, must come not only from the mouth of a credible witness, but must also "be
credible, reasonable, and in accord with human experience."59 A credible witness must, therefore, be able to narrate
a convincing and logical story.
In this case, petitioner Manolito's testimony that he sent notice and proof of loss of the mortgaged vehicle to
Citytrust through fax lacks credibility especially since he failed to present the facsimile report evidencing the
transmittal.60 His failure to keep the facsimile report or to ask for a written acknowledgement from Citytrust of its
receipt of the transmittal gives us reason to doubt the truthfulness of his testimony. His testimony on the alleged
theft is likewise suspect. To begin with, no police report was presented.61 Also, the insurance policy was renewed
even after the mortgaged vehicle was allegedly stolen.62 And despite repeated demands from respondent BPI,
petitioner-spouses made no effort to communicate with the bank in order to clarify the matter. The absence of any
overt act on the part of petitioner-spouses to protect their interest from the time the mortgaged vehicle was stolen up
to the time they received the summons defies reason and logic. Their inaction is obviously contrary to human
experience. In addition, we cannot help but notice that although the mortgaged vehicle was stolen in November
1997, petitioner-spouses defaulted on their monthly amortizations as early as August 10, 1997. All these taken
together cast doubt on the truth and credibility of his testimony.
Thus, we are in full accord with the findings of the MeTC and the CA that petitioner Manolito's testimony lacks
credence as it is dubious and self-serving.63 Failing to prove their defense, petitioner-spouses are liable to pay their
remaining obligation.
WHEREFORE the Petition is hereby DENIED. The assailed November 16, 2007 Decision and the September 19,
2008 Resolution of the Court of Appeals in CA-G.R. SP No. 91217 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
A.C. No. 10043 November 20, 2013
AURORA H. CABAUATAN, Complainant,

vs.
ATTY. FREDDIE A. VENIDA, Respondent.
RESOLUTION
DEL CASTILLO, J.:
The Integrated Bar of the Philippines (IBP) thru its Commission on Bar Discipline (CBD) received a Complaint1 filed
by Aurora H. Cabauatan (complainant) against respondent Atty. Freddie A. Venida for serious misconduct and gross
neglect of duty. In an Order2 dated June 14, 2007, the IBP-CBD directed respondent to file his Answer within 15
days from receipt. Respondent failed to file his Answer. On May 29, 2008, the Investigating Commissioner3 notified
the parties of the mandatory conference scheduled on July 10, 2008.4 The parties were likewise directed to submit
their Mandatory Conference Brief at least three days before the scheduled conference. Only the complainant
submitted her brief.5 During the mandatory conference set on July 10, 2008, complainant who was already 78 years
old appeared. Respondent failed to appear.6 Consequent the Investigating Commissioner reset the mandatory
conference to September 18, 2008.7
On September 18, 2008, respondent again failed to appear despite notice thus he was deemed to have waived his
right to be present and to submit evidence in his behalf. Only the complainant was present and complied with the
directive to submit her Position Paper together with the documents that would support her case.8
The facts of the case as incorporated in the Report and Recommendation9 of the Investigating Commissioner are as
follows:
This is a Disbarment case filed by Complainant against Respondent for gross, reckless and inexcusable negligence.
Complainant alleged that she was the appellant in CA-G.R. [No.] 85024 entitled Aurora Cabauatan, Plaintiff-
Appellant vs. Philippine National Bank, Defendant-Appellee. The case was originally handled by a different lawyer
but she decided to change her counsel and engaged the services of the Respondent x x x. Complainant was then
furnished by the Respondent of the pleadings he prepared, such as "Appearance as Counsel/Dismissal of the
Previous Counsel and a Motion for Extension of time to File a Memorandum."
Complainant made several follow-ups on her case until she lost contact with the Respondent. Complainant alleged
the gross, reckless and inexcusable negligence of the Respondent [which she] was able to prove with the Entry of
Judgment (attached as Annex "C" of her Position Paper, and as Annex "D" of her Complaint) issued by the
Honorable Court of Appeals quoted hereunder. "x x x
This is to certify that on March 31, 2006 a resolution rendered in the above-entitled case was filed in this Office, the
dispositive portion of which reads as follows:
WHEREFORE, the appeal in this case is deemed ABANDONED and DISMISSED on authority of Sec. 1(e), Rule 50
of the 1996 Rules of Civil Procedure.
SO ORDERED.
and that the same has on April 23, 2006 become final and executory and is hereby recorded in the Book of Entries
of Judgments. x x x"
From the order itself, it is obvious that Respondent did not submit any pleading with the Court of Appeals. It is
likewise very noticeable that the Respondent was not among those furnished with a copy of the Entry of Judgment
hence it is crystal clear that he never submitted his Entry of Appearance with the Court of Appeals [insofar] as the
case of the Complainant is concerned. When the Complainant was following up on the status of the case with him,
Respondent assured the Complainant that he was doing his best in dealing with the case, nevertheless, later on
Complainant lost contact with him.
The fact that the Entry of Judgment issued by the Court of Appeals that stated "x x x deemed ABANDONED and
DISMISSED x x x," including the fact that he was not one of the parties furnished with a copy of the Entry of
Judgment proved the inaction and negligence of the Respondent.
Respondent did [furnish] Complainant x x x a copy of "Appearance as Counsel/Dismissal of the Previous Counsel
and a Motion for Extension of time to File a Memorandum," however, no further actions were [made] by the
Respondent to protect [the] rights and interest of his client.10
Based on the foregoing narration of facts, the Investigating Commissioner found that respondent has not been
diligent and competent in handling the case of the complainant when he failed to file the necessary pleading before
the court resulting in its outright dismissal. The respondent also disregarded the orders of the IBP when he failed to
file his Answer, to attend the mandatory conference, and to file his Position Paper despite receipt of the
corresponding notices.11 The Investigating Commissioner thus recommended that respondent be suspended from
the practice of law for one year.12
In Resolution No. XX-2012-51013 dated December 14, 2012, the IBP Board of Governors adopted and approved the
Investigating Commissioner's Report and Recommendation.
Our Ruling
We adopt the findings and recommendation of the IBP.
The Code of Professional Responsibility pertinently provides:
Canon 17 – A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposed on him.
Canon 18 – A lawyer shall serve his client with competence and diligence.
xxxx
Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith
shall render him liable.
Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable
time to the client's request for information.
It is beyond dispute that complainant engaged the services of respondent to handle her case which was then on
appeal before the Court of Appeals. However, respondent merely showed to complainant the draft of the pleading
"Appearance as Counsel/Dismissal of the Previous Counsel and a Motion for Extension of time to File a
Memorandum" but failed to file the same before the appellate court. Plainly, respondent had been remiss and
negligent in handling the case of his client; he neglected the legal matter entrusted to him by the complainant and he
is liable therefor.
Indeed, when a lawyer takes a client's cause, he covenants that he will exercise due diligence in protecting the
latter's rights. Failure to exercise that degree of vigilance and attention expected of a good father of a family makes
the lawyer unworthy of the trust reposed on him by his client and makes him answerable not just to his client but
also to the legal profession, the courts and society. x x x14
Complainant also established that she made several follow-ups with the respondent but the latter merely ignored her
or made her believe that he was diligently handling her case. Thus, complainant was surprised when she received a
notice from the Court of Appeals informing her that her appeal had been abandoned and her case dismissed. The
dismissal had become final and executory. This is a clear violation of Rule 18.04, Canon 18 of the Code of
Professional Responsibility which enjoins lawyers to keep their clients informed of the status of their case and shall
respond within a reasonable time to the clients' request for information.
In addition, we concur with the findings of the IBP that respondent is guilty of disregarding its notices and
orders. Respondent did not heed the IBP's Order to file his Answer. He also disregarded the IBP's directives for him
1âwphi1
to attend the mandatory conference. Moreover, he did not submit his Position Paper despite receipt of notice.
Respondent's refusal to obey the orders of the IBP "is not only irresponsible, but also constitutes utter disrespect for
the judiciary and his fellow lawyers. His conduct is unbecoming of a lawyer, for lawyers are particularly called upon
to obey court orders and processes and are expected to stand foremost in complying with court directives being
themselves officers of the court."15 Respondent should be reminded that -
As an officer of the court, [he] is expected to know that a resolution of this Court is not a mere request but an order
which should be complied with promptly and completely. This is also true of the orders of the IBP as the
investigating arm of the Court in administrative cases against lawyers.
Respondent should strive harder to live up to his duties of observing and maintaining the respect due to the courts,
respect for law and for legal processes, and of upholding the integrity and dignity of the legal profession in order to
perform his responsibilities as a lawyer effectively.16
WHEREFORE, respondent Atty. Freddie A Venida is SUSPENDED from the practice o law for one year17 effective
immediately, with WARNING that a similar violation will be dealt with more severely. He is DIRECTED to report to
this Court the date of his receipt of this Resolution to enable this Court to determine when his suspension shall take
effect.
Let a copy of this Resolution be entered in the personal records of respondent as a member of the Bar, and copies
furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court
Administrator for circulation to all courts in the country.
SO ORDERED.
SECOND DIVISION
A.C. No. 5239 November 18, 2013
SPOUSES GEORGE A. WARRINER and AURORA R. WARRINER, Complainants,

