Republic of the Philippines

SUPREME COURT
Baguio City

FIRST DIVISION

G.R. No. 137873 April 20, 2001

D. M. CONSUNJI, INC., petitioner,

vs.
COURT OF APPEALS and MARIA J. JUEGO, respondents.

KAPUNAN, J.:

At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M. Consunji,
Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death.

PO3 Rogelio Villanueva of the Eastern Police District investigated the tragedy and filed a report
dated November 25, 1990, stating that:

x x x. [The] [v]ictim was rushed to [the] Rizal Medical Center in Pasig, Metro Manila
where he was pronounced dead on arrival (DOA) by the attending physician, Dr. Errol de
Yzo[,] at around 2:15 p.m. of the same date.

Investigation disclosed that at the given time, date and place, while victim Jose A. Juego
together with Jessie Jaluag and Delso Destajo [were] performing their work as
carpenter[s] at the elevator core of the 14th floor of the Tower D, Renaissance Tower
Building on board a [p]latform made of channel beam (steel) measuring 4.8 meters by 2
meters wide with pinulid plywood flooring and cable wires attached to its four corners
and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely
inserted to connect the chain block with the [p]latform, got loose xxx causing the whole
[p]latform assembly and the victim to fall down to the basement of the elevator core,
Tower D of the building under construction thereby crushing the victim of death, save his
two (2) companions who luckily jumped out for safety.

It is thus manifest that Jose A. Juego was crushed to death when the [p]latform he was
then on board and performing work, fell. And the falling of the [p]latform was due to the
removal or getting loose of the pin which was merely inserted to the connecting points of
the chain block and [p]latform but without a safety lock.1

On May 9, 1991, Jose Juego’s widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a
complaint for damages against the deceased’s employer, D.M. Consunji, Inc. The employer
raised, among other defenses, the widow’s prior availment of the benefits from the State
Insurance Fund.

After trial, the RTC rendered a decision in favor of the widow Maria Juego. The dispositive
portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff, as

follows:

1. P50,000.00 for the death of Jose A. Juego.

2. P10,000.00 as actual and compensatory damages.

3. P464,000.00 for the loss of Jose A. Juego’s earning capacity.

4. P100,000.00 as moral damages.

5. P20,000.00 as attorney’s fees, plus the costs of suit.

 SO ORDERED.2

On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in
toto.

D. M. Consunji now seeks the reversal of the CA decision on the following grounds:

 THE APPELLATE COURT ERRED IN HOLDING THAT THE POLICE REPORT

WAS ADMISSIBLE EVIDENCE OF THE ALLEGED NEGLIGENCE OF
PETITIONER.

 THE APPELLATE COURT ERRED IN HOLDING THAT THE DOCTRINE

OF RES IPSA LOQUITOR[sic] IS APPLICABLE TO PROVE NEGLIGENCE ON
THE PART OF PETITIONER.

 THE APPELLATE COURT ERRED IN HOLDING THAT PETITIONER IS

PRESUMED NEGLIGENT UNDER ARTICLE 2180 OF THE CIVIL CODE, AND

 THE APPELLATE COURT ERRED IN HOLDING THAT RESPONDENT IS NOT

PRECLUDED FROM RECOVERING DAMAGES UNDER THE CIVIL CODE.3

Petitioner maintains that the police report reproduced above is hearsay and, therefore,
inadmissible. The CA ruled otherwise. It held that said report, being an entry in official records,
is an exception to the hearsay rule.

The Rules of Court provide that a witness can testify only to those facts which he knows of his
personal knowledge, that is, which are derived from his perception.4 A witness, therefore, may
not testify as what he merely learned from others either because he was told or read or heard
the same. Such testimony is considered hearsay and may not be received as proof of the truth
of what he has learned.5 This is known as the hearsay rule.

Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as
evidence applies to written, as well as oral statements.6

The theory of the hearsay rule is that the many possible deficiencies, suppressions, sources of
error and untrustworthiness, which lie underneath the bare untested assertion of a witness, may
be best brought to light and exposed by the test of cross-examiantion.7 The hearsay rule,
therefore, excludes evidence that cannot be tested by cross-examination.8

The Rules of Court allow several exceptions to the rule,9 among which are entries in official
records. Section 44, Rule 130 provides:

Entries in official records made in the performance of his duty made in the performance
of his duty by a public officer of the Philippines, or by a person in the performance of a
duty specially enjoined by law areprima facie evidence of the facts therein stated.

In Africa, et al. vs. Caltex (Phil.), Inc., et al.,10 this Court, citing the work of Chief Justice Moran,
enumerated the requisites for admissibility under the above rule:

(a) that the entry was made by a public officer or by another person specially enjoined by
law to do so;

(b) that it was made by the public officer in the performance of his duties, or by such
other person in the performance of a duty specially enjoined by law; and

(c) that the public officer or other person had sufficient knowledge of the facts by him
stated, which must have been acquired by him personally or through official information.

The CA held that the police report meets all these requisites. Petitioner contends that the last
requisite is not present.
The Court notes that PO3 Villanueva, who signed the report in question, also testified before the
trial court. InRodriguez vs. Court of Appeals,11 which involved a Fire Investigation Report, the
officer who signed the fire report also testified before the trial court. This Court held that the
report was inadmissible for the purpose of proving the truth of the statements contained in the
report but admissible insofar as it constitutes part of the testimony of the officer who executed
the report.

x x x. Since Major Enriquez himself took the witness stand and was available for cross-
examination, the portions of the report which were of his personal knowledge or which
consisted of his perceptions and conclusions were not hearsay. The rest of the report,
such as the summary of the statements of the parties based on their sworn statements
(which were annexed to the Report) as well as the latter, having been included in the
first purpose of the offer [as part of the testimony of Major Enriquez], may then be
considered as independently relevant statements which were gathered in the course of
the investigation and may thus be admitted as such, but not necessarily to prove the
truth thereof. It has been said that:

"Where regardless of the truth or falsity of a statement, the fact that it has been
made is relevant, the hearsay rule does not apply, but the statement may be
shown. Evidence as to the making of such statement is not secondary but
primary, for the statement itself may constitute a fact in issue, or be
circumstantially relevant as to the existence of such a fact."

When Major Enriquez took the witness stand, testified for petitioners on his Report and
made himself available for cross-examination by the adverse party, the Report, insofar
as it proved that certain utterances were made (but not their truth), was effectively
removed from the ambit of the aforementioned Section 44 of Rule 130. Properly
understood, this section does away with the testimony in open court of the officer who
made the official record, considers the matter as an exception to the hearsay rule and
makes the entries in said official record admissible in evidence as prima facie evidence
of the facts therein stated. The underlying reasons for this exceptionary rule are
necessity and trustworthiness, as explained in Antillon v. Barcelon.

The litigation is unlimited in which testimony by officials is daily needed; the

occasions in which the officials would be summoned from his ordinary duties to
declare as a witness are numberless. The public officers are few in whose daily
work something is not done in which testimony is not needed from official
sources. Were there no exception for official statements, hosts of officials would
be found devoting the greater part of their time to attending as witnesses in court
or delivering deposition before an officer. The work of administration of
government and the interest of the public having business with officials would
alike suffer in consequence. For these reasons, and for many others, a certain
verity is accorded such documents, which is not extended to private documents.
(3 Wigmore on Evidence, Sec. 1631).

The law reposes a particular confidence in public officers that it presumes they
will discharge their several trusts with accuracy and fidelity; and, therefore,
whatever acts they do in discharge of their duty may be given in evidence and
shall be taken to be true under such a degree of caution as to the nature and
circumstances of each case may appear to require.

It would have been an entirely different matter if Major Enriquez was not presented to
testify on his report. In that case the applicability of Section 44 of Rule 143 would have
been ripe for determination, and this Court would have agreed with the Court of Appeals
that said report was inadmissible since the aforementioned third requisite was not
satisfied. The statements given by the sources of information of Major Enriquez failed to
qualify as "official information," there being no showing that, at the very least, they were
under a duty to give the statements for record.
Similarly, the police report in this case is inadmissible for the purpose of proving the truth of the
statements contained therein but is admissible insofar as it constitutes part of the testimony of
PO3 Villanueva.

In any case, the Court holds that portions of PO3 Villanueva’s testimony which were of his
personal knowledge suffice to prove that Jose Juego indeed died as a result of the elevator
crash. PO3 Villanueva had seen Juego’s remains at the morgue,12 making the latter’s death
beyond dispute. PO3 Villanueva also conducted an ocular inspection of the premises of the
building the day after the incident13 and saw the platform for himself.14 He observed that the
platform was crushed15 and that it was totally damaged.16 PO3 Villanueva also required Garcia
and Fabro to bring the chain block to the police headquarters. Upon inspection, he noticed that
the chain was detached from the lifting machine, without any pin or bolt.17

What petitioner takes particular exception to is PO3 Villanueva’s testimony that the cause of the
fall of the platform was the loosening of the bolt from the chain block. It is claimed that such
portion of the testimony is mere opinion. Subject to certain exceptions,18 the opinion of a witness
is generally not admissible.19

Petitioner’s contention, however, loses relevance in the face of the application of res ipsa
loquitur by the CA. The effect of the doctrine is to warrant a presumption or inference that the
mere fall of the elevator was a result of the person having charge of the instrumentality was
negligent. As a rule of evidence, the doctrine of res ipsa loquituris peculiar to the law of
negligence which recognizes that prima facie negligence may be established without direct
proof and furnishes a substitute for specific proof of negligence.20

The concept of res ipsa loquitur has been explained in this wise:

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

x x x where it is shown that the thing or instrumentality which caused the injury
complained of was under the control or management of the defendant, and that the
occurrence resulting in the injury was such as in the ordinary course of things would not
happen if those who had its control or management used proper care, there is sufficient
evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation
by the defendant, that the injury arose from or was caused by the defendant’s want of
care.21

One of the theoretical based for the doctrine is its necessity, i.e., that necessary evidence is
absent or not available.22

The res ipsa loquitur doctrine is based in part upon the theory that the defendant in
charge of the instrumentality which causes the injury either knows the cause of the
accident or has the best opportunity of ascertaining it and that the plaintiff has no such
knowledge, and therefore is compelled to allege negligence in general terms and to rely
upon the proof of the happening of the accident in order to establish negligence. The
inference which the doctrine permits is grounded upon the fact that the chief evidence of
the true cause, whether culpable or innocent, is practically accessible to the defendant
but inaccessible to the injured person.

It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a
plaintiff, without knowledge of the cause, reaches over to defendant who knows or
should know the cause, for any explanation of care exercised by the defendant in
respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine,
another court has said, is a rule of necessity, in that it proceeds on the theory that under
 the peculiar circumstances in which the doctrine is applicable, it is within the power of
the defendant to show that there was no negligence on his part, and direct proof of
defendant’s negligence is beyond plaintiff’s power. Accordingly, some court add to the
three prerequisites for the application of the res ipsa loquitur doctrine the further
requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured
party had no knowledge or means of knowledge as to the cause of the accident, or that
the party to be charged with negligence has superior knowledge or opportunity for
explanation of the accident.23

The CA held that all the requisites of res ipsa loquitur are present in the case at bar:

There is no dispute that appellee’s husband fell down from the 14th floor of a building to
the basement while he was working with appellant’s construction project, resulting to his
death. The construction site is within the exclusive control and management of appellant.
It has a safety engineer, a project superintendent, a carpenter leadman and others who
are in complete control of the situation therein. The circumstances of any accident that
would occur therein are peculiarly within the knowledge of the appellant or its
employees. On the other hand, the appellee is not in a position to know what caused the
accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent
or not readily available, provided the following requisites are present: (1) the accident
was of a kind which does not ordinarily occur unless someone is negligent; (2) the
instrumentality or agency which caused the injury was under the exclusive control of the
person charged with negligence; and (3) the injury suffered must not have been due to
any voluntary action or contribution on the part of the person injured. x x x.

No worker is going to fall from the 14th floor of a building to the basement while
performing work in a construction site unless someone is negligent[;] thus, the first
requisite for the application of the rule of res ipsa loquitur is present. As explained
earlier, the construction site with all its paraphernalia and human resources that likely
caused the injury is under the exclusive control and management of appellant[;] thus[,]
the second requisite is also present. No contributory negligence was attributed to the
appellee’s deceased husband[;] thus[,] the last requisite is also present. All the requisites
for the application of the rule of res ipsa loquitur are present, thus a reasonable
presumption or inference of appellant’s negligence arises. x x x.24

Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur,
but argues that the presumption or inference that it was negligent did not arise since it "proved
that it exercised due care to avoid the accident which befell respondent’s husband."

Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the
defendant’s negligence is presumed or inferred25 when the plaintiff establishes the requisites for
the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the
elements, the burden then shifts to defendant to explain.26 The presumption or inference may be
rebutted or overcome by other evidence and, under appropriate circumstances disputable
presumption, such as that of due care or innocence, may outweigh the inference.27 It is not for
the defendant to explain or prove its defense to prevent the presumption or inference from
arising. Evidence by the defendant of say, due care, comes into play only after the
circumstances for the application of the doctrine has been established.1âwphi1.nêt

In any case, petitioner cites the sworn statement of its leadman Ferdinand Fabro executed
before the police investigator as evidence of its due care. According to Fabro’s sworn
statement, the company enacted rules and regulations for the safety and security of its workers.
Moreover, the leadman and the bodegero inspect the chain block before allowing its use.

It is ironic that petitioner relies on Fabro’s sworn statement as proof of its due care but, in
arguing that private respondent failed to prove negligence on the part of petitioner’s employees,
also assails the same statement for being hearsay.

Petitioner is correct. Fabro’s sworn statement is hearsay and inadmissible. Affidavits are
inadmissible as evidence under the hearsay rule, unless the affiant is placed on the witness
stand to testify thereon.28 The inadmissibility of this sort of evidence is based not only on the
lack of opportunity on the part of the adverse party to cross-examine the affiant, but also on the
commonly known fact that, generally, an affidavit is not prepared by the affiant himself but by
another who uses his own language in writing the affiant’s statements which may either be
omitted or misunderstood by the one writing them.29 Petitioner, therefore, cannot use said
statement as proof of its due care any more than private respondent can use it to prove the
cause of her husband’s death. Regrettably, petitioner does not cite any other evidence to rebut
the inference or presumption of negligence arising from the application of res ipsa loquitur, or to
establish any defense relating to the incident.

Next, petitioner argues that private respondent had previously availed of the death benefits
provided under the Labor Code and is, therefore, precluded from claiming from the deceased’s
employer damages under the Civil Code.

Article 173 of the Labor Code states:

Article 173. Extent of liability. – Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of
the employer to the employee, his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents. The payment of compensation
under this Title shall not bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as
amended, Republic Act Numbered Six hundred ten, as amended, Republic Act
Numbered Forty-eight hundred sixty-four as amended, and other laws whose benefits
are administered by the System or by other agencies of the government.

The precursor of Article 173 of the Labor Code, Section 5 of the Workmen’s Compensation Act,
provided that:

Section 5. Exclusive right to compensation. – The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil Code
and other laws because of said injury x x x.

Whether Section 5 of the Workmen’s Compensation Act allowed recovery under said Act as well
as under the Civil Code used to be the subject of conflicting decisions. The Court finally settled
the matter in Floresca vs.Philex Mining Corporation,30 which involved a cave-in resulting in the
death of the employees of the Philex Mining Corporation. Alleging that the mining corporation, in
violation of government rules and regulations, failed to take the required precautions for the
protection of the employees, the heirs of the deceased employees filed a complaint against
Philex Mining in the Court of First Instance (CFI). Upon motion of Philex Mining, the CFI
dismissed the complaint for lack of jurisdiction. The heirs sought relief from this Court.

Addressing the issue of whether the heirs had a choice of remedies, majority of the Court En
Banc,31 following the rule in Pacaña vs. Cebu Autobus Company, held in the affirmative.

WE now come to the query as to whether or not the injured employee or his heirs in
case of death have a right of selection or choice of action between availing themselves
of the worker’s right under the Workmen’s Compensation Act and suing in the regular
courts under the Civil Code for higher damages (actual, moral and exemplary) from the
employers by virtue of the negligence or fault of the employers or whether they may avail
themselves cumulatively of both actions, i.e., collect the limited compensation under the
Workmen’s Compensation Act and sue in addition for damages in the regular courts.

In disposing of a similar issue, this Court in Pacaña vs. Cebu Autobus Company, 32
SCRA 442, ruled thatan injured worker has a choice of either to recover from the
employer the fixed amounts set by the Workmen’s Compensation Act or to prosecute an
ordinary civil action against the tortfeasor for higher damages but he cannot pursue both
courses of action simultaneously. [Underscoring supplied.]
Nevertheless, the Court allowed some of the petitioners in said case to proceed with their suit
under the Civil Code despite having availed of the benefits provided under the Workmen’s
Compensation Act. The Court reasoned:

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss
dated May 14, 1968 before the court a quo, that the heirs of the deceased employees,
namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino
submitted notices and claims for compensation to the Regional Office No. 1 of the then
Department of Labor and all of them have been paid in full as of August 25, 1967, except
Saturnino Martinez whose heirs decided that they be paid in installments x x x. Such
allegation was admitted by herein petitioners in their opposition to the motion to dismiss
dated may 27, 1968 x x x in the lower court, but they set up the defense that the claims
were filed under the Workmen’s Compensation Act before they learned of the official
report of the committee created to investigate the accident which established the
criminal negligence and violation of law by Philex, and which report was forwarded by
the Director of Mines to then Executive Secretary Rafael Salas in a letter dated October
19, 1967 only x x x.