vs.
ATTY. RENI M. DUBLIN, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This resolves the administrative Complaint1 filed on March 14, 2000 by complainant-spouses George Arthur
Warriner (Warriner) and Aurora R. Warriner against respondent Atty. Reni M. Dublin for gross negligence and
dereliction of duty.
In their Complaint filed directly before the Office of the Bar Confidant of this Court, complainants alleged that they
secured the services of respondent in the filing of a Complaint for damages captioned as Aurora M Del Rio-Warriner
and her spouse-husband George Arthur Warriner, plaintiffs, versus E.B. Villarosa & Partner Co. Ltd. and docketed
as Civil Case No. 23,396-95 before the Regional Trial Court (RTC) of Davao City, Branch 16; that during the
proceedings in Civil Case No. 23,396-95, respondent requested the RTC for a period of 10 days within which to
submit his Formal Offer of Documentary Evidence; that despite the lapse of the requested period, respondent did
not submit his Formal Offer of Documentary Evidence; that respondent did not file any comment to E.B. Villarosa &
Partner Co., Ltd. s motion to declare complainants to have waived their right to file Formal Offer of Documentary
Evidence; that respondent belatedly filed a Formal Offer of Documentary Evidence which the RTC denied; that
respondent did not oppose or file any comment to E.B. Villarosa & Partner Co., Ltd.’s move to dismiss the
Complaint; and that the RTC eventually dismissed Civil Case No. 23,396-95 to the prejudice of herein complainants.
In a Resolution2 dated June 26, 2000, we directed respondent to file his Comment to this administrative Complaint.
Upon receipt of the Resolution on August 24, 2000,3 respondent requested for an extension of 30 days which was
granted.4
However, as of August 5, 2002, or after a lapse of almost two years, respondent had not yet filed his Comment.
Thus, we resolved to require respondent to "show cause why he should not be disciplinarily dealt with or held in
contempt for such failure and to comply with the resolution requiring said comment, both within ten (10) days from
notice."5 Respondent received our directive but chose to ignore the same.6 In another Resolution7 dated August 4,
2003, we imposed a fine of ₱1,000.00 on respondent and reiterated our directives requiring him to file his Comment
and to submit an explanation on his failure to file the same. However, respondent again ignored this Court’s
directive. Thus, on February 15, 2006, we increased the fine to ₱2,000.00 but respondent continued to ignore our
Resolutions.8 Consequently, on March 10, 2008, we resolved to order respondent’s arrest and detention until he
complies with our Resolutions.9
This time, respondent heeded our directives by submitting his Compliance10 and Comment.11 Respondent claimed
that he failed to file his Comment to the instant administrative case because he lost the records of Civil Case No.
23,396-95 and that he tried to get a copy from the RTC to no avail.
In his Comment belatedly filed eight years after the prescribed period, respondent averred that complainant
Warriner is an Australian national who married his Filipino spouse as a convenient scheme to stay in the country;
that he rendered his services in Civil Case No. 23,396-95 free of charge; that he accepted the case because he was
challenged by Warriner’s criticism of the Philippine judicial system; that he doubted the veracity of Warriner’s claim
that the construction being undertaken by E.B. Villarosa & Partner Co., Ltd. indeed caused the erosion of the soil
towards his property; that Warriner was his only witness during the trial; that the reluctance of other witnesses to
testify for Warriner strengthened his suspicion of the veracity of Warriner’s claim; that upon inquiries, he discovered
that the bits of evidence presented by Warriner were fabricated; that the barangay officials do not wish to participate
in the fraudulent scheme of Warriner; that he visited Warriner’s property and saw that Warriner authored the
damage to his property by draining the soil erosion prevention ditches provided by E.B. Villarosa & Partner Co., Ltd.;
that he had a heated argument with Warriner during which the latter threatened him with a disbarment suit; that
based on his discovery, respondent did not wish to submit his Formal Offer of Documentary Evidence; that
complainants no longer saw him or inquired about the status of the case; that he did not withdraw from the case
because complainants no longer visited him at his law office; that if he withdraws, Warriner would only hire another
lawyer to perpetrate his fraudulent scheme; and that he could not be held administratively liable for filing a belated
Formal Offer of Documentary Evidence as he only did the same to protect the legal profession and in accordance
with his oath not to do any falsehood or promote unlawful causes.
In a Resolution12 dated July 16, 2008, we found respondent’s explanation for failing to comply with our directives not
fully satisfactory hence, we admonished him to be more circumspect in his dealings with the Court. At the same
time, we referred the Complaint to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.
The parties submitted their respective Position Papers before the IBP Commission on Bar Discipline.
In their Position Paper,13 complainants insisted that respondent mishandled their case before the RTC by filing a
motion to admit the formal exhibits almost three months after the prescribed period; that respondent did not present
complainants’ Marriage Contract and General Power of Attorney that would have allowed Warriner to represent his
wife while the latter is out of the country; that complainants’ marriage is not for convenience; that complainants have
a son out of said marriage; that respondent was paid for his services; that E.B. Villarosa & Partner Co., Ltd. did not
secure an Environmental Compliance Certificate (ECC) before undertaking the construction; that Warriner was not
the sole witness for the prosecution; that the records of Civil Case No. 23,396-95 would show that a representative
from the Department of Environment and Natural Resources (DENR) and the Barangay Captain were likewise
presented; and that these witnesses proved that Warriner’s claim was not a fabrication.
In his Position Paper,14 respondent contradicted his earlier assertion in his Comment filed before the Court that
Warriner was his only witness in Civil Case No. 23,396-95 by claiming this time that aside from Warriner, he also
presented as witnesses a former barangay official and a representative from DENR. He conceded that E.B.
Villarosa & Partner Co., Ltd. indeed failed to secure an ECC but claimed that this alone would not prove that E.B.
Villarosa & Partner Co., Ltd. did not institute corrective measures to prevent soil erosion and damages to
neighboring houses such as Warriner’s. He insisted that it is the natural topography of the place which caused the
soil erosion which again contradicted his earlier allegation in his Comment before this Court that it was Warriner who
caused the soil erosion by destroying the ditches constructed by the developer. Moreover, he alleged that the
estimate of damages provided by Bening’s Garden which he offered as an exhibit in Civil Case No. 23,396-95 was a
fabrication as there is no such entity in Laurel St., Davao City.
In their Supplemental Position Paper,15 complainants argued, among others, that since more than eight years have
lapsed, it is possible that Bening’s Garden relocated to another address but it does not mean that it never existed.
In his Report and Recommendation,16 the Investigating Commissioner17 found respondent guilty of mishandling Civil
Case No. 23,396-95 in violation of the Code of Professional Responsibility and thus recommended respondent’s
suspension from the practice of law for a period of six months.
The IBP Board of Governors, in Resolution No. XIX-2010-44218 dated August 28, 2010, approved with modification
the findings and recommendation of the Investigating Commissioner. The IBP Board of Governors noted that aside
from mishandling the case of complainants, respondent also showed his propensity to defy the orders of the court,
thus it recommended respondent's suspension from the practice of law for one year.
Respondent moved for reconsideration insisting that the IBP’s Resolution is not supported by facts. He maintained
that his actuations did not amount to a violation of the Code of Professional Responsibility; and that the filing of the
Formal Offer of Documentary Evidence, although belated, exculpated him from any liability. He asserted that the
exhibits were fabricated thus he deliberately belatedly filed the Formal Offer of Documentary Evidence in the hope
that the same would be refused admission by the RTC. He denied defying lawful orders of the RTC or this Court. He
insisted that defiance of lawful orders connotes total, complete or absolute refusal and not mere belated filing. He
argued that he did not oppose or file comment to the Motion to Dismiss as he deemed the same proper considering
the fabricated allegations of his clients. Respondent argued that the penalty recommended by the IBP is not
commensurate to his infractions. He alleged that the records of this case would show that he did not utterly
disregard the orders or processes of the Court or the IBP. He claimed that this Court should have deemed his failure
to timely file a Comment as a waiver on his part to file the same, and not as defiance of this Court’s orders. Besides,
he insisted that the only issue to be resolved by the IBP was the alleged mishandling of Civil Case No. 23,396-95;
the IBP should not have delved on whether he disregarded or was disrespectful of the Court’s orders because he
was not given any opportunity to rebut the same.
Finally, respondent posited that his penalty is oppressive, excessive and disproportionate. He argued that with his
suspension, the other cases he is handling would be affected.
Complainants also filed their Motion for Reconsideration insisting that respondent should be disbarred or suspended
for five years from the practice of law. To this, respondent filed his Comment asserting that the Investigating
Commissioner erred and was inaccurate when he stated in his Report and Recommendation that respondent had a
heated argument with the complainants. He averred that after the filing of the Formal Offer of Documentary
Evidence and until the dismissal of Civil Case No. 23,396-95, he had no occasion to meet the complainants. He
maintained that he had nothing to be remorseful about and that there is absolutely no evidence that would justify his
suspension. He maintained that "being basic and elementary in any legal procedure, a failure or refusal to submit
comment is but a waiver to so comment and puts the controversy submitted for resolution based on the evidence
available at hand x x x. It is unfortunate that the Supreme Court did not consider respondent’s failure or omission as
having such effects, but such failure cannot be considered as a contemptuous act x x x."
The IBP Board of Governors, however, was not persuaded hence it denied respondent’s Motion for
Reconsideration.
On May 6, 2013, respondent filed before this Court An Ex Parte Manifestation (Not a Motion for
Reconsideration)19insisting that his failure to timely file comment on the administrative case does not constitute
defiance of the Court’s directives but is only "a natural human expression of frustration, distraught and
disappointment" when this Court and the IBP entertained a clearly unmeritorious Complaint. In any case, he averred
that on April 12, 2013, the IBP Davao City Chapter presented him with a Certificate of Appreciation for his invaluable
support to the local chapter. He claims that –
x x x Even a feeble minded average person will find it ridiculously hilarious and comical that the [IBP] National Office
condemns undersigned for his acts allegedly inimical to the profession but will be ‘praised to the heavens’, so to
speak, by the local chapter of the same organization for his invaluable support to that same organization whose
object, among others, is to discipline its members to be respectful and [subservient] to the rule of law by serving
justice in an orderly and dignified manner. Weight and credence must be accorded the recognition and appreciation
by this local chapter being logically considered as having the first hand observation and, thus, the personal
knowledge of undersigned’s personal character, integrity, uprightness, reputation and sacrifices in the practice of his
legal profession.
As a gesture of meek obedience, respondent will not pray for the reconsideration and setting aside of that resolution
adopted by the Honorable Board of Governors suspending him from the practice of law for one (1) year, erroneous,
disproportionate and harsh as it may be. Undersigned only prays that, by way of protecting the prestigious image of
the [IBP], measures be adopted to prevent it from becoming a laughing stock of professional organizations in the
Philippines worthy for the books of wonders by its inconsistent, ridiculous and contradictory stance of disciplining its
members exemplified by the predicament of respondent in this instant proceeding on the one hand but on the other
hand is extolled by its local chapter to high heavens for his "invaluable support" of the tenets and foundation of that
very same organization that condemns him. THIS IS HILARIOUSLY COMICAL AND ABSURDLY ODD.
Our Ruling
Respondent is indeed guilty of mishandling Civil Case No. 23,396-95. Records show that the 10-day period given to
respondent to submit his formal offer of documentary evidence pursuant to the RTC Order dated November 11,
1997 lapsed without any compliance from the respondent.
Consequently, the RTC, in its January 23, 1998 Order deemed respondent to have waived the submission of his
formal offer of exhibits. Instead of asking the RTC to set aside the above Order, respondent filed on February 3,
1998 a Motion to Admit the Belated Formal Exhibits in Evidence. As to be expected, the RTC denied the motion. At
the same time, it directed E.B. Villarosa & Partner Co., Ltd. to file its Motion to Dismiss by way of Demurrer to
Evidence. Again, respondent failed to comment or oppose the Motion to Dismiss despite the opportunity given by
the RTC. As a result, Civil Case No. 23,396-95 was dismissed.
Plainly, respondent violated the Code of Professional Responsibility particularly Canon 18 and Rule 18.03 which
provide:
Canon 18 – A lawyer shall serve his client with competence and diligence.
Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith
shall render him liable.
Worse, it appears that respondent deliberately mishandled Civil Case No. 23,396-95 to the prejudice of herein
complainants. Culled from the pleadings respondent submitted before this Court and the IBP, respondent admitted
that he deliberately failed to timely file a formal offer of exhibits because he believes that the exhibits were fabricated
and was hoping that the same would be refused admission by the RTC. This is improper. If respondent truly
believes that the exhibits to be presented in evidence by his clients were fabricated, then he has the option to
withdraw from the case. Canon 22 allows a lawyer to withdraw his services for good cause such as "[w]hen the
client pursues an illegal or immoral course of conduct with the matter he is handling"20 or "[w]hen the client insists
that the lawyer pursue conduct violative of these canons and rules."21 Respondent adverted to the estimate of
damages provided by Bening’s Garden as a fabrication as there is no such entity in Laurel St., Davao City.
Unfortunately, respondent anchored his claim that Bening's Garden does not exist merely on the claim of Rudolph
C. Lumibao, a "sympathetic client" and a part-time gardener. Complainants refuted this allegation by claiming that
Bening's Garden must have relocated its business considering that more than eight years have passed since the
estimate was secured. Complainants also pointed out that since the filing of this case, respondent has thrice
relocated his office but this does not mean that his practice has ceased to exist.
We also agree with the IBP that respondent has a propensity to disobey and disrespect court orders and
processes. Note that we required respondent to submit his Comment to this administrative Complaint as early as
1âwphi1
year 2000. However, he was only able to file his Comment eight years later, or in 2008 and only after we ordered his
arrest. "As an officer of the court, respondent is expected to know that a resolution of this Court is not a mere
request but an order which should be complied with promptly and completely.22
Finally, it has not escaped our notice that respondent is also prone to resorting to contradictions in his effort to
exculpate himself. In his Comment filed before this Court, respondent claimed that Warriner was his only witness in
Civil Case No. 23,396-95. However, in his Position Paper filed before the IBP, he admitted that aside from Warriner,
he also presented as witnesses a former barangay official and a representative from DENR. Next, he claimed in his
Comment filed before this Court that he had a heated argument with Warriner during which the latter threatened him
with a disbarment suit. The Investigating Commissioner took this into account when he submitted his Report and
Recommendation. Surprisingly, respondent claimed in his Comment to complainant's Motion for Reconsideration
before the IBP that the Investigating Commissioner erred and was inaccurate when he stated in his Report and
Recommendation that respondent had a heated argument with the complainants. Moreover, respondent claimed in
his Comment before this Court that Warriner authored the damage to his property by draining the soil erosion
prevention ditches provided by E.B. Villarosa & Partner Co., Ltd. However, he again contradicted himself when he
claimed in his Position Paper that the natural topography of the place was the cause of the erosion. At this juncture,
respondent must be reminded that as a lawyer and an officer of the Court, he "owes candor, fairness and good faith
to the court."23 He "shall not do any falsehood, nor consent to the doing of any in court; nor shall he mislead, or allow
the Court to be misled by any artifice."24
Under the circumstances, and considering that we had already admonished respondent and had him arrested for his
adamant refusal to obey our directives, we find the penalty of suspension from the practice of law for six months, as
recommended by the Investigating Commissioner, and as we similarly imposed in Hernandez v. Padilla25 and Pesto
v. Millo,26 commensurate to respondent’s infractions. Besides, we wish to emphasize that "suspension is not
primarily intended as a punishment but a means to protect the public and the legal profession."27
IN VIEW WHEREOF, Atty. Reni M. Dublin is SUSPENDED from the practice of law for six months effective upon
receipt of this Resolution with a WARNING that a similar violation will be dealt with more severely. He is DIRECTED
to report to this Court the date of his receipt of this Resolution to enable this Court to determine when his
suspension shall take effect.
Let a copy of this Resolution be entered in the personal records of respondent as a member of the Bar and copies
furnished the Office of the Bar Confidant the Integrated Bar of the Philippines and the Office of the Court
Administrator for circulation to all courts in the country.
SO ORDERED.
SECOND DIVISION
A.C. No. 8954 November 13, 2013