WE hold that although the other petitioners had received the benefits under the
Workmen’s Compensation Act, such my not preclude them from bringing an action
before the regular court because they became cognizant of the fact that Philex has been
remiss in its contractual obligations with the deceased miners only after receiving
compensation under the Act. Had petitioners been aware of said violation of government
rules and regulations by Philex, and of its negligence, they would not have sought
redress under the Workmen’s Compensation Commission which awarded a lesser
amount for compensation. The choice of the first remedy was based on ignorance or a
mistake of fact, which nullifies the choice as it was not an intelligent choice. The case
should therefore be remanded to the lower court for further proceedings. However,
should the petitioners be successful in their bid before the lower court, the payments
made under the Workmen’s Compensation Act should be deducted from the damages
that may be decreed in their favor. [Underscoring supplied.]

The ruling in Floresca providing the claimant a choice of remedies was reiterated in Ysmael
Maritime Corporation vs. Avelino,32 Vda. De Severo vs. Feliciano-Go,33 and Marcopper Mining
Corp. vs. Abeleda.34 In the last case, the Court again recognized that a claimant who had been
paid under the Act could still sue under the Civil Code. The Court said:

In the Robles case, it was held that claims for damages sustained by workers in the
course of their employment could be filed only under the Workmen’s Compensation Law,
to the exclusion of all further claims under other laws. In Floresca, this doctrine was
abrogated in favor of the new rule that the claimants may invoke either the Workmen’s
Compensation Act or the provisions of the Civil Code, subject to the consequence that
the choice of one remedy will exclude the other and that the acceptance of
compensation under the remedy chosen will preclude a claim for additional benefits
under the other remedy. The exception is where a claimant who has already been paid
under the Workmen’s Compensation Act may still sue for damages under the Civil Code
on the basis of supervening facts or developments occurring after he opted for the first
remedy. (Underscoring supplied.)

Here, the CA held that private respondent’s case came under the exception because private
respondent was unaware of petitioner’s negligence when she filed her claim for death benefits
from the State Insurance Fund. Private respondent filed the civil complaint for damages after
she received a copy of the police investigation report and the Prosecutor’s Memorandum
dismissing the criminal complaint against petitioner’s personnel. While stating that there was no
negligence attributable to the respondents in the complaint, the prosecutor nevertheless noted
in the Memorandum that, "if at all," the "case is civil in nature." The CA thus applied the
exception in Floresca:

x x x We do not agree that appellee has knowledge of the alleged negligence of

appellant as early as November 25, 1990, the date of the police investigator’s report.
The appellee merely executed her sworn statement before the police investigator
 concerning her personal circumstances, her relation to the victim, and her knowledge of
the accident. She did not file the complaint for "Simple Negligence Resulting to
Homicide" against appellant’s employees. It was the investigator who recommended the
filing of said case and his supervisor referred the same to the prosecutor’s office. This is
a standard operating procedure for police investigators which appellee may not have
even known. This may explain why no complainant is mentioned in the preliminary
statement of the public prosecutor in her memorandum dated February 6, 1991, to wit:
"Respondent Ferdinand Fabro x x x are being charged by complainant of "Simple
Negligence Resulting to Homicide." It is also possible that the appellee did not have a
chance to appear before the public prosecutor as can be inferred from the following
statement in said memorandum: "Respondents who were notified pursuant to Law
waived their rights to present controverting evidence," thus there was no reason for the
public prosecutor to summon the appellee. Hence, notice of appellant’s negligence
cannot be imputed on appellee before she applied for death benefits under ECC or
before she received the first payment therefrom. Her using the police investigation report
to support her complaint filed on May 9, 1991 may just be an afterthought after receiving
a copy of the February 6, 1991 Memorandum of the Prosecutor’s Office dismissing the
criminal complaint for insufficiency of evidence, stating therein that: "The death of the
victim is not attributable to any negligence on the part of the respondents. If at all and as
shown by the records this case is civil in nature." (Underscoring supplied.) Considering
the foregoing, We are more inclined to believe appellee’s allegation that she learned
about appellant’s negligence only after she applied for and received the benefits under
ECC. This is a mistake of fact that will make this case fall under the exception held in
the Floresca ruling.35

The CA further held that not only was private respondent ignorant of the facts, but of her rights
as well:

x x x. Appellee [Maria Juego] testified that she has reached only elementary school for
her educational attainment; that she did not know what damages could be recovered
from the death of her husband; and that she did not know that she may also recover
more from the Civil Code than from the ECC. x x x.36

Petitioner impugns the foregoing rulings. It contends that private respondent "failed to allege in
her complaint that her application and receipt of benefits from the ECC were attended by
ignorance or mistake of fact. Not being an issue submitted during the trial, the trial court had no
authority to hear or adjudicate that issue."

Petitioner also claims that private respondent could not have been ignorant of the facts because
as early as November 28, 1990, private respondent was the complainant in a criminal complaint
for "Simple Negligence Resulting to Homicide" against petitioner’s employees. On February 6,
1991, two months before the filing of the action in the lower court, Prosecutor Lorna Lee issued
a resolution finding that, although there was insufficient evidence against petitioner’s
employees, the case was "civil in nature." These purportedly show that prior to her receipt of
death benefits from the ECC on January 2, 1991 and every month thereafter, private
respondent also knew of the two choices of remedies available to her and yet she chose to
claim and receive the benefits from the ECC.

When a party having knowledge of the facts makes an election between inconsistent remedies,
the election is final and bars any action, suit, or proceeding inconsistent with the elected
remedy, in the absence of fraud by the other party. The first act of election acts as a
bar.37 Equitable in nature, the doctrine of election of remedies is designed to mitigate possible
unfairness to both parties. It rests on the moral premise that it is fair to hold people responsible
for their choices. The purpose of the doctrine is not to prevent any recourse to any remedy, but
to prevent a double redress for a single wrong.38

The choice of a party between inconsistent remedies results in a waiver by election. Hence, the
rule in Florescathat a claimant cannot simultaneously pursue recovery under the Labor Code
and prosecute an ordinary course of action under the Civil Code. The claimant, by his choice of
one remedy, is deemed to have waived the other.
Waiver is the intentional relinquishment of a known right.39

[It] is an act of understanding that presupposes that a party has knowledge of its rights,
but chooses not to assert them. It must be generally shown by the party claiming a
waiver that the person against whom the waiver is asserted had at the time knowledge,
actual or constructive, of the existence of the party’s rights or of all material facts upon
which they depended. Where one lacks knowledge of a right, there is no basis upon
which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver
cannot be established by a consent given under a mistake or misapprehension of fact.

A person makes a knowing and intelligent waiver when that person knows that a right
exists and has adequate knowledge upon which to make an intelligent decision.

Waiver requires a knowledge of the facts basic to the exercise of the right waived, with
an awareness of its consequences. That a waiver is made knowingly and intelligently
must be illustrated on the record or by the evidence.40

That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the
exception in Floresca.

It is in light of the foregoing principles that we address petitioner’s contentions.

Waiver is a defense, and it was not incumbent upon private respondent, as plaintiff, to allege in
her complaint that she had availed of benefits from the ECC. It is, thus, erroneous for petitioner
to burden private respondent with raising waiver as an issue. On the contrary, it is the defendant
who ought to plead waiver, as petitioner did in pages 2-3 of its Answer;41 otherwise, the defense
is waived. It is, therefore, perplexing for petitioner to now contend that the trial court had no
jurisdiction over the issue when petitioner itself pleaded waiver in the proceedings before the
trial court.

Does the evidence show that private respondent knew of the facts that led to her husband’s
death and the rights pertaining to a choice of remedies?

It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. In this
case, the "fact" that served as a basis for nullifying the waiver is the negligence of petitioner’s
employees, of which private respondent purportedly learned only after the prosecutor issued a
resolution stating that there may be civil liability. InFloresca, it was the negligence of the mining
corporation and its violation of government rules and regulations. Negligence, or violation of
government rules and regulations, for that matter, however, is not a fact, but aconclusion of law,
over which only the courts have the final say. Such a conclusion binds no one until the courts
have decreed so. It appears, therefore, that the principle that ignorance or mistake of fact
nullifies a waiver has been misapplied in Floresca and in the case at bar.

In any event, there is no proof that private respondent knew that her husband died in the
elevator crash when on November 15, 1990 she accomplished her application for benefits from
the ECC. The police investigation report is dated November 25, 1990, 10 days after the
accomplishment of the form. Petitioner filed the application in her behalf on November 27, 1990.

There is also no showing that private respondent knew of the remedies available to her when
the claim before the ECC was filed. On the contrary, private respondent testified that she was
not aware of her rights.

Petitioner, though, argues that under Article 3 of the Civil Code, ignorance of the law excuses
no one from compliance therewith. As judicial decisions applying or interpreting the laws or the
Constitution form part of the Philippine legal system (Article 8, Civil Code), private respondent
cannot claim ignorance of this Court’s ruling inFloresca allowing a choice of remedies.

The argument has no merit. The application of Article 3 is limited to mandatory and prohibitory
laws.42 This may be deduced from the language of the provision, which, notwithstanding a
person’s ignorance, does not excuse his or her compliance with the laws. The rule
in Floresca allowing private respondent a choice of remedies is neither mandatory nor
prohibitory. Accordingly, her ignorance thereof cannot be held against her.

Finally, the Court modifies the affirmance of the award of damages. The records do not indicate
the total amount private respondent ought to receive from the ECC, although it appears from
Exhibit "K"43 that she received P3,581.85 as initial payment representing the accrued pension
from November 1990 to March 1991. Her initial monthly pension, according to the same Exhibit
"K," was P596.97 and present total monthly pension was P716.40. Whether the total amount
she will eventually receive from the ECC is less than the sum of P644,000.00 in total damages
awarded by the trial court is subject to speculation, and the case is remanded to the trial court
for such determination. Should the trial court find that its award is greater than that of the ECC,
payments already received by private respondent under the Labor Code shall be deducted from
the trial court'’ award of damages. Consistent with our ruling in Floresca, this adjudication aims
to prevent double compensation.

WHEREFORE, the case is REMANDED to the Regional Trial Court of Pasig City to determine
whether the award decreed in its decision is more than that of the ECC. Should the award
decreed by the trial court be greater than that awarded by the ECC, payments already made to
private respondent pursuant to the Labor Code shall be deducted therefrom. In all other
respects, the Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

Davide, Jr., Puno, Pardo, and Ynares-Santiago, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-15127 May 30, 1961

EMETERIO CUI, plaintiff-appellant,

vs.
ARELLANO UNIVERSITY, defendant-appellee.

G.A.S. Sipin, Jr., for plaintiff-appellant.

E. Voltaire Garcia for defendant-appellee.

CONCEPCION, J.:

Appeal by plaintiff Emeterio Cui from a decision of the Court of First Instance of Manila,
absolving defendant Arellano University from plaintiff's complaint, with costs against the plaintiff,
and dismissing defendant's counter claim, for insufficiency of proof thereon.

In the language of the decision appealed from:

The essential facts of this case are short and undisputed. As established by the
agreement of facts Exhibits X and by the respective oral and documentary evidence
introduced by the parties, it appears conclusive that plaintiff, before the school year
1948-1949 took up preparatory law course in the defendant University. After finishing his
preparatory law course plaintiff enrolled in the College of Law of the defendant from the
school year 1948-1949. Plaintiff finished his law studies in the defendant university up to
and including the first semester of the fourth year. During all the school years in which
plaintiff was studying law in defendant law college, Francisco R. Capistrano, brother of
the mother of plaintiff, was the dean of the College of Law and legal counsel of the
defendant university. Plaintiff enrolled for the last semester of his law studies in the
defendant university but failed to pay his tuition fees because his uncle Dean Francisco
R. Capistrano having severed his connection with defendant and having accepted the
deanship and chancellorship of the College of Law of Abad Santos University, plaintiff
left the defendant's law college and enrolled for the last semester of his fourth year law
in the college of law of the Abad Santos University graduating from the college of law of
the latter university. Plaintiff, during all the time he was studying law in defendant
university was awarded scholarship grants, for scholastic merit, so that his semestral
tuition fees were returned to him after the ends of semester and when his scholarship
grants were awarded to him. The whole amount of tuition fees paid by plaintiff to
defendant and refunded to him by the latter from the first semester up to and including
the first semester of his last year in the college of law or the fourth year, is in total
P1,033.87. After graduating in law from Abad Santos University he applied to take the
bar examination. To secure permission to take the bar he needed the transcripts of his
records in defendant Arellano University. Plaintiff petitioned the latter to issue to him the
needed transcripts. The defendant refused until after he had paid back the P1,033 87
which defendant refunded to him as above stated. As he could not take the bar
examination without those transcripts, plaintiff paid to defendant the said sum under
protest. This is the sum which plaintiff seeks to recover from defendant in this case.

Before defendant awarded to plaintiff the scholarship grants as above stated, he was
made to sign the following contract covenant and agreement:

"In consideration of the scholarship granted to me by the University, I hereby waive my

right to transfer to another school without having refunded to the University (defendant)
the equivalent of my scholarship cash.
(Sgd.) Emeterio Cui".
It is admitted that, on August 16, 1949, the Director of Private Schools issued Memorandum No.
38, series of 1949, on the subject of "Scholarship," addressed to "All heads of private schools,
colleges and universities," reading:

1. School catalogs and prospectuses submitted to this, Bureau show that some schools
offer full or partial scholarships to deserving students — for excellence in scholarship or
for leadership in extra-curricular activities. Such inducements to poor but gifted students
should be encouraged. But to stipulate the condition that such scholarships are good
only if the students concerned continue in the same school nullifies the principle of merit
in the award of these scholarships.

2. When students are given full or partial scholarships, it is understood that such
scholarships are merited and earned. The amount in tuition and other fees
corresponding to these scholarships should not be subsequently charged to the recipient
students when they decide to quit school or to transfer to another institution.
Scholarships should not be offered merely to attract and keep students in a school.

3. Several complaints have actually been received from students who have enjoyed
scholarships, full or partial, to the effect that they could not transfer to other schools
since their credentials would not be released unless they would pay the fees
corresponding to the period of the scholarships. Where the Bureau believes that the right
of the student to transfer is being denied on this ground, it reserves the right to authorize
such transfer.

that defendant herein received a copy of this memorandum; that plaintiff asked the Bureau of
Private Schools to pass upon the issue on his right to secure the transcript of his record in
defendant University, without being required to refund the sum of P1,033.87; that the Bureau of
Private Schools upheld the position taken by the plaintiff and so advised the defendant; and
that, this notwithstanding, the latter refused to issue said transcript of records, unless said
refund were made, and even recommended to said Bureau that it issue a written order directing
the defendant to release said transcript of record, "so that the case may be presented to the
court for judicial action." As above stated, plaintiff was, accordingly, constrained to pay, and did
pay under protest, said sum of P1,033.87, in order that he could take the bar examination in
1953. Subsequently, he brought this action for the recovery of said amount, aside from P2,000
as moral damages, P500 as exemplary damages, P2,000 as attorney's fees, and P500 as
expenses of litigation.

In its answer, defendant reiterated the stand it took, vis-a-vis the Bureau of Private Schools,
namely, that the provisions of its contract with plaintiff are valid and binding and that the
memorandum above-referred to is null and void. It, likewise, set up a counterclaim for
P10,000.00 as damages, and P3,000 as attorney's fees.

The issue in this case is whether the above quoted provision of the contract between plaintiff
and the defendant, whereby the former waived his right to transfer to another school without
refunding to the latter the equivalent of his scholarships in cash, is valid or not. The lower court
resolved this question in the affirmative, upon the ground that the aforementioned memorandum
of the Director of Private Schools is not a law; that the provisions thereof are advisory, not
mandatory in nature; and that, although the contractual provision "may be unethical, yet it was
more unethical for plaintiff to quit studying with the defendant without good reasons and simply
because he wanted to follow the example of his uncle." Moreover, defendant maintains in its
brief that the aforementioned memorandum of the Director of Private Schools is null and void
because said officer had no authority to issue it, and because it had been neither approved by
the corresponding department head nor published in the official gazette.

We do not deem it necessary or advisable to consider as the lower court did, the question
whether plaintiff had sufficient reasons or not to transfer from defendant University to the Abad
Santos University. The nature of the issue before us, and its far reaching effects, transcend
personal equations and demand a determination of the case from a high impersonal plane.
Neither do we deem it essential to pass upon the validity of said Memorandum No. 38, for,
regardless of the same, we are of the opinion that the stipulation in question is contrary to public
policy and, hence, null and void. The aforesaid memorandum merely incorporates a sound
principle of public policy. As the Director of Private Schools correctly pointed, out in his letter,
Exhibit B, to the defendant,