HON. MARIBETH RODRIGUEZ-MANAHAN, Presiding Judge, Municipal Trial Court, San Mateo,
Rizal,Complainant,
vs.
ATTY. RODOLFO FLORES, Respondent.
RESOLUTION
DEL CASTILLO, J.:
Respondent Atty. Rodolto Flores (Atty. Flores) was counsel for the defendant in Civil Case No. 1863 captioned as
Marsha Aranas plaintiff versus Arnold Balmores defendant a suit for damages filed before the Municipal Trial Court
of San Mateo, Rizal and presided by herein complainant Judge Maribeth Rodriguez-Manahan (Judge Manahan).
During the proceedings in Civil Case No. 1863, Judge Manahan issued an Order1 dated January 12, 2011, whereby
she voluntarily inhibited from hearing Civil Case No. 1863. The said Order reads in part, viz:
More than mere contempt do his (Atty. Flores) unethical actuations, his traits of dishonesty and discourtesy not only
to his own brethren in the legal profession, but also to the bench and judges, would amount to grave misconduct, if
not a malpractice of law, a serious ground for disciplinary action of a member of the bar pursuant to Rules 139 a &
b.
IN VIEW WHEREOF, furnish a copy of this Order to the Bar Discipline Committee, Integrated Bar of the Philippines,
to the Supreme Court en banc, for appropriate investigation and sanction.2
Upon receipt of the copy of the above Order, the Office of the Bar Confidant (OBC) deemed the pronouncements of
Judge Manahan as a formal administrative Complaint against Atty. Flores. Docketed as A.C. No. 8954, the case
was referred to the Executive Judge of the Regional Trial Court of Rizal for investigation, report and
recommendation.3
In her Investigation, Report and Recommendation,4 Investigating Judge Josephine Zarate Fernandez (Investigating
Judge) narrated the antecedents of the case as follows:
A complaint for Damages was filed before the Municipal Trial Court (MTC) of San Mateo, Rizal docketed as Civil
Case No. 1863, entitled Marsha Aranas vs. Arnold Balmores. The Public Attorney’s Office (PAO) thru Atty.
Ferdinand P. Censon represented the complainant while Atty. Rodolfo Flores appeared as counsel for the
defendant.
x x x During the Preliminary Conference x x x, respondent Atty. Flores entered his appearance and was given time
to file a Pre-Trial Brief. x x x On May 24, 2010, respondent Atty. Flores filed his Pre-Trial Brief but without proof of
MCLE compliance hence it was expunged from the records without prejudice to the filing of another Pre-Trial Brief
containing the required MCLE compliance. x x x Atty. Flores asked for ten (10) days to submit proof.
The preliminary conference was reset several times (August 11, September 8) for failure of respondent Atty. Flores
to appear and submit his Pre-Trial Brief indicating thereon his MCLE compliance. The court a quo likewise issued
Orders dated September 15 and October 20, 2010 giving respondent Atty. Flores a last chance to submit his Pre-
Trial Brief with stern warning that failure to do so shall be considered a waiver on his part.
Meanwhile, respondent Atty. Flores filed a Manifestation in Court dated September 14, 2010 stating among others,
the following allegations:
xxxx
4. When you took your oath as member of the Bar, you promised to serve truth, justice and fair play. Do you
think you are being truthful, just and fair by serving a cheater?
5. Ignorance of the law excuses no one for which reason even Erap was convicted by the
Sandiganbayan. But even worse is a lawyer who violates the law.
1âwphi 1
6. Last but not the least, God said Thou shall not lie. Again the Philippine Constitution commands: Give
every Filipino his due. The act of refusal by the plaintiff is violative of the foregoing divine and human laws.
xxxx
Respondent Atty. Flores later filed his Pre-Trial Brief bearing an MCLE number which was merely superimposed
without indicating the date and place of compliance. During the preliminary conference on November 24, 2010,
respondent Atty. Flores manifested that he will submit proof of compliance of his MCLE on the following day. On
December 1, 2010, respondent Atty. Flores again failed to appear and to submit the said promised proof of MCLE
compliance. In its stead, respondent Atty. Flores filed a Letter of even date stating as follows:
If only to give your Honor another chance to prove your pro plaintiff sentiment, I am hereby filing the attached Motion
which you may once more assign to the waste basket of nonchalance.
With the small respect that still remains, I have asked the defendant to look for another lawyer to represent him for I
am no longer interested in this case because I feel I cannot do anything right in your sala.5
The Investigating Judge found Atty. Flores to have failed to give due respect to the court by failing to obey court
orders, by failing to submit proof of his compliance with the Mandatory Continuing Legal Education (MCLE)
requirement, and for using intemperate language in his pleadings. The Investigating Judge recommended that Atty.
Flores be suspended from the practice of law for one year.6
The OBC adopted the findings and recommendation of the Investigating Judge.7
Our Ruling
There is no doubt that Atty. Flores failed to obey the trial court’s order to submit proof of his MCLE compliance
notwithstanding the several opportunities given him. "Court orders are to be respected not because the judges who
issue them should be respected, but because of the respect and consideration that should be extended to the
judicial branch of the Government. This is absolutely essential if our Government is to be a government of laws and
not of men. Respect must be had not because of the incumbents to the positions, but because of the authority that
vests in them. Disrespect to judicial incumbents is disrespect to that branc the Government to which they belong, as
well as to the State which has instituted the judicial system."8
Atty. Flores also employed intemperate language in his pleadings. As an officer of the court, Atty. Flores is expected
to be circumspect in his language. Rule 11.03, Canon 11 of the Code of Professional Responsibility enjoins all
attorneys to abstain from scandalous, offensive or menacing language or behavior before the Courts. Atty. Flores
failed in this respect.
At this juncture, it is well to remind respondent that:
While a lawyer owes absolute fidelity to the cause of his client full devotion to his client's genuine interest and warm
zeal in the maintenance and defense of his client's rights, as well as the exertion of his utmost learning and ability,
he must do so only within the bounds of law. A lawyer is entitled to voice his c1iticism within the context of the
constitutional guarantee of freedom of speech which must be exercised responsibly. After all, every right carries with
it the corresponding obligation. Freedom is not freedom from responsibility, but freedom with responsibility. The
lawyer's fidelity to his client must not be pursued at the expense of truth and orderly administration of justice. It must
be done within the confines of reason and common sense.9
However, we find the recommended penalty too harsh and not commensurate with the infractions committed by the
respondent. It appears that this is the first infraction committed by respondent. Also, we are not prepared to impose
on the respondent the penalty of one-year suspension for humanitarian reasons. Respondent manifested before this
Court that he has been in the practice of law for half a century.10 Thus, he is already in his twilight years. Considering
the foregoing, we deem it proper to fine respondent in the amount of ₱5,000.00 and to remind him to be more
circumspect in his acts and to obey and respect court processes.
ACCORDINGLY, respondent Atty. Rodolfo Flores is FINED in the amount of ₱5,000.00 with STERN WARNING that
the repetition of a similar offense shall be dealt with more severely.
SO ORDERED.
SECOND DIVISION
G.R. No. 192183 November 11, 2013

vs.
ANDY ZULIETA a.k.a. "Bogarts," Accused-Appellant.
DECISION
DEL CASTILLO, J.:
On appeal is the August 13, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 00568-MIN which
affirmed with modification the October 24, 2007 Judgment2 of the Regional Trial Court RTC) of Cagayan de Oro
City, Branch 38, finding appellant Andy Zulieta a.k.a. Bogarts guilty beyond reasonable doubt of he crime of Murder.
Factual Antecedents
On July 21, 2006, an Information3 was filed charging appellant with the crime of Murder, the accusatory portion of
which reads:
That on June 13, 2006, at around 10:00 o'clock in the evening, more or less, at Sto. Niño, Lapasan, Cagayan de
Oro City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with treachery
and with intent to kill, did then and there wilfully, unlawfully and feloniously stab one Armand Labando, with the use
of a Batangas knife, hitting on the chest x x x the latter thereby inflicting mortal wounds which caused his immediate
death. Contrary to Art. 248 of the Revised Penal Code, in relation to RA 7659, as amended.
When arraigned on November 3, 2006, appellant pleaded not guilty.4 During the pre-trial, no stipulation of facts was
made hence trial on the merits ensued.5
Summary of Facts
The Facts as summarized by the trial court are as follows:
The first witness for the prosecution was SPO1 Apolinario Ubilas who testified that on June 13, 2006, at about 10:00
o’clock in the evening, Police Precinct Commander Police Inspector Ladao directed him to verify and investigate x x
x a stabbing incident x x x which took place in Sto. Niño, Lapasan, Cagayan de Oro City. The victim was no longer
at the crime scene as he was reportedly brought to the Northern Mindanao Medical Center (NMMC) so he made
inquiries as to possible witnesses of the incident and learned that Bryan Pascua witnessed the incident. He then
proceeded to NMMC and saw the body of the victim, which was declared dead-on-arrival. Per order of their Precinct
Commander, a police team conducted a pursuit operation and was able to arrest, on the following day, Jonathan
Zaporteza and Rey Sabado, companions of the accused Andy Zulieta.
The next witness was Bryan Pascua who testified that on June 13, 2006, at about 10:30 in the evening, he and
deceased Armand Labando, Jr. were outside their boarding house, seated at the bench just outside the store of
Jimmy Saura. While they were eating bananas, Bogarts, Rey and Tantan approached them. Bogarts, who had with
him a pitcher, dropped it in front of them so they immediately stood up. He then heard Tantan shout, "birahi na na"
(hit him now), then saw Bogarts pull a batangas knife and stab the deceased, hitting him on his chest. He ran
towards their boarding house, afraid that he will be attacked next.
The next witness for the prosecution was Dr. Francisco Romulo C. Villaflor, a Medico-Legal Officer of the Philippine
National Police, who testified that he conducted an autopsy of the deceased Armand Labando, Jr. and found that
the stab wound was inflicted on the anterior chest hitting the most vital organ of the body, the right ventricle of the
heart. Based on his analysis, the instrument used in inflicting the wound was a bladed, pointed instrument, which
could be a knife and by the location of the wound, the assailant was in front of the victim.
After the testimony of Dr. Villaflor, the prosecution offered their exhibits: exhibit "A", the Death Certificate of Armand
Labando, Jr. and exhibit "B", the Autopsy Report of Dr. Villaflor, which were admitted by the defense. The
prosecution then rested its case.
Accused set up denial and alibi as his defense claiming that on June 13, 2006 at 10:00 o’clock in the evening, he
was asleep in his house in Gingoog City with his wife and in-laws. Sometime in November, 2006, he was arrested
by Police Officer Radam and companions at his house in Gingoog City for being accused of killing the deceased
Armand Labando, Jr. Accused claimed that he does not know the deceased Armand Labando, Jr., Rey Sabando,
Jonathan Zaporteza or witness Bryan Pascua. When cross-examined by the Court, accused claimed that his
nickname is Andy as his real name is Zandy and he is not known in Sto. Niño as Bogarts. He, however, admitted
that he was born in Sto. Niño, Lapasan, Cagayan de Oro City in 1985, lived and stayed with his parents in Sto. Niño,
Lapasan, until he got married in x x x 2005. He then transferred residence with his own family to Gingoog.
The next witness for the defense was Maryflor Mamba Zulieta, wife of the accused, who testified that she married
the accused [o]n August 28, 2005 in Nazareno Parish, Cagayan de Oro City. They resided in Gingoog City from the
time they got married until the day that her husband was arrested. Her husband works at the farm of Mr. Lugod, in
Cabuyuan, Gingoog City, planting, weeding and harvesting rice, from 7:00 o’clock in the morning until 4:00 o’clock in
the afternoon, but goes home at noontime to eat lunch. On July 13, 2006, at around 10:00 o’clock in the evening,
they were asleep in their house in Gingoog City. Sometime in October or November, 2006, at around 4:00 o’clock in
the morning, while they were still sleeping, they were surprised when some men entered their house, went upstairs
and handcuffed her husband as he is said to be under arrest.6
On October 24, 2007, the RTC rendered its Judgment finding appellant guilty of killing the victim Armand Labando,
Jr. (Labando) with the attendant qualifying circumstance of treachery. The dispositive portion of the Judgment reads
as follows:
Accordingly, the Court finds accused Andy Zulieta guilty beyond reasonable doubt of the crime of murder and he is
hereby sentenced to suffer the penalty of reclusion perpetua, with accessory penalties provided by law. He is also
liable to pay the heirs of Armand Labando, Jr. civil damages in the amount of Php50,000.00, moral damages of
Php50,000.00 and costs of suit.
SO ORDERED.7
Aggrieved, appellant filed his Notice of Appeal8 which was approved by the RTC.
In its Decision dated August 13, 2009, the CA affirmed with modification the Judgment of the RTC, viz:
WHEREFORE, the appealed Decision of the Regional Trial Court, Branch 38 in Cagayan de Oro City finding
appellant Andy Zulieta guilty beyond reasonable doubt of Murder, is AFFIRMED WITH MODIFICATION, in that
appellant is further ORDERED to pay the heirs of Armand Labando, Jr., the amount of ₱25,000.00 as exemplary
damages, in addition to the amount of ₱50,000.00 as civil indemnity and ₱50,000.00 as moral damages.
SO ORDERED.9
Hence, this present appeal.
Assignment of Error
Appellant seeks his acquittal by assigning the lone error that:

THE COURT A QUO GRAVELY ERRED IN CONVICTING HEREIN ACCUSED-APPELLANT DESPITE THE
FAILURE OF THE PROSECUTION TO PROVE HIS GUILT BEYOND REASONABLE DOUBT.10
Appellant insists on his alibi that on June 13, 2006, at around 10 o’clock in the evening, he was sleeping at his
house in Gingoog City. He argues further that even assuming his presence at the scene of the crime at Sto. Niño,
Lapasan, Cagayan de Oro City, and that he killed Labando, the killing could not have been attended by the
qualifying circumstance of treachery. He posits that the prosecution failed to show that he employed means or
methods to ensure that Labando would not be able to defend himself.
Our Ruling
Appellant’s alibi, being inherently weak, deserves no credence at all especially when measured up against the
positive identification by the prosecution witness, Bryan Pascua (Pascua), pointing to appellant as the perpetrator of
the crime. Besides, nobody corroborated appellant’s alibi other than his wife who is obviously biased in his favor
thus making her testimony self-serving. Moreover, appellant failed to prove that it was physically impossible for him
to be present at the crime scene at the time of its commission. As observed by the CA, Cagayan de Oro City could
be traversed from Gingoog City within two hours;11 hence, it is not physically impossible for appellant to commit the
crime in Cagayan de Oro City and still go home to Gingoog City after its commission.
Aside from having been positively identified by prosecution witness Pascua, appellant failed to impute any ill motive
to Pascua. Thus, the trial court correctly lent credence to Pascua’s testimony:
The testimony of witness Bryan Pascua is clear, spontaneous and straightforward when he said that accused Andy
Zulieta stabbed the deceased. When asked if he can identify the accused, the witness pointed his finger at the
accused Andy Zulieta who was in the courtroom. Asked how he knew of such fact, he categorically said that he
knew the accused long before the incident, recognized his face that night because the place was lighted and at the
time of the stabbing incident, he was one (1) meter away from the assailant and the victim. He further testified that
he was surprised when the accused, together with his companions, approached them, dropped the pitcher in front of
them and suddenly stabbed the deceased on his chest when in fact there was no prior heated argument or
statement made by deceased Armand Labando, Jr. which could have caused the ire of accused Andy Zulieta.12
We likewise affirm the findings of both the RTC and the CA that treachery attended the killing. "There is treachery
1âwphi1
when the offender commits any of the crimes against the person, employing means, methods or forms in the
execution thereof which tend directly and specially to insure its execution, without risk to himself arising from the
defense which the offended party might make."13 "The essence of treachery is that the attack comes without a
warning and in a swift, deliberate, and unexpected manner, affording the hapless, unarmed, and unsuspecting
victim no chance to resist or escape."14 Otherwise stated, an unexpected and sudden attack which renders the victim
unable and unprepared to put up a defense is the essence of treachery. In this case, the victim Labando was totally
unaware of the threat. He was merely sitting on the bench in front of a sari-sari store eating bananas when
appellant, without any provocation or prior argument, suddenly stabbed him on his chest, piercing the right ventricle
of his heart thus causing his instantaneous death. The stabbing was deliberate, unexpected, swift and sudden which
foreclosed any escape, resistance or defense coming from the victim. This is a classic example of treachery.
Settled is the rule that factual findings of the trial court and its assessment on the credibility of witnesses deserve
utmost respect by this Court. In this case, we find no reason to deviate from the findings or assessment of the trial
court there being no showing that it has overlooked or mis-appreciated some facts which if considered would
materially impact on or change the outcome of the case. On the contrary, we find that the trial court meticulously
studied the case and properly weighed the evidence presented by the parties. Thus, we stand by its pronouncement
that-
After a careful review and analysis of the evidence for the prosecution and the defense and recalling the mien and
manner of testimony by the witnesses, especially the positive testimony and identification by eyewitness Bryan
Pascua of the accused, the Court is convinced that it is accused Andy Zulieta a.k.a. "Bogarts" who suddenly
stabbed the deceased, resulting in his instantaneous death.15
Article 248 of the Revised Penal Code provides that the penalty for the crime of murder is reclusion perpetua to
death. Both the trial court and the CA correctly found appellant guilty of murder and imposed upon him the penalty
of reclusion perpetua, the lower of the two indivisible penalties, due to the absence of an aggravating circumstance
attending the commission of the crime.16
"When death occurs due to a crime, the following damages may be awarded: (1) civil indemnity ex delicto for the
death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; and (5)
temperate damages."17 Both the RTC and the CA properly awarded civil indemnity to the heirs of the victim but the
same must be increased to ₱75,000.00 in line with prevailing jurisprudence.18 The heirs of the victim are likewise
entitled to moral damages which the trial court and the CA properly awarded in the amount of ₱50,000.00. The
award of exemplary damages in view of the aggravating circumstance of treachery is likewise correct however the
same must be increased to ₱30,000.00 in line with prevailing jurisprudence.19 "Moreover, while actual damages
cannot be awarded since there was no evidence of actual expenses incurred for the death of the victim, in lieu
thereof, the sum of ₱25,000.00 may be granted, as it is hereby granted, by way of temperate damages as it cannot
be denied that the heirs of the victim suffered pecuniary loss although the exact amount was not proved."20 In
addition) all damages awarded shall earn interest at the rate of 6% per annum from date of finality of this Decision
until fully paid.21
WHEREFORE, the August 13 2009 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 00568-MIN is
AFFIRMED with MODIFICATIONS as follows: a) the award of civil indemnity is increased to ₱75,000.00; b) the
award of exemplary damages is increased to ₱30,000.00; c) temperate damages in the amount of ₱25,000.00 is
awarded in lieu of actual damages; and d) all damages awarded shall earn interest at the rate of 6% per annum
from date of finality of this judgment until fully paid.
SO ORDERED.
SECOND DIVISION
G.R. No. 181473 November 11, 2013