There is one more point that merits refutation and that is whether or not the contract
entered into between Cui and Arellano University on September 10, 1951 was void as
against public policy. In the case of Zeigel vs. Illinois Trust and Savings Bank, 245 Ill.
180, 19 Ann. Case 127, the court said: 'In determining a public policy of the state, courts
are limited to a consideration of the Constitution, the judicial decisions, the statutes,
and the practice of government officers.' It might take more than a government bureau or
office to lay down or establish a public policy, as alleged in your communication, but
courts consider the practices of government officials as one of the four factors in
determining a public policy of the state. It has been consistently held in America that
under the principles relating to the doctrine of public policy, as applied to the law of
contracts, courts of justice will not recognize or uphold a transaction which its object,
operation, or tendency is calculated to be prejudicial to the public welfare, to sound
morality or to civic honesty (Ritter vs. Mutual Life Ins. Co., 169 U.S. 139; Heding vs.
Gallaghere 64 L.R.A. 811; Veazy vs. Allen, 173 N.Y. 359). If Arellano University
understood clearly the real essence of scholarships and the motives which prompted this
office to issue Memorandum No. 38, s. 1949, it should have not entered into a contract
of waiver with Cui on September 10, 1951, which is a direct violation of our
Memorandum and an open challenge to the authority of the Director of Private Schools
because the contract was repugnant to sound morality and civic honesty. And finally, in
Gabriel vs. Monte de Piedad, Off. Gazette Supp. Dec. 6, 1941, p. 67 we read: 'In order
to declare a contract void as against public policy, a court must find that the contract as
to consideration or the thing to be done, contravenes some established interest of
society, or is inconsistent with sound policy and good morals or tends clearly to
undermine the security of individual rights. The policy enunciated in Memorandum No.
38, s. 1949 is sound policy. Scholarship are awarded in recognition of merit not to keep
outstanding students in school to bolster its prestige. In the understanding of that
university scholarships award is a business scheme designed to increase the business
potential of an education institution. Thus conceived it is not only inconsistent with sound
policy but also good morals. But what is morals? Manresa has this definition. It is good
customs; those generally accepted principles of morality which have received some kind
of social and practical confirmation. The practice of awarding scholarships to attract
students and keep them in school is not good customs nor has it received some kind of
social and practical confirmation except in some private institutions as in Arellano
University. The University of the Philippines which implements Section 5 of Article XIV of
the Constitution with reference to the giving of free scholarships to gifted children, does
not require scholars to reimburse the corresponding value of the scholarships if they
transfer to other schools. So also with the leading colleges and universities of the United
States after which our educational practices or policies are patterned. In these
institutions scholarships are granted not to attract and to keep brilliant students in school
for their propaganda mine but to reward merit or help gifted students in whom society
has an established interest or a first lien. (Emphasis supplied.)

WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered
sentencing the defendant to pay to the plaintiff the sum of P1,033.87, with interest thereon at
the legal rate from September 1, 1954, date of the institution of this case, as well as the costs,
and dismissing defendant's counterclaim. It is so ordered.

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Barrera, Parades, Dizon, De Leon and
Natividad, JJ., concur.
Bautista Angelo, J., reserves his vote.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 139479 December 27, 2002

PHILIPPINE NATIONAL BANK, petitioner,

vs.
NEPOMUCENO PRODUCTIONS, INC., FILM ADVERTISING MEDIA EXHIBITIONS, INC.
(FAME),
LUIS NEPOMUCENO, AMPARO NEPOMUCENO, and JESUS NEPOMUCENO, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari of the decision of the Court of Appeals in CA-G.R.
CV No. 475001affirming the decision of the Regional Trial Court of Pasig City (Branch 155) in
Civil Case No. 28809 which set aside the foreclosure proceedings and auction sale of
respondent’s properties and ordered petitioner to pay attorney’s fees.

The relevant facts of the case are undisputed.

On November 28, 1973, petitioner Philippine National Bank (PNB) granted respondents a 4
Million Pesos (P4,000,000.00) credit line to finance the filming of the movie "Pacific
Connection."2 The loan was secured by mortgages on respondents’ real and personal
properties, to wit: (1) a 7,623 square meters parcel of land located in Malugay Street, Makati
(referred to as the Malugay property); (2) a 3,000 square meters parcel of land located in North
Forbes Park, Makati (referred to as the Forbes property);3 and (3) several motion picture
equipments.4The credit line was later increased to 6 Million Pesos (P6,000,000.00) on January
14, 1974,5 and finally to 7.5 Million Pesos (P7,500,000.00) on September 8, 1974.6

Respondents defaulted in their obligation. Petitioner sought foreclosure of the mortgaged

properties with the Sheriff’s Office of Pasig, Rizal. Initially scheduled on August 12, 1976, the
auction sale was re-scheduled several times without need of republication of the notice of sale,
as stipulated in the Agreement to Postpone Sale,7 until finally, the auction sale proceeded on
December 20, 1976, with petitioner as the highest bidder in the amount ofP10,432,776.97.8

Aggrieved, respondents filed Civil Case No. 28809 with the Regional Trial Court of Pasig
(Branch 155), an action for annulment of foreclosure sale and damages with
injunction.9 Respondents contended that the foreclosure sale is null and void because: (1) the
obligation is yet to mature as there were negotiations for an additional loan amount of
P5,000,000.00; (2) lack of publication; (3) the purchase price was grossly inadequate and
unconscionable; and (4) the foreclosure proceedings were initiated by petitioner in bad faith.10

In its Decision dated September 16, 1992, the court a quo ordered the annulment and setting
aside of the foreclosure proceedings and auction sale held on December 20, 1976 on the
ground that there was lack of publication of the notice of sale.11 The court a quo also ordered
petitioner to pay P100,000.00 as attorney’s fees.12

Dissatisfied, petitioner elevated the case to the Court of Appeals.

During completion stage of the appeal, the appellate court issued a Resolution on January 31,
1996 dismissing petitioner’s appeal with regard to the Forbes Park property as the same was
already the subject of a Deed of Reconveyance executed by petitioner in favor of respondents
on November 22, 1994, as well as a Compromise Agreement dated September 13, 1994
between the same parties.13 Said Resolution having become final and executory on February
26, 1996, entry of judgment was made on March 27, 1996.14 Hence, resolution of the appeal in
the Court of Appeals pertained only to the Malugay property.
On December 11, 1998, the appellate court rendered the assailed Decision, which affirmed in
toto the decision of the court a quo.15

Hence, herein petition for review under Rule 45 of the Rules of Court.

Petitioner maintains that:

"I

"THE COURT OF APPEALS ERRED IN DECLARING PNB’S FORECLOSURE SALE OF

RESPONDENTS’ PROPERTIES NULL AND VOID FOR LACK OF REPUBLICATION DESPITE
THE PARTIES AGREEMENT TO WAIVE THE REPUBLICATION AND RESPOSTING OF
SHERIFF’S SALE

"II

"THE COURT OF APPEALS ERRED IN NOT DECLARING THE RESPONDENTS IN

ESTOPPEL TO ASSAIL THE VALIDITY OF THE FORECLOSURE SALE AFTER THEY
INDUCED PNB TO EXECUTE THE AGREEMENT TO POSTPONE SALE WAIVING THE
REPUBLICATION AND REPOSTING OF THE SHERIFF’S NOTICE OF SALE

"III

"THE COURT OF APPEALS ERRED IN SUSTAINING THAT RESPONDENTS ARE NOT

THIRD PERSONS IN CONTEMPLATION OF THE LAW"16

The focal issue in this case is whether the parties to the mortgage can validly waive the posting
and publication requirements mandated by Act No. 3135.

We answer in the negative.

Act. No. 3135, as amended, governing extrajudicial foreclosure of mortgages on real property
is specific with regard to the posting and publication requirements of the notice of sale, to wit:

"Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at
least three public places of the municipality or city where the property is situated, and if such
property is worth more than four hundred pesos, such notice shall also be published once a
week for at least three consecutive weeks in a newspaper of general circulation in the
municipality or city."

On this score, it is well settled that what Act No. 3135 requires is: (1) the posting of notices of
sale in three public places; and, (2) the publication of the same in a newspaper of general
circulation.17 Failure to publish the notice of sale constitutes a jurisdictional defect, which
invalidates the sale.18

Petitioner, however, insists that the posting and publication requirements can be dispensed with
since the parties agreed in writing that the auction sale may proceed without need of re-
publication and re-posting of the notice of sale.19

We are not convinced. Petitioner and respondents have absolutely no right to waive the posting
and publication requirements of Act No. 3135.

In People v. Donato,20 the Court expounded on what rights and privileges may be waived, viz.:

"x x x the doctrine of waiver extends to rights and privileges of any character, and, since the
word 'waiver' covers every conceivable right, it is the general rule that a person may waive any
matter which affects his property, and any alienable right or privilege of which he is the owner or
which belongs to him or to which he is legally entitled, whether secured by contract, conferred
with statute, or guaranteed by constitution, provided such rights and privileges rest in the
individual, are intended for his sole benefit, do not infringe on the rights of others, and further
provided the waiver of the right or privilege is not forbidden by law, and does not contravene
public policy; and the principle is recognized that everyone has a right to waive, and agree to
waive, the advantage of a law or role made solely for the benefit and protection of the individual
in his private capacity, if it can be dispensed with and relinquished without infringing on any
public right, and without detriment to the community at large x x x.

"Although the general rule is that any right or privilege conferred by statute or guaranteed by
constitution may be waived, a waiver in derogation of a statutory right is not favored, and a
waiver will be inoperative and void if it infringes on the rights of others, or would be against
public policy or morals and the public interest may be waived.

"While it has been stated generally that all personal rights conferred by statute and guaranteed
by constitution may be waived, it has also been said that constitutional provisions intended to
protect property may be waived, and even some of the constitutional rights created to secure
personal liberty are subjects of waiver."21

While it is established that rights may be waived, Article 6 of the Civil Code explicitly provides
that such waiver is subject to the condition that it is not contrary to law, public order, public
policy, morals, or good customs, or prejudicial to a third person with a right recognized by law.22

The principal object of a notice of sale in a foreclosure of mortgage is not so much to notify the
mortgagor as to inform the public generally of the nature and condition of the property to be
sold, and of the time, place, and terms of the sale. Notices are given to secure bidders and
prevent a sacrifice of the property.23 Clearly, the statutory requirements of posting and
publication are mandated, not for the mortgagor’s benefit, but for the public or third persons. In
fact, personal notice to the mortgagor in extrajudicial foreclosure proceedings is not even
necessary, unless stipulated.24 As such, it is imbued with public policy considerations and any
waiver thereon would be inconsistent with the intent and letter of Act No. 3135.

Moreover, statutory provisions governing publication of notice of mortgage foreclosure sales

must be strictly complied with and slight deviations therefrom will invalidate the notice and
render the sale at the very least voidable.25

"Where required by the statute or by the terms of the foreclosure decree, public notice of the
place and time of the mortgage foreclosure sale must be given, a statute requiring it being held
applicable to subsequent sales as well as to the first "advertised sale of the property. It has
been held that failure to advertise a mortgage foreclosure sale in compliance with statutory
requirements constitutes a jurisdictional defect invalidating the sale and that a substantial error
or omission in a notice of sale will render the notice insufficient and vitiate the sale."26

Thus, in the recent case of Development Bank of the Philippines v. Aguirre,27 the foreclosure
sale held more than two (2) months after the published date of sale was considered void for lack
of republication.28 Similarly, in the instant case, the lack of republication of the notice of the
December 20, 1976 foreclosure sale renders it void.

The right of a bank to foreclose a mortgage upon the mortgagor’s failure to pay his obligation
must be exercised according to its clear mandate, and every requirement of the law must be
complied with, lest the valid exercise of the right would end.29 The exercise of a right ends when
the right disappears, and it disappears when it is abused especially to the prejudice of others. 30

We also cannot accept petitioner’s argument that respondents should be held in estoppel for
inducing the former to re-schedule the sale without need of republication and reposting of the
notice of sale.

Records show that respondents, indeed, requested for the postponement of the foreclosure
sale.31 That, however, is all that respondents sought. Nowhere in the records was it shown that
respondents purposely sought re-scheduling of the sale without need of republication and
reposting of the notice of sale. To request postponement of the sale is one thing; to request it
without need of compliance with the statutory requirements is another. Respondents, therefore,
did not commit any act that would have estopped them from questioning the validity of the
foreclosure sale for non-compliance with Act No. 3135.
In addition, the "Agreement to Postpone Sale" signed by respondents was obviously prepared
solely by petitioner.32 A scrutiny of the agreement discloses that it is in a ready-made form and
the only participation of respondents is to affix or "adhere" their signature thereto. It therefore
partakes of the nature of a contract of adhesion, i.e., one in which one of the contracting parties
imposes a ready-made form of contract which the other party may accept or reject, but cannot
modify.33 One party prepares the stipulation in the contract, while the other party merely affixes
his signature or his "adhesion" thereto, giving no room for negotiation, and depriving the latter of
the opportunity to bargain on equal footing.34 As such, their terms are construed strictly against
the party who drafted it.35

Finally, while we rule that the appellate court did not commit any error in affirming the decision
of the court a quo, we find the award of P100,000.00 as attorney's fees to be excessive. Article
2208 of the Civil Code allows the award of such fees when its claimant is compelled to litigate
with third persons or to incur expenses to protect its just and valid claim. In view of petitioner's
foreclosure of the property without complying with the statutory requirements, 36 the award of
attorney's fees of P25,000.00 is just, fair, and reasonable.

WHEREFORE, the Decision dated December 10, 1998 in CA-G.R. CV No. 47500 is hereby
AFFIRMED with modification that the award of attorney’s fees is reduced to P25,000.00.

No pronouncement as to costs.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Callejo, Sr., JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 118435 June 20, 1997

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
MARIO SERZO, JR., accused-appellant.

PANGANIBAN, J.:

The right to counsel of an accused is guaranteed by our Constitution, our laws and our Rules of
Court. During custodial investigation, arraignment, trial and even on appeal, the accused is
given the option to be represented by a counsel of his choice. But when he neglects or refuses
to exercise this option during arraignment and trial, the court shall appoint one for him. While the
right to be represented by counsel is absolute, the accused's option to hire one of his own
choice is limited. Such option cannot be used to sanction reprehensible dilatory tactics, to trifle
with the Rules or to prejudice the equally important rights of the state and the offended party to
speedy and adequate justice.

This will be amplified in this appeal seeking the reversal of the August 23, 1994 Decision of the
Regional Trial Court of Antipolo, Rizal, Branch 72, 1 in Criminal Case No. 90-5997 convicting
Appellant Mario Serzo, Jr. of murder under Article 248 of the Revised Penal Code.

Appellant was charged with murder in an Information dated September 4, 1990 filed by Rizal
Assistant Provincial Prosecutor Filipinas Z. Aguilar-Ata, worded as follows: 2

That on or about the 22nd day of August, 1990, in the Municipality of Antipolo,
Province of Rizal, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, armed with bladed weapon, with intent to kill, with
treachery, did then and there willfully, unlawfully and feloniously attack, assault
and stab one Alfredo Alcantara y Casabal at the back, thereby inflicting upon him
stab wounds which directly caused his death.

Thereafter, pre-trial was waived and the case proceeded to trial on the merits. After arraignment
and trial, appellant was found guilty as charged and sentenced thus: 3

WHEREFORE, on the basis of the foregoing, the Court finds accused GUILTY
BEYOND REASONABLE DOUBT of having committed the crime of MURDER
and as prescribed under Article 248 of the Revised Penal Code, hereby
sentences accused to suffer the penalty of reclusion perpetua and to indemnify
the victim's wife in the amount of FIFTY THOUSAND PESOS (P50,000.00) as
actual damages and TWENTY FIVE THOUSAND PESOS (P25,000.00) as moral
damages and costs.

The Antecedents

Summarizing the testimonies of Adelaida Alcantara (the victim's widow), Medico-Legal Officer
Dario L. Gajardo and Epifania Andrade, the trial court found the following facts: 4

Alfredo Alcantara Y Casabal never knew that death was just around the corner
inevitably meeting his way. That fateful night of August 22, 1990, Alfredo together
with his wife Adelaida Alcantara were (sic) staying inside their house comfortably
watching television when at around 11:30 in the evening, Susana Serzo, mother
 of the accused, and one Epifania Bentilacion came knocking at their doorsteps
and pleading for help to bring out her grandchildren who were being held inside
their house by her son, the accused in this case. Unhesitatingly, the couple
heeded their call and went with them at (sic) their house, located just across the
private complainant's residence. The spouses were able to rescue the
grandchildren and to bring them to a safer place. When returning to their house,
Alfredo Alcantara who was walking just armslength ahead of his wife, was
attacked by accused Mario Serzo from behind. Accused stabbed Alfredo at his
back forcing the latter to scamper for his dear life. However, accused was able to
overpower him thereby causing his fall in the canal where he was repeatedly
stabbed by the accused. Adelaida Alcantara shouted for help but was likewise
attacked by the accused as she was only half-meter away from her husband.
However, Adelaida fortunately was able to hold the hand of the knifewielder and
persistently fought the accused. (p. 05 TSN June 3, 1991) At that moment, the
commotion had already caught the attention of the residents within the vicinity
who responded to help her thereby causing the accused to flee. The victim
Alfredo Alcantara, who remained lying and motionless in the canal, was rushed
to the hospital where he was confirmed dead. (p. 06 TSN June 3, 1991) The
Medico-legal Officer, Dr. Dario Gajardo, testified in Court that the victim
sustained three (3) stab wounds, two at the back and one in his chest, which
instantaneously caused the victim's death. (p. 04 TSN May 13, 1991)

In view of appellant's allegation that he was denied his right to counsel, a narration of the
proceedings before the trial court is now in order. Arraignment was set by the trial court on
January 8, 1991, during which appellant appeared without counsel. Consequently, the trial court
appointed Atty. Wilfredo Lina-ac as counsel de oficio for the arraignment only. Appellant,
however, moved that the arraignment be reset and that he be given time to engage a counsel of
his own choice, which the trial court granted. 5

On February 11, 1991, appellant appeared without a counsel de parte. He was nonetheless
arraigned with the assistance of Counsel de oficio Wilfredo Lina-ac. 6 He pleaded "not guilty."
Pre-trial was waived and trial was set on April 22, May 6 and 13, 1991 for the reception of the
prosecution evidence and June 3 and 17, 1991 for the defense.