vs.
DONEY GADUYON y TAPISPISAN, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This is a case of a father defiling his 12-year old daughter on three separate occasions.
On appeal is the Decision1 dated July 31, 2007 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02511 that
affirmed in toto the January 18 2006 Decision2 of the Regional Trial Court (RTC), Branch 76, San Mateo, Rizal, in
Criminal Case Nos. 6572-74, finding appellant Doney Gaduyon y Tapispisan (appellant) guilty beyond reasonable
doubt of qualified rape,3 qualified object rape4 and sexual abuse5 committed against his own daughter "AAA".6
Factual Antecedents
Three Informations were filed against appellant, the relevant portions of which read as follows:
In Criminal Case No. 6572 for Qualified Rape
That on or about the 22nd day of August 2002, in the Municipality of San Mateo, Province of Rizal, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, taking advantage of his moral authority
and ascendancy and by means of force and intimidation, did then and there willfully, unlawfully, and feloniously have
carnal knowledge of one "AAA," a minor, 12 years of age, against her will and without her consent, the said crime
having been attended by the qualifying circumstances of relationship and minority, the said accused being the
parent of the said victim, a 12-year old minor daughter of the accused thereby raising the crime to Qualified Rape
which is aggravated by the circumstance of Treachery, Abuse of Superior Strength, Nighttime and Dwelling.
CONTRARY TO LAW.7
In Criminal Case No. 6573 for Sexual Abuse
That on or about the 21st day of August 2002, in the Municipality of San Mateo, Province of Rizal, Philippines and
and ascendancy being the parent of the victim "AAA", with lewd design x x x and intent to debase, degrade or
demean said victim, did then and there willfully, unlawfully and knowingly commit lascivious conduct on the said
"AAA," a minor, 12 years of age, by then and there touching her breast and rubbing her arms, against her will and
without her consent thereby constituting SEXUAL ABUSE which is prejudicial to her normal growth and
development with attendant aggravating circumstance of RELATIONSHIP increasing the penalty of the offense to its
maximum period.
CONTRARY TO LAW.8
In Criminal Case No. 6574 for Qualified Object Rape
That on or about the 9th day of October 2002, in the Municipality of San Mateo, Province of Rizal, Philippines and
and ascendancy and by means of force and intimidation, did then and there willfully, unlawfully, and feloniously
insert his finger into the genital orifice of "AAA," a minor, 12 years of age, against her will and without her consent,
the said crime having been attended by the qualifying circumstances of relationship and minority, the said accused
being the parent of the said victim, a 12-year old minor daughter of the accused thereby raising the crime to
qualified object rape which is aggravated by the circumstance of Treachery, Abuse of Superior Strength, Nighttime
and Dwelling.
CONTRARY TO LAW.9
Appellant pleaded not guilty to all the charges. Upon termination of the pre-trial conference, trial ensued.
Appellant is married to the mother of "AAA" with whom he has three daughters. Their eldest child is "AAA," who at
the time material to this case was only 12 years old.
On August 21, 2002, the mother and sisters of "AAA" attended the wake of her auntie in Caloocan City. "AAA" and
her father, the appellant, were thus the only ones left in the family residence in San Mateo, Rizal. At around 9:00
p.m. of the said date, "AAA" was lying in her bed in the family room located at the upper portion of their house when
appellant fondled her breasts and touched her arms.10 Appellant threatened "AAA" not to tell her mother about the
incident or else something bad might happen to the latter.11
At around 11:00 p.m. of the following day, August 22, 2002, and while her mother and sisters were still in Caloocan
City, "AAA" was awakened when appellant lowered her shorts and panty.12 Appellant spread her legs and inserted
his penis into her vagina.13 "AAA" felt pain but could do nothing but cry.14 Appellant pulled out his penis and inserted
it again into "AAA’s" vagina. When he was done, appellant put her shorts and panty back on and again threatened
"AAA."15
After more than a month or on October 9, 2002, at about 10:30 p.m. and while "AAA" was sleeping in a double-deck
bed and her sister was in the lower portion thereof, "AAA" was suddenly awakened. She noticed that her short pants
had been lowered while appellant was already lying beside her.16 Appellant then inserted his index finger into
"AAA’s" vagina. "AAA" only cried upon feeling the pain. After his deplorable act, appellant reiterated his previous
threat to "AAA."17
After a few minutes, "AAA’s" mother entered the room where her daughters were sleeping. She noticed that "AAA"
was covered with pillows, except for her head and feet.18 Upon approaching "AAA," she saw that her legs were
spread apart and her panty was slightly lowered and inserted at the center of her genitals.19 The mother then
suspected that her husband did something bad to "AAA" since only she and her husband were awake at that time.
However, she opted to remain silent and just pray.20
When "AAA" went to school the following day, she was asked by her religion teacher if her father did something bad
to her.21 "AAA" who was teary-eyed did not answer.22 Later, "AAA’s" class adviser called her.23 They ate in the
canteen and thereafter proceeded to the adoration chapel to pray.24 After praying, the teacher asked "AAA" the
same question propounded by the religion teacher.25 This time, "AAA" replied that her father did something bad to
her twice but did not reveal the details surrounding the same.26 "AAA’s" mother then came and asked her daughter if
appellant did something bad to her. "AAA" answered "Yes. It happened twice."27 Thus, "AAA" and her mother went to
the police station and reported the incidents of her defilement.28 A physical examination done upon "AAA" revealed
that she was in a non-virgin physical state but that there are no signs of any form of trauma.29 A psychiatric
evaluation likewise revealed that "AAA" was suffering from Post-traumatic Stress Disorder with Depressed Mood.30
Appellant denied the accusations against him and instead advanced the following version of events.
From August 21, 2002 until 9:00 a.m. of August 22, 2002, his wife and their two younger daughters attended the
wake of his wife’s sister in Caloocan City.31 While he admitted that only he and "AAA" were left in their house, he
denied mashing her breast.32 He claimed that at the time of the alleged incident on August 21, 2002, he was
overseeing their computer shop.33 He also denied raping "AAA" the following day since his wife and his youngest
daughter were already home by then and they all slept in their house in the evening of that day.34
Anent what transpired on October 9, 2002, appellant claimed that he closed their computer shop at around 10:00
p.m.35 He then proceeded upstairs and saw his wife feeding their youngest daughter.36 She asked him to take over so
she could go to the bathroom downstairs.37 At 10:25 p.m., his wife returned.38 Appellant then heard a noise from the
outside. After a while, his kumpare called him to report that his brother threw stones at the house of his kumpare’s
father.39 Appellant immediately went outside.40 There was therefore no truth to the claim of "AAA" that he inserted his
finger inside her vagina that night.41
The defense believed that "AAA" was just induced by appellant’s wife to make false accusations against him.42 This
was due to his wife’s infidelity which was confirmed when his wife confessed that she went out with another
man43and when their younger daughter saw his wife kissing another man.44 Despite this, appellant claimed that he
already forgave his wife for the sake of their children.45
Appellant’s mother corroborated his story. According to her, appellant’s family was in their house in the morning of
August 22, 2002.46 She even talked to the wife of appellant at around 6:00 p.m. and was told that she went home
with her youngest daughter so they could rest since they have no place to stay in the wake they attended in
Caloocan City.47 The next day, "AAA," her mother and sister went back to the wake.48
Appellant’s sister-in-law testified that after "AAA," her mother and sister went to the wake on August 23, 2002, she,
together with her son, mother-in-law, and appellant followed that evening.49 She observed that there seemed to be
nothing wrong with "AAA" since she was serving food in the wake and playing with her cousins.50
In its January 18, 2006 Decision,51 the RTC gave more weight to "AAA’s" positive testimony as against appellant’s
bare denials since her testimony was candid, straightforward and free from material contradictions. Her testimony
was complemented by the findings of the medico-legal officer who examined "AAA." In fact, "AAA" suffered intense
psychological stress and depression as a result of the abuses.
On the other hand, the RTC found that appellant’s denials were not substantiated by clear and convincing
evidence. It also found unacceptable his attempt to malign the reputation of his wife and daughter in order to
1âw phi 1
exculpate himself. According to the said court, this evasive attitude of appellant cannot prevail over "AAA’s"
testimony.
Accordingly, the RTC disposed of the criminal cases thus:
WHEREFORE, premises considered judgment is hereby rendered as follows:
(a) In Criminal Case No. 6572, for the rape committed on August 22, 2002, accused Doney Gaduyon y
Tapispisan is hereby sentenced to suffer the penalty of DEATH and to pay the victim "AAA," the amount of
₱50,000 as civil indemnity, ₱50,000 as moral damages and ₱25,000.00 as exemplary damages.
(b) In Criminal Case No. 6573, for the sexual abuse committed on August 21, 2002, accused Doney
Gaduyon y Tapispisan is hereby sentenced to an indeterminate penalty of One (1) year and One (1) month
of Prision Correcional as minimum to Two (2) years, Eleven (11) months of Prision Correccional in its
medium period as maximum.
(c) In Criminal Case No. 6574, for the rape committed on October 9, 2002, accused Doney Gaduyon y
Tapispisan is hereby sentenced to suffer the penalty of DEATH and to pay the victim "AAA" the amount of
₱50,000 as civil indemnity, ₱50,000 as moral damages and ₱25,000.00 as exemplary damages.
SO ORDERED.52
On September 4, 2006, the RTC, however, partially modified the above judgment53 insofar as the penalty imposed in
Criminal Case No. 6574 is concerned, viz:
The aforesaid judgment is hereby partially modified x x x to read, as follows:
"WHEREFORE, premises considered, the judgment is hereby rendered, as follows:
(a) x x x
(b) x x x
(c) In Criminal Case No. 6574, for the rape committed on October 9, 2002, accused Doney Gaduyon y
Tapispisan is hereby sentenced to suffer the indeterminate penalty of imprisonment of 6 years and 1 day of
prision mayor, as minimum, to 14 years, 8 months and 1 day of reclusion temporal, as maximum and to pay
the victim "AAA", the amount of ₱30,000.00, as civil indemnity, ₱30,000.00, as moral damages and
₱15,000.00, as exemplary damages.
SO ORDERED."54
On appeal, the appellate court sustained appellant’s conviction. Like the RTC, it stressed that appellant’s bare
assertions cannot overcome the categorical testimony of the victim. It brushed aside the inconsistencies on the part
of "AAA" as pointed out by appellant and concluded, after a careful evaluation of the facts and evidence on record,
that appellant’s guilt was proven beyond reasonable doubt.
Hence, the dispositive portion of the CA’s July 31, 2007 Decision:55
WHEREFORE, the appealed Decision is AFFIRMED in toto.
SO ORDERED.56
Still insisting on his innocence, appellant prays for the reversal of the CA’s appealed Decision and adopts the same
assignment of errors he advanced before the said court, viz:
THE LOWER COURT ERRED IN NOT ACCORDING TO THE ACCUSED THE PRESUMPTION OF INNOCENCE
TO WHICH HE IS ENTITLED IN CRIMINAL CASES AND FOR CONVICTING HIM OF THE OFFENSES CHARGED
WITHOUT THE BENEFIT OF PROOF BEYOND REASONABLE DOUBT DESPITE THE EVIDENCE SHOWING
THAT –
A. THE CLAIM OF THE PROSECUTION THAT THE ACCUSED AND HIS DAUGHTER WERE
ALONE AT THEIR SAN MATEO RESIDENCE IN THE EVENING OF 22 AUGUST 2002, THE DATE
WHEN THE ALLEGED PENILE PENETRATION TOOK PLACE IS A BRAZEN LIE;
B. "AAA" DID NOT MANIFEST OVERT PHYSICAL SIGNS THAT SHE WAS RAPED;
C. "AAA" GAVE FOUR CONFLICTING ACCOUNTS ON HOW SHE WAS RAPED;
D. "AAA" GAVE THREE CONFLICTING ACCOUNTS ON HOW SHE WAS "FINGERED" BY HER
FATHER IN THE EVENING OF 9 OCTOBER 2002;
E. X X X THE MOTHER OF THE ALLEGED VICTIM, CONCOCTED THE 9 OCTOBER 2002

INCIDENT;
F. THERE IS NO SPONTANEOUS DISCLOSURE. "AAA" WAS PRESSURED TO ACCUSE HER

FATHER;
G. "AAA" IS SUSCEPTIBLE TO PRESSURE AND MANIPULATION;
H. "AAA" BESTOWED [ON] HER FATHER A WARM SMILE WHEN SHE IDENTIFIED HIM IN
COURT, WHICH IS UNEXPECTED IF SHE HAD IN FACT BEEN RAPED AND MOLESTED BY
HER OWN FATHER;
I. THE DEMEANOR OF "AAA" X X X IN THE COURSE OF THE COURT PROCEEDINGS IS FAR

FROM INSPIRING;
J. "AAA" GAVE FOUR CONFLICTING VERSIONS OF WHAT TRANSPIRED AFTER THE

ALLEGED RAPE;
K. "AAA" IS CONSISTENT IN GIVING INCONSISTENT STATEMENTS;
L. THE STATEMENT OF "AAA" THAT HER FATHER DID BAD THINGS TO HER TWICE
CONTRADICTS HER CLAIM THAT SHE WAS SEXUALLY MOLESTED THRICE;
M. "AAA" GAVE CONFLICTING ACCOUNTS ON HOW SHE FINALLY DISCLOSED HER ORDEAL;
N. THE WITNESSES FOR THE PROSECUTION GAVE CONFLICTING ACCOUNTS OF HOW

"AAA" MADE THE DISCLOSURE;
O. X X X THE CLASS ADVISER OF "AAA" AND A WITNESS FOR THE PROSECUTION, COULD
NOT BE BELIEVED WITH SAFETY;
P. THE CLAIM THAT THE ACCUSED "FINGERED" HIS DAUGHTER IN THE EVENING OF 9
OCTOBER 2002 IS INCREDIBLE;
Q. FROM HER TESTIMONY, IT APPEARS THAT "AAA" IS SUBCONSCIOUSLY SENDING

SUBTLE HINTS TO THE COURT TO RECEIVE HER TESTIMONY WITH CAUTION;
R. THE PARENTS OF "AAA" ARE NOT GETTING ALONG WELL;
S. THE CLINICAL FINDING OF THE PSYCHIATRIST IS FAULTY AND INCONCLUSIVE; AND T.

THE MEDICAL EVIDENCE IS NOT CONCLUSIVE OF RAPE.57
In fine, appellant contends that the prosecution failed to establish by proof beyond reasonable doubt that he
committed the crimes attributed to him.58 He argues that his alibi and denial deserve greater weight in evidence than
the testimony of the prosecution witnesses.59
Our Ruling
The crime of rape under Article 266-A of the Revised Penal Code (RPC)
The enactment of Republic Act (RA) No. 8353, otherwise known as the Anti-Rape Law of 1997, reclassified the
crime of rape as a crime against persons.60 It also amended Article 335 of the RPC and incorporated therein Article
266-A which reads:
Art. 266-A. Rape, When and How Committed. – Rape is committed-
c. By means of fraudulent machination or grave abuse of authority; d. When the offended party is
under twelve (12) years of age or is demented, even though none of the circumstances mentioned
above be present;
2. By any person who, under any of the circumstances mentioned in paragraph 1 hereof, shall commit an act
of sexual assault by inserting his penis into another person’s mouth or anal orifice, or any instrument or
object, into the genital or anal orifice of another person.
Thus, rape can now be committed either through sexual intercourse or through sexual assault. In rape under
paragraph 1 or rape through sexual intercourse, carnal knowledge is the crucial element which must be proven
beyond reasonable doubt.61 This is also referred to as "organ rape" or "penile rape"62 and must be attended by any of
the circumstances enumerated in subparagraphs (a) to (d) of paragraph 1. There must be evidence to establish
beyond reasonable doubt that the perpetrator’s penis touched the labia of the victim or slid into her female organ,
and not merely stroked the external surface thereof, to ensure his conviction of rape by sexual intercourse.63
On the other hand, rape under paragraph 2 of the above-quoted article is commonly known as rape by sexual
assault. The perpetrator, under any of the attendant circumstances mentioned in paragraph 1, commits this kind of
rape by inserting his penis into another person’s mouth or anal orifice, or any instrument or object into the genital or
anal orifice of another person. It is also called "instrument or object rape", also "gender-free rape", or the narrower
"homosexual rape."64
The crime of sexual abuse under Republic Act No. 7610
On the other hand, RA 7610, otherwise known as the "Special Protection of Children Against Child Abuse,
Exploitation and Discrimination Act", defines and penalizes child prostitution and other sexual abuse. "Sexual abuse
includes the employment, use, persuasion, inducement, enticement or coercion of a child to engage in, or assist
another person to engage in, sexual intercourse or lascivious conduct or the molestation, prostitution, or incest with
children. Lascivious conduct means the intentional touching, either directly or through clothing, of the genitalia,
anus, groin, breast, inner thigh, or buttocks, or the introduction of any object into the genitalia, anus or mouth, of any
person, whether of the same or opposite sex, with an intent to abuse, humiliate, harass, degrade, or arouse or
gratify the sexual desire of any person, bestiality, masturbation, lascivious exhibition of the genitals or pubic area of
a person."65
The Information in Criminal Case No. 6573 against appellant was for violation of Section 5(b), Article III of RA 7610,
which pertinently provides:
SEC. 5. Child Prostitution and Other Sexual Abuse. - Children, whether male or female, who for money, profit, or
any other consideration or due to the coercion or influence of any adult, syndicate or group, indulge in sexual
intercourse or lascivious conduct, are deemed to be children exploited in prostitution and other sexual abuse.
The penalty of reclusion temporal in its medium period to reclusion perpetua shall be imposed upon the following:
xxxx
(b) Those who commit the act of sexual intercourse or lascivious conduct with a child exploited in prostitution or
subjected to other sexual abuse: Provided, That when the victim is under twelve (12) years of age, the perpetrators
shall be prosecuted under Article 335, paragraph 3, for rape and Article 336 of Act No. 3815, as amended, the
Revised Penal Code, for rape or lascivious conduct, as the case may be: Provided, that the penalty for lascivious
conduct when the victim is under twelve (12) years of age shall be reclusion temporal in its medium period; x x x.
(Emphasis supplied)
In paragraph (b), the following requisites must concur: (1) the accused commits the act of sexual intercourse or
lascivious conduct; (2) the act is performed with a child exploited in prostitution or subjected to other sexual abuse;
and (3) the child, whether male or female is below eighteen (18) years of age.66 This paragraph "punishes sexual
intercourse or lascivious conduct not only with a child exploited in prostitution but also with a child subjected to other
sexual abuse. It covers not only a situation where a child is abused for profit but also one in which a child, through
coercion, intimidation or influence, engages in sexual intercourse or lascivious conduct."67
Appellant is guilty of the two kinds of rape under Art. 266-A of the RPC and of sexual abuse under RA 7610.
Our examination of the testimony of "AAA" reveals that there was carnal knowledge or sexual intercourse through
force, threat and intimidation on August 22, 2002. Appellant also committed rape by sexual assault when he inserted
his finger into the genitalia of "AAA" on October 9, 2002. He also subjected "AAA," a minor at 12 years of age, to
sexual abuse by means of lascivious conduct through intimidation or influence, when he mashed her breasts and
stroked her arms on August 21, 2002. "AAA" gave detailed accounts of these acts of perversion, viz:
Q: Last August 21, 2002, at around 9:00 o’clock in the evening where were you?
A: I was in our house, sir.
xxxx
Q: At such time, place and date do you recall any unusual incident that happened?
A: There was, sir.
Q: What was that?
A: I saw my daddy fondling my breasts and holding my arms, sir.
Q: And where were you in the house when your father did that to you?
A: I was in the room, sir.
Q: Where in the room?

xxxx
A: In the bed, sir.
ATTY. SAN JOAQUIN:
Q: What were you doing in bed?
A: I was lying, sir.
Q: And you said that your father, while you were in bed in the room, touched your breasts, would you please
demonstrate to the court how your father touched your breasts?
A: Like this, sir.
ATTY. SAN JOAQUIN:
Witness cupping with her two (2) palms her breasts x x x.
xxxx
ATTY. SAN JOAQUIN:
Q: You also said that your father touched your arms, would you please demonstrate to the court how your father
touched your arms?
A: Like this, sir.
ATTY. SAN JOAQUIN
Witness demonstrating with her right palm placed on her left shoulder and the left palm placed on her right shoulder
and then moving them downwards.
Q: When your father did that to you, what did you do?
A: I was crying, sir.
Q: And did you say anything to your father?
A: None, sir.
Q: Did your father say anything to you?
A: Yes, sir.
Q: What was that?
A: He told me not to tell anything to my mother because in case I would tell something to my mother, something will
happen to her, sir.
ATTY. SAN JOAQUIN:
May we manifest, your Honor, that the witness, while saying the words she had just said, had teary eyes and was
wiping her tears with her handkerchief.
Q: When that was done to you by your father, who were in the house?
A: Only the two (2) of us, sir.
Q: Where was your mother?
A: She was in the wake of my aunt, sir.
Q: Where was your sister "CCC"?
A: Also at the wake, sir.
Q: How about your sister "DDD"?
A: Also at the wake of my aunt, sir.
Q: What time was that again?
A: 9:00 o’clock, sir.
Q: Daytime or nighttime?
A: Evening, sir.
xxxx
Q: "AAA," while you are testifying now, what do you feel?
A: I am afraid (natatakot po), sir.
ATTY. SAN JOAQUIN:
May we manifest that while the witness answers "natatakot po" she is crying and wiping her eyes with her
handkerchief.
Q: At about 11 o’clock in the evening after August 22, 2002, where were you?
A: I was in the house, sir.
Q: What house?
A: The house of my grandmother, sir.
Q: Where is that?
A: "YYY," San Mateo, Rizal, sir.
Q: At that time, date and place, do you recall an unusual incident that happened?
A: There was, sir.
Q: What was that?
A: While I was sleeping I was suddenly awakened, sir.

Q: Why were you suddenly awakened from sleep?
A: Because my dad was lowering my shorts, sir.
Q: How did you know that your daddy was lowering your shorts?
A: I saw it, sir.
Q: Was your daddy able to lower your shorts?
A: Yes, sir.
Q: What else did he do after lowering your shorts?
A: He lowered my panty, sir.
Q: Was your daddy able to lower your panty?
A: Yes, sir.
Q: What were you doing when your daddy was lowering your shorts and then panty, what were you doing?
A: I was crying, sir.
Q: After your daddy has lowered your shorts and panty what happened next?
A: He separated my legs (ibinuka niya po ang hita ko), sir.
Q: After your daddy separated your legs, what happened next?
A: He inserted his penis into my vagina, sir.
Q: You said he inserted his penis into your vagina, was he able to insert his penis into your vagina?
A: Yes, sir.
Q: When your daddy inserted his penis into your vagina, what did you feel?
A: It was painful, sir.
xxxx
Q: When the penis of your father was already inserted into your vagina, what happened next?
A: He pulled it out and then inserted it again (hinugot niya tapos ay ipinasok niya uli), sir.
Q: How many times did that happen that your daddy pulled out his penis from you and then inserted it, how many
times?
A: Two (2) times, sir.
Q: Then afterwards what happened?
A: He pulled it out again then he returned my panty, sir.

Q: What else?
A: He also returned my shorts, sir.
Q: Did you say anything to your daddy when he did that to you?
A: No, sir.
Q: How about your daddy, did he tell you anything?
A: Yes, sir.
Q: What was that?
A: Not to tell anything to my mother because something will happen to her if I tell anything to her, sir.
Q: Who were in the house when your father did that to you?
A: Only the two (2) of us, sir.
Q: Where was your mother?
A: She was still in the wake of my aunt, sir.
Q: How about your sister "CCC"?
A: She was also in the wake, sir.
xxxx
Q: What time was that when it happened?
A: At 11:00 o’clock, sir.
Q: Daytime or nighttime?
A: Nighttime, sir.
xxxx
Q: "AAA," I am asking you this question, at about 10:30 o’clock in the evening of October 9, 2002, where were you?
A: I was in the house, sir.
Q: What house?
A: "YYY," San Mateo, Rizal, sir.
Q: At such time, date and place, do you recall any unusual incident that happened?
A: There was, sir.
Q: What was that?
A: When I saw my shorts under my feet and my dad was already lying beside me, sir.
Q: How do you know that your daddy was beside you?
A: I saw him, sir.
Q: Where were you at that time, what place in the house?
A: In the room, sir.
Q: Where in the room?
A: x x x my bed, sir.
Q: What are you doing in bed?
A: I was sleeping, sir.
Q: Now, you said that you found out that your shorts was no longer being worn by you, what happened next?
A: My daddy inserted his finger in my vagina, sir.
Q: Which finger of your daddy was inserted at that time into your vagina?
A: The index finger, sir.
xxxx
Q: "AAA," when your father inserted his finger into your vagina, what did you feel?
A: It was painful, sir.
Q: What did you do when your father inserted his finger into your vagina?
A: I just cried, sir.
Q: Did you tell your father anything?
A: None, sir.
Q: How about your father, did he tell you anything?
A: Yes, there was, sir.
Q: What was that?
A: Not to tell anything to my mother, sir.
Q: Now, who were in the house when that happened?
A: My sisters "CCC" and "DDD" and also my mother, sir.
Q: Where was your mother when your father was inserting his finger into your vagina, where was your mother?
A: I do not know, sir.
Q: How about your sister "CCC"?