The hearings scheduled on April 22, 1991 and May 6, 1991 were cancelled on motion of Public
Prosecutor Robert H. Tobia. 7 On both dates, appellant appeared with Atty. Lina-ac. On May 13
and June 3, 1991, trial proceeded with the testimonies of prosecution witnesses. On behalf of
appellant, Atty. Lina-ac cross-examined the said witnesses.

On June 17, 1991, trial was again cancelled as appellant appeared without counsel. 8 On
August 13, 1991, the prosecution rested its case. 9

On November 4 and 11, 1991, presentation of evidence for the defense was reset as appellant
was not ready to testify 10 and he manifested his intention to secure the services of a counsel de
parte. 11 On March 3, 1992, Atty. Lina-ac was relieved as counsel de oficio in view of appellant's
manifestation and refusal to cooperate with said counsel. 12 On April 6, 1992 appellant appeared
without counsel, forcing the trial court to appoint another counsel de oficio, Bella Antonano.
Counsels for both parties agreed to reset the trial, but appellant refused to sign the minutes of
the proceedings. 13

On April 27, 1992, 14 over vehement objection from the prosecution, hearing was reset for the
last time as appellant was still looking for a counsel de parte. 15 On August 25, 1992, appellant
appeared without counsel; thus, the trial court appointed Atty. Bonifacia Garcia of the Public
Attorney's Office (PAO) as appellant's counsel de oficio. Again, trial was postponed. 16 On
September 1 and October 19, 1992, trial was postponed on motion of Atty. Garcia. 17 Appellant
again refused to sign the minutes of the proceedings for both trial dates. On November 5, 1992,
appellant refused to cooperate with Atty. Garcia by declining to take the witness stand, forcing
the defense to rest its case. 18 Both parties were ordered to submit their respective memoranda
in ten days, after which the case would be submitted for decision. Atty. Garcia was further
ordered to manifest within the same period whether appellant would change his mind and
cooperate with her. No memorandum or manifestation was ever filed by appellant.
Appellant wrote Judge Angeles three times within the period beginning December 16, 1992 until
April 2, 1993, seeking legal advice and the early resolution of the case. Branch Clerk of Court
Melchisedek A. Guan replied to him twice, informing him that Judge Angeles was prohibited by
law from giving legal advice to litigants in cases pending in his court and that a decision was
forthcoming. On July 13, 1994, appellant wrote Deputy Court Administrator Reynaldo L. Suarez,
asking for the early resolution of his case. 19 The latter referred said letter to Judge Angeles for
appropriate action.

Thereafter, the assailed Decision convicting appellant of murder was promulgated on August
23, 1994.

Ruling of the Trial Court

In its Decision, the trial court noted that appellant simply refused to secure the services of a
counsel de parte and to present evidence in his defense despite ample opportunity accorded to
him. Said the trial court:

The defense particularly the accused assisted by counsel however refused to

present any evidence despite several opportunities afforded by the Court. As
early as the arraignment stage, accused refused to be assisted by a counsel de
oficio from the Public Attorney's Office (PAO) insisting that he be assisted by a
counsel of his own choice. For several settings, accused and her (sic) mother
were allowed to secure the services of a counsel de parte. However, they failed
to present one. Hence, the Court, to avoid further delay in the proceedings of the
case, was constrained to assign a counsel de oficio from the PAO.

During the presentation of evidence for the defense, accused and counsel could
not present any witness as accused refused to cooperate and to testify in Court.
Hence, the defense waived its right to present any evidence.

Considering that this case has been dragging for several years already . . . the
court . . . afforded the defense another opportunity to present its case by
submitting its memorandum simultaneously with the Prosecution. Thereafter, the
case was submitted for decision. 20

Consequently, the trial court convicted appellant on the basis of the evidence presented by the
prosecution. Appellant was positively identified as the assailant by the widow, Adelaida
Alcantara, who survived his attack. In her distinct and vivid narration of the sequence of events
leading to the murder, she showed that the attack was treacherous as the victim was stabbed at
the back and without warning.

Not satisfied with the trial court's Decision, appellant through Counsel Carmelo L.
Arcilla 21 appealed to this Court.

Assignment of Errors

In his Brief filed by Atty. Arcilla, appellant questions his conviction for murder based on the
following alleged errors on the part of the trial court: 22

The lower court erred in not giving the defendant-appellant time to engage
counsel of his own choice.

II

The lower court erred in not affording the defendant-appellant the chance to
present evidence for his defense.

III
 The lower court erred in not acquitting the defendant-appellant.

Mainly, appellant alleges that he had been denied effective legal representation. His thesis is
that the trial court did not give him enough time to engage a counsel de parte, effectively
depriving him of the chance to present evidence in his defense. In fact, the scant five-page
Appellant's Brief was dedicated entirely to this argument without contesting the facts found by
the trial court.

The Court's Ruling

The right of an accused to counsel is guaranteed by the Constitution, the supreme law of the
land. This right is granted to minimize the imbalance in the adversarial system where the
accused is pitted against the awesome prosecutory machinery of the state. In the words of
Justice Black, 23 this is a "recognition . . . that an average (accused) does not have the
professional skill to protect himself . . . before a tribunal with power to take his life or liberty,
wherein
the (prosecutor) is . . . an experienced and learned counsel." In Powell vs. Alabama, 24 Mr.
Justice Sutherland wrote at greater length on why an accused needs a competent counsel:

Even the intelligent and educated layman has small and sometimes no skill in the
science of law. If charged with crime, he is incapable, generally, of determining
for himself whether the indictment is good or bad. He is unfamiliar with the rules
of evidence. Left without the aid of counsel he may be put on trial without a
proper charge, and convicted upon incompetent evidence, or evidence irrelevant
to the issue or otherwise inadmissible. He lacks both the skill and knowledge
adequately to prepare his defense, even though he has a perfect one. He
requires the guiding hand of counsel at every step in the proceedings against
him. Without it, though he be not guilty, he faces the danger of conviction
because he does not know how to establish his innocence.

The right covers the period beginning from custodial investigation, well into the rendition of
judgment, 25 and even on appeal. Article III of the 1987 Constitution provides this right to an
accused not only during trial but even before an information is filed. It provides:

Sec. 12. (1) 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.

Sec. 14 (1) No person shall be held to answer for a criminal offense without due
process of law.

(2) In all criminal prosecutions, the accused shall be presumed innocent until the
contrary is proved, and shall enjoy the right to be heard by himself and counsel, .
..

With these precepts as springboard, the Rules of Court grants an accused the right to counsel
under the following provisions, viz.:

RULE 112

PRELIMINARY INVESTIGATION

xxx xxx xxx

Sec. 7. When accused lawfully arrested without warrant. — . . .

However, before the filing of such complaint or information, the person arrested
may ask for a preliminary investigation by a proper officer in accordance with this
Rule, but he must sign a waiver of the provisions of Article 125 of the Revised
 Penal Code, as amended, with the assistance of a lawyer and in case of non-
availability of a lawyer, a responsible person of his choice. . . . .

xxx xxx xxx

RULE 113

ARREST

Sec. 14. Right of attorney or relative to visit person arrested. — Any member of
the bar shall, at the request of the person arrested or of another acting in his
behalf, have the right to visit and confer privately with such person, in the jail or
any other place of custody at any hour of the day or, in urgent cases, of the night.
This right shall also be exercised by any relative of the person arrested subject to
reasonable regulation.

Rule 115

RIGHTS OF ACCUSED

Sec. 1. Rights of accused at the trial.— In all criminal prosecutions, the accused
shall be entitled:

xxx xxx xxx

(c) To be present and defend in person and by counsel at every stage of the
proceedings, from the arraignment to the promulgation of the judgment. . . . .

xxx xxx xxx

Rule 116 of the Rules of Court makes it compulsory that the trial court inform the accused of his
right to counsel prior to arraignment, thus:

Sec. 6. Duty of court to inform accused of his right to counsel. — Before

arraignment, the court shall inform the accused of his right to counsel and shall
ask him if he desires to have one. Unless the accused is allowed to defend
himself in person, or he has employed counsel of his choice, the court must
assign a counsel de oficio to defend him.

Sec. 7. Appointment of counsel de oficio. — The court, considering the gravity of

the offense and the difficulty of the questions that may arise, shall appoint as
counsel de oficio only such members of the bar in good standing who, by reason
of their experience and ability may adequately defend the accused. But in
localities where such members of the bar are not available, the court may appoint
any person, resident of the province and of good repute for probity and ability, to
defend the accused.
26
Even on appeal, the accused is still afforded the right to counsel under Rule 122:

Sec. 13. Appointment of counsel de oficio for accused on appeal. — It shall be

the duty of the clerk of the trial court upon the presentation of a notice of appeal
in a criminal case, to ascertain from the appellant, if he be confined in prison,
whether he desires the Court of Appeals or the Supreme Court to appoint a
counsel to defend him de oficio and to transmit with the record, upon a form to be
prepared by the clerk of the appellate court, a certificate of compliance with this
duty and of the response of the appellant to his inquiry.