A: At the lower portion of the double-deck, sir.
Q: What was "CCC" doing there at the lower portion of your double-deck bed?
A: She was sleeping, sir.
Q: How about "DDD"?
A: She was on the mattress, sir.
Q: What time was that in the evening?
A: At about 10:30, sir.68
We agree with the observation of the lower courts that the testimony of "AAA" is worthy of credence. She positively
identified appellant as her abuser. She did not waver on the material points of her testimony and maintained the
same even on cross-examination. Indeed, her statements under oath are sufficient evidence to convict appellant for
the crimes alleged in the Informations.69
Moreover, "AAA’s" testimony is corroborated by the result of her medical examination which showed the presence of
a deep healed laceration in her private part.70 This finding is consistent with her declaration that appellant inserted
his penis and finger into her vagina. "Where a victim’s testimony is corroborated by the physical findings of
penetration, there is sufficient basis for concluding that sexual intercourse did take place."71
Appellant seeks to discredit "AAA’s" testimony by insisting that he could not have raped the latter in the evening of
August 22, 2002 since the whole family was in their house that day. This assertion is undeserving of credence due
to our constant pronouncement that a bare assertion cannot prevail over the categorical testimony of a victim.72Even
if corroborated by appellant’s mother, the same does not deserve any weight since courts usually frown upon the
corroborative testimony of an immediate member of the family of an accused and treat it with suspicion. The close
filial relationship between the witness and the accused casts a thick cloud of doubt upon the former’s testimony.
Even assuming that appellant was not alone with "AAA" on August 22, 2002, the presence of other people is not a
deterrent to the commission of rape. This observation is apparent from the rape by sexual assault committed on
October 9, 2002 while the entire family was in the residence. As aptly held by the RTC and the CA, rape indeed
does not respect time and place. Appellant impugns the credibility of "AAA" by emphasizing that she gave conflicting
accounts on the manner she was raped. He also stresses the contradictions in the testimony of "AAA" and the other
prosecution witnesses on the events that transpired after the alleged rape and regarding the disclosure by "AAA" of
her ordeal.
We are not persuaded. Our review of the transcript of stenographic notes of the testimonies of the prosecution
witnesses reveals that these inconsistencies refer to inconsequential matters "that do not bear upon the elements of
the crime of rape. The decisive factor in the prosecution for rape is whether the commission of the crime has been
sufficiently proven. For a discrepancy or inconsistency in the testimony of a witness to serve as a basis for acquittal,
it must refer to the significant facts indispensable to the guilt or innocence of the appellant for the crime charged. As
the inconsistencies alleged by the appellant had nothing to do with the elements of the crime of rape, they cannot be
used as [grounds] for his acquittal."73
With regard to the inconsistencies on the part of "AAA," it bears stressing that "victims do not cherish keeping in
their memory an accurate account of the manner in which they were sexually violated. Thus, an errorless
recollection of a harrowing experience cannot be expected of a witness, especially when she is recounting details
from an experience as humiliating and painful as rape. Furthermore, rape victims, especially child victims, should
not be expected to act the way mature individuals would when placed in such a situation."74 Verily, in this case,
minor inconsistencies in the testimony of "AAA" are to be expected because (1) she was a minor child during her
defloration; (2) she was to testify on a painful and humiliating experience; (3) she was sexually assaulted several
times; and, (4) she was examined on details and events that happened almost six months before she testified.75
Anent appellant’s other assigned errors, we quote the following findings of the CA:
The argument that "AAA" did not manifest overt physical signs of having been raped since she acted and walked
normally the following day cannot justify the reversal of appellant’s conviction. How a person goes about the day
after the happening of a horrid event is not a tell-tale sign of the truth or falsity of an allegation. The workings of the
human mind placed under a great deal of emotional and psychological stress are unpredictable and different people
react differently. Furthermore, under the circumstances of this case, overt physical manifestations cannot be
expected since "AAA" did not put up any form of resistance. The threat of harm to be inflicted on her mother was
sufficient intimidation for her to succumb to her father’s lust out of fear. The pattern of instilling fear, utilized by the
perpetrator in incestuous rape to intimidate his victim into submission, is evident in virtually all cases. It is through
this fear that the perpetrator hopes to create a climate of extreme psychological terror which would, he hopes, numb
his victim into silence and force her to submit to repeated acts of rape over a period of time. The relationship of the
victim to the perpetrator magnifies this terror, because the perpetrator is a person normally expected to give solace
and protection to the victim.
Appellant would also want to impress upon this Court that the accusation of his daughter was concocted by his wife
because of their marital problems. This contention is preposterous. It is unnatural for a mother to sacrifice her own
daughter, a child of tender years, and subject her to the rigors and humiliation of a public trial for rape if she was not
driven by an honest desire to have her daughter’s transgressor punished accordingly.
Neither can it be said that there was no spontaneous disclosure by "AAA" of the incident. Appellant threatened
1âwphi 1
"AAA." The humiliation caused by the rape by her own father in addition to the burden of being responsible should
her mother be harmed are sufficient to prevent any child from freely disclosing her ordeal. We must be reminded
that the crime of rape by itself attaches much humiliation and more so if the loss is caused by her father. Delay and
the initial reluctance of a rape victim to make public the assault on her virtue is neither unknown [nor] uncommon.
That there was no spontaneous disclosure does not mean that appellant is innocent of the crimes. "AAA" was
apparently a terrified young child who was completely at the mercy of her shameless father. Thus, "AAA’s"
hesitation may be attributed to her age, the moral ascendancy of the accused over her, and his threats against her.
On the other hand, neither should the smile of "AAA" while identifying her father in court be given any malicious
significance. While appellant puts much importance to said smile, which could be a way of concealing her
nervousness, he ignored the fact that "AAA" cried while testifying on the details of the incidents. In fact, during her
testimony, she categorically stated that she was afraid and ashamed. The candid and straightforward narration of
how she was abused and the tears that accompanied her story are earmarks of credibility and must be given full
faith and credit.
With respect to appellant’s contention that the clinical finding of Dr. Joven Ignacio, the psychiatrist, is faulty and not
conclusive because she appeared to be biased, it is noteworthy that even without said psychiatric test, the finding of
the trial court would still be affirmed considering that the sole testimony of the victim is sufficient basis for conviction
in rape, which is a crime usually committed in seclusion.
Indeed, We are convinced that "AAA" had no reason to falsely incriminate her own father in view of the fact that the
accusation would surely deny her mother the companionship of a husband and the protection of a father for her
younger sisters. It has been consistently held that the testimony of a rape victim as to who abused her is credible
where she has no motive to testify against the accused.76
On the other hand, what appellant offered for his defense were mere denials which, as aptly observed by the RTC,
are unsupported by clear and convincing evidence.
Given the foregoing circumstances, the CA correctly affirmed the Decision of the RTC finding appellant guilty of the
crimes charged.
The Proper Penalty
The RTC imposed upon appellant the penalty of death for committing the crime of qualified rape through sexual
intercourse in Criminal Case No. 6572. The Information in this case alleged the qualifying circumstances of
relationship and minority. Appellant is the father of "AAA" and he admitted this filial bond between them during the
pre-trial conference77 and trial. "Admission in open court of relationship has been held to be sufficient and, hence,
conclusive to prove relationship with the victim."78 Also, "AAA’s" birth certificate was submitted as proof of her age.
This document suffices as competent evidence of her age.79
"In view, however, of the passage of R.A. No. 9346, which prohibits the imposition of the penalty of death, the
penalty of reclusion perpetua, without eligibility for parole, should be imposed."80 Appellant is thus sentenced to
reclusion perpetua without eligibility for parole for the crime of qualified rape committed through sexual intercourse
in Criminal Case No. 6572.
With regard to the crime of sexual abuse under RA 7610, the penalty provided for violation of Section 5, Article III
thereof is reclusion temporal in its medium period to reclusion perpetua . "As the crime was committed by the father
of ["AAA,"] the alternative circumstance of relationship should be appreciated. In crimes against chastity, such as
Acts of Lasciviousness, relationship is always aggravating."81 With the presence of this aggravating circumstance
and no mitigating circumstance, the penalty in Criminal Case No. 6573 shall be applied in its maximum period –
reclusion perpetua.82
On the other hand, prision mayor is the penalty prescribed for rape by sexual assault under Article 266-B of the
RPC. The penalty is increased to reclusion temporal if the rape is committed with any of the 10 aggravating/
qualifying circumstances mentioned in said article.83 Just like in Criminal Case No. 6572, the qualifying
circumstances of relationship and minority are sufficiently alleged and proven in this case. The penalty therefore is
reclusion temporal which ranges from twelve (12) years and one (1) day to twenty (20) years. Applying the
Indeterminate Sentence Law, the penalty next lower in degree is prision mayor which ranges from six (6) years and
one (1) day to twelve (12) years. Hence, the trial court and the CA correctly imposed the indeterminate penalty of
imprisonment of six (6) years and one (1) day of prision mayor as minimum, to fourteen (14) years, eight (8) months
and (1) day of reclusion temporal, as maximum in Criminal Case No. 6574.
The Damages
In line with prevailing jurisprudence, the award of damages to "AAA" in Criminal Case No. 6572 must be increased
as follows: ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages and ₱30,000.00 as exemplary
damages.84She is further awarded civil indemnity of ₱20,000.00, moral damages and a fine at ₱15,000.00 each in
Criminal Case No. 6573.85 In Criminal Case No. 6574, the awards of civil indemnity and moral damages at
₱30,000.00 each are maintained but the award of exemplary damages is increased to ₱30,000.00.86 "AAA" is also
entitled to an interest on all the amounts of damages awarded at the legal rate of 6% per annum from the date of
finality of this judgment until fully paid.87
WHEREFORE, the July 31, 2007 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 02511 which affirmed in
toto the Decision of the Regional Trial Court of San Mateo, Rizal, Branch 76 finding appellant Doney Gaduyon y
Tapispisan guilty beyond reasonable doubt of the crimes charged is AFFIRMED with MODIFICATIONS in that:
1. In Criminal Case No. 6572, appellant Doney Gaduyon y Tapispisan is sentenced to suffer the penalty of
reclusion perpetua without eligibility for parole and ordered to pay AAA ₱75,000.00 as civil indemnity,
₱75,000.00 as moral damages, and ₱30,000.00 as exemplary damages;
2. In Criminal Case No. 6573, appellant Doney Gaduyon y Tapispisan is sentenced to suffer the penalty of
reclusion perpetua and ordered to pay AAA ₱20,000.00 as civil indemnity, Pl5,000.00 as moral damages
and a fine of 15,000.00;
3. In Criminal Case No. 6574, appellant Doney Gaduyon y Tapispisan is ordered to pay AAA ₱30,000.00 as
exemplary damages.
"AAA" is entitled to an interest on all damages awarded at the legal rate of 6% per annum from the date of finality of
SO ORDERED.
A.C. No. 9385 November 11, 2013
MARIANO AGADAN, EDEN MOLLEJON, ARSENIO IGME, JOSE NUMBAR, CECILIA LANGAWAN, PABLO
PALMA, JOSELITO CLAVERIA, MIGUEL FLORES, and ALBERT GAYDOWEN, Complainants,
vs.
ATTY. RICHARD BALTAZAR KILAAN, Respondent.
RESOLUTION
DEL CASTILLO, J.:
On September 12, 2005, complainants Mariano Agadan, Eden Mollejon, Arsenio Igme, Jose Numbar, Cecilia
Langawan, Pablo Palma, Joselito Claveria, Miguel Flores and Albert Gaydowen filed before the Integrated Bar of
the Philippines – Baguio Benguet Chapter (IBP-Baguio-Benguet Chapter) a Complaint1 against respondent Atty.
Richard Baltazar Kilaan (Atty. Kilaan) for falsification of documents, dishonesty and deceit. They alleged that Atty.
Kilaan intercalated certain entries in the application for issuance of Certificate of Public Convenience (CPC) to
operate public utility jeepney filed before the Land Transportation Franchising and Regulatory Board – Cordillera
Administrative Region (LTFRB-CAR) and docketed as Case No. 2003-CAR-688 by substituting the name of the
applicant from Gary Adasing (Adasing)2 to that of Joseph Batingwed (Batingwed);3 that Atty. Kilaan submitted false
and/or insufficient documentary requirements in support of Batingwed s application for CPC; that Atty. Kilaan
prepared a Decision based on the Resolution of the LTFRB Central Office which dismissed the Opposition filed by
the complainants; and that the said Decision granted the application of Batingwed which was adopted by the
LTFRB-CAR.
On February 27, 2006, the IBP-Baguio-Benguet Chapter formally endorsed the Complaint to the IBP Commission
on Bar Discipline (CBD) for appropriate action.4 Acting on the Complaint, the IBP-CBD directed Atty. Kilaan to
submit his Answer.5
In his Answer6 dated April 8, 2006, Atty. Kilaan denied violating the Lawyer s Oath and the Code of Professional
Responsibility. He disclaimed any pat1icipation in the preparation of the Decision with respect to the application of
Batingwed for CPC. He explained that it is the Regional Director of the Department of Transportation and
Communication (DOTC)-CAR who approves the application and who drafts the Decision after the LTFRB-CAR
signifies its favorable recommendation. He denied exercising any influence over the DOTC-CAR or the LTFRB. He
claimed that Batingwed had decided to abandon his application hence he no longer submitted the necessary
requirements therefor. He also disavowed any knowledge that Batingwed s application had been forwarded to the
LTFRB Central Office for approval. Atty. Kilaan claimed that he knew about the favorable Decision only when
Batingwed showed him the same. He narratted that considering the incomplete documents, the LTFRB mistakenly
approved Batingwed s application. Thus, when it discovered its error, the LTFRB immediately revoked the grant of
CPC to Batingwed.
He denied intercalating the entries in the application for CPC of Batingwed. He averred that once an application has
been filed, the application and all accompanying records remain with the LTFRB and could no longer be retrieved by
the applicant or his counsel; as such, it is highly improbable for him to intercalate the entries therein. Atty. Kilaan
further explained that it was Adasing who paid the filing fee in behalf of Batingwed but the cashier erroneously
indicated Adasing instead of Batingwed as payor. Atty. Kilaan lamented that Adasing who is not in the Philippines
could not corroborate his explanation. Finaliy, Atty. Kilaan noted that complainants filed the instant suit in retaliation
for the dismissal of their Opposition to the application for CPCs which he filed on behalf of his other clients.
The case was set for mandatory conference7 after which the parties submitted their respective Position Papers.8 In
their Position Paper, complainants further alleged that the Verification in Batingwed's application for CPC was
notarized by Atty. Kilaan as Doc. No: 253, Page No. 51, Book No. VIII, Series of 2003. However, upon verification of
Atty. Kilaan's Notarial Registry submitted to the Regional Trial Court Clerk of Court in Baguio City, the said notarial
entry actually refers to a Deed of Sale and not the Verification of Batingwed's application. Also, complainants belied
Atty. Kilaan's allegation that Adasing is 'presently abroad by presenting the Affidavit of Adasing claiming that he
never left the country.
In his Report and Recommendation, the Investigating Commissioner9 found complainants to have miserably failed to
prove that Atty. Kilaan intercalated the entries in the application for CPC of Batingwed. Their allegation was based
on mere suspicion devoid of any credible proof, viz:
At the onset, it is very difficult to prove that it was respondent himself who was responsible for any intercalation,
particularly the substitution of Joseph Batingwed's application folder in lieu of Gary Odasing's. Indeed, that is a
grave charge, and based on the evidence presented by complainants, all that they can muster is a suspicion that
cannot be confirmed. Of course, this has to be pointed out - anyone who had access to the case folder could have
possibly been responsible for whatever intercalation that may have occurred. That being said, this Office is not
prepared to make that leap into conjecture and conclude that it was respondent's doing.
Besides, the Certification of the Receiving Clerk of the DOTC CAR dated 18 October 2006 -which notably was
submitted by complainants -stated that the application of Gary Odasing was continued by Joseph Batingwed.
Complainants have not alleged that the same constitutes a violation of the rules and procedures of LTFRB. Thus, it
may be presumed to have been done in the regular course of business.10
However, the Investigating Commissioner did not totally absolve Atty. Kilaan as he found him liable for violating the
Notarial Law considering that the Verification of Batingwed's application which he notarized and denominated as
Doc. No. 253, Page No. 51, Book No. VIII, Series of 2003 was actually recorded as a Deed of Sale in his Notarial
Register. In addition, the Investigating Commissioner noted that Atty. Kilaan lied under oath when he alleged that
Adasing was abroad as this was squarely belied by Adasing in his Affidavit. The Investigating Commissioner held
thus:
Respondent must be punished for making it appear that he notarized a document the Verification-when in truth and
in fact, the entry in his Notatial Registry shows a different document. Thus, it is but proper to suspend respondent s
privilege of being commissioned as a Notary Public.
Not only that. Despite knowing that the Verification was not properly notarized, respondent, as counsel for the
applicant, proceeded to file the defectively verified Petition with the LTFRB-Baguio City. Clearly, there was
falsehood committed by him, as there can be no other conclusion except that respondent antedated the Verification.
xxxx
Lastly, this cannot end without this being said. Respondent made matters worse by alleging in his Answer to the
instant administrative complaint that Gary Odasing was abroad -which seemingly was drawn up more out of
convenience than for truth. Now, that allegation had been completely rebuffed and found to be untrue by the
execution of an Affidavit by Gary Odasing himself. x x x It is therefore an affront to this Office that respondent would
attempt to defend himself by pleading allegations, which were seemingly made deliberately, and which were later
found to be untrue. Clearly, respondent tried, albeit vainly, to deceive even this Office.11
The Investigating Commissioner recommended, viz:
WHEREFORE, it is the recommendation of the undersigned that respondent s notarial commission, if still existing,
be REVOKED immediately and that he be further PROHIBITED from being commissioned as a notary public for
TWO (2) YEARS.
Moreover, it is likewise recommended that respondent be SUSPENDED from the practice of law for a period of
TWO (2) MONTHS.12
In its September 19, 2007 Resolution No. XVIII-2007-82, the IBP Board of Governors adopted and approved the
Report and Recommendation of the Investigating Commissioner with modification that Atty. Kilaan’s Notarial
Commission be revoked and that he be disqualified from being appointed as Notary Public for two years, thereby
deleting the penalty of suspension from the practice of law. Respondent moved for reconsideration but it was denied
by the IBP Board of Governors in its Resolution No. XX-2012-41 dated January 15, 2012.
After a careful review of the records, we find that Atty. Kilaan committed the following infractions: 1) violation of the
Notarial Law; 2) violation of the Lawyer s Oath; and 3) violation of the Code of Professional Responsibility.
In his Motion for Reconsideration tiled before the IBP Board of Governors, Atty. Kilaan passed on the blame to his
secretary for the inaccuracies in the entries in his Notarial Register. He asserted that being a private practitioner, he
is burdened with cases thus he delegated to his secretary the job of recording the documents which he notarized in
his Notarial Register. He argued that the revocation of his notarial commission and disqualification for two years is
too harsh. a penalty considering that he is a first-time offender; he prayed for leniency considering that his family
depended on his income for their collective needs.
It is settled that it is the notary public who is personally accountable for the accuracy of the entries in his Notarial
Register. The Court is not persuaded by respondent s explanation that he is burdened with cases thus he was
constrained to delegate the recording of his notarial acts in his Notarial Register to his secretary. In tact, this
argument has already been rebuffed by this Court in Lingan v. Attys. Calubaquib and Baliga,13 viz:
Sections 245 and 246 of the Notarial Law provided:
SEC. 245. Notarial Register.--Every notary public shall keep a register to be known as the notarial register, wherein
record shall be made of all his official acts as notary; and he shall supply a ce1tified copy of such record, or any part
thereof: to any person applying for it and paying the legal fees therefore. (emphasis supplied)
xxx xxx xxx
SEC. 246. Matters to be entered therein. - The notary public shall enter in such register, in chronological order, the
nature of each instrument executed, sworn to, or acknowledged before him, the person executing, swearing to or
acknowledging the instrument, the witnesses, if any to the signature, the date of execution, oath, or
acknowledgment of the instrument, the fees collected by him for his services as notary in connection therewith, and,
when the instrument is a contract, he shall keep a connect copy thereof as part of his records, and shall likewise
enter in said records a brief description of the substance thereof and shall give to each entry a consecutive number,
beginning with number one in each calendar year. The notary shall give to each instrument executed, sworn to, or
acknowledged before him a number corresponding to the one in his register, and shall also state on the instrument
the page or pages of his register on which the same is recorded. No blank line shall be left between entries.
xxx xxx xxx
In this connection, Section 249(b) stated:
SEC. 249. Grounds fix revocation of commission. – The following derelictions of duty on the part of a notary public
shall, in the discretion of the proper judge of first instance, be sufficient ground for the revocation of his commission:
xxx xxx xxx
(b) The failure of the notary to make the proper entry or entries in his notarial register touching his notatial acts in the
manner required by law.
xxx xxx xxx
From the language of the subsection, it is abundantly clear that the notary public is personally accountable for all
entries in his notarial register. Respondents cannot be relieved of responsibility for the violation of the aforesaid
sections by passing the buck to their secretaries, a reprehensible practice which to this day persists despite our
open condemnation. Respondents. especially Calubaquib. a self-proclaimed "prominent legal practitioner should
have known better than to give us such a simple-minded excuse.
We likewise remind respondents that notarization is not an empty, meaningless or routinary act but one invested
with substantive public interest such that only those who are qualified or authorized to do so may act as notaries
public. The protection of that interest necessarily requires that those not qualified or authorized to act must be
prevented from inflicting themselves upon the public the courts and the administrative offices in general.
Notarization by a notary public converts a private document into a public one and makes it admissible in evidence
without further proof of its authenticity. Notaries public must therefore observe utmost care with respect to the basic
requirements of their duties.
In Gemina v. Atty. Madamba,14 we have also ruled that –

x x x The inaccuracies in his Notarial Register entitles and his failure to enter the documents that he admittedly
notarized constitute dereliction of duty as a notary public. He cannot escape liability by putting the blame on his
secretary. The lawyer himself, not merely his secretary, should be held accountable for these misdeeds.
A notary public is empowered to perform a variety of notarial acts, most common of which are the acknowledgement
and affirmation of documents or instruments. In the performance of these notarial acts, the notary public must be
mindful of the significance of the notarial seal affixed on documents. The notarial seal converts a document from a
private to a public instrument, after which it may be presented as evidence without need for proof of its genuineness
and due execution. Thus, notarization should not be treated as an empty, meaningless or routinary act. A notary
1âwphi 1
public exercises duties calling for caretl1lness and faithfulness. Notaries must inform themselves of the facts they
certify to; most importantly, they should not take pmt or allow themselves to be pmt of illegal transactions.
Canon 1 of the Code of Professional Responsibility requires every lawyer to uphold the Constitution, obey the laws
of the land, and promote respect for the law and legal processes.
The Notarial Law and the 2004 Rules on Notarial Practice, moreover, require a duly commissioned notary public to
make the proper entries in his Notarial Register and to refrain from committing any dereliction or any act which may
serve as cause for the revocation of his commission or the imposition of administrative sanctions.
Under the 2004 Rules on Notarial Practice, the respondent s failure to make the proper entry or entries in his
Notarial Register of his notarial acts, his failure to require the presence of a principal at the time of the notarial acts,
and his failure to identify a principal on the basis of personal knowledge by competent evidence are grounds for the
revocation of a lawyer s commission as a notary public.
Indeed, Rule VI, Sections I and 2 of the 2004 Rules of Notarial Practice require a notary public to keep and maintain
a Notarial Register wherein he will record his every notarial act. His failure to make the proper entry or entries in his
notarial register concerning his notarial acts is a ground for revocation of his notarial commission.15 As mentioned,
respondent failed to make the proper entries in his Notarial Register; as such, his notarial commission may be
properly revoked.
Aside from violating the Notarial Law, respondent also violated his Lawyer’s Oath and the Code of Professional
Responsibility by committing falsehood in the pleadings he submitted before the IBP. His claim that Adasing was
abroad hence could not corroborate the explanation made by Batingwed was proved to be untruthful when
complainants submitted the Affidavit of Adasing insisting that he never left the country. Canon 10,
Rule 10.0 of the Code of Professional Responsibility expressly provides that a lawyer shall not do any falsehood,
nor consent to the doing of any in Court; nor shall he mislead, or allow the Court to be misled by any artifice. In the
same vein, Canon 1, Rule 1.01 mandates that a lawyer shall

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SECOND DIVISION

G.R. No. 207633, December 09, 2015

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JOHNLIE LAGANGGA Y DUMPA, Accused-Appellant.

DEL CASTILLO, J.:

Contrary to law.4ChanRoblesVirtualawl ibra ry

Version of the Prosecution

Version of the Defense

Ruling of the Regional Trial Court

Ruling of the Court of Appeals

The appeal is barren of merit.

The Civil Liability

SO ORDERED. chanroblesvi rtua llawli bra ry

G.R. No. 203397, December 09, 2015

DEL CASTILLO, J.:

Ruling of the Regional Trial Court

WHEREFORE, the complaint is ordered dismissed.

Defendants' counterclaim is likewise ordered dismissed.

SO ORDERED.9 ChanRoblesVi rtualaw lib rary

Riding of the Court of Appeals

We grant the appeal.

SO ORDERED.11 (Emphasis in the original).

Petitioners claim that the CA erred:

The Court denies the Petition.

SO ORDERED. chanroblesvi rtua llawli bra ry

G.R. No. 203115, December 07, 2015

ISLAND OVERSEAS TRANSPORT CORPORATION/PINE CREST SHIPPING CORPORATION/CAPT. EMMANUEL L.

DEL CASTILLO, J.:

Effective from 1st January to 31st December, 2007

Degree of Disability Rate of Compensation (US$)

Junior Officers &

100 82,500 110,000 137,500

75 61,900 82,500 103,150

60 49,500 66,000 82,500

50 41,250 55,000 68,750

40 33,000 44,000 55,000

30 24,750 33,000 41,250

20 16,500 22,000 27,500

2. Combined disability grading under the POEA schedule of disabilities:

Proceedings before the Labor Arbiter

SO ORDERED.19 ChanRoblesVi rtua lawlib rary

Proceedings before the National Labor Relations Commission

SO ORDERED.24 ChanRoblesVi rtua lawlib rary

Proceedings before the Court of Appeals

The Petition is partially meritorious.

We are not convinced.

Article 192(c)(1) of the Labor Code provides that:

G.R. No. 201652, December 02, 2015

DEL CASTILLO, J.:

Ruling of the PARAD

The dispositive portion of the Decision reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

SO ORDERED.11 ChanRoblesVi rtua lawlib rary

Proceedings before the DARAB

2) identification, qualification or disqualification of potential farmer[s]-beneficiaries.

Jurisdiction is conferred by law. x x x

SO ORDERED.16 ChanRoblesVi rtua lawlib rary

Proceedings before the CA

SO ORDERED.21 ChanRoblesVi rtua lawlib rary

Proceedings before this Court

Hence, the present recourse, with petitioners now contending that:

This Court's Ruling

G.R. No. 195654, November 25, 2015

DEL CASTILLO, J.:

JOINT COMPROMISE AGREEMENT