The foregoing is buttressed by another provision in Rule 124:

 Sec. 2. Appointment of counsel de oficio for the accused. — If it appears from the
record of the case as transmitted: (a) that the accused is confined in prison, (b)
without counsel de parte on appeal, and (c) signed the notice of appeal himself,
then the clerk of the Court of Appeals shall designate a member of the bar to
defend him, such designation to be made by rotation, unless otherwise directed
by order of the court.

An accused-appellant not confined in prison shall not be entitled to a counsel de

oficio, unless the appointment of such counsel is requested in the appellate court
within ten (10) days from receipt of the notice to file brief and the right thereto is
established by affidavit.

Recently, Republic Act No. 7438 was enacted providing, inter alia, that any person arrested,
detained or under custodial investigation shall at all times be assisted by counsel.

A deprivation of the right to counsel divests the accused of an equality in arms resulting in the
denial of a level playing field, so to speak. In a previous case, this Court held that an accused
was deprived of his right to counsel when he retained the services of a person who
misrepresented himself as a lawyer. 27 In People vs. Malunsing, 28retrial was ordered on the
ground that petitioner was denied his constitutional right to counsel. Very old and unlettered, he
was shown not to have understood what was going on during the trial. In said case, although
the lawyer of his co-accused was appointed as his counsel, petitioner was not properly apprised
by said court of his right to be assisted by counsel. No evidence was presented for and on his
behalf and the trial court did not even bother to inquire why he did not take the witness stand
when all the other defendants were presented as witnesses.

This is the legal backdrop against which appellant's allegation of deprivation of his right to
counsel shall be measured.

Right to Counsel De Parte Is Not Absolute

Accordingly, an accused may exercise his right to counsel by electing to be represented either
by a court-appointed lawyer or by one of his own choice. While his right to be represented by
counsel is immutable, his option to secure the services of counsel de parte, however, is not
absolute. The court is obliged to balance the privilege to retain a counsel of choice against the
states's and the offended party's equally important right to speedy and adequate justice. Thus,
the court may restrict the accused's option to retain a counsel de parte if the accused insists on
an attorney he cannot afford, or the chosen counsel is not a member of the bar, or the attorney
declines to represent the accused for a valid reason, e.g. conflict of interest and the like. 29

Also, the right to counsel de parte is, like other personal rights,
waivable 30 so long as (1) the waiver is not contrary to law, public order, public policy, morals or
good customs; or prejudicial to a third person with a right recognized by law 31 and (2) the
waiver is unequivocally, knowingly and intelligently made. 32

In Sayson vs. People, 33 this Court held that the duty of the court to appoint a counsel de
oficio is not mandatory where the accused has proceeded with the arraignment and the trial with
a counsel of his choice but, when the time for the presentation of the evidence for the defense
was due, he appears by himself alone because of the inexcusable absence of his counsel. In
another case, this Court held that the right to be heard and to reopen the case (and send it to
trial anew) could not be allowed if doing so would sanction a plainly dilatory tactic and a
reprehensible trifling with the orderly administration of justice. 34

In the present case, appellant claims that he was not given sufficient time to engage a
counsel de parte, thereby preventing him from presenting evidence in his defense. In his Brief
he adds, but without giving particulars or proof, that allegedly his counsels de oficio did not exert
their "utmost efforts" in representing him, thus: 35

. . . (T)he lower court afforded the accused the assistance of counsel de oficio as
early as the arraignment stage but failed to show that utmost efforts were exerted
by said counsel to defend the life and liberty of the accused. The duty of the court
 is not ended with such appointment, however, as it should also see to it that the
counsel does his duty by the defendant. Counsel de oficio should not merely
make the motions of defending the accused but exert his utmost efforts as if he
were representing a paying client.

The Solicitor General, in his eleven-page Brief, 36 rebuts this, arguing that appellant's actions
during the trial showed instead a "lackadaisical stance on his own defense."

Appellant had been given ample time to secure the services of a counsel de parte, but his
subsequent appearances in court without such counsel and his act of allowing this situation to
continue until the presentation of his evidence betrays his lack of intention to do so. It even
appears that he was merely delaying his own presentation of evidence on purpose to the
prejudice of the offended party, the trial court and the orderly administration of justice.

Furthermore, appellant did not demonstrate in what way the services of his counsels de
oficio were unsatisfactory. He did not cite any instance substantiating his claim that he was not
effectively represented. In short, he was afforded a chance to be heard by counsel of his own
choice, but by his own neglect or mischief, he effectively waived such right. It taxes the mind to
think that, almost two years 37 since appellant first invoked his right to be represented by
counsel de parte, he still could not find one who would suit his needs and desires. Neither did
he cooperate with his court-named lawyers.

The facts of this case do not constitute a deprivation of appellant's constitutional right to counsel
because he was adequately represented by three court-appointed lawyers: Atty. Lina-ac, Atty.
Antonano and Atty. Garcia. Courts are not required to await indefinitely the pleasure and
convenience of the accused as they are also mandated to promote the speedy and orderly
administration of justice. Nor should they countenance such an obvious trifling with the rules.
Indeed, public policy requires that the trial continue as scheduled, considering that appellant
was adequately represented by counsels who were not shown to be negligent, incompetent or
otherwise unable to represent him.

Crime and Punishment

In spite of appellant's failure, either through negligence or unreasonable refusal, to impute

errors to the assailed Decision — other than the alleged violation of his right to counsel — this
Court nonetheless scoured the records of the trial, perused the transcripts of the testimony of
the witnesses for the prosecution, evaluated the evidence and examined the applicable laws
and jurisprudence to determine the correctness of the trial court's Decision. We, however, find
no cogent reason to reverse the conviction of appellant. In a case of murder or homicide, it is
enough that the death of the victim and the responsibility of the person who caused such death
are proven 38beyond reasonable doubt. Both elements were duly established by the prosecution
witnesses. Dr. Gajardo testified to the fact of death while Widow Adelaida Alcantara positively
identified the appellant as the assailant.

Based on the facts established by the prosecution which remain uncontested, the Court affirms
the trial court's appreciation of the qualifying circumstance of treachery. To constitute treachery,
two conditions must concur: (1) the employment of means of execution that gives the person
attacked no opportunity to defend himself or to retaliate and (2) deliberate or conscious adoption
of the means of execution. 39 The manner of the attack itself is proof enough of alevosia. Widow
Adelaida vividly described the stabbing as
follows: 40

Q: And you said a certain Suzana Serzo together with one

Epifania Bentilacion came to your house and asked for help from
you, is that right?

A: Yes, sir.

Q: And that you responded for help Mrs. witness?

A: Yes, sir.
 Q: And you are together with your husband in helping Suzana
Serzo?

A: Yes, sir.

Q: What was the help she was asking Mrs. witness?

xxx xxx xxx

A: She was asking to help her children being held by Mario Serzo
by not letting them go out of the house.

xxx xxx xxx

Q: Were you able to help the grandchildren of Suzana Serzo?

A: Yes, sir.

Q: And after you help (sic) them what happened next?

A: We brought them to where they could hide and then we went

home.

Q: You said you heard somebody approaching you at the back

through the sound of his footsteps is that right?

A: Yes, sir.

xxx xxx xxx

Q: What happened next after you hear (sic) those footsteps at

your back?

A: My husband was just beside me.

Q: And immediately your husband was stabbed by the accused?

A: Yes, sir.

From this testimony, it appears that appellant waited for the victim and his wife and pounced on
them swiftly and without warning. The victim and his wife were already on their way home after
transferring appellant's children to a safe place. They were unarmed as they had absolutely no
idea that appellant would attack them right then and from behind. The manner of the attack
tended directly and especially to insure the execution of the crime without risk to appellant and
virtually no chance for the victim to defend himself. 41 Even Adelaida's life would have been
mortally threatened were it not for the timely intervention of her neighbors.

Damages and Indemnity

Actual and moral damages require the presentation of proof before they can be awarded by the
trial court. 42According to Adelaida, burial expenses in the amount of P2,000.00 were
incurred. 43 This is separate and distinct from civil indemnity awarded under prevailing
jurisprudence, which is granted without further proof beyond the fact of death and the accused's
responsibility therefor. Moral damages were not discussed at all in Adelaida's testimony. Hence,
without any factual basis, the award of moral damages is not justified.

WHEREFORE, the assailed Decision is hereby AFFIRMED, but the award of moral damages is
DELETED. Instead, appellant is ORDERED TO PAY the amount of P50,000.00 as civil
indemnity and actual damages of P2,000.00 as burial expenses.
SO ORDERED.

Narvasa, C.J., Davide, Jr. and Melo, JJ., concur.

Francisco, J., is on leave